What changed in this filing

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Item 1A. Risk Factors

2024-12-27 compared with 2023-12-29 · 119 added, 169 removed, 521 unchanged (36% of the section changed)

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except as required by applicable laws and regulations.

Risks Related to COVID-19 Pandemic

The COVID-19 Pandemic Has Had A Significant

Impact On Our Operations Since March 2020 And Could Materially And Adversely Affect Our Future Business And Financial Results.

In March 2020, a novel strain

of coronavirus was declared a global pandemic and a National Public Health Emergency.

The novel coronavirus pandemic and related suggested

and mandated social distancing and “shelter-in-place” orders and other governmental mandates relating thereto (collectively,

“COVID-19”) caused significant disruptions to our business, adversely affected and will, in all likelihood continue to adversely

affect, our restaurant operations and financial results for the foreseeable future, particularly if further government directives are

put in place for a significant amount of time.

The Department of Health and Human Services (HHS) permitted the federal Public Health Emergency

for COVID-19 (PHE) declared by the Secretary of the Department of Health and Human Services (Secretary) under Section 319 of the Public

Health Service (PHS) Act to expire at the end of the day on May 11, 2023.

We have experienced significant issues relating to suppliers and labor

impacted by the COVID-19 pandemic.

If our suppliers’ employees are unable to work, whether because of illness, quarantine, limitations

on travel or other government restrictions in connection with COVID-19, or if the supply chain is disrupted for any other reason such

as travel limitations and other restrictions on commerce, we could face shortages of food items or other supplies at our restaurants and

our operations and sales could be adversely impacted by such supply interruptions.

The impact of COVID-19, and the volatile regional

and global economic conditions stemming from the pandemic, may also precipitate or exacerbate other risks discussed in this Item 1A -

Risk Factors and elsewhere in this report, any of which could have a material effect on us.

If we are not able to respond to and manage

the impact of such events effectively, our business and financial condition will be negatively impacted.

Risks Related to Our Business

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would materially affect our financial performance.

COVID-19 has had a significant

impact on domestic economies and will likely continue to negatively impact these economies for some time.

Dining out is a discretionary

In addition to COVID-19, factors that affect consumer behavior and spending for restaurant dining, such as changes in general

economic conditions (including national, regional and local economic conditions), discretionary spending patterns, employment levels,

instability in the housing market, and high energy and food costs may have a material adverse effect on us.

If economic conditions worsen,

our financial performance could be adversely affected.

Factors that affect consumer behavior and spending for restaurant dining, such as changes in general economic conditions (including

national, regional and local economic conditions), discretionary spending patterns, employment levels, instability in the housing market,

and high energy and food costs may have a material adverse effect on us.

If economic conditions worsen, our financial performance could

be adversely affected.

Intense competition in the restaurant and package liquor store industry

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However, we are currently

unable to contract for extended periods of time for certain of our commodities.

unable to contract for extended periods of time for certain commodities.

Consequently, these commodities can be subject to unforeseen

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if we are unable to expand in a timely and profitable manner.

To grow successfully, we must open new restaurants

and/or package liquor stores on a timely and profitable basis.

We have experienced delays in restaurant and/or package liquor store openings

from time to time and may experience delays in the future.

During our fiscal year 2023, we opened our new limited partnership owned restaurant

in Miramar, Florida (Store #25) for business, as well as our company owned package liquor store in Miramar, Florida (Store #24) and our

newly built stand-alone package liquor store in Hollywood, Florida (Store #19P) for business, replacing our package liquor store destroyed

by fire which previously operated at that site.

During our fiscal year 2023, we also continued constructing a stand-alone building on

the same site in Hollywood, Florida adjacent to Store #19P, replacing our restaurant destroyed by fire which previously operated at that

site (Store #19R).

We anticipate that the restaurant in Hollywood, Florida (Store #19R) will open for business in March 2024.

successfully, we must open new restaurants and/or package liquor stores on a timely and profitable basis.

We have experienced delays in

restaurant and/or package liquor store openings from time to time and may experience delays in the future.

During our fiscal year 2024,

we opened our restaurant in Hollywood, Florida (Store #19R) which replaced our restaurant destroyed by fire that previously operated at

Our ability to open and profitably

operate restaurants and/or package liquor stores is subject to various risks such as identification and availability of suitable and economically

viable locations, the negotiation of acceptable leases or the purchase terms of existing locations, the availability of limited partner

investors or other means to raise capital, the need to obtain all required governmental permits (including zoning approvals) on a timely

basis, the need to comply with other regulatory requirements, the availability of necessary contractors and subcontractors, the availability

of construction materials and labor, the ability to meet construction schedules and budgets, variations in labor and building material

costs, changes in weather or other acts of God that could result in construction delays and adversely affect the results of one or more

restaurants and/or package liquor stores for an indeterminate amount of time.

If we are unable to manage these risks successfully, we

will face increased costs and lower than anticipated revenues which will materially adversely affect our business, financial condition,

operate restaurants and/or package liquor stores is subject to various risks such as identification and availability of suitable and

economically viable locations, the negotiation of acceptable leases or the purchase terms of existing locations, the availability of

limited partner investors or other means to raise capital, the need to obtain all required governmental permits (including zoning approvals)

on a timely basis, the need to comply with other regulatory requirements, the availability of necessary contractors and subcontractors,

the availability of construction materials and labor, the ability to meet construction schedules and budgets, variations in labor and

building material costs, changes in weather or other acts of God that could result in construction delays and adversely affect the results

of one or more restaurants and/or package liquor stores for an indeterminate amount of time.

If we are unable to manage these risks successfully,

we will face increased costs and lower than anticipated revenues which will materially adversely affect our business, financial condition,

operating results and cash flow.

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upon our financial condition and/or results of operations.

We secured windstorm insurance coverage for the period commencing December

30, 2023 at a higher premium.

Subsequent Events for a discussion of windstorm insurance for the period commencing December

30, 2023 on page 31.

Our inability or failure to execute a comprehensive business continuity

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hurricanes and other natural disasters and back up and off-site locations for recovery of electronic and other forms of data and information.

and the COVID-19 pandemic has provided a limited test of our ability to manage our business remotely.

However, if we are unable to fully

implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness

in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal communication and

operating procedures that could have a material adverse effect on our financial condition, results of operation and exposure to administrative

and other legal claims.

In addition, these threats are constantly evolving, which increases the difficulty of accurately and timely predicting,

planning for and protecting against the threat.

As a result, our disaster recovery procedures and business continuity plans security may

not adequately address all threats we face or protect us from loss.

However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform

vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns

in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operation

and exposure to administrative and other legal claims.

In addition, these threats are constantly evolving, which increases the difficulty

of accurately and timely predicting, planning for and protecting against the threat.

As a result, our disaster recovery procedures and

business continuity plans security may not adequately address all threats we face or protect us from loss.

Inability to attract and retain customers could

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Typically, licenses must be renewed annually and may be revoked or suspended for cause

Alcoholic beverage control regulations relate to numerous aspects of the daily operations of the restaurants, including minimum

age of guests and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling and storage and dispensing

of alcoholic beverages.

If we fail to comply with federal, state or local regulations, our licenses may be revoked and we may be forced

to terminate the sale of alcoholic beverages at one or more of our restaurants.

Alcoholic beverage control regulations relate to numerous aspects of the daily operations of the restaurants, including

minimum age of guests and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling and storage

and dispensing of alcoholic beverages.

If we fail to comply with federal, state or local regulations, our licenses may be revoked and

we may be forced to terminate the sale of alcoholic beverages at one or more of our restaurants.

The Federal Americans with

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supply chain or cause us to be the target of litigation, which could materially adversely affect our financial performance.

COVID-19 pandemic had a significant adverse impact on our customer traffic and ability to operate our restaurants and may do so again

in the foreseeable future.

Future pandemics and other diseases may have a similar or more severe impact.

COVID-19 pandemic had a significant adverse impact on our customer traffic and ability to operate our restaurants and future pandemics

and other diseases may have a similar or more severe impact.

In years past, several

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and our operations depend substantially on the availability of our point-of-sale system and related networks and applications.

These systems

may be vulnerable to attacks or outages from security breaches, viruses and other disruptive problems, as well as from physical theft,

fire, power loss, telecommunications failure or other catastrophic events.

Any failure of these systems to operate effectively, whether

from security breaches, maintenance problems, upgrades or transitions to new platforms, or other factors could result in interruptions

systems may be vulnerable to attacks or outages from security breaches, viruses and other disruptive problems, as well as from physical

theft, fire, power loss, telecommunications failure or other catastrophic events.

Any failure of these systems to operate effectively,

whether from security breaches, maintenance problems, upgrades or transitions to new platforms, or other factors could result in interruptions

to or delays in our restaurant or other operations, adversely impacting the restaurant or store experience for our customers or negatively

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In addition, remediation of any problems with our systems could result in significant, unplanned expenses.

The Effect of Recent Changes to U.S.

Healthcare Laws May Increase

Our Healthcare Costs and Negatively Impact Our Financial Results.

The effect of changes to U.S.

healthcare laws may increase our healthcare

costs and negatively impact our financial results.

We offer eligible full-time

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currently choose not to participate in our healthcare plans.

However, under the comprehensive U.S.

health care reform law enacted in 2010,

the Affordable Care Act, certain provisions, including, the employer mandate, may increase our labor costs significantly.

implementing the requirements of the Affordable Care Act is likely to impose additional administrative costs on us.

The costs and other

effects of these new healthcare requirements cannot be determined with certainty, but they may have a material adverse effect on our financial

and operating results.

The costs and other effects of any new healthcare requirements cannot be

determined with certainty, but they may have a material adverse effect on our financial and operating results.

Governmental regulation in one or more

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and we incur legal costs to defend these and similar cases and the amount of such losses or costs could be significant.

several states and localities in which we operate and the federal government have from time to time enacted minimum wage increases, paid

sick leave and mandatory vacation accruals and similar requirements and these changes could increase our labor costs.

In addition, several

states and localities in which we operate and the federal government have from time to time enacted minimum wage increases, paid sick

leave and mandatory vacation accruals and similar requirements and these changes could increase our labor costs.

Changes in U.S.

healthcare laws could also adversely impact us if they result in significant new welfare and benefit costs or increased compliance expenses.

laws could also adversely impact us if they result in significant new welfare and benefit costs or increased compliance expenses.

also are subject to being audited from time to time for compliance with citizenship or work authorization requirements.

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Our reputation and financial performance may be materially harmed as a result of any of these factors.

On the other hand, in the event we wrongfully reject

work authorization documents or if our compliance procedures are found to have a disparate impact on a protected class, such as a racial

minority or based on the citizenship status of applicants, we could be found to be in violation of anti-discrimination laws.

experience adverse publicity arising from enforcement activity related to work authorization compliance, anti-discrimination compliance,

or both, that negatively impacts our brand and may make it more difficult to hire and keep qualified employees.

Moreover, our business

could be adversely affected by increased labor costs or difficulties in finding the right employees for our restaurants.

the other hand, in the event we wrongfully reject work authorization documents or if our compliance procedures are found to have a disparate

impact on a protected class, such as a racial minority or based on the citizenship status of applicants, we could be found to be in violation

of anti-discrimination laws.

We could experience adverse publicity arising from enforcement activity related to work authorization compliance,

anti-discrimination compliance, or both, that negatively impacts our brand and may make it more difficult to hire and keep qualified

Moreover, our business could be adversely affected by increased labor costs or difficulties in finding the right employees

for our restaurants.

Additionally,

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been a particular focus.

For example, the State of California, New York City and a number of other jurisdictions around the U.S.

adopted regulations requiring that chain restaurants include calorie information on their menus and/or make other nutritional information

available and nation-wide nutrition disclosure requirements included in the U.S.

health care reform law went into effect as of December 1,

These nutrition disclosure requirements may increase our expenses or slow customers as they select their food and beverage choices

decreasing our throughput.

These initiatives may also change customers’ buying habits in a way that adversely impacts our sales.

Numerous jurisdictions around the U.S.

have adopted regulations requiring that chain restaurants include calorie

information on their menus and/or make other nutritional information available and U.S.

health care reform law included nation-wide nutrition

disclosure requirements.

These nutrition disclosure requirements may increase our expenses or slow customers as they select their food

and beverage choices decreasing our throughput.

These initiatives may also change customers’ buying habits in a way that adversely

impacts our sales.

Privacy/Cybersecurity

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of security breaches or regulatory violations, which could impair our sales or ability to attract and keep qualified employees.

Local Licensure, Zoning and Other Regulation

licensure, zoning and other regulation

of our restaurants is also subject to state and local licensing and regulation by health, alcoholic beverage, sanitation, food and workplace

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money damages and other remedies.

We could become subject to numerous claims alleging violations of federal and state laws regarding workplace

and employment matters, including wages, work hours, overtime, vacation and family leave, discrimination, wrongful termination and similar

matters, and we could become subject to class action or other lawsuits related to these or different matters.

Our customers could file

complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a visit to our

restaurants or that we have problems with food quality, operations or our food related disclosure or advertising practices.

The restaurant

industry has been subject to a growing number of claims based on the nutritional content of food products sold and disclosure and advertising

Regardless of whether

any claims against us are valid or whether we are ultimately held liable for such claims, they may be expensive to defend and may divert

time and money away from our operations and hurt our performance.

A significant judgment for any claims against us could materially and

adversely affect our financial condition or results of operations.

Any adverse publicity resulting from these allegations, whether directed

at us or at fast casual or quick-service restaurants generally, may also materially and adversely affect our reputation or prospects,

We could become subject to numerous claims alleging violations of federal and state laws regarding

workplace and employment matters, including wages, work hours, overtime, vacation and family leave, discrimination, wrongful termination

and similar matters, and we could become subject to class action or other lawsuits related to these or different matters.

Our customers

could file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a

visit to our restaurants or that we have problems with food quality, operations or our food related disclosure or advertising practices.

The restaurant industry has been subject to a growing number of claims based on the nutritional content of food products sold and disclosure

and advertising practices.

of whether any claims against us are valid or whether we are ultimately held liable for such claims, they may be expensive to defend and

may divert time and money away from our operations and hurt our performance.

A significant judgment for any claims against us could materially

and adversely affect our financial condition or results of operations.

Any adverse publicity resulting from these allegations, whether

directed at us or at fast casual or quick-service restaurants generally, may also materially and adversely affect our reputation or prospects,

which in turn could adversely affect our results.

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and because cyberattacks can originate from a wide variety of sources.

If our information security

systems or data are compromised in a material way, our ability to conduct our business may be impaired, we may incur financial losses

and we may incur costs to remediate possible harm and/or to pay fines or take other action which could have a material adverse impact

on our business.

If our information security systems or data are compromised

in a material way, our ability to conduct our business may be impaired, we may incur financial losses and we may incur costs to remediate

possible harm and/or to pay fines or take other action which could have a material adverse impact on our business.

a material failure in our information technology systems, our business operations and profits could be negatively affected and our systems

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effectively manage and run our business.

These systems and our business needs will continue to evolve and require upgrading and maintenance

These systems and our business needs will continue to evolve and require upgrades and maintenance

over time, consequently requiring significant future commitments of resources and capital.

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or other attempts to harm our systems.

A failure of these systems to operate effectively, problems with transitioning to upgraded or replacement

systems, or any other failure to maintain a continuous and secure information technology network for any of the above reasons could result

in interruption and delays in customer services, adversely affect our reputation, and negatively impact our results of operations.

A failure of these systems to operate effectively, problems with transitioning to upgraded or

replacement systems, or any other failure to maintain a continuous and secure information technology network for any of the above reasons

could result in interruption and delays in customer services, adversely affect our reputation, and negatively impact our results of operations.

Acts of violence

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make it more difficult to staff our restaurants fully, which could materially adversely affect our financial performance.

The occurrence or threat of extraordinary events, such

as active shooter or future terrorist attacks military and governmental responses, and the protest of future wars, may result in negative

changes to economic conditions likely resulting in decreased consumer spending.

Additionally, decreases in consumer discretionary spending

may impact the frequency with which our customers choose to dine out at restaurants or the amount they spend on meals while dining out

at restaurants, thereby adversely affecting our sales and results of operations.

A decrease in consumer discretionary spending may also

adversely affect our ability to achieve the benefit of planned menu price increases to help preserve our operating margins.

occurrence or threat of extraordinary events, such as active shooter or future terrorist attacks military and governmental responses,

and the protest of future wars, may result in negative changes to economic conditions likely resulting in decreased consumer spending.

Additionally, decreases in consumer discretionary spending may impact the frequency with which our customers choose to dine out at restaurants

or the amount they spend on meals while dining out at restaurants, thereby adversely affecting our sales and results of operations.

decrease in consumer discretionary spending may also adversely affect our ability to achieve the benefit of planned menu price increases

to help preserve our operating margins.

impact on customer perceptions of our brand.

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of any such publicity is particularly long-lasting, the value of our brand may suffer and our ability to grow could be diminished.

Business, Which Has Become an Increasingly Significant Part of Our Business, is Subject to Risks.

due to the COVID-19 pandemic, our revenue derived from digital orders, which includes delivery and customer pickup has increased substantially.

While we are uncertain as to whether this business will continue to increase and/or be significant, we have implemented technology, targeted

advertising and promotions and to some extent remodeled our restaurants, to accommodate the growth of our digital business.

continue to grow our digital business, it may be difficult for us to recoup these costs or achieve our sales growth potential.

on third-party delivery services to fulfill package store delivery orders, and the ordering and payment platforms used by these third-parties,

or online ordering system, could be interrupted by technological failures, user errors, cyber-attacks or other factors, which could adversely

impact sales through these channels and negatively impact our reputation.

Additionally, our delivery partners are responsible for order

fulfillment and errors or failures to make timely deliveries could cause guests to stop ordering from us.

The third-party delivery business

is competitive, with a number of players competing for market share and delivery drivers.

If the third-party delivery services that

we utilize cease or curtail operations, increase their fees, or give greater priority or promotions on their platforms to our competitors,

our delivery business and our sales may be negatively impacted.

Our Institutional

Lender No Longer Originates, Renews or Modifies loans at LIBOR Effective January 1, 2022.

Effective January 1, 2022, our

institutional lender no longer originates, renews or modifies loans at LIBOR, except in limited situations.

As of September 30, 2023,

we had one variable rate instrument outstanding that is impacted by changes in interest rates.

The variable rate debt instrument is equal

to the lender’s BSBY Screen Rate plus one and one-half percent (1.50%) per annum.

As a means of managing our interest rate risk

on the debt instrument, we entered into an interest rate swap agreement with our unrelated third party lender to convert this variable

rate debt obligation to fixed rate.

ITEM 1B UNRESOLVED STAFF COMMENTS

As a Smaller Reporting Company

as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations

and therefore are not required to provide the information requested by this Item 1B.

business has become an increasingly significant part of our business.

revenue derived from digital orders, which includes delivery and customer pickup has increased substantially.

We have implemented technology,

targeted advertising and promotions and to some extent remodeled our restaurants, to accommodate the growth of our digital business.

we do not continue to grow our digital business, it may be difficult for us to recoup these costs or achieve our sales growth potential.

We rely on third-party delivery services to fulfill package store delivery orders, and the ordering and payment platforms used by these

third-parties, or online ordering system, could be interrupted by technological failures, user errors, cyber-attacks or other factors,

which could adversely impact sales through these channels and negatively impact our reputation.

Additionally, our delivery partners are

responsible for order fulfillment and errors or failures to make timely deliveries could cause guests to stop ordering from us.

The third-party

delivery business is competitive, with a number of players competing for market share and delivery drivers.

If the third-party delivery

services that we utilize cease or curtail operations, increase their fees, or give greater priority or promotions on their platforms to

our competitors, our delivery business and our sales may be negatively impacted.

interest rates.

As of September 28, 2024, we had

one variable rate instrument outstanding that is impacted by changes in interest rates.

The variable rate debt instrument is equal to

the lender’s BSBY Screen Rate plus one and one-half percent (1.50%) per annum.

As a means of managing our interest rate risk on

the debt instrument, we entered into an interest rate swap agreement with our unrelated third party lender to convert this variable rate

debt obligation to fixed rate.

The Bloomberg Index Services Limited announced the permanent cessation of all tenors of BSBY, effective

immediately following the last publication of BSBY on November 15, 2024.

As of that date, our lender has determined that a commercially

reasonable and good faith alternative to BSBY is the 1 Month CME Term Secured Overnight Financing Rate (“SOFR”), plus 10 Basis

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors