Note 3 – Royalties and fees included initial franchise fees of $332,929 (after deferral of initial fees of $145,000 and amortizing $262,429 of previously deferred fees) for the nine-month period ended September 30, 2026, and $158,487 for the nine-month period ended September 30, 2025. Royalties and fees included initial franchise fees of $114,629 for the three-month period ended September 30, 2026 and $46,379 for the three-month period ended September 30, 2025. Royalties and fees included equipment commissions of $64,495 for the nine-month period ended September 30, 2026, and $43,269 for the nine-month period ended September 30, 2025. Royalties and fees included equipment commissions of $36,693 for the three-month period ended September 30, 2026 compared to $25,665 for the three-month period ended September 30, 2025. Royalties and fees, including initial franchise fees and equipment commissions, were $4.8 million for the nine-month period ended September 30, 2026, and $4.4 million for the nine-month period ended September 30, 2025. Royalties and fees including initial franchise fees and equipment commissions were $1.6 million for the three-month period ended September 30, 2026 compared to $1.5 million for the three-month period ended September 30, 2025.

At September 30, 2026, the deferred contract income and deferred contract cost was $1,612,506. The deferred contract income and deferred contract cost was $1,699,935 as of December 31, 2025. Both balances are recognized in income and expensed over the term of the underlying franchise agreement.

At December 31, 2025 and September 30, 2026, the carrying values of the Company’s franchise receivables have been reduced to anticipated realizable value. After considering this reduction of carrying value, the Company anticipates that substantially all of its accounts receivable reflected on the consolidated balance sheet as of September 30, 2026, will be collected.

During the three-month and nine-month periods ended September 30, 2026 there were no Company-operated or franchised Craft Pizza & Pub restaurants opened or closed. There have been 28 new non-traditional locations opened January 1, 2026 through September 30, 2026. The Company currently expects franchisees to open approximately 37 non-traditional franchise locations prior to December 31, 2026. During the period January 1, 2026 through September 30, 2026 there were five units closed and, as of this report, the Company has no information about any other units closing.