What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-03-31 compared with 2024-04-01 · 63 added, 72 removed, 323 unchanged (29% of the section changed)

1 unchanged sentence

Risks Related to a Health Emergency

Future health emergencies may adversely impact our business.

The recent pandemic and government responses significantly impacted the economy.

Although our business did not experience significant adverse effects from the initial spread of COVID, its variants or another virus could negatively affect our business.

Possible outcomes include declines in customer traffic at our restaurants, our inability to staff our restaurants fully and, in more severe cases, may cause a temporary closure, our inability to obtain supplies, and increased commodity costs, possibly for prolonged periods of time.

Most of our restaurants remained operational during the height of the COVID-19 epidemic.

The extent to which health emergencies may impact our business, markets, supply chain, customers and workforce will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of a health emergency and the actions to contain it or to otherwise limit its impact, a rapidly spreading virus could contribute to the perceived health risk and may affect our business.

If any or all of the foregoing events were to occur, our business, liquidity, financial condition, and results of operations could be materially adversely impacted.

Health emergencies may adversely impact our business.

Government responses to health emergencies have significantly impacted the economy.

Although our business did not experience significant adverse effects during the peak of COVID-19, its variants or another virus could negatively affect our business.

Possible outcomes include declines in customer traffic at our restaurants, our inability to staff our restaurants fully, and, in more severe cases, a temporary restaurant closure, difficulty in our ability to obtain supplies, and increased commodity costs, possibly for prolonged periods of time.

The impact of health emergencies on our business, markets, supply chain, customers, and workforce is contingent upon unpredictable future developments, which may significantly influence our business operations, liquidity, financial condition, and overall performance.

Risks Related to Our Growth Strategy

Acquiring or opening new restaurants is subject to risks and challenges.

We will face challenges as we acquire or open new restaurants;

We expect to face challenges if we acquire or open new restaurants;

many of these challenges pose risks that are beyond our control, including, but not limited to, our ability to acquire locations at a favorable cost, the expense and other factors involved in remodeling or updating locations, hiring managerial personnel and our lack of familiarity with local regulations.

Any one of these challenges, as well as others we may have yet to identify, could result in significant unanticipated costs being incurred by us.

If we cannot open new restaurants, or if restaurant openings are significantly delayed or costlier than we anticipate, our revenue growth and earnings could be adversely impacted, and our business negatively affected.

Any of these challenges, as well as others we may have yet to identify, could result in significant unanticipated costs being incurred.

As discussed throughout this Annual Report, difficulties of integration include coordinating and consolidating geographically separated systems and facilities, integrating the management and personnel of the acquired brands, maintaining employee morale and retaining key employees, implementing our management information systems and financial accounting and reporting systems, establishing and maintaining effective internal control over financial reporting, and implementing operational procedures and disciplines to control costs and increase profitability.

10 unchanged sentences

availability of acceptable acquisition or lease terms and arrangements.

Acquisition of existing restaurants is risky and could negatively impact our financial results.

We expect to continue expanding our business by acquiring existing restaurant businesses.

Any such business may be in geographic regions in which we have not operated and may offer food concepts significantly different from our existing business.

The acquisition of existing restaurants is risky and could negatively impact our financial results.

We are evaluating our strategy of expanding our business by acquiring existing restaurant businesses.

In the event we make restaurant acquisitions in the future, any such business may be in geographic regions in which we have not operated and may offer food concepts significantly different from our existing business.

Our strategy to pursue expansion through the acquisition of existing restaurant businesses is subject to risks and uncertainties, including all the risks of our current operations as outlined in this Annual Report and other factors, including:

the investigation of the business of the target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs, and if we decide not to or cannot complete a specific acquisition, the costs incurred likely would not be recoverable;

investigating a potential acquisition, including negotiating and drafting agreements and documents, requires substantial management time and costs.

If we do not complete a target acquisition, the costs incurred likely would not be recoverable;

a target business may be a privately held company with very information available;

17 unchanged sentences

Any acquisition that we pursue, whether completed or not, involves risks, including:

material adverse effects on our operating results, particularly in the fiscal quarters immediately following the acquisition, as the acquired restaurants are integrated into our operations;

material adverse effects on our operating results, particularly in the quarters immediately following the acquisition, as the acquired restaurants are integrated into our operations;

potential impairment of tangible and intangible assets and goodwill acquired in the acquisition;

6 unchanged sentences

Though we expect to retain key personnel of any existing restaurant group to assist with managing the restaurants, we may not be able to retain such personnel for any meaningful period.

Moreover, even if we retain management from the acquired business, our executive officers may not manage the new restaurants profitably for numerous reasons, including our inability to predict the consumer preferences and trends that drive the success of these types of restaurants.

Moreover, even if we retain management from the acquired business, our executive officers may not manage the new restaurants profitably for numerous reasons, including our inability to predict consumer preferences and trends that drive the success of these types of restaurants.

Any failure to effectively manage the restaurants comprising an acquired restaurant group could, among other negative effects, adversely impact our operations and deplete our capital resources, affecting our financial condition and the market price for our common stock.

13 unchanged sentences

Our growth strategy may divert management’s attention from operating our existing restaurants.

As we execute our growth strategy, management will be focused on the numerous complex and time-consuming activities required to acquire or open new restaurants and to integrate and operate an existing restaurant group.

As we grow, management will be focused on the numerous complex and time-consuming activities required to acquire or open new restaurants and to integrate and operate an existing restaurant group.

These activities may divert management’s attention from our existing restaurants, and our existing restaurants may suffer.

The time management allocated to implementing our growth strategies may interfere with its ability to manage our existing restaurants, which could negatively impact our revenues at existing restaurants and harm our business, financial condition, and results of operations.

We may enter into additional long-term, non-cancelable leases.

In connection with the restaurants we acquired over the last two years, we have entered into long-term, non-cancelable leases for the space in which such restaurants operate.

Implementing our growth strategies may reduce the time available to manage our current restaurants, potentially harming our revenue, business, financial condition, and operations.

We may enter into additional long-term, non-cancellable leases.

In connection with acquired restaurants, we have entered into long-term, non-cancelable leases for the space in which such restaurants operate.

Further, future acquisitions may be subject to long-term, non-cancelable leases.

Under non-cancelable leases, we may be required to pay all or a portion of the real estate taxes, insurance, common area maintenance charges, and other operating costs associated with the property.

In addition, non-cancelable leases may provide for contingent rental payments based on sales thresholds.

In addition, non-cancelable leases may provide contingent rental payments based on sales thresholds.

If acquired restaurants are subject to long-term non-cancelable leases or we enter into such leases when we acquire a restaurant and such restaurants are not profitable, and we decide to close one or more of them, we may nonetheless be committed to perform our obligations under the applicable leases including, among other things, paying the base rent and other expenses that we agreed to pay for the balance of the lease term.

7 unchanged sentences

hire, train, motivate, manage, and retain our employees.

We may not be able to install adequate management information and control systems efficiently and timely.

We may be unable to install adequate management information and control systems efficiently and timely.

Our current or planned personnel, systems, procedures, and controls may need to be revised to support our future operations.

7 unchanged sentences

In addition, many of our competitors have greater name recognition nationally.

Failure to successfully compete with the restaurants in our markets could result in declining customer traffic and may prevent us from increasing or sustaining our revenues and profitability.

The failure to successfully compete with the restaurants in our markets could result in declining customer traffic and may prevent us from increasing or sustaining our revenues and profitability.

Success in the restaurant industry is based on various factors, including changes in consumer tastes, nutritional and dietary trends, consumer spending, traffic patterns, and the type, number, and location of competing restaurants often affect the restaurant.

7 unchanged sentences

We seek to increase menu prices to help offset costs, including the increased cost for commodities, minimum wages, employee benefits, insurance arrangements, construction, utilities, and other essential operating costs resulting from general inflation.

If consumers do not accept our selection and amount of menu price increases and reduce guest traffic or are insufficient to counter increased costs, our financial results could be negatively affected.

Our Dairy Queen franchise business must comply with the Dairy Queen franchise agreement.

We own a Dairy Queen (“DQ”) franchise in Ham Lake, Minnesota.

We are contractually bound to abide by the franchise agreement with DQ, including certain financial obligations, monthly royalty payments, and marketing fees comprising a significant percentage of our DQ gross sales.

Failure to abide by the terms of the franchise agreement or take actions prohibited by the franchise agreement could result in the franchisor terminating the franchise agreement.

If this franchise were terminated, our operating results could be adversely affected.

If consumers do not accept menu price increases, resulting in reduced guest traffic, our financial results would be negatively affected.

Public attitudes regarding diet and health could result in new regulations influencing consumers.

Changes in attitudes regarding diet and health or new information regarding the adverse health effects of consuming certain foods could result in changes in government regulation and shifts in consumer eating habits that may impact our business, financial condition, or results of operations.

These changes have resulted in and may continue to result in, laws and regulations requiring us to disclose the nutritional content of our food offerings.

Changes in diet attitudes, health information, or government regulations could affect consumer habits and impact our business, finances, and operations.

While currently exempt from requirements, changes in laws and regulations may require us to disclose the nutritional content of our food offerings.

We may be unable to effectively respond to changes in consumer health perceptions, successfully implement the nutrient content disclosure requirements, and adapt our menu offerings to eating habits.

1 unchanged sentence

Unfavorable publicity could reduce sales at our restaurants.

We may face negative publicity, including comments on social media, relating to aspects of our business, including, among others, food quality, public health concerns, restaurant facilities, customer complaints or litigation alleging illness or injury, health inspection scores, the integrity of our suppliers’ food processing and other policies, practices and procedures, employee relationships or other matters at one or more of our restaurants.

Negative publicity generated against our restaurants may adversely affect us, regardless of whether the allegations are valid or if we are held responsible.

We may face negative publicity, including comments on social media relating to aspects of our business.

Public comments may address, among others, food quality, public health concerns, restaurant facilities, customer complaints or litigation alleging illness or injury, health inspection scores, the integrity of our suppliers’ food processing and other policies, practices and procedures, employee relationships or other matters at one or more of our restaurants.

Negative publicity regarding our restaurants may adversely affect us, regardless of whether the comments are valid.

In addition, the negative impact of adverse publicity relating to one restaurant may extend beyond the restaurant involved to affect our other restaurants.

A similar risk exists concerning food service businesses that are unrelated to us if customers mistakenly associate such businesses with our operations.

Employee claims against us based on, among other things, wage and hour violations, discrimination, harassment, or wrongful termination may also create not only legal and financial liability but negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be exerted in favor of our operations.

Employee claims against us based on, among other things, wage and hour violations, discrimination, harassment, or wrongful termination may also create not only legal and financial liability but also negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be exerted in favor of our operations.

These risks are amplified because of the prevalence of social media.

1 unchanged sentence

Food safety concerns could harm our business by reducing demand and increasing costs.

The occurrence or reports of food-borne illnesses and food safety issues have occurred in the food industry in the past and could occur in the future.

The occurrence or reports of food-borne illnesses and food safety issues have occurred in the food industry and could occur in the future.

Any report or publicity linking us to food-borne illness or other food safety issues, including food tampering or contamination, could adversely affect our brand, reputation, revenues, and profits.

9 unchanged sentences

Other events could increase commodity prices or cause shortages that could affect the cost and quality of the items we buy or require us to raise prices or limit our menu options.

These events and other general economic and demographic conditions could impact our pricing and negatively affect our sales and restaurant-level profit margins.

These events and general economic and demographic conditions may impact our pricing and adversely affect our sales and restaurant-level profit margins.

We do not enter into forward pricing arrangements with our suppliers, making us more susceptible to changes in commodity prices.

1 unchanged sentence

Our profitability is also affected by insurance, labor, marketing, taxes, and real estate costs, which could increase due to inflation, changes in laws, competition, or other events beyond our control.

Our ability to respond and react to such increases and other more general economic and demographic conditions will depend on various factors, including the responses of our competitors and customers.

Our ability to respond to and react to such increases and other more general economic and demographic conditions will depend on various factors, including the responses of our competitors and customers.

Competition and other factors may constrain our ability to respond to increasing costs by raising menu prices.

5 unchanged sentences

We rely on certain suppliers and distributors for all our supplies.

In fiscal 2023, we purchased approximately 60% of our food, paper, packaging and related supplies from Sysco Corporation, the nation’s largest distributor of food products.

In addition, we purchase our beverages, other than coffee, tea, or milk, from PepsiCo and its affiliated bottlers for Burger Time.

During 2024, we purchased approximately 30% of our food, paper, packaging, and related supplies from Sysco Corporation, the nation’s largest distributor of food products.

In July 2024, we entered into a new primary supplier relationship for BTND with Performance Food Service, a Sysco competitor.

We continue to utilize Sysco in certain locations, including PIE.

In addition, for BTND, we purchase beverages other than coffee, tea, or milk from PepsiCo and its affiliated bottlers.

These entities are also responsible for delivering these products to us.

Our reliance on these vendors exclusively to provide us with our entire inventory at reasonable prices presents certain risks.

Our reliance on these vendors exclusively provides us with our entire inventory at reasonable prices, presenting certain risks.

We do not control the businesses of our vendors, and our efforts to specify and monitor the standards under which they perform may not be successful.

41 unchanged sentences

Failure to effectively manage social media could adversely impact our business.

In recent years, there has been a marked increase in the use of social media platforms, including blogs, chat platforms, social media websites, and other forms of Internet-based communications, which allow individuals access to a broad audience of consumers and other interested persons.

The use of social media platforms has increased significantly.

This includes blogs, chat platforms, social media websites, and other Internet-based communications, enabling individuals to reach a broad audience of consumers.

The rising popularity of social media and other consumer-oriented technologies has increased the speed and accessibility of information dissemination.

6 unchanged sentences

Other risks associated with the use of social media include improper disclosure of proprietary information, negative comments about our brands, exposure of personally identifiable information, fraud, hoaxes, or malicious dissemination of false information.

The inappropriate use of social media by our customers or employees could increase our costs, lead to litigation, or result in negative publicity that could damage our reputation and adversely affect our business.

Our customers’ or employees’ inappropriate use of social media could increase our costs, lead to litigation, or result in negative publicity that could damage our reputation and adversely affect our business.

Legal and Regulatory Risks

1 unchanged sentence

Government regulation and changes in consumer eating habits resulting from shifting attitudes regarding diet and health or the latest information regarding changes in the health effects of consuming our menu offerings may impact our business.

In general, because of our size, we have been exempted from regulations related to the disclosure of nutritional information.

However, as we grow our business, it is highly likely that parts of our business will be required to comply with state and local regulations relating to the disclosure of ingredients and nutritional information.

We expect the trend toward enacting laws and regulations affecting disclosure of our menu offerings' ingredients and nutritional content will continue.

In general, because of our size, we have been exempted from regulations related to disclosing nutritional information.

However, as we grow, parts of our business will likely be required to comply with state and local regulations relating to the disclosure of ingredients and nutritional information.

We anticipate that laws and regulations requiring disclosure of our menu’s ingredients and nutritional content will continue to increase.

We cannot guarantee our ability to effectively respond to changes in consumer health perceptions, successfully implement the nutrient content disclosure requirements, or adapt our menu offerings.

1 unchanged sentence

New information or attitudes regarding diet and health could result in changes in regulations and consumer eating habits that could adversely affect our revenues.

Regulations and consumer eating habits may change because of new information or attitudes regarding diet and health.

These changes may include regulations that impact our restaurant menu items' ingredients and nutritional content.

For example, many states, counties, and cities are enacting menu-labeling laws requiring multi-unit restaurant operators to make certain nutritional information available to guests or restrict the sale of certain ingredients in restaurants.

Regulations and consumer preferences may change because of new information or attitudes regarding diet and health.

These changes may include regulations impacting menu item ingredients and nutritional content.

For example, many states, counties, and cities have enacted menu-labeling laws requiring multi-unit restaurant operators to make nutritional information available to guests or restrict the sale of certain ingredients in restaurants.

The success of our restaurant operations is dependent, in part, upon our ability to respond effectively to changes in consumer health and disclosure regulations and to adapt our menu offerings to trends in eating habits.

If consumer health regulations or consumer eating habits change significantly, we may be required to modify or delete certain menu items.

To the extent we cannot respond with appropriate changes to our menu offerings, it could materially affect customer demand and adversely impact our revenues.

We are subject to many federal, state, and local laws;

compliance is costly and complex.

If consumer health regulations or consumer eating habits change significantly, we may be required to modify or delete specific menu items.

If we cannot adjust our menu offerings appropriately, regulations may adversely impact customer demand and our revenues.

We are subject to many federal, state, and local laws and compliance is costly and complex.

The restaurant industry is subject to extensive federal, state, and local laws and regulations, including those relating to the preparation and sale of food, licensing and regulation by state and local authorities relating to health, sanitation, safety, and fire standards.

10 unchanged sentences

In addition, certain laws, including the ADA, could require us to expend significant funds.

Failure to comply with food control regulations could result in losing our food service licenses, harming our business.

Failure to comply with regulations could result in losing our food service licenses, harming our business.

Under various federal, state, and local government regulations, restaurants are required to obtain and maintain licenses, permits and approvals to operate their businesses.

2 unchanged sentences

Typically, licenses must be renewed annually and may be revoked, suspended, or denied renewal for cause at any time if governmental authorities determine that our conduct violates applicable regulations.

Difficulties or failure to maintain or obtain the required licenses and approvals could adversely affect our existing restaurants and delay or result in our decision to cancel the opening of new restaurants, adversely affecting our business.

Restaurant companies have been the target of lawsuits and other proceedings alleging violations of employment laws.

Difficulties or failures to maintain or obtain the required licenses and approvals could adversely affect our existing restaurants and delay or result in our decision to cancel the opening of new restaurants, adversely affecting our business.

Restaurant companies have been the target of allegations of violations of employment laws.

Our business is subject to the risk of litigation by employees, consumers, suppliers, stockholders or others through private actions, class actions, administrative proceedings, regulatory actions, or other litigation.

15 unchanged sentences

Third parties may also oppose our trademark applications or otherwise challenge our use of the trademarks.

In the event that our trademarks are successfully challenged, we could be forced to rebrand our goods and services, which could result in a loss of brand recognition and could require us to devote resources to advertising and marketing.

If our trademarks are successfully challenged, we could be forced to rebrand our goods and services, which could result in a loss of brand recognition and require us to devote resources to advertising and marketing.

If our efforts to register, maintain and protect our intellectual property are inadequate, or if any third party misappropriates, dilutes, or infringes on our intellectual property, the value of our brands may be harmed, which could have an material adverse effect on our business and might prevent our brands from achieving or maintaining market acceptance.

11 unchanged sentences

If sales decrease, our profitability could decline as we spread fixed costs across a lower level of sales.

Prolonged negative trends in restaurant sales could cause us to, among other things, reduce the number and frequency of new restaurant openings, close restaurants, delay remodeling of our existing restaurants, or take asset impairment charges.

Prolonged negative trends in restaurant sales could cause us to, among other things, reduce the number and frequency of new restaurant openings, close restaurants, delay the remodeling of our existing restaurants, or take asset impairment charges.

We are susceptible to regional economic developments.

9 unchanged sentences

Our marketing programs may not be successful.

We intend to continue to invest in marketing efforts that will attract and retain customers.

We intend to continue investing in marketing efforts to attract and retain customers.

These initiatives may not be successful, resulting in expenses incurred without the benefit of higher revenues.

Additionally, if these initiatives are not successful, we may engage in additional promotional activities to attract and retain customers, including buy-one-get-one offers and other offers for free or discounted food, and any such additional promotional activities could adversely impact our operations results.

If these initiatives are unsuccessful, we may engage in additional promotional activities to attract and retain customers, including buy-one-get-one offers and other offers for free or discounted food.

Any such additional promotional activities could adversely impact the results of our operations.

We plan to continue emphasizing mobile and other digital ordering, delivery, and pick-up orders.

These efforts may fail or may result in unexpected operational challenges that adversely impact our costs.

These efforts may fail or result in unexpected operational challenges that adversely impact our costs.

We may also introduce new menu items that may not achieve the expected sales levels.

62 unchanged sentences

As a result, you may not receive any return on an investment in our common stock for a price greater than that you paid.

Raising additional equity capital may be more difficult while the warrants are outstanding.

Raising additional equity capital may be more challenging while the warrants are outstanding.

While the warrants issued in our IPO are outstanding, the holders of such warrants will be able to profit from a rise in the market price of our common stock.

14 unchanged sentences

we may indemnify employees and agents in those circumstances permitted by applicable law;

we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;

we will not be obligated pursuant to our bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification,

1 unchanged sentence

we may not retroactively amend our bylaw provisions to reduce our indemnification obligations to directors, officers, employees, and agents.

Reduced disclosure requirements applicable to emerging growths may make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act.

We may take advantage of certain exemptions from various reporting requirements that apply to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors find our common stock less attractive, there may be a less active trading market for our common stock, and our stock price may be more volatile.

We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B).

We could remain an “emerging growth company” for up to five years from the last day of our fiscal year in which the first sale of our common equity securities occurred pursuant to an effective registration statement under the Securities Act or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

Notwithstanding the above, we are also a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting;

Reduced disclosure requirements may make our common stock less attractive to investors.

We are a “smaller reporting company.” Specifically, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting;

and have certain other decreased disclosure obligations in their SEC filings.

Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

We cannot predict if investors will find our common stock less attractive because we may rely on th ese exemptions.

If some investors find our common stock less attractive, there may be a less active trading market for our common stock, and our stock price may be more volatile.

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