Notes Payable and Long-Term Debt |
9 Months Ended | |||
|---|---|---|---|---|
Jun. 30, 2026 | ||||
| Notes Payable and Long-Term Debt [Abstract] | ||||
| Notes Payable and Long-Term Debt |
Revolving Credit Facility. The Company and its wholly owned subsidiaries (the “Subsidiaries”) maintain an amended and restated credit agreement with Huntington Bank (“Huntington”), as successor to Cadence Bank, with whom the facility was originally established. Pursuant to the credit agreement, as amended to date, Huntington agreed to loan the Company up to $8,000,000, with a maturity date of April 20, 2028 (the “Revolving Credit Facility”). The Revolving Credit Facility amended and restated the Company’s prior credit facility with Huntington in its entirety. The Revolving Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%. The loans may from time to time consist of a mixture of SOFR Rate Loans and Base Rate Loans with differing interest rates based upon varying additions to the Federal Funds Rate, the Huntington prime rate or Term SOFR. Each of the Subsidiaries are guarantors of the Revolving Credit Facility.
Proceeds from the Revolving Credit Facility, if and when drawn, may be used (i) to fund new restaurant development, (ii) to finance the buyout of non-controlling partners in certain restaurants, (iii) to finance the redemption, purchase or other acquisition of equity interests in the Company and (iv) for working capital and other general corporate purposes.
The Revolving Credit Facility includes customary affirmative and negative covenants and events of default. The Revolving Credit Facility also requires the Company to maintain various financial condition ratios, including minimum liquidity, an amended maximum leverage ratio and an amended minimum fixed charge coverage ratio. In addition, to the extent the aggregate outstanding balance under the revolver under the Revolving Credit Facility exceeds $4.0 million, the Company is required to meet a new specified leverage ratio, on a pro forma basis, before making further borrowings as well as certain restricted payments, investments and growth capital expenditures. As of the date of filing of this report, the Company was in compliance with each of these covenants under the Revolving Credit Facility.
As a result of entering into the Revolving Credit Facility and the various amendments, the Company paid loan origination costs including professional fees of approximately $324,000 and is amortizing these costs over the term of the credit agreement. As of June 30, 2026 the unamortized balance of these fees was $66,000.
In connection with the Revolving Credit Facility, the Company and the Subsidiaries entered into an Amended and Restated Security and Pledge Agreement (the “Security Agreement”) with Huntington. Under the Security Agreement, the Revolving Credit Facility is secured by a first priority security interest in substantially all the assets of the Company and the Subsidiaries.
As of June 30, 2026, there were no borrowings against the facility. Availability of the Revolving Credit Facility for borrowings is reduced by the outstanding face value of any letters of credit issued under the facility. As of June 30, 2026, there were approximately $10,000 in outstanding letters of credit issued under the facility, and approximately $7,990,000 of committed funds available.
Parker Promissory Note. Good Times Drive Thru, Inc., a wholly owned subsidiary of the Company, is the maker of an unsecured promissory note in connection with the purchase of the previously franchised Good Times Burgers and Frozen Custard restaurant located in the Denver suburb of Parker, Colorado. JGN Management, Inc., the former franchisee, is the holder of the note. The Parker Promissory Note fully amortizes over its original ten-year life maturing on June 1, 2034, carries an interest rate of 5.00% and is, in all respects, subordinate to the Revolving Credit Facility. As of June 30, 2026, the outstanding principal balance on the Parker Promissory Note was $318,000. Annual principal maturities over the next five years are approximately $36,000 each year.
Total interest expense on notes payable was $18,000 and $49,000 for the quarters ended June 30, 2026 and July 1, 2025, respectively. |