What changed in this filing

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Item 1. Business

2024-04-01 compared with 2023-04-18 · 86 added, 73 removed, 163 unchanged (49% of the section changed)

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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”);

As of March 1, 2024, including our partially-owned Bagger Dave’s business, we operated seventeen restaurants comprising the following:

Seven Burger Time fast-food restaurants and one Dairy Queen franchise located in the North Central region of the United States, collectively (“BTND”), a Sioux Falls, South Dakota location was closed in February 2024;

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

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

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

Our Dairy Queen store is operated under a franchise agreement with International Dairy Queen.

We pay royalty and advertising payments to the franchisor as required by the franchise agreement.

Effective October 17, 2023, we agreed with International Dairy Queen to sell the business, which has a current book value at December 31, 2023 of approximately $438,500, including remaining goodwill, to an approved buyer.

Under the terms of the agreement with International Dairy Queen, we will continue to operate the location during the six-month period we plan to sell the business.

However, we may retain ownership of the physical assets, including the land and building.

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.

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

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

In fiscal 2023, we continued to evaluate business opportunities, having deployed a portion of our November 2021 public offering in 2022, acquiring three operating restaurant properties.

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

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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.

The net proceeds from the IPO 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.

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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.

Our burger patties are produced 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.

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

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

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

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

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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.

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

We own the real estate on which our Burger Time restaurants are situated.

In 2023, we leased the property for a Sioux Falls, South Dakota location, which we closed in February 2024.

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

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

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

Our manager training stresses food quality;

fast, friendly customer service;

restaurant cleanliness;

and proper management operations of a quick service restaurant.

Our manager training stresses food quality, fast, friendly customer service, restaurant cleanliness, 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 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.

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

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.

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 restaurant facility management, new restaurant openings and the roll-out of key operational initiatives.

Our restaurants are managed using weekly operating budgets, comparing their actual results to planned results.

We purchase most 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.

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

As of March 1, 2024, our Burger Time restaurants employed 86 individuals, including 24 full-time and 62 part-time employees.

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

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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.

Our Dairy Queen store is operated under a franchise agreement with International Dairy Queen (“IDQ”).

We pay royalty and advertising payments to the franchisor as required by the franchise agreement.

Effective October 17, 2023, we agreed with IDQ to sell and exit the business, which has a book value at December 31, 2023, of approximately $438,500.

The agreement with IDQ requires a sale of the business to a buyer approved by the franchisor.

As further agreed, we continue to operate the location while seeking a buyer for the business.

We currently have no plans to enter into additional franchise agreements.

However, we will consider franchise opportunities should 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.

On March 2, 2022, we acquired substantially all the assets of Keegan’s Seafood Grille, Inc.

(“Keegan’s”), 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.

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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.

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

Keegan’s also 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.

As of March 1, 2024, Keegan’s employed 36 persons, including 12 full-time and 24 part-time employees.

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

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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.

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

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

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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.

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

pastries, soups and salads are all freshly made on-site.

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.

As of March 1, 2024, PIE employed 34 persons, including eight full-time and 32 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.

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

We have rebranded the business as 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.

As of March 1, 2024, VBG employed 29 persons, including seven full-time and 22 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.

In June 2022, we acquired common stock of Bagger Dave’s Burger Tavern, Inc.

(“BDVB”), initially representing 41.2% ownership.

In 2024, it was reduced to 39.6% as a result of a sale of newly issued shares by BDVB.

BDVB is a publicly traded company that owns and operates six Bagger Dave’s restaurants.

Bagger Dave’s is a casual restaurant and bar concept providing an inviting, entertaining atmosphere specializing in burgers, tavern-style pizzas, hand-cut fries, local craft beers, milkshakes, salads, and other items.

BDVB opened its first location in Berkley, Michigan, in January 2008 and currently operates four restaurants in Michigan, one in Ft.

Wayne, Indiana, and one in Centerville, Ohio.

BDVB has 152 employees, 22 salaried managers and 40 full-time and 130 part-time employees.

Marketing and Advertising

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

Our marketing and advertising expenditures are 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.

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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.

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

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

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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.

Our strategy is to acquire 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:

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

creating dual concept locations, allowing for two or more of our brands to share physical assets;

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

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

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

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.

As a public company, we may be presented with other opportunities, including, for example, a reverse merger candidate in the restaurant industry, whereby a significantly larger private restaurant chain avails itself of our public company status by merging with our business.

We will evaluate these opportunities if and when they are presented.

Growth Through Acquisitions

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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.

We may purchase either individual restaurant properties or multi-unit businesses at prices expected 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:

We intend to evaluate acquisition opportunities to ensure the accretive and efficient integration of additional restaurant concepts.

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

In evaluating opportunities, we 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;

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sustainable operating results;

geographic diversification;

geographic diversification, and

growth potential.

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.

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.

We operate acquired businesses with a shared central management organization.

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

By leveraging our management services platform, we expect to achieve post-acquisition cost benefits by reducing the acquired business's corporate overhead.

If we acquire restaurant chains or individual units near 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 sales growth strategy to optimize restaurant performance.

One of the metrics we use to measure an increase in sales is same-store sales growth, which reflects the change in year-over-year sales for the comparable store base.

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

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Trademarks and Service Marks

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

We operate under several trade names 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.

Our trademarks and service marks, whether or not formally registered, are valuable to us and essential 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.

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

We own restaurants in the industry's quick service, fast casual, and casual dining categories.

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

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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 is affected by, among other things, 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.

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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.

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

Regulation and Compliance

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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.

We operate each restaurant with standards and procedures that 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;

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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.

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.

Most of our hourly staff, except for BDVB’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.

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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.

Many of these requirements are inconsistent or interpreted differently from one area 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.

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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.

We are subject to extensive federal, state, and local laws and regulations relating to environmental protection, including regulating discharges into the air and water, storing and disposing of waste, and cleaning 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.

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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.

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

As of March 1, 2024, 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.

Including wholly owned subsidiaries of the Company, as of March 1, 2024, we had approximately 188 employees, including 54 full-time and 134 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.

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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.

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

Our investments include our net investment of $729,325 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.

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

Under terms of the Note modification, we obtained 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.

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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.

The investment in NGI does not have a readily determinable market value, and it is carried at the historic cost determined by BT Brands which the Company believes is reasonable relative to recent sales of stock by NGI.

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