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Item 1. Business

2023-04-18 compared with 2022-03-17 · 199 added, 226 removed, 37 unchanged (92% of the section changed)

4 unchanged sentences

Overview of Our Company

We own and operate fast-food restaurants in the north-central United States and are seeking to expand into other regions and other foodservice businesses.

We currently own and operate nine Burger Time restaurants in Minnesota, North Dakota, and South Dakota and a Dairy Queen franchise in Ham Lake, Minnesota.

Our plan is to purchase one or more existing restaurant businesses.

Our operating principles for Burger Time include:

(i) offering a “Bigger Burger” to deliver our customers “more good food for your money”;

(ii) offering a limited menu to permit attention to quality and speed of preparation;

(iii) providing fast service by way of single and double drive-thru designs and a point-of-sale system at our restaurants that expedites the ordering and preparation process;

and (iv) great tasting quality food made fresh to order at a fair price.

We currently serve the drive-thru and take-out segment of the restaurant industry.

We operate in the fast-food hamburger category of the quick service restaurant, or QSR, a restaurant industry segment.

Fast-food restaurants are characterized by limited menus, limited or no table service, and fast service.

According to IBISWorld, there are nearly 200,000 fast-food restaurants in the United States, and fast food generated an estimated $278.6 billion in revenue in 2021, with an estimated $126.9 billion, or approximately 45% of the U.S.

fast-food market, deriving from the hamburger segment.

Therefore, the hamburger segment is the largest segment of the U.S.

Our objective is to increase value for our shareholders in the foodservice industry.

BT Brands owns and operates various restaurants in the eastern two-thirds of the United States.

As of April 1, 2023, including our 41.2% owned Bagger Dave’s business, we operated nineteen restaurants comprising the following:

Eight Burger Time fast-food restaurants and one Dairy Queen franchise located in the North Central region of the United States, collectively (“BTND”);

Bagger Dave’s Burger Tavern, Inc, a 41.2% owned affiliate, operates six Bagger Dave’s restaurants in Michigan, Ohio, and Indiana (“Bagger Dave’s”);

Keegan’s Seafood Grille in Indian Rocks Beach, Florida (“Keegan’s”);

Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts (“PIE”).

Village Bier Garten is a German-themed restaurant, bar, and entertainment venue in Cocoa, Florida (“VBG”).

Our objective is to build value for our shareholders in the food service industry.

Our principal strategy is to acquire multi-unit restaurant concepts and individual restaurant properties at attractive earnings multiples.

Though we do not currently plan to do so, we may develop additional Burger Time locations under certain circumstances.

Once acquired, we will operate the acquired business(es) with a shared central management organization.

Assuming we are successful in acquiring an operating business, following the acquisition, we may pursue expansion in the number of locations and will implement programs to increase comparable-store sales and profits and to boost brand awareness

During fiscal 2022, we deployed a portion of our November 2021 public offering acquiring three operating restaurant properties.

We operate the acquired businesses with a shared central management organization.

Additional elements of our growth strategy encompass increasing sales and efforts to boost brand awareness.

Our Corporate History

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in January 2016.

Prior to the Share Exchange, the Company was majority-owned by affiliates of the placement agent in the 2018 Private Placement described below.

Upon the closing of the 2018 Private Placement, the Company, and BTND, LLC, “BTND,” entered into a Share Exchange Agreement whereby the membership interests in BTND were exchanged for shares of our common stock comprising 85.9% of the outstanding shares of our Company, without giving effect to the sale of any securities sold in the 2018 Private Placement (the “Share Exchange”).

Following the Share Exchange, the Company became the sole member of BTND and changed its name to BT Brands, Inc.

Concurrent with the Share Exchange, Maxim Group, LLC acted as the placement agent for 205,002 shares of our common stock at $3.00 per share and warrants to purchase up to 102,503 shares of our common stock with an initial exercise price of $4.00 per share, for which Maxim Group, LLC acted as the placement agent (the “2018 Private Placement”).

We received approximately $615,000 in gross proceeds and $492,266 in net proceeds from the 2018 Private Placement.

On June 13, 2019, the Company amended and restated its certificate of incorporation to change its corporate name to “BT Brands, Inc.” to better reflect its growth plans and adopt specific provisions in line with its status as a public company.

On June 12, 2020, the holders of 100% of our outstanding shares of common stock adopted resolutions approving the change of corporate domicile from Delaware to Wyoming.

As of December 18, 2020, the Company became domiciled in Wyoming.

On November 12, 2021, we completed a public offering of 2,400,000 units of our securities at a public offering price of $5.00 per unit, each unit comprising one share of common stock and one warrant to purchase one share of common stock at an initial exercise price of $5.50 per share.

On November 12, 2021, the underwriters of the offering exercised their option to purchase 360,000 Warrants for $3,600 under the over-allotment option, and on November 16, 2021, the public offering closed.

The net proceeds to the Company from the offering, including the exercise of the underwriter’s option to purchase additional warrants, were approximately $10.7 million, excluding any proceeds from the exercise of warrants, after deducting underwriting discounts and commissions and payment of estimated offering expenses of approximately $1.3 million.

The Burger Time brand originated in August 1987 with its first restaurant in Fargo, North Dakota.

Over the next five years, several additional Burger Time restaurants were opened in Minnesota, North Dakota, and South Dakota.

In 2005, the restaurant assets were sold to STEN Corporation, a public company of which Kenneth Brimmer, our Chief Operating Officer, Chairman and member of the board of directors, and Gary Copperud, our Chief Executive Officer and a member of our board of directors, were officers and directors.

In May 2007, BTND purchased the Burger Time assets from STEN Corporation.

Gary Copperud was the managing member of BTND from the acquisition in 2007 until the closing of the Share Exchange and 2018 Private Placement.

Burger Time Restaurants

At our Burger Time restaurants, we seek to give our customers more good food for their money and deliver it “hot ‘n fresh.”

Our Burger Time restaurants feature a wide variety of juicy, flame-broiled burgers that we refer to as “Bigger Burgers” because they are made with approximately 25% more meat and are larger in diameter than the typical quarter-pound burger offerings served by our competitors.

Our burgers are custom made to our specifications by our supplier, with no fillers, only beef and salt.

Each burger is prepared to a customer’s order and is served hot and fresh.

Burger favorites include a mushroom Swiss burger, a jalapeno burger, and a full-pound burger to satisfy the heartiest appetite.

In 2020, we changed our corporate domicile from Delaware to Wyoming.

The Burger Time brand originated in August 1987 with the first restaurant in Fargo, North Dakota.

Additional Burger Time restaurants opened in Minnesota, North Dakota, and South Dakota in the following years.

On November 12, 2021, we completed an initial public offering of 2,400,000 units of our securities at a public offering price of $5.00 per unit, each unit comprising one share of common stock and one warrant to purchase one share of common stock at an initial exercise price of $5.50 per share (the “IPO”).

The net proceeds from the IPO, including the exercise of the underwriters’ option to purchase additional warrants, were approximately $10.7 million, excluding any proceeds from the exercise of warrants and after deducting underwriting discounts and commissions and payment of estimated offering expenses of approximately $1.3 million.

Following our IPO, we have pursued the acquisition of restaurant properties in diverse locations across the United States.

Our recent acquisitions have allowed us to diversify our operations into new restaurant segments and new geographic regions, reducing our dependency on the financial performance of our Burger Time restaurants.

Our Restaurants

Burger Time restaurants feature a variety of burgers and other quick-serve foods.

Our juicy, flame-broiled burgers, called “Bigger Burgers,” are made with approximately 25% more meat and are larger in diameter than our competitors' typical quarter-pound burger offerings.

Our burger patties are made to our specifications by our supplier.

We prepare each burger to a customer’s order and serve it hot and fresh.

Other entrees include chicken sandwiches, pulled pork sandwiches, and chicken chunks.

Our burgers and sandwiches are served on fresh buns and are topped generously with top-tier condiments.

We offer an array of traditional and signature sides, many of which have evolved into regional favorites, such as large cut battered onion rings, cheese curds, fried pickle spears, and chicken fries.

We also offer soft drinks and other reasonably priced food and beverage items.

In addition, we offer specialty sandwiches and wraps at similar price points from time to time.

We offer an array of traditional and signature sides, many of which have evolved into regional favorites.

We also offer other reasonably priced food and beverage items.

From time to time, we offer specialty sandwiches and wraps at competitive prices.

Our limited menu is designed to deliver quality across all products, a high taste profile, and speedy delivery.

Our objective is to serve customers within 60 seconds of their arrival during the peak day parts of lunch and dinner and within 3 minutes at other times.

We can achieve this based on our single and double drive-thru format and our integrated restaurant design and equipment layout to deliver exceptional food with fast service times.

Our restaurants have a computerized point-of-sale system which displays each item ordered on a monitor viewed by food and drink preparers.

This enables the preparers to begin filling an order before the order is completed and totaled, thereby increasing the speed of service to the customer and the number of sales per hour.

One of our key operating strategies is to manage inventory and storage requirements with frequent deliveries, ensuring that our food is always fresh.

Subject to seasonal and local conditions, our restaurants are generally open seven days a week from 10 am to 10 pm for lunch, dinner, and late-night snacks and meals.

We also have recently introduced online ordering through our website with curbside delivery.

We believe that our restaurants appeal to a broad spectrum of consumers., We cater to consumers who appreciate the size and variety of our burgers, the value for the money proposition offered by our bigger burgers, and the speed and efficiency offered by our single and double drive-thru windows.

The table below provides basic information about each of our restaurants.

Business Owner

Fargo, North Dakota

Moorhead, Minnesota

Grand Forks, North Dakota

Waite Park, Minnesota

Bismarck, North Dakota

Sioux Falls, South Dakota

Sioux Falls, South Dakota (1)

Minot, North Dakota

Ham Lake, Minnesota (2)

BTND DQ, LLC (3)

Paul, Minnesota

Richmond, Indiana (4)(5)

held for sale

BTND IN, LLC (4) (5)

Hazelwood, Missouri (5)

held for sale

BTND MO, LLC (5)

Land is leased from a third party.

Dairy Queen franchise.

Restaurant operations are 99% owned by BTND, LLC, and 1% owned by the current restaurant manager.

Restaurant operations closed in December 2018.

Property for sale.

We own the real estate on which all but one of our ten operating restaurants are situated.

We lease the property on which one of our Sioux Falls, South Dakota restaurants is located.

The Sioux Falls location is leased on a month-to-month basis, for which we pay a monthly rent of $1,600 to a third party.

All of our owned properties are subject to mortgages secured by our real and personal property.

On June 27, 2021, we refinanced most of our existing mortgage debt, which bore interest at 4.75%.

As of January 2, 2022, we had $3,027,971 in contractual obligations relating to amounts due under mortgages on the real property on which our stores are situated.

Our monthly required payment is approximately $22,700.

Under the terms of the refinanced mortgage debt, our nominal interest cost is 3.45% fixed for the next ten years.

In addition to being secured by the restaurants and other property at the sites, each mortgage note is also personally guaranteed by Gary Copperud, our Chief Executive Officer.

Our restaurants are in commercial and mixed-use zoning districts near where our target customers work and live positioning the restaurants for lunch and dinner visits.

Burger Time Restaurant Design

Our Burger Time units are free-standing facilities with single or double drive-thru capability and walk-up service windows.

The menu, store layout, and equipment are designed to work together to offer exceptional food with rapid service times.

This integrated design seeks to maximize food output with minimal labor.

Burger Time stores have a visible, distinctive look intended to appeal to customers of all ages.

Historically, Burger Time stores have ranged from 600 to 1000 sq.

Regardless of its size, each restaurant is designed for maximum financial and operational efficiency, with only four employees required to staff a store effectively.

As a result of their small size, our restaurants can be constructed on as little as 15,000 square feet of land.

Our restaurants generally require a smaller capital investment and have lower occupancy and operating costs per restaurant than traditional quick-service competitors.

The size of the facility also permits greater flexibility for selecting prospective sites for restaurants.

Our Burger Time design encompasses a red and white structure and features a single or double drive-thru.

The roof overhangs to protect the drive-thru windows from the weather.

A walk-up service window is situated at the front of each restaurant.

Our design and color scheme are intended to convey a message of “clean and fast” to the passing motorist.

Our restaurants do not provide an interior dining area but offer parking and a patio for outdoor eating.

Each restaurant employs eight to sixteen employees, including a manager and an assistant manager.

Work shifts are staggered and vary in time to ensure superior customer service during our busiest times.

We are focused on customer service, and we seek to staff our stores with friendly and customer-focused personnel.

We have enjoyed a long relationship with many of the managers of our restaurants, several of whom have been with Burger Time for more than seven years.

We will seek to establish similar relationships with the managers who join us in the future.

Our Burger Time brand appeals to a broad spectrum of consumers.

We cater to consumers who appreciate the size and variety of our burgers and the value of our Bigger Burger, combined with the speed and efficiency provided by our single and double drive-thru windows.

Subject to seasonal and local conditions, our restaurants are generally open seven days a week from 10 a.m.

until 9 or 10 p.m., depending on the time of year.

We offer online ordering through our website with curbside delivery.

Burger Time serves the drive-thru and take-out segment of the restaurant industry.

Our operating principles for Burger Time include:

(i) offering a “Bigger Burger” to deliver our customers “more good food for your money”;

(ii) offering a limited menu to permit attention to quality and speed of preparation;

(iii) providing fast service by way of single and double drive-thru designs and a point-of-sale system that expedites the ordering and preparation process;

and (iv) great tasting quality food made fresh to order at a fair price.

Our eight Burger Time restaurants are in Minnesota, North Dakota and South Dakota.

We own the real estate on which all but one of our Burger Time restaurants are situated.

In addition, we lease the property for one of our Sioux Falls, South Dakota locations.

Our Burger Time units are free-standing facilities with single or double “drive-thru’ s” and walk-up service windows.

The menu, store layout and equipment are designed to work together to offer exceptional food with fast service times.

This integrated design allows for maximum food output with minimal labor.

Each restaurant typically employs eight to sixteen employees, including a manager and an assistant manager.

Work shifts are staggered to ensure superior customer service during our busiest times.

We focus on customer service and seek to staff our stores with friendly, customer-focused personnel.

Our managers and assistant managers are full-time employees.

We support our managers by offering competitive wages, including incentive bonuses for performance.

Our experienced managers train new assistant managers in all facets of a restaurant’s operations.

Other personnel are trained in a matter of days.

Our manager training stresses food quality, fast, friendly customer service;

Our manager training stresses food quality;

fast, friendly customer service;

restaurant cleanliness;

and proper quick-service restaurant management operations.

and proper management operations of a quick service restaurant.

We also focus on food safety and sanitation, employment laws and regulations, and systems to control food and labor costs.

All managers and assistant managers are required to obtain food safety (HACCP) training and obtain the Certification applicable to their location.

Our managers and assistant managers are full-time employees.

We support our managers by offering competitive wages, including incentive bonuses tied to unit performance.

Most other staff members are part-time employees.

Our future growth and success depend on our ability to attract, develop and retain qualified restaurant management and hourly staff members, which may be challenging.

Restaurant Reporting

Each restaurant has a computerized point-of-sale system monitored by the restaurant’s management.

With this system, managers can monitor sales, labor, customer counts, and other pertinent information.

This information allows a manager to better control labor utilization, inventories, and operating costs.

Information is reported up to our corporate staff.

It is analyzed to maximize cost efficiencies in food and labor costs, inventories and customer counts weekly, and profit and loss statements and balance sheets monthly.

The general manager of each restaurant reports directly to a Director of Operations, who reports to our Chief Operating Officer, who oversees all aspects of restaurant operations, including kitchen operations, restaurant facility management, new restaurant openings, and the roll-out of key operational initiatives.

Purchasing and Distribution

We purchase most of our food, paper, packaging, and related supplies from Sysco Corporation, the nation’s largest distributor of food products.

All managers and assistant managers must obtain the required food safety (HACCP) certification applicable to their location.

Each restaurant has a point-of-sale system monitored by the management of the restaurant.

These systems allow managers to monitor sales, labor, customer counts and other pertinent information.

The general manager of each restaurant reports directly to a Director of Operations, who in turn reports to our Chief Operating Officer, who oversees all aspects of restaurant operations, including kitchen operations, restaurant facility management, new restaurant openings and the roll-out of key operational initiatives.

All our restaurants prepare detailed monthly operating budgets and compare their actual results to their budgets.

We purchase a majority of our food, paper, packaging and related supplies for our Burger Time restaurants from Sysco Corporation, the nation’s largest distributor of food products.

Sysco distributes these supplies to our restaurants on a frequent and routine basis.

Typically, our inventory of food and supplies usually does not exceed $10,000 at any individual restaurant.

These procedures ensure that our food is consistently fresh and frees cash flow for other purposes.

Our agreement with Sysco expires on May 30, 2022, and will automatically be extended for additional one-year terms unless terminated by either party.

Either party may terminate the agreement with 180 days’ notice or in the event of a material breach that is not cured within 60 days.

In addition, Sysco may terminate the contract if we fail to pay any amounts owed, or if, in Sysco’s sole judgment, either our financial position deteriorates materially, or Sysco becomes aware of circumstances that would materially impact our ability to meet our financial obligations.

We are party to a five-year exclusive beverage service agreement.

We have agreed for Burger Time locations to purchase our beverages, other than coffee, tea, and milk, from PepsiCo, including its affiliated bottlers, through December 21, 2025.

Under this agreement, PepsiCo provides economic incentives for being an exclusive supplier and provides beverage-dispensing equipment free of charge.

Either party may terminate the agreement in the event of a material breach that is not cured within 30 days.

Beef is our most significant product cost item and is expected to remain such for the foreseeable future.

As a result, fluctuations in supply and prices can significantly impact our financial results.

As of April 1, 2023, our Burger Time restaurants employed 81 individuals, including 20 full-time and 61 part-time employees.

Our full-time employees are salaried managers and assistant managers;

the remaining restaurant staff are hourly employees.

Dairy Queen Franchise

In October 2015, we acquired a 99% ownership interest in a Dairy Queen (“DQ”) franchise in Ham Lake, Minnesota.

The franchise’s remaining 1% ownership interest is owned by the General Manager, with specific DQ qualifications and whose ownership is required under the operating agreement with the franchisor.

We are party to a franchise agreement with DQ that, among other things, restricts our menu offerings to the established DQ menu and limits our flexibility.

We are prohibited from selling non-DQ-approved items at this franchise location and may not market this restaurant as a part of Burger Time.

We have no plans to enter into additional franchise agreements with DQ or any other national chain of restaurants.

However, we will consider franchise opportunities if we become aware of an attractive opportunity.

Keegan’s Seafood Grille

On March 2, 2022, we acquired substantially all the assets of Keegan’s Seafood Grille, Inc., an operating restaurant located in Indian Rocks Beach, Florida, for $1,150,000.

Keegan’s Seafood Grille has operated in the same location for over 35 years, serving the Clearwater, Florida market.

We acquired the “Keegan’s Seafood Grille” tradename and website and plan to continue to operate as Keegan’s Seafood Grille.

Keegan’s is a family-friendly casual restaurant located directly across the street from the beach.

The establishment’s award-winning dishes are made in-house using the freshest local ingredients.

Keegan’s motto is “Eat Fresh and Eat Wild.” Keegan’s is well known for daily fish specials, innovative seafood dishes, an extensive kids’ menu, and excellent service.

Keegan’s offers a selection of beer and wine.

The restaurant features indoor and outdoor dining options, is open daily for lunch and dinner, and offers take-out and curbside pickup options.

As of April 15, 2023, Keegan’s employed 41 persons, including 21 full-time and 20 part-time employees.

Our employees include a full-time, salaried manager and a salaried kitchen manager;

the remaining restaurant staff are hourly employees.

Pie In The Sky Coffee and Bakery

On May 11, 2022, we acquired the assets of Pie In The Sky Coffee and Bakery (“PIE”), a coffee restaurant and bakery near the Steamship Authority ferry terminal in Woods Hole, Massachusetts.

We acquired the assets for an aggregate purchase price of $1,150,000.

We acquired the “Pie In The Sky” tradename and the piecoffee.com web address as part of the purchase.

PIE has served the local community and ferry travelers to Martha’s Vineyard for nearly forty years.

PIE serves a variety of breakfast and lunch sandwiches, all prepared on store-baked bread;

handmade pastries, soups and salads are all freshly made.

In addition, we offer patrons freshly roasted coffee beverages, smoothies, and brand merchandise.

The store is open seven days a week, year-round, except Christmas.

As of April 15, 2023, PIE employed 47 persons, including three full-time and 44 part-time employees.

Our full-time employees include three full-time, salaried managers and assistant managers and a varying number of staff, all of whom are hourly employees.

Village Bier Garten

On August 4, 2022, we acquired substantially all of the assets, including tradenames and social media accounts of Von Stephan Village Bier Garten.

We have rebranded the business Village ( “VBG”), a German-themed, family-friendly casual restaurant and bar concept in Cocoa, Florida.

VBG features authentic German food and imported German beers combined with regular entertainment, creating an entertaining atmosphere and delivering a memorable guest experience.

The restaurant offers indoor seating and access to an outdoor shared seating area where patrons eat and enjoy live entertainment most evenings.

As of April 1, 2023, Village Bier Garten employed 31 persons, including six full-time and 25 part-time employees.

Our employees include two salaried managers, two hourly assistant managers, and hourly restaurant staff.

Bagger Dave’s Burger Tavern

In June 2022, we acquired capital stock representing 41.2% ownership of Bagger Dave’s Burger Tavern, Inc., a publicly-traded company that owns and operates six Bagger Dave’s restaurants, a casual restaurant and bar concept.

Bagger Dave’s provides an inviting, entertaining atmosphere specializing in burgers, tavern-style pizzas, hand-cut fries, local craft beers, milkshakes, salads and other items.

Bagger Dave’s opened its first restaurant in Berkley, Michigan, in January 2008 and operates four restaurants in Michigan, one restaurant in Ft.

Wayne, Indiana, and one location in Centerville, Ohio, with 165 full-time employees, including a total of 22 salaried managers and assistants.

Marketing and Advertising

Our marketing efforts for Burger Time are intended to convey the principles that we believe attract our core customers – we provide our patrons with more good food for their money by offering them “a bigger burger,” and we give it to them “hot ‘n fresh.”

To date, our marketing and advertising spend have been principally allocated to social media with limited advertisements in newspapers and radio in the geographic areas in which our restaurants are located.

Our marketing and advertising expenditures have been principally allocated to social media, with limited advertisements in newspapers and radio.

In addition, we have employed product discount coupons, live remote broadcasts, customer contests, and direct mailings.

We also utilize marketing incentives from our suppliers whenever possible.

We recently introduced an online ordering capability and curbside delivery program through our website.

We expect to emphasize direct database marketing supplemented by social media tools to promote our brand and local stores.

Our Burger Time restaurants offer an online ordering capability and curbside delivery program through the BTND website, and we expect to implement online ordering at all of our businesses.

We emphasize direct database marketing supplemented by social media tools to promote our brand and local stores.

Collectively, however, our marketing-related expenditures have historically comprised less than 1% of our net revenues.

We believe our restaurant sales have traditionally, and generally, been derived from drive-by traffic and dedicated return visits from loyal customers.

However, we recognize that as we expand our restaurant base, our marketing and advertising expenditures may need to increase.

We further expect that as we open new restaurants in existing geographic areas, we will be able to take advantage of operating and marketing efficiencies resulting from the “clustering” of our restaurants.

We expect to develop and deploy a more sophisticated marketing campaign, including an expanded social media presence, to build consumer brand awareness of our restaurants.

Dairy Queen Franchise

In October 2015, we acquired a 99% ownership interest in a Dairy Queen franchise in Ham Lake, Minnesota.

The franchise’s remaining 1% ownership interest is held by the General Manager of the location, who possesses specific Dairy Queen qualifications and whose ownership is required under the operating agreement with the franchisor.

Because we are a franchisee, we are party to a franchise agreement with Dairy Queen that, among other things, restricts our menu offerings at this location to the established Dairy Queen menu and limits our flexibility in the operating model we may employ at this location.

Expressly, we are prohibited from selling any non-Dairy Queen-approved items at this franchise location, and we may not market this restaurant as a part of Burger Time.

We have no plans at this time to enter into any other franchise agreements with Dairy Queen or any other national chain of restaurants, as we believe our profitable future can best be realized by acquiring unrelated restaurant businesses.

However, we may consider it if we become aware of an attractive opportunity to assume control of a Dairy Queen or other franchise restaurant.

Burger Time Restaurant Economic Model

Our Burger Time restaurant economic model is based on three principles:

a low capital investment, low conversion and incremental expenses, and lean and disciplined operating efficiencies.

For example, in the case of our Burger Time locations, because we do not offer interior seating, our restaurant footprint is small, generally around 650 square feet, which can be situated on a parcel of real estate as small as 15,000 sq.

(approximately 0.344 acres), which includes sufficient space for parking and outdoor seating.

While some of our newer restaurants have been larger, enabling us to offer some limited in-store seating, our basic model remains the same.

As a result, our real estate costs remain relatively low whether we purchase or lease.

Operationally, we take steps to maintain efficiency, including maintaining inventory of approximately $10,000 per store at any given time (which also has the advantage of allowing for frequent deliveries of fresh food).

Our Burger Time restaurant investment model targets a total cash investment of between $325,000 and $535,000 or an average of $430,000.

Real estate and finance costs vary materially by location but, assuming the average investment figure applies, the amount allocated to purchasing real estate would be approximately $225,000.

Costs to develop a new Burger Time location can fluctuate significantly, based on the number and timing of restaurant openings and the specific expenses incurred for each restaurant.

Generally, restaurant sales are derived from drive-by traffic and dedicated return visits from loyal customers.

However, as we expand our restaurant base, our marketing and advertising expenditures may need to increase.

We expect to develop more sophisticated marketing programs, including an expanded social media presence, to build consumer brand awareness of our restaurants.

Growth Strategy

We are seeking to increase value for our shareholders in the foodservice industry.

Our strategy is to acquire restaurant concepts and individual restaurant properties at attractive earnings multiples.

Though we do not currently plan to do so, we may develop additional Burger Time locations under certain circumstances by acquiring and converting existing properties.

We are seeking to increase value for our shareholders in the food service industry.

Our strategy is acquiring restaurant concepts and individual properties at attractive earnings multiples.

Other key elements of our growth strategy encompass increasing same-store sales and introducing a campaign to boost brand awareness.

As we develop and extend our business into new food concepts and geographic areas, we expect to pursue strategies that will leverage our multiple brands, capacity, and reach, which may include:

introducing dual concept locations that allow for two or more of our brands to operate in a single space and share a single kitchen and staff, to enhance our return on investment;

advancing aggressive third-party national branded and local delivery services;

entering into local and regional product licensing agreements that allow for the sale in third-party retail establishments of popular products that we offer at our restaurants;

employing extensive use of direct database marketing, including social media, to drive business to all concepts under our control.

As a public company, we may be presented with and would evaluate any opportunities to become a reverse merger candidate in the restaurant industry, whereby a significantly larger private restaurant chain seeks to avail itself of our public company status by merging with our business.

Expansion Through Acquisitions

We intend to make strategic and opportunistic acquisitions that provide an entrance into targeted restaurant segments and geographic areas.

Restaurant businesses become available for acquisition frequently.

We believe that we may purchase either individual restaurant properties or multi-unit businesses at prices that provide an attractive return on our investment.

We may acquire operating assets where a franchise program is the focus of the acquired foodservice business.

We intend to follow a disciplined strategy of evaluating acquisition opportunities to ensure and enable the accretive and efficient acquisition and integration of additional restaurant concepts.

Successful execution of our acquisition strategy will allow us to diversify our operations both into other dining concepts and geographic locations.

In evaluating potential acquisitions, we may consider the following characteristics, among others that management considers relevant to each opportunity:

the value proposition offered by acquisition targets when comparing the purchase price to the potential return on our investment;

established, recognized brands within their geographic footprint;

steady cash flow;

track records of long-term operating performance;

creating dual concept locations allowing for two or more of our brands to operate in a single space with a shared kitchen;

offering third-party (e.g., Uber Eats) and local delivery services;

entering into licensing agreements allowing the third-party sale of our products;

employing direct database marketing, including social media, to drive business.

As a public company, we may be presented with and would evaluate any other opportunities that may become available, including, for example, a reverse merger candidate in the restaurant industry, whereby a significantly larger private restaurant chain seeking to avail itself of our public company status by merging with our business.

Growth Through Acquisitions

We intend to continue to make acquisitions that provide an entrance into targeted restaurant segments and geographic areas.

Restaurant businesses frequently become available for acquisition.

We may purchase either individual restaurant properties or multi-unit businesses at prices projected to provide attractive returns on our investment.

In addition, we may acquire operating assets where a franchise program is the focus of the acquired food service business.

We intend to follow a disciplined strategy of evaluating acquisition opportunities to ensure the accretive and efficient integration of additional restaurant concepts.

Successful execution of our strategy will allow us to diversify our operations both into other dining concepts and geographic locations.

In evaluating potential acquisitions, we may consider the following characteristics, among others relevant to each opportunity:

the value proposition when comparing the purchase price to the potential return on our investment;

established, recognized brands within a geographic footprint;

a historical record of consistent and growing cash flow;

record of operating performance;

sustainable operating results;

1 unchanged sentence

growth potential.

Assuming we successfully acquire new businesses, we will operate the business or businesses with a shared central management organization.

When we acquire new businesses, we will operate the business or businesses with a shared central management organization.

Following the acquisition, we expect to pursue a growth plan to expand the number of locations and increase comparable store sales and profits, as described below.

We anticipate that by leveraging our management services platform, we will be able to achieve post-acquisition cost benefits by reducing the corporate overhead of the acquired business.

If we acquire one or more restaurant chains or individual units near each other, we believe the concentration of operations will provide economic synergies with respect to management functions, marketing, and advertising, supply chain assistance, staff training, and operational oversight.

Future Development of Additional Burger Time Restaurants

We may, in certain circumstances, consider developing an additional Burger Time location.

Conditions which might give rise to developing additional Burger Time locations include the opportunity to acquire and convert a property that previously had operated as a fast-food establishment at a highly attractive price in a location that fits naturally within Burger Time’s geographic footprint so that we may share service expenses, including advertising costs.

If we elect to open additional Burger Time restaurants, we expect that the development of these restaurants will, based on our experience, require a minimum of six to nine months after opening to achieve the targeted restaurant-level sales and operating margins.

If we were to open a Burger Time restaurant in new and untested markets, achieving targeted sales may take longer since the local population will not be familiar with our brand and building brand awareness takes time.

How quickly new restaurants achieve their targeted sales and operating margin depends on many factors, including the level of consumer familiarity with our brand, as well as the availability of experienced managers and other staff.

However, every restaurant has a unique opening sales pattern, which is difficult to predict.

Increase Same-Store Sales

By leveraging our management services platform, we will achieve post-acquisition cost benefits by reducing the corporate overhead of the acquired business.

If we acquire restaurant chains or individual units close to each other, concentration could provide economic synergies with respect to management functions, marketing, advertising, supply chain assistance, staff training, and operational oversight.

Increase Sales

Same-store sales growth reflects the change in year-over-year sales for the comparable store base.

We intend to deploy a multi-faceted same-store sales growth strategy to optimize restaurant performance.

We will apply techniques proven in the restaurant industry to increase same-store sales at our Burger Time restaurants and our acquired properties and develop new approaches that reflect our corporate character and restaurant composition.

We intend to deploy a multi-faceted sales growth strategy to optimize restaurant performance.

We will apply techniques proven in the restaurant industry to increase same-store sales at all our restaurants.

We also may develop new approaches that reflect our corporate character and restaurant composition.

We expect to utilize customer feedback and analyze sales data to introduce, test, and hone existing and new menu items.

In addition, we will investigate using public relations and experiential marketing to engage customers.

We expect our strategies to increase same-store sales will evolve as we acquire new restaurant concepts in new markets.

Our strategies to increase same-store sales will evolve as we acquire new restaurant concepts in new markets.

Increase Brand Awareness

Increasing brand awareness is important to the growth of our Company.

We will develop and implement forward-looking branding strategies for our Burger Time concept and any acquired businesses.

Increasing brand awareness is essential to the growth of our Company.

We intend to develop and implement forward-looking branding strategies for our businesses.

We will seek to leverage social media and employ targeted digital advertising to expand the reach of our brands and drive traffic to our stores.

In addition, we intend to develop mobile applications that will allow consumers to find restaurants, order online and receive special offers.

We will deploy cross-over ads with radio and social media interacting with each other.

We expect our branding initiatives to evolve as we consummate acquisitions of restaurant concepts that appeal to distinct consumer markets in differing geographic areas.

We expect our branding initiatives to evolve as we complete acquisitions.

Trademarks and Service Marks

We have registered “It’s Burger Time” and “Hot ‘n Now” with the United States Patent and Trademark Office.

Our trademarks and service marks are valuable to us and essential to our marketing efforts.

We may develop additional trademarks in the future.

Our policy is to pursue registration of our marks whenever possible and to oppose vigorously any infringement of its marks.

The restaurant industry is highly competitive and is dominated by significant chains that possess substantially greater financial and other resources than we have.

The industry is affected by geographic competition changes;

the public’s eating habits and preferences, local and national economic conditions that impact consumer spending, population trends, and local traffic patterns.

The industry’s critical elements of competition are the price, quality, and value of food products offered;

quality and speed of service;

advertising effectiveness;

brand name awareness;

restaurant convenience;

and attractiveness of facilities.

We compete primarily based on the value of food (portion size), price, food quality, and speed of service.

A significant change in pricing or other marketing strategies by one or more of our competitors could adversely impact our sales, earnings, and growth.

Our competition includes a variety of national and regional fast-food chains and locally-owned restaurants that offer carry-out, dine-in, delivery, and catering services, many of which have achieved significant brand and product recognition and engage in extensive advertising and promotional programs.

Our competition in the geographic areas in which we operate includes McDonald’s, Burger King, Carl’s Jr., and Wendy’s.

We operate under several tradenames and have acquired a variety of trade and service marks.

We have registered “It’s Burger Time” with the United States Patent and Trademark Office.

Our trademarks and service marks, whether or not formally registered, are valuable to us and important to our marketing efforts.

We may develop additional marks in the future.

Our policy is to pursue registration of our marks when appropriate and to vigorously oppose infringement .

We own restaurants in the quick service, fast casual, and casual dining categories of the restaurant industry.

The competitive environment in each category is intense in terms of price, service, location, and food quality.

We face significant competition from a wide variety of restaurants on a national, regional, and local level.

Dining choices continue to expand with the increasing popularity of food delivery services.

The restaurant industry is often affected by changes in consumer tastes, dietary trends, local and national economic conditions, demographics, traffic patterns, consumer spending, population trends, and local traffic patterns.

The restaurant industry has few barriers to entry, and new competitors may emerge at any time.

Seasonal factors and the timing of holidays cause our revenue to fluctuate from quarter to quarter.

Our revenue per Burger Time is typically slightly lower in the first and fourth quarters due to the impact of cold weather at our upper Midwest locations.

Adverse weather conditions may also affect customer traffic, especially in the first and fourth quarters, when customers do not use our outdoor seating areas, which impacts the use of these areas and may adversely affect our revenue.

Future acquisitions may have a different seasonal pattern than our Burger Time restaurants.

As of January 2, 2022, the Company had three members of its senior corporate personnel.

Each of the Burger Time restaurants and the Dairy Queen franchise has a manager, a full-time, salaried employee, an assistant manager or supervisor, and a varying number of restaurant staff, all of whom are hourly employees.

As of January 2, 2022, we had approximately 107 employees, of which 17 were full-time, and 90 were part-time.

Our BTND revenue is typically lower in the first and fourth quarters because of winter weather.

PIE is highly seasonal, with a significant portion of its business occurring during summer.

Our Florida locations achieve peak revenue during the winter travel season.

Regulation and Compliance

Our operations are subject to a wide range of federal, state, and local government regulations, including those relating to, among others, public health and safety, zoning and fire codes, labor, and franchising.

Our failure to obtain or retain food or other licenses and registrations or exemptions would adversely affect the operations of our restaurants.

We operate each of our restaurants with standards and procedures designed to comply with applicable laws, codes, and regulations.

To date, we have not experienced and do not anticipate any problems in obtaining required licenses, permits, or approvals;

however, any difficulties, delays, or failures in obtaining such licenses, permits, registrations, exemptions, or permissions in the future could delay or prevent the opening of a location and adversely impact the viability of a restaurant.

The development and construction of any new restaurants will be subject to compliance with applicable zoning, land use, and environmental regulations.

We believe federal and state environmental regulations have not had a material effect on operations, but more stringent and varied requirements of local government bodies concerning zoning, land use, and environmental factors could delay construction and increase development costs for new restaurants.

We are also subject to the Fair Labor Standards Act, the Immigration Reform and Control Act of 1986, and various federal and state laws governing such matters as minimum wages, overtime, unemployment tax rates, workers’ compensation rates, citizenship requirements, and other working conditions.

Most of our hourly staff, except for Bagger Dave’s Michigan tip-compensated employees, are paid above the applicable federal or state minimum wage.

Accordingly, increases in the minimum wage likely will not have a significant impact on labor costs.

We also may be subject to various laws and regulations related to any future franchise operations.

We are also subject to the Americans with Disabilities Act, which prohibits discrimination based on disability in public accommodations and employment.

States, counties, and cities have enacted menu labeling laws requiring restaurant operators to disclose certain nutritional information to consumers or have enacted legislation restricting the use of certain ingredients in restaurants.

Many of these requirements are inconsistent or interpreted differently from one jurisdiction to another.

These requirements may be different or inconsistent with requirements that we are subject to under the Patient Protection and Affordable Care Act of 2010, (“ACA”), as amended, which establishes federal requirements applicable to chain restaurants with 20 or more locations to post nutritional information on their menus.

In addition, the ACA mandates that restaurant businesses with more than 50 full-time employees offer health benefits to full-time employees and their dependents or face possible penalties.

The ACA imposes significant reporting requirements on restaurant businesses including certifying whether they offer minimum essential coverage to full-time employees.

The failure to comply with ACA is significant and new regulations increasing coverage requirements and costs could have a material adverse effect on our business.

We are not engaged in the business as a “franchisor.” We operate a Dairy Queen unit as a “franchisee” of Dairy Queen.

Franchise operations are governed by state laws that regulate the offer and sale of franchises and the franchisor-franchisee relationship.

Such laws generally require registration of the franchise offering with state authorities and regulate the franchise relationship by, for example, requiring the franchisor to deal with its franchisees in good faith, prohibiting interference with the right of free association among franchisees, limiting the imposition of standards of performance on a franchisee and regulating discrimination against franchisees in charges, royalties or fees.

In addition, such laws may restrict a franchisor in the termination of a franchise agreement by, for example, requiring “good cause” to exist as a basis for the termination, advance notice to the franchisee of the termination, an opportunity to cure a default and a repurchase of inventory or other compensation.

Environmental Matters

We are subject to extensive federal, state, and local laws and regulations relating to environmental protection, including regulation of discharges into the air and water, storage and disposal of waste, and clean-up of contaminated soil and groundwater.

Under various federal, state, and local laws, an owner or operator of real estate may be liable for the costs of removal or remediation of hazardous or toxic substances on, in, or emanating from such property.

Such liability may be imposed without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances.

We have not conducted a comprehensive environmental review of our properties or operations.

As a result, no assurance can be given that we have identified potential environmental liabilities at our properties or that such liabilities will not have a material adverse effect on our financial condition.

As of April 15, 2023, our corporate office had three employees.

In addition, each of our restaurants has a General Manager, an assistant manager or supervisor, and a varying number of restaurant staff, all hourly employees.

Including wholly owned subsidiaries of the Company, as of April 15, 2023, we had approximately 220 employees, including 51 full-time and 168 part-time employees.

None of our employees are unionized or covered by collective bargaining agreements, and we consider our current employee relations to be good.

Marketable Securities

We have, from time to time, purchased publicly-traded marketable securities.

From time to time, we purchase publicly traded marketable securities.

Historically, these securities consisted of investments in exchange-listed common stocks with published prices per share readily available.

Risk Factors.

As a smaller reporting company, as defined by Rule 12b-2 of the Securities Act of 1934, as amended, (the “Exchange Act”) and Item 10(f)(1) of Regulation S-K, the Company has elected to comply with certain scaled disclosure reporting obligations and is not required to provide the information required by this item.

Unresolved Staff Comments.

Our investments include our net investment of $1,065,187 in Bagger Dave’s as determined under the “Equity Method” of accounting.

Our $304,000 total investment in Next Gen Ice, Inc.

(“NGI”) includes equity in the form of 179,000 common shares received in 2020 ownership as consideration for extending the maturity of a note receivable that was repaid in August 2020.

Under terms of the Note modification, we received 179,000 shares of common stock in NGI from the founders of NGI.

We also received warrants expiring March 31, 2029, to purchase 358,000 shares of common stock for $1.00 per share.

We attributed $75,000 to the value of the equity received.

This amount was reflected as interest income in 2020.

The 2020 fair value continues to be reflected as the value of this investment.

On February 12, 2022, we invested $229,000 in 138,788 shares of NGI Series A1 8% Cumulative Convertible Preferred Stock, convertible share for share into NGI common shares.

This investment is reflected at the cost of $229,000.

The preferred investment included a five-year warrant to purchase 34,697 shares at $1.65 per share.

Our CEO, Gary Copperud, is Chairman of the board of directors of NGI.

Our Chief Operating Officer, Kenneth Brimmer, is also a member of the board of directors of NGI and serves as its Chief Financial Officer.

The investment in NGI does not have a readily determinable market value, and it is carried at the historic cost determined by BT Brands.

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 1. Business