What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2026-02-05 · 149 added, 135 removed, 589 unchanged (33% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

N ine Months Ended

COSTS AND EXPENSES

65 unchanged sentences

Balance, December 29, 2024

Stock-based compensation expense

Purchase of treasury stock

Balance, March 30, 2025

Treasury Stock

4 unchanged sentences

Balance, December 28, 2025

Stock-based compensation expense

Balance, March 29, 2026

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

27 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Purchase of treasury stock

Taxes paid on issuance of restricted stock units

33 unchanged sentences

Treasury bills as short-term, regardless of their maturity dates, as these are readily available to fund current operations and can be liquidated at any time at the discretion of the Company.

As of December 28, 2025 and June 29, 2025, the Company held U.S.

As of March 29, 2026 and June 29, 2025, the Company held U.S.

Treasury bills valued at approximately $ 10.9 million and $ 7.0 million, respectively, which are included within short-term investments on the accompanying Condensed Consolidated Balance Sheets.

For the three months ended December 28, 2025 and December 29, 2024, interest income recognized on U.S.

For the three months ended March 29, 2026 and March 30, 2025, interest income recognized on U.S.

Treasury bills was $ 95 thousand and $ 77 thousand, respectively.

For the six months ended December 28, 2025 and December 29, 2024, interest income recognized on the U.S.

For the nine months ended March 29, 2026 and March 30, 2025, interest income recognized on the U.S.

Treasury bills was $ 266 thousand and $ 231 thousand, respectively.

6 unchanged sentences

The fair value of the Company’s investments in U.S.

Treasury bills at December 28, 2025 and June 29, 2025, was determined using Level 1 observable inputs.

Treasury bills at March 29, 2026 and June 29, 2025, was determined using Level 1 observable inputs.

The following table summarizes the Company’s financial assets and financial liabilities measured at fair value (in thousands):

11 unchanged sentences

The Company monitors franchisee receivable balances and adjusts credit terms when necessary to minimize the Company’s exposure to high-risk accounts receivable.

For the three month period ended December 28, 2025, provision for credit losses were $ 7 thousand compared to $ 9 thousand for the same period in the prior fiscal year.

For the six month period ended December 28, 2025, provision for credit losses were $ 11 thousand compared to recoveries for credit losses of $ 8 thousand for the same period in the prior fiscal year.

For the three month period ended March 29, 2026, provision for credit losses were $ 9 thousand compared to recoveries for credit losses of $ 14 thousand for the same period in the prior fiscal year.

For the nine month period ended March 29, 2026, provision for credit losses were $ 20 thousand compared to recoveries for credit losses of $ 22 thousand for the same period in the prior fiscal year.

Changes in the allowance for credit losses from continuing operations consisted of the following (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

Balance at beginning of year

Provision (recovery) for credit losses

Amounts written off

Amounts recovered (written off)

Ending balance

Fiscal Quarters

The three and six month periods ended December 28, 2025 and December 29, 2024 each contained 13 weeks and 26 weeks, respectively.

The three and nine month periods ended March 29, 2026 and March 30, 2025 each contained 13 weeks and 39 weeks, respectively.

Use of Management Estimates

53 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Franchise royalties

6 unchanged sentences

Other franchise revenue

The following table reflects the changes in deferred franchise and development fees for the six months ended on December 28, 2025 and December 29, 2024 (in thousands):

The following table reflects the changes in deferred franchise and development fees for the nine months ended on March 29, 2026 and March 30, 2025 (in thousands):

Beginning balance

1 unchanged sentence

Ending balance

The following table illustrates franchise and development fees expected to be recognized in the future related to performance obligations that were unsatisfied or partially satisfied as of December 28, 2025 (in thousands):

Franchise and

40 unchanged sentences

Lease Guarantees

The Company has guaranteed the financial responsibilities of one franchised store lease.

The guaranteed lease is not considered an operating lease because the Company does not have the right to control the underlying asset.

If the franchisee abandons the lease and fails to meet the lease’s financial obligations, the lessor may assign the lease to the Company for the remainder of the term.

If the Company does not expect to assign the abandoned lease to a new franchisee within 12 months, the lease will be considered an operating lease and a right-of-use asset, and lease liability will be recognized.

The Company is no longer guaranteeing the financial responsibilities of any franchised store lease.

Practical Expedients and Accounting Policy Elections

5 unchanged sentences

To the extent that there are variable lease payments, we recognize those payments in our income statements in the period in which the obligation for those payments is incurred.

The components of total lease expense for the three and six months ended December 28, 2025 and December 29, 2024, where operating lease cost is included in general and administrative expense and sublease income is included in revenues in the accompanying Condensed Consolidated Statements of Income, are as follows (in thousands):

The components of total lease expense for the three and nine months ended March 29, 2026 and March 30, 2025, where operating lease cost is included in general and administrative expense and sublease income is included in revenues in the accompanying Condensed Consolidated Statements of Income, are as follows (in thousands):

Three Months Ended

Six Months Ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Nine Months Ended

March 29, 2026

March 30, 2025

March 29, 2026

March 30, 2025

Operating lease cost

2 unchanged sentences

Weighted average remaining lease term and weighted average discount rate for operating leases are as follows:

December 28, 2025 December 29, 2024

March 29, 2026

March 30, 2025

Weighted average remaining lease term

7 unchanged sentences

Fiscal Year 2029

Fiscal Year 2030

Total operating lease payments

4 unchanged sentences

Management believes that any such claims and actions currently pending are either covered by insurance or would not have a material adverse effect on the Company’s results of operations or financial condition if decided in a manner that is unfavorable to the Company.

No accrual has been recorded for any claims or actions at December 28, 2025 or June 29, 2025.

No accrual has been recorded for any claims or actions at March 29, 2026 or June 29, 2025.

Note D - Stock-Based Compensation

Stock Options:

For the three and six months ended December 28, 2025 and December 29, 2024, the Company recognized stock-based compensation expense related to stock options of zero .

As of December 28, 2025, there was no unamortized stock-based compensation expense related to stock options.

For the three and nine months ended March 29, 2026 and March 30, 2025, the Company recognized stock-based compensation expense related to stock options of zero .

As of March 29, 2026, there was no unamortized stock-based compensation expense related to stock options.

The following table summarizes the number of shares of the Company’s common stock subject to outstanding stock options:

Six Months Ended

December 28, 2025

December 29, 2024

Nine Months Ended

March 29, 2026

March 30, 2025

Outstanding at beginning of year

3 unchanged sentences

Restricted Stock Units:

For the three and six months ended December 28, 2025, the Company had stock-based compensation expense related to RSUs of $ 62 thousand and $ 100 thousand, respectively.

For the three and six months ended December 29, 2024, the Company had stock-based compensation expense related to RSUs of $ 53 thousand and $ 126 thousand, respectively.

As of December 28, 2025, there was $ 591 thousand unamortized stock-based compensation expense related to RSUs.

As of December 28, 2025 the RSUs will be amortized during the next 34 months.

A summary of the status of restricted stock units as of December 28, 2025 and December 29, 2024, and changes during the six months then ended is presented below:

Six Months Ended

December 28, 2025

December 29, 2024

For the three and nine months ended March 29, 2026, the Company had stock-based compensation expense related to RSUs of $ 111 thousand and $ 211 thousand, respectively.

For the three and nine months ended March 30, 2025, the Company had stock-based compensation expense related to RSUs of $ 52 thousand and $ 178 thousand, respectively.

As of March 29, 2026, there was $ 531 thousand unamortized stock-based compensation expense related to RSUs.

As of March 29, 2026 the RSUs will be amortized during the next 31 months.

A summary of the status of restricted stock units as of March 29, 2026 and March 30, 2025, and changes during the nine months then ended is presented below:

Nine Months Ended

March 29, 2026

March 30, 2025

Unvested at beginning of year

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Net income available to common shareholders

5 unchanged sentences

Net income per common share

For the three and six months ended December 28, 2025, exercisable options to purchase 50,000 shares of common stock at exercise price $ 3.95 were excluded from the computation of diluted EPS because they had an intrinsic value of zero .

For the three and six months ended December 28, 2025, 277,400 and 277,400 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end, respectively.

For the three and six months ended December 29, 2024, exercisable options to purchase 74,286 shares of common stock at exercise prices from $ 3.95 to $ 13.11 were excluded from the computation of diluted EPS because they had an intrinsic value of zero .

For the three and six months ended December 29, 2024, 142,328 and 247,328 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end, respectively.

For the three and nine months ended March 29, 2026, exercisable options to purchase 50,000 shares of common stock at exercise price $ 3.95 were excluded from the computation of diluted EPS because they had an intrinsic value of zero .

For the three and nine months ended March 29, 2026, 277,400 and 277,400 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end, respectively.

For the three and nine months ended March 30, 2025, exercisable options to purchase 74,286 shares of common stock at exercise prices from $ 3.95 to $ 13.11 were excluded from the computation of diluted EPS because they had an intrinsic value of zero .

For the three and nine months ended March 30, 2025, 247,328 and 247,328 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end, respectively.

Note F - Income Taxes

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

Federal tax expense

15 unchanged sentences

All assets are located within the United States.

Summarized in the following tables are revenues, expenses, operating income, and income before taxes for the Company’s reportable segments as of the three and six months ended December 28, 2025 and December 29, 2024 (in thousands):

Summarized in the following tables are revenues, expenses, operating income, and income before taxes for the Company’s reportable segments as of the three and nine months ended March 29, 2026 and March 30, 2025 (in thousands):

Three Months Ended

3 unchanged sentences

Franchise royalties

Supplier and distributor incentive revenues

Supplier and distributor

incentive revenues

Franchise license fees

Area development exclusivity fees and foreign master license fees

Area development

exclusivity fees and foreign master license fees

Advertising fund contributions

4 unchanged sentences

COSTS AND EXPENSES:

General and administrative expenses

General and administrative

Franchise expenses

8 unchanged sentences

NET INCOME/(LOSS)

Six Months Ended

Nine Months Ended

Franchise royalties

Supplier and distributor incentive revenues

Supplier and distributor

incentive revenues

Franchise license fees

Area development exclusivity fees and foreign master license fees

Area development

exclusivity fees and foreign master license fees

Advertising fund contributions

4 unchanged sentences

COSTS AND EXPENSES:

General and administrative expenses

General and administrative

Franchise expenses

Provision (recovery) for credit losses

Provision (recovery) for

credit losses

Depreciation and amortization expense

7 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes appearing elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended June 29, 2025, together with our Quarterly Report on Form 10-Q for the period ended September 28, 2025, may contain certain forward-looking statements that are based on current management expectations.

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes appearing elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended June 29, 2025, together with our Quarterly Reports on Form 10-Q for the periods ended September 28, and December 28, 2025, may contain certain forward-looking statements that are based on current management expectations.

Generally, verbs in the future tense and the words “believe,” “expect,” “anticipate,” “estimate,” “intends,” “opinion,” “potential” and similar expressions identify forward-looking statements.

1 unchanged sentence

Our actual results could differ materially from our expectations.

Further information concerning our business, including additional factors that could cause actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q, are set forth in our Annual Report on Form 10-K for the year ended June 29, 2025, as well as our Quarterly Report on Form 10-Q for the period ended September 28, 2025.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

4 unchanged sentences

We facilitate food, equipment and supply distribution to our domestic and international system of restaurants through agreements with third-party distributors.

At December 28, 2025, franchised and licensed units consisted of the following:

Three Months Ended December 28, 2025

At March 29, 2026, franchised and licensed units consisted of the following:

Three Months Ended March 29, 2026

(in thousands, except unit data)

System-Wide Retail Sales

Domestic Franchised/Licensed

International Franchised

Six Months Ended December 28, 2025

Nine Months Ended March 29, 2026

(in thousands, except unit data)

22 unchanged sentences

EBITDA and Adjusted EBITDA

Adjusted EBITDA for the fiscal quarter ended December 28, 2025 increased $0.1 million compared to the same period of the prior fiscal year.

Adjusted EBITDA for the fiscal quarter ended March 29, 2026 increased $0.2 million compared to the same period of the prior fiscal year.

Year-to-date Adjusted EBITDA increased $0.3 million compared to the same period of the prior fiscal year.

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Interest income

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Pizza Inn Retail Sales - Total Domestic Units

13 unchanged sentences

Total Domestic Units

Pizza Inn total domestic retail sales increased by $1.1 million, or 4.1%, for the three months ended December 28, 2025 when compared to the same period of the prior year.

Pizza Inn total domestic retail sales increased by $1.9 million, or 7.2%, for the three months ended March 29, 2026 when compared to the same period of the prior year.

Compared to the same fiscal quarter of the prior year, average Buffet Units open in the period increased from 77 to 82.

Comparable store retail sales increased by $0.6 million, or 2.5%, for the three month period ended December 28, 2025 as compared to the same period of the prior fiscal year.

For the three months ended December 28, 2025, the increase in domestic retail sales were primarily the result of the increase in the average number of Buffet units, supplemented by an increase in comparable domestic store retail sales.

Pizza Inn total domestic retail sales increased by $3.6 million, or 7.1%, for the six months ended December 28, 2025 when compared to the same period of the prior year.

Comparable store retail sales increased by $0.6 million, or 2.3%, for the three month period ended March 29, 2026 as compared to the same period of the prior fiscal year.

For the three months ended March 29, 2026, the increase in domestic retail sales were primarily the result of the increase in the average number of Buffet units, supplemented by an increase in comparable domestic store retail sales.

Pizza Inn total domestic retail sales increased by $5.5 million, or 7.1%, for the nine months ended March 29, 2026 when compared to the same period of the prior year.

Compared to the same fiscal period of the prior year, average Buffet Units open in the period increased from 78 to 80.

Comparable store retail sales increased by $2.7 million, or 5.3%, for the six month period ended December 28, 2025 as compared to the same period of the prior fiscal year.

For the six months ended December 28, 2025, the increase in domestic retail sales were primarily the result of the increase in the average number of Buffet Units, supplemented by an increase in comparable domestic store retail sales.

The following chart summarizes Pizza Inn restaurant activity for the three and six months ended December 28, 2025:

Three Months Ended December 28, 2025

Comparable store retail sales increased by $3.3 million, or 4.3%, for the nine month period ended March 29, 2026 as compared to the same period of the prior fiscal year.

For the nine months ended March 29, 2026, the increase in domestic retail sales were primarily the result of the increase in the average number of Buffet Units, supplemented by an increase in comparable domestic store retail sales.

The following chart summarizes Pizza Inn restaurant activity for the three and nine months ended March 29, 2026:

Three Months Ended March 29, 2026

Buffet Units - Franchised

4 unchanged sentences

International Units (all types)

Six Months Ended December 28, 2025

Nine Months Ended March 29, 2026

Buffet Units - Franchised

4 unchanged sentences

International Units (all types)

There was a net increase of one unit in the total domestic Pizza Inn unit count during the three and six months ended December 28, 2025, respectively.

There were zero and two units transferred between franchisees in the total domestic Pizza Inn unit count during the three and six months ended December 28, 2025, respectively.

For the three and six months ended December 28, 2025, the number of international Pizza Inn units decreased by one and three net units, respectively.

There were zero transfers in the total international Pizza Inn unit count during the three and six months ended December 28, 2025.

There was a net increase of zero and one unit in the total domestic Pizza Inn unit count during the three and nine months ended March 29, 2026, respectively.

There were one and four units transferred between franchisees in the total domestic Pizza Inn unit count during the three and nine months ended March 29, 2026, respectively.

For the three and nine months ended March 29, 2026, the number of international Pizza Inn units decreased by one and four net units, respectively.

There were zero transfers in the total international Pizza Inn unit count during the three and nine months ended March 29, 2026.

The Company believes the number of both domestic and international Pizza Inn units will increase modestly in future periods.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Pie Five Retail Sales - Total Units

9 unchanged sentences

Total Domestic Units

Pie Five total domestic retail sales decreased by $0.4 million, or 16.3%, for the three months ended December 28, 2025 when compared to the same period of the prior year.

Pie Five total domestic retail sales decreased by $0.7 million, or 24.1%, for the three months ended March 29, 2026 when compared to the same period of the prior year.

Compared to the same fiscal quarter of the prior year, average units open in the period decreased from 18 to 15.

Comparable store retail sales decreased by $34 thousand, or 1.5%, for the three month period ended December 28, 2025 as compared to the same period of the prior fiscal year.

For the three months ended December 28, 2025, the decrease in domestic retail sales were primarily the result of the decrease in average store count, supplemented by a decrease in comparable store retail sales.

Pie Five total domestic retail sales decreased by $1.0 million, or 17.6%, for the six months ended December 28, 2025 when compared to the same period of the prior year.

Comparable store retail sales decreased by $0.3 million, or 11.6%, for the three month period ended March 29, 2026 as compared to the same period of the prior fiscal year.

For the three months ended March 29, 2026, the decrease in domestic retail sales were primarily the result of the decrease in average store count, supplemented by a decrease in comparable store retail sales.

Pie Five total domestic retail sales decreased by $1.7 million, or 19.7%, for the nine months ended March 29, 2026 when compared to the same period of the prior year.

Compared to the same fiscal period of the prior year, average units open in the period decreased from 18 to 16.

Comparable store retail sales decreased by $0.3 million, or 5.7%, for the six month period ended December 28, 2025 as compared to the same period of the prior fiscal year.

For the six months ended December 28, 2025, the decrease in domestic retail sales were primarily the result of the decrease in average store count, supplemented by a decrease in comparable store retail sales.

The following chart summarizes Pie Five restaurant activity for the three and six months ended December 28, 2025:

Three Months Ended December 28, 2025

Comparable store retail sales decreased by $0.6 million, or 7.6%, for the nine month period ended March 29, 2026 as compared to the same period of the prior fiscal year.

For the nine months ended March 29, 2026, the decrease in domestic retail sales were primarily the result of the decrease in average store count, supplemented by a decrease in comparable store retail sales.

The following chart summarizes Pie Five restaurant activity for the three and nine months ended March 29, 2026:

Three Months Ended March 29, 2026

Pie Five Units - Franchised

1 unchanged sentence

Total Domestic Units

Six Months Ended December 28, 2025

Nine Months Ended March 29, 2026

Pie Five Units - Franchised

1 unchanged sentence

Total Domestic Units

There was a net decrease of one unit in the total domestic Pie Five unit count during the three and six months ended December 28, 2025.

There were zero transfers in the total domestic Pie Five unit count during the three and six months ended December 28, 2025.

There was a net decrease of two and three units in the total domestic Pie Five unit count during the three and nine months ended March 29, 2026.

There were zero transfers in the total domestic Pie Five unit count during the three and nine months ended March 29, 2026.

We believe that Pie Five units will decrease modestly in future periods.

1 unchanged sentence

In addition to Corporate overhead support, the Company defines its operating segments as Pizza Inn Franchising and Pie Five Franchising.

The following is additional business segment information for the three and six months ended December 28, 2025 and December 29, 2024 (in thousands):

Three Months Ended December 28, 2025 and December 29, 2024

The following is additional business segment information for the three and nine months ended March 29, 2026 and March 30, 2025 (in thousands):

Three Months Ended March 29, 2026 and March 30, 2025

Three Months Ended

4 unchanged sentences

Rental income

Other franchise revenue

Total revenues

2 unchanged sentences

Franchise expenses

Provision for credit losses

Provision (recovery) for credit losses

Depreciation and amortization expense

4 unchanged sentences

INCOME/(LOSS) BEFORE TAXES

Six Months Ended December 28, 2025 and December 29, 2024

Six Months Ended

Nine Months Ended March 29, 2026 and March 30, 2025

Nine Months Ended

Franchise and license revenues

14 unchanged sentences

The volume of supplier and distributor incentive revenues is dependent on the level of total retail sales, which are impacted by changes in comparable store sales and restaurant count, as well as the products sold to franchisees through third-party food distributors.

Total revenues for the three month period ended December 28, 2025 and for the same period in the prior fiscal year were $3.0 million and $2.9 million, respectively.

Total revenues for the six month period ended December 28, 2025 and for the same period in the prior fiscal year were $6.3 million and $5.9 million, respectively.

Total revenues for the three month period ended March 29, 2026 and for the same period in the prior fiscal year were $3.2 million and $3.0 million, respectively.

Total revenues for the nine month period ended March 29, 2026 and for the same period in the prior fiscal year were $9.5 million and $8.9 million, respectively.

Pizza Inn Franchise and License

Pizza Inn franchise revenues increased by $0.3 million to $2.8 million for the three month period ended December 28, 2025 as compared to the same period in the prior fiscal year.

Pizza Inn franchise revenues increased by $0.3 million to $3.0 million for the three month period ended March 29, 2026 as compared to the same period in the prior fiscal year.

The 12.2% increase was driven by increases in supplier and distributor incentives and domestic royalties mainly due to an increase in system-wide retail sales.

Pizza Inn franchise revenues increased by $0.5 million to $5.8 million for the six month period ended December 28, 2025 as compared to the same period in the prior fiscal year.

Pizza Inn franchise revenues increased by $0.8 million to $8.8 million for the nine month period ended March 29, 2026 as compared to the same period in the prior fiscal year.

The 10.7% increase was driven by increases in supplier and distributor incentives and domestic royalties mainly due to an increase in system-wide retail sales.

Pie Five Franchise and License

Pie Five franchise revenues decreased by $0.1 million to $0.2 million for the three month period ended December 28, 2025 as compared to the same period in the prior fiscal year.

The 21.7% decrease was driven by decreases in domestic royalties and supplier and distributor incentives from lower system-wide retail sales mainly due to unit closures.

Pie Five franchise revenues decreased by $0.1 million to $0.5 million for the six month period ended December 28, 2025 as compared to the same period in the prior fiscal year.

The 21.9% decrease was driven by decreases in domestic royalties and supplier and distributor incentives from lower system-wide retail sales mainly due to unit closures.

Pie Five franchise revenues decreased by $0.1 million to $0.2 million for the three month period ended March 29, 2026 as compared to the same period in the prior fiscal year.

The 20.1% decrease was driven by decreases in domestic royalties from lower system-wide retail sales mainly due to unit closures.

Pie Five franchise revenues decreased by $0.2 million to $0.7 million for the nine month period ended March 29, 2026 as compared to the same period in the prior fiscal year.

The 21.9% decrease was driven by decreases in domestic royalties from lower system-wide retail sales mainly due to unit closures.

Costs and Expenses:

General and Administrative Expenses

Total general and administrative expenses increased by $0.2 million for the three month period ended December 28, 2025 as compared to the same period of the prior fiscal year.

The 15.6% increase was driven by increases in salaries, supplemented by increases in legal fees, which reflect fewer legal settlements recognized in the current year compared to the prior year.

Total general and administrative expenses increased by $0.1 million to $2.9 million for the six month period ended December 28, 2025 as compared to the same period of the prior fiscal year.

The 2.3% increase was driven by increases in salaries.

Total general and administrative expenses increased by $0.2 million to $1.5 million for the three month period ended March 29, 2026 as compared to the same period of the prior fiscal year.

The 11.8% increase was driven by increases in salaries, offset by decreases in legal fees.

Total general and administrative expenses increased by $0.3 million to $4.4 million for the nine month period ended March 29, 2026 as compared to the same period of the prior fiscal year.

The 7.9% increase was driven by increases in salaries, offset by decreases in legal fees.

Franchise Expenses

Franchise expenses include general and administrative expenses directly related to the sale and continuing service of domestic and international franchises.

Total franchise expenses decreased by $0.1 million to $0.7 million for the three month period ended December 28, 2025 as compared to the same period of the prior fiscal year.

The 11.7% decrease was driven by decreases in salaries directly related to franchise operations.

Total franchise expenses decreased by $0.1 million to $1.8 million for the six month period ended December 28, 2025 as compared to the same period of the prior fiscal year.

Total franchise expenses remained relatively stable at $0.7 million for the three month period ended March 29, 2026 as compared to the same period of the prior fiscal year.

The 2.7% decrease was driven by decreases in salaries directly related to franchise operations, offset by increases in advertising fees.

Total franchise expenses decreased by $0.1 million to $2.5 million for the nine month period ended March 29, 2026 as compared to the same period of the prior fiscal year.

The 2.9% decrease was driven by decreases in salaries directly related to franchise operations, offset by increases in advertising fees.

Provision (Recovery) for Credit Losses

The Company monitors franchisee receivable balances and adjusts credit terms when necessary to minimize the Company’s exposure to high-risk accounts receivable.

For the three month period ended December 28, 2025, provision for credit losses were $7 thousand compared to $9 thousand for the same period in the prior fiscal year.

For the six month period ended December 28, 2025, provision for credit losses were $11 thousand compared to recoveries for credit losses of $8 thousand for the same period in the prior fiscal year.

For the three month period ended March 29, 2026, provision for credit losses were $9 thousand compared to recoveries for credit losses of $14 thousand for the same period in the prior fiscal year.

For the nine month period ended March 29, 2026, provision for credit losses were $20 thousand compared to recoveries for credit losses of $22 thousand for the same period in the prior fiscal year.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased by $11 thousand to $42 thousand for the three month period ended December 28, 2025 as compared to the same period in the prior fiscal year.

Depreciation and amortization expense decreased by $2 thousand to $42 thousand for the three month period ended March 29, 2026 as compared to the same period in the prior fiscal year.

The decrease was primarily the result of lower depreciation of equipment.

Depreciation and amortization expense decreased by $12 thousand to $84 thousand for the six month period ended December 28, 2025 as compared to the same period in the prior fiscal year.

Depreciation and amortization expense decreased by $14 thousand to $126 thousand for the nine month period ended March 29, 2026 as compared to the same period in the prior fiscal year.

The decrease was primarily the result of lower depreciation of equipment due to less capital expenditure spend.

Interest Income

Interest income increased by $4 thousand to $91 thousand for the three month period ended December 28, 2025 as compared to the same period in the prior fiscal year and increased by $13 thousand to $182 thousand for the six month period ended December 28, 2025 as compared to the same period in the prior fiscal year.

Interest income increased by $14 thousand to $98 thousand for the three month period ended March 29, 2026 as compared to the same period in the prior fiscal year and increased by $27 thousand to $280 thousand for the nine month period ended March 29, 2026 as compared to the same period in the prior fiscal year.

The increase was primarily driven by interest received on U.S.

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Federal tax expense

1 unchanged sentence

Total income tax expense

For the three and six months ended December 28, 2025, the Company recorded an income tax expense of $205 thousand and $411 thousand, respectively.

For the three and six months ended December 29, 2024, the Company recorded an income tax expense of $144 thousand and $313 thousand, respectively.

The increase for the three months ended as of December 28, 2025 was driven by increases in federal taxes, primarily due to higher taxable income and fewer discrete tax items related to restricted stock units vesting than in the prior year.

The increase for the six months ended as of December 28, 2025 was primarily driven by increases in federal taxes, primarily due to higher taxable income and fewer discrete tax items related to restricted stock units vesting than in the prior year.

For the three and nine months ended March 29, 2026, the Company recorded an income tax expense of $255 thousand and $666 thousand, respectively.

For the three and nine months ended March 30, 2025, the Company recorded an income tax expense of $228 thousand and $541 thousand, respectively.

The increase for the three months ended as of March 29, 2026 was driven by increases in federal taxes, primarily due to higher taxable income and fewer discrete tax items related to restricted stock units vesting than in the prior year.

The increase for the nine months ended as of March 29, 2026 was primarily driven by increases in federal taxes, primarily due to higher taxable income and fewer discrete tax items related to restricted stock units vesting than in the prior year.

The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies.

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Earnings per Share

Basic net income per share remained relatively stable at $0.04 per share for the three months ended December 28, 2025, compared to the comparable period in the prior fiscal year.

The Company had net income of $0.6 million for the three months ended December 28, 2025 compared to net income of $0.6 million in the comparable period in the prior fiscal year, on revenues of $3.0 million for the three months ended December 28, 2025 compared to $2.9 million in the comparable period in the prior fiscal year.

Basic net income per share increased $0.01 per share to $0.09 per share for the six months ended December 28, 2025, compared to the comparable period in the prior fiscal year.

The Company had net income of $1.3 million for the six months ended December 28, 2025 compared to net income of $1.1 million in the comparable period in the prior fiscal year, on revenues of $6.3 million for the six months ended December 28, 2025 compared to $5.9 million in the comparable period in the prior fiscal year.

Basic net income per share increased $0.01 per share to $0.06 per share for the three months ended March 29, 2026, compared to the comparable period in the prior fiscal year.

The Company had net income of $0.8 million for the three months ended March 29, 2026 compared to net income of $0.7 million in the comparable period in the prior fiscal year, on revenues of $3.2 million for the three months ended March 29, 2026 compared to $3.0 million in the comparable period in the prior fiscal year.

Basic net income per share increased $0.02 per share to $0.15 per share for the nine months ended March 29, 2026, compared to the comparable period in the prior fiscal year.

The Company had net income of $2.1 million for the nine months ended March 29, 2026 compared to net income of $1.9 million in the comparable period in the prior fiscal year, on revenues of $9.5 million for the nine months ended March 29, 2026 compared to $8.9 million in the comparable period in the prior fiscal year.

Liquidity and Capital Resources

During the six month period ended December 28, 2025, the Company's primary source of liquidity was proceeds from operating activities.

During the nine month period ended March 29, 2026, the Company's primary source of liquidity was proceeds from operating activities.

Cash flows from operating activities generally reflect net income adjusted for certain non-cash items including depreciation and amortization, changes in deferred taxes, stock-based compensation, and changes in working capital.

Cash provided by operating activities was $0.9 million for the six month period ended December 28, 2025 compared to cash provided by operating activities of $1.2 million for the six month period ended December 29, 2024.

The primary driver of decreased operating cash flow during the six month period ended December 28, 2025 was increased prepaid expenses related to marketing and insurance.

Cash provided by operating activities was $2.1 million for the nine month period ended March 29, 2026 compared to cash provided by operating activities of $2.2 million for the nine month period ended March 30, 2025.

The primary driver of decreased operating cash flow during the nine month period ended March 29, 2026 was increased accounts receivable due to the timing of payments.

Cash flows from investing activities reflect purchases and maturities of short-term investments as well as net proceeds from the sale of assets and capital expenditures for the purchase of Company assets.

Cash used in investing activities during the six month period ended December 28, 2025 was $3.1 million compared to cash used in investing activities of $1.1 million for the six month period ended December 29, 2024.

Net cash used in investing activities during the six month period ended December 28, 2025 was primarily attributable to decreased maturities of U.S.

Cash used in investing activities during the nine month period ended March 29, 2026 was $3.8 million compared to cash used in investing activities of $3.0 million for the nine month period ended March 30, 2025.

Net cash used in investing activities during the nine month period ended March 29, 2026 was primarily attributable to increased purchases of U.S.

Treasury bills.

Cash flows used in financing activities generally reflect changes in the Company's stock and debt activity during the period.

Net cash used in financing activities was zero for the six month period ended December 28, 2025 compared to net cash used in financing activities of $0.2 million for the six month period ended December 29, 2024.

Net cash used by financing activities for the six month period ended December 29, 2024 was primarily attributable to taxes paid on vested RSUs.

Net cash used in financing activities was zero for the nine month period ended March 29, 2026 compared to net cash used in financing activities of $1.4 million for the nine month period ended March 30, 2025.

Net cash used by financing activities for the nine month period ended March 30, 2025 was primarily attributable to repurchases of the Company's stock.

Management believes the cash and short-term investments on hand combined with net cash provided by operations will be sufficient to fund operations for the next 12 months and beyond.

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The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

As of December 28, 2025 and June 29, 2025, the Company had no uncertain tax positions.

As of March 29, 2026 and June 29, 2025, the Company had no uncertain tax positions.

The Company assesses its exposures to loss contingencies from legal matters based upon factors such as the current status of the cases and consultations with external counsel and provides for the exposure by accruing an amount if it is judged to be probable and can be reasonably estimated.

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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-Q

Item 1. Financial Statements