Good Times Restaurants Inc. (GTIM)

Good Times Restaurants Inc. (GTIM) Consumer Business Overview

Good Times Restaurants Inc. operates and franchises two distinct U.S. restaurant concepts: Good Times Burgers & Frozen Custard, an upscale quick-service drive-through, and Bad Daddy's Burger Bar, a full-service upscale casual diner. The company, established in 1987, maintains a regional presence with 74 locations as of late 2021, positioning itself within the competitive consumer cyclical restaurant sector.

What Is the Investment Thesis for GTIM?

Good Times Restaurants Inc. (GTIM) presents an investment profile centered on its dual-brand strategy within the U.S. restaurant sector, characterized by a P/E ratio of 7.5 and a profit margin of 1.3%. The company's established brand recognition in its core markets, particularly for Good Times Burgers & Frozen Custard, provides a foundational strength. The Bad Daddy's Burger Bar concept, with 42 locations as of December 15, 2021, compared to 32 Good Times locations, represents a key growth vector, tapping into the upscale casual dining segment. Value drivers include potential for increased same-store sales performance across both brands and efficient management of operating costs, which are critical given the company's 10.3% gross margin. The company's beta of 0.65 suggests lower volatility relative to the broader market. However, GTIM's small market capitalization of $15.10M makes it vulnerable to economic downturns and intense competitive pressures inherent in the restaurant industry. Future growth catalysts would likely involve strategic expansion of the Bad Daddy's Burger Bar footprint, leveraging its full-service model, and optimizing the operational efficiency of both concepts to improve the modest 1.3% profit margin. Investors should monitor the company's ability to scale its operations profitably and adapt to evolving consumer preferences.

Based on FMP financials and quantitative analysis

GTIM Key Highlights

• Market capitalization of $15.10M, indicating a small-cap company within the restaurant sector.
• Price-to-Earnings (P/E) ratio of 7.45, suggesting a valuation relative to earnings.
• Profit margin of 1.3% and gross margin of 10.3%, reflecting the company's profitability and cost structure.
• Operates 74 restaurant locations as of December 15, 2021, comprising 42 Bad Daddy's Burger Bar and 32 Good Times Burgers & Frozen Custard establishments.
• Beta of 0.65, indicating lower historical volatility compared to the overall market.

Who Are GTIM's Competitors?

GTIM is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are GTIM's Key Strengths?

• Established brand recognition for Good Times Burgers & Frozen Custard in core markets.
• Dual-brand strategy diversifying revenue streams across quick-service and full-service casual dining.
• Relatively low Beta of 0.65 suggests lower market volatility.
• Operational experience spanning since 1987.

What Are GTIM's Weaknesses?

• Small market capitalization of $15.10M, indicating vulnerability to economic shifts.
• Modest profit margin of 1.3% and gross margin of 10.3% suggest limited profitability.
• Limited geographic footprint with 74 locations as of December 2021, primarily regional.
• Dependence on consumer discretionary spending, making it sensitive to economic downturns.

What Could Drive GTIM Stock Higher?

• Strategic expansion of the Bad Daddy's Burger Bar concept into new markets, leveraging its upscale casual dining appeal to capture additional market share and revenue streams.
• Initiatives to improve same-store sales performance across both Good Times and Bad Daddy's brands through menu innovation, promotional campaigns, and enhanced customer experience.
• Efforts to optimize operational efficiencies and manage supply chain costs, aiming to improve the company's 1.3% profit margin and 10.3% gross margin.

What Are the Key Risks for GTIM?

• Financial-distress signal — its Altman Z-Score of 1.53 sits in the distress zone (elevated bankruptcy risk).
• Intense competitive pressures within the U.S. restaurant industry from numerous national and regional chains, potentially impacting market share and pricing power.
• Vulnerability to economic downturns, as the company's small market capitalization of $15.10M and reliance on discretionary consumer spending make it susceptible to reduced patronage.
• Rising operating costs, including food, labor, and rent, which could further compress the company's already modest profit margins.
• Shifts in consumer preferences, such as increased demand for healthier options or alternative dining formats, could impact demand for current menu offerings.

What Are the Growth Opportunities for GTIM?

• Expansion of Bad Daddy's Burger Bar: The Bad Daddy's Burger Bar concept, with 42 locations as of December 15, 2021, represents a significant growth avenue. The upscale casual dining segment continues to attract consumers seeking premium experiences beyond traditional fast-food. Expanding the footprint of Bad Daddy's through new corporate-owned locations or strategic franchising could capture additional market share in underserved regions. This growth could be fueled by the brand's full-service model and differentiated menu, potentially increasing overall revenue and leveraging economies of scale. The timeline for such expansion would be ongoing, contingent on capital availability and market receptiveness, with each new unit contributing to the company's top-line growth.
• Enhancing Brand Loyalty and Same-Store Sales for Good Times Burgers & Frozen Custard: The Good Times Burgers & Frozen Custard brand, an established regional player with 32 locations as of December 15, 2021, can drive growth by focusing on increasing same-store sales. Initiatives could include menu innovation, limited-time offers, and loyalty programs designed to enhance customer frequency and average check size. Leveraging its upscale quick-service, drive-through model, the company can capitalize on consumer demand for convenience without compromising quality. Successful execution in this area would directly impact profitability, improving the modest 1.3% profit margin and strengthening the brand's position in its core markets. This is an ongoing opportunity with continuous refinement.
• Optimizing Operational Efficiency and Supply Chain Management: With a gross margin of 10.3%, there is an ongoing opportunity to enhance profitability through rigorous operational efficiency improvements and strategic supply chain management. This includes negotiating better terms with suppliers, optimizing labor scheduling, reducing food waste, and streamlining kitchen processes across all 74 locations. Implementing advanced analytics to forecast demand more accurately can minimize inventory holding costs and ensure product freshness. These efforts, while not directly increasing revenue, can significantly expand the company's 1.3% profit margin, freeing up capital for further expansion or debt reduction. This is a continuous improvement opportunity with immediate and long-term financial benefits.
• Digital Transformation and Customer Engagement: Investing in digital platforms, including enhanced online ordering, mobile apps, and targeted digital marketing, presents a substantial growth opportunity. For both Good Times Burgers & Frozen Custard's drive-through model and Bad Daddy's Burger Bar's full-service experience, a robust digital presence can improve customer convenience, expand reach, and foster loyalty. Data-driven insights from digital interactions can inform menu development and promotional strategies. This ongoing transformation can increase order accuracy, reduce wait times, and personalize the customer experience, potentially leading to higher transaction volumes and increased customer retention across the company's network of restaurants.
• Strategic Franchising for Capital-Efficient Expansion: While the company operates both corporate and franchised locations, accelerating strategic franchising, particularly for the Bad Daddy's Burger Bar concept, could provide a capital-efficient path to expansion. Franchising allows for growth without significant capital expenditure from the parent company, leveraging franchisees' local market knowledge and investment. This approach generates recurring royalty and franchise fees, contributing to revenue with higher margins. Careful selection of franchisees and robust support systems would be crucial to maintain brand consistency and quality across the expanding network. This is an ongoing opportunity that could significantly scale the company's footprint over the next 3-5 years.

What Opportunities Does GTIM Have?

• Expansion of Bad Daddy's Burger Bar into new markets, leveraging the upscale casual dining trend.
• Enhancing same-store sales through menu innovation and loyalty programs for both brands.
• Optimizing operational efficiencies and supply chain management to improve margins.
• Leveraging digital platforms for online ordering, delivery, and enhanced customer engagement.

What Threats Does GTIM Face?

• Intense competition from numerous national, regional, and local restaurant chains.
• Sensitivity to economic downturns impacting consumer discretionary spending.
• Rising food, labor, and operating costs eroding already thin profit margins.
• Shifting consumer preferences towards healthier options or alternative dining formats.

What Are GTIM's Competitive Advantages?

• Established brand recognition within its core regional markets for Good Times Burgers & Frozen Custard.
• Dual-brand strategy catering to distinct consumer preferences (quick-service vs. full-service upscale casual).
• Focus on "upscale" quality within both quick-service and casual dining segments, differentiating from generic fast food.
• Operational experience spanning since 1987 in the competitive restaurant industry.

What Does GTIM Do?

Good Times Restaurants Inc. (GTIM) is a U.S.-based restaurant holding company that has carved out a niche in the fast-casual and casual dining segments through its dual-brand strategy. Established in 1987 and headquartered in Golden, Colorado, the company has evolved from its initial focus on quick-service dining to encompass a broader spectrum of the restaurant market. Its portfolio primarily consists of two distinct dining chains, each catering to different consumer preferences and dining occasions. The first brand, Good Times Burgers & Frozen Custard, represents the company's roots in the upscale quick-service sector. This concept is characterized by its drive-through accessibility and a menu focused on premium burgers and frozen custard, aiming to provide a higher-quality experience within the fast-food landscape. As of December 15, 2021, the Good Times Burgers & Frozen Custard chain comprised 32 restaurants, operating primarily in regional markets. Complementing its quick-service offering, Good Times Restaurants Inc. also owns, operates, franchises, and licenses Bad Daddy's Burger Bar. This brand positions itself as a full-service, upscale casual dining establishment, offering a more extensive menu and a sit-down experience. Bad Daddy's Burger Bar targets consumers seeking a premium burger experience in a relaxed, full-service setting, often featuring craft beers and a broader array of appetizers and entrees. As of the same December 15, 2021 date, the Bad Daddy's Burger Bar network was significantly larger, with 42 locations. The company's operational model leverages both corporate-owned and franchised locations, allowing for controlled expansion while also benefiting from the capital efficiency and local market expertise that franchising can offer. This dual-brand approach enables GTIM to address different segments of the consumer market, from quick, convenient meals to more leisurely dining experiences. With a total of 74 restaurants across its two brands as of late 2021, Good Times Restaurants Inc. maintains a focused presence within the U.S. restaurant industry, aiming to differentiate itself through quality ingredients and distinct dining concepts.

What Products and Services Does GTIM Offer?

• Operates and franchises Good Times Burgers & Frozen Custard restaurants.
• Manages Good Times Burgers & Frozen Custard as an upscale quick-service, drive-through concept.
• Owns, operates, franchises, and licenses Bad Daddy's Burger Bar.
• Positions Bad Daddy's Burger Bar as a full-service, upscale casual dining establishment.
• Maintains a network of 42 Bad Daddy's Burger Bar locations as of December 15, 2021.
• Manages 32 Good Times Burgers & Frozen Custard restaurants as of December 15, 2021.
• Focuses on the U.S. restaurant sector with two distinct dining chains.

How Does GTIM Make Money?

• Generates revenue from sales of food and beverages at company-owned Good Times Burgers & Frozen Custard locations.
• Earns revenue from sales of food and beverages at company-owned Bad Daddy's Burger Bar locations.
• Receives franchise fees and ongoing royalties from franchised Good Times Burgers & Frozen Custard establishments.
• Collects franchise fees and ongoing royalties from franchised Bad Daddy's Burger Bar establishments.

What Industry Does GTIM Operate In?

Good Times Restaurants Inc. operates within the highly competitive U.S. restaurant industry, a segment of the broader Consumer Cyclical sector. This industry is characterized by evolving consumer preferences, intense competition from both established chains and independent eateries, and sensitivity to economic conditions. Trends such as demand for convenience, healthier options, and unique dining experiences significantly influence market dynamics. GTIM's dual-brand strategy positions it across two distinct sub-segments: the upscale quick-service drive-through market with Good Times Burgers & Frozen Custard and the full-service upscale casual dining market with Bad Daddy's Burger Bar. The company competes for market share by emphasizing quality ingredients and distinct brand identities. Its relatively small scale, with 74 locations as of late 2021, means it operates alongside much larger national and international chains, requiring agile adaptation to market shifts and effective cost management to maintain its 1.3% profit margin.

Who Are GTIM's Key Customers?

• Consumers seeking quick-service, high-quality burgers and frozen custard (Good Times).
• Diners looking for a full-service, upscale casual dining experience with premium burgers (Bad Daddy's).
• Families and individuals desiring convenient drive-through options.
• Customers valuing a sit-down restaurant atmosphere for meals.

Net buyingInsider Activity

The most recent 11 insider filings for Good Times Restaurants Inc. break down as 2 sales and 9 purchases. On net that is roughly 15K shares acquired (about $10K) — insiders putting money in tends to read as conviction.

GTIM Valuation & Market Position

With a $15.10M market cap, Good Times Restaurants Inc. sits in the micro-cap segment of the market. Relative to its peer group, GTIM's quantitative score of 58/100 is roughly in line with the peer average of 59/100.

ROE 5%Key Financial Metrics

Return on equity for Good Times Restaurants Inc. stands at 5.5%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 2.2%, showing how much profit it generates from its asset base. GTIM trades at a trailing price-to-earnings ratio of 7.51, below the Consumer Cyclical sector average of ~39x. Its free cash flow yield is 13.5%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.40 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 12.2%, the inverse of the P/E and a quick read on earnings relative to price.

F-Score 9/9Financial Health

Good Times Restaurants Inc.'s Piotroski F-Score is 9/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 1.53 places it in the distress zone, a signal of elevated financial risk.

FY2026 estForward Outlook

Wall Street analysts project Good Times Restaurants Inc. revenue of about $77.8M for fiscal 2026, with EPS near $-0.19.

Company Profile

Good Times Restaurants Inc. operates in the Restaurants industry within the Consumer Cyclical sector. It is headquartered in Golden, US. The company is led by CEO Ryan Zink. GTIM has traded publicly since 1992.

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Good Times Restaurants Inc. Consumer Cyclical Stock: Key Questions Answered

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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