BT Brands, Inc. (BTBD): Business Model Canvas [Dec-2025 Updated]

Honestly, looking at the Business Model Canvas for BT Brands, Inc. (BTBD) right now feels like watching a company execute a complex dual-track strategy. You've got the core business-14 restaurants bringing in $14.04 million in revenue over the last twelve months-but the real story is the pivot: they are actively merging with Aero Velocity, Inc. for drone tech while planning to spin off the restaurant operations into a new entity, BT Group, Inc. My take, after two decades in this game, is that the value isn't just in the food service, which hit $823,000 in restaurant-level adjusted EBITDA last quarter, but in how they manage this transition to deliver shareholder value from both the stable base and the high-growth potential. Dive into the full nine blocks below to see exactly how they plan to pull this off.

BT Brands, Inc. (BTBD) - Canvas Business Model: Key Partnerships

You're looking at the relationships BT Brands, Inc. (BTBD) relies on to execute its strategy, especially as it pivots hard into the drone technology sector. Honestly, these partnerships are critical right now, given the pending transformation.

The most significant partnership is the planned merger with Aero Velocity, Inc., which is set to redefine the company's core business away from just restaurants toward advanced drone technologies and AI-powered solutions for government and commercial clients. This is an all-stock transaction, which means the existing ownership structure is changing dramatically.

Here are the key structural details of that combination:

• Aero Velocity shareholders are expected to own approximately 89% of the combined company.
• Existing BT Brands stockholders are expected to retain about 11% ownership on a fully diluted economic basis.
• The deal includes an equity investment from Aero Velocity shareholders ranging from \$3 million up to \$5 million in the combined entity.
• The transaction is targeted to close in the fourth quarter of 2025 or the first quarter of 2026.

The strategic review process leading to this merger involved external financial guidance. BT Brands, Inc. has been working with an investment banking firm to evaluate strategic options, including this merger, following a strategic review that started last year. While the firm's name or specific advisory fees aren't public in the latest filings, their role was central to the decision to pursue the drone technology platform.

The company maintains a crucial, though financially challenging, partnership in the restaurant segment through its equity stake in Bagger Dave's Burger Tavern, Inc. This is not a direct operational partnership but a significant ownership tie that impacts results. You need to keep an eye on this one, as the strategic review may lead to its sale, which was being negotiated for Q3 2025.

Here's a quick look at the Bagger Dave's relationship as of the third quarter of 2025:

The restaurant segment also relies on standard suppliers for food, beverage, and restaurant operating equipment. Specific vendor contracts or costs aren't detailed in the public reports, but these relationships underpin the operations of the remaining Burger Time, Keegan's Seafood Grille, Pie In The Sky Coffee and Bakery, and Schnitzel Haus locations. The company's Restaurant-level adjusted EBITDA for Q3 2025 was \$823,000, a 74% increase year-over-year, suggesting some operational efficiencies with these suppliers.

Finally, real estate partners have been involved in strategic asset sales, which provided a non-recurring boost to the bottom line. This is a key part of managing the balance sheet during the transition. For instance, the operating income in Q3 2025 included a specific \$242,000 gain on asset sales. To be fair, a property sale completed after Q2 2025 (the Richmond, Indiana property) was expected to contribute a gain of approximately \$250,000, which aligns closely with the reported Q3 figure.

Also, note that BT Brands, Inc. amended its Equity Distribution Agreement with Maxim Group LLC to increase its at-the-market offering capacity to \$3,565,880, which is a financial partnership for capital raising.

Finance: draft 13-week cash view by Friday.

BT Brands, Inc. (BTBD) - Canvas Business Model: Key Activities

You're looking at the core actions BT Brands, Inc. (BTBD) is taking right now to manage its existing operations while executing major corporate restructuring. It's a dual focus: keeping the lights on in the restaurants and pushing through the merger and spin-off.

The primary operational activity centers on managing the existing portfolio. As of the Q3 2025 reporting period, BT Brands, Inc. was operating a diverse portfolio of 14 restaurant locations. This portfolio is a mix of quick-service and casual dining concepts. The company is actively managing these assets, which contributed to a strong profitability metric in the recent quarter.

Driving operational efficiencies is a clear focus, directly impacting the bottom line of the restaurant segment. This effort resulted in the restaurant-level adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, a measure of core operating profitability) reaching $823,000 in Q3 2025. This figure represents a 74% increase from the $472,000 reported in Q3 2024. Furthermore, the management of real estate assets is an active key activity, evidenced by the inclusion of a $242,000 gain on asset sales within the Q3 2025 operating income.

The most significant strategic activities involve the planned corporate transformation. BT Brands, Inc. is executing the definitive merger agreement with Aero Velocity, Inc., a transaction unanimously approved by both boards. This all-stock deal is expected to close in the fourth quarter of 2025 or the first quarter of 2026. Concurrent with this, the company is developing the spin-off entity, BT Group, Inc., which will hold the restaurant assets. The plan is for BT Brands to transfer all assets and liabilities to a new Wyoming subsidiary, BT Group, distribute its shares to common stockholders, and then BT Group would seek a public listing.

Here's a quick look at the structure of the proposed combination and the restaurant footprint:

The restaurant operations themselves require constant management across several distinct concepts. You need to keep the day-to-day running smoothly across these various formats:

• Operating Six Burger Time fast-food restaurants in the North Central US.
• Managing the 40.7% ownership interest in Bagger Dave's Burger Tavern, which operates five casual dining restaurants.
• Overseeing standalone units: Keegan's Seafood Grille in Indian Rocks Beach, Florida.
• Overseeing standalone units: Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts.
• Overseeing standalone units: Schnitzel Haus, a German-themed dining restaurant in Hobe Sound, Florida.

The financial results from Q3 2025 show the immediate impact of these activities, with Net Income reaching $914,975 on total revenue of $3.9 million for the thirteen weeks ended September 28, 2025. Finance: draft the pro-forma cash flow statement incorporating the expected equity investment by end of next week.

BT Brands, Inc. (BTBD) - Canvas Business Model: Key Resources

You're looking at the core assets that power BT Brands, Inc. (BTBD) right now, late in 2025. These aren't just line items; they are the tangible and intellectual foundations supporting their current operations and strategic pivots.

The most visible resource is the multi-brand restaurant portfolio. As of the thirteen weeks ended September 28, 2025, BT Brands, Inc. operated fourteen restaurant locations in total, including their ownership stake in an affiliate. This portfolio is diversified across different service models and geographies.

Here's a breakdown of the physical and affiliated restaurant assets:

Financially, liquidity is a key resource. As of September 28, 2025, cash and short-term investments totaled $4.7 million. This represented an increase of $1.2 million from the second quarter of 2025. For context on the balance sheet at that time, Total Cash (MRQ) was reported as $4.74M, while Total Debt (MRQ) stood at $3.74M. The company maintained a strong Current Ratio of 6.80 at the time.

The human capital is another critical component. BT Brands, Inc. maintained a workforce of approximately 180 total employees across all locations. This figure includes 40 full-time employees. The efficiency of this team can be looked at through a metric like Revenue Per Employee, which was reported as $77,991.

The management team's focus on strategic transactions is a current, high-value intangible resource. This focus is evidenced by the definitive merger agreement entered into on September 2, 2025, with Aero Velocity, Inc.. This strategic direction is aimed at repositioning the platform to deliver value.

You can see the operational scale and financial backing side-by-side:

• Total Workforce: 180 employees
• Full-Time Workforce: 40 employees
• Cash & Short-Term Investments (9/28/2025): $4.7 million
• Restaurant-level adjusted EBITDA (Q3 2025): $823,000
• Total Operating Locations (Direct + Affiliate): 11 (14 locations minus 3 Bagger Dave's sold locations, based on Q3 revenue commentary)

The search results don't provide specific, current dollar values for the owned real estate properties, so we note this as a strategic asset category without a concrete figure as of late 2025.

Finance: draft 13-week cash view by Friday.

BT Brands, Inc. (BTBD) - Canvas Business Model: Value Propositions

You're looking at the value propositions for BT Brands, Inc. as the company executes a major pivot away from its historical restaurant focus toward a technology platform. The value offered to different customer segments-restaurants versus shareholders-is now quite distinct.

Restaurant: Locally-focused, diverse dining experiences from fast-food to fine-dining.

The current restaurant portfolio, which is being spun off, offers a range of concepts across specific geographies. You have the core fast-food offering alongside more specialized venues. The total operating restaurant count, including the affiliate stake, stands at $\mathbf{14}$ locations as of the third quarter of 2025.

• Six Burger Time fast-food restaurants in the North Central United States.
• Keegan's Seafood Grille in Indian Rocks Beach, Florida.
• Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts.
• Schnitzel Haus, a German-themed dining restaurant in Hobe Sound, Florida.
• A $\mathbf{40.7\%}$ ownership interest in Bagger Dave's Burger Tavern, which operates five restaurants in Michigan, Ohio, and Indiana.

Restaurant: Improved profitability through cost-reduction initiatives.

Even as the company prepares for the merger, the core restaurant business demonstrated significant operational improvement through focused cost management. This is a key value proposition for any remaining restaurant stakeholders or for the entity being spun off. For instance, labor costs were brought down to $\mathbf{35.7\%}$ of sales in the third quarter, an improvement from $\mathbf{39.8\%}$ the prior year.

The impact of these cost controls is clear in the EBITDA figures:

Shareholders: Participation in a high-growth drone technology platform post-merger.

The primary value driver for existing BT Brands, Inc. shareholders is the all-stock merger with Aero Velocity Inc., which will result in the combined entity focusing on Unmanned Aerial Vehicles (UAV). Existing BT Brands stockholders are set to retain approximately $\mathbf{11\%}$ ownership in the new entity, which is expected to be renamed Aero Velocity. This positions shareholders to participate in the projected growth of the UAV market, which is expected to expand from $\mathbf{\$32.96 \text{ billion}}$ in 2025 to $\mathbf{\$132.36 \text{ billion}}$ by 2035. The combined company aims to capture $\mathbf{\$54.64B}$ of the commercial drone market by 2030.

Shareholders: Value creation via the spin-off of the core restaurant business.

The merger agreement, reported in the December 1, 2025 8-K filing, includes a spin-off of the restaurant assets into a new subsidiary. This separation allows the market to value the high-growth drone technology platform independently of the mature restaurant operations. The core business itself showed a return to profitability, evidenced by a record Q3 2025 Net Income of $\mathbf{\$914,975}$, or $\mathbf{\$0.15}$ per share. The nine-month period ending Q3 2025 showed an EPS of $\mathbf{\$0.10}$.

Consistent, quality food service in regional and destination markets.

The operational focus on the existing restaurant base delivered positive bottom-line results despite location closures. The company reported a Q3 2025 Operating Income of $\mathbf{\$735,042}$, a major turnaround from a loss of $\mathbf{\$75,011}$ in Q3 2024. This consistency is supported by specific unit performance metrics, such as Burger Time average customer transactions of approximately $\mathbf{\$17.90}$ during the third quarter.

• Q3 2025 Net Income: \$914,975.
• Total Cash and short-term investments at the end of Q3 2025: \$4.7 million.
• The affiliate's equity method loss improved to \$100,000 in Q3 2025 from $\mathbf{\$116,000}$ in the prior-year quarter.

Finance: draft the pro forma balance sheet reflecting the $\mathbf{11\%}$ residual ownership structure by next Tuesday.

BT Brands, Inc. (BTBD) - Canvas Business Model: Customer Relationships

You're looking at how BT Brands, Inc. (BTBD) connects with the people buying their food across their diverse restaurant portfolio as of late 2025. The relationships are fundamentally built on the point of sale, whether it's a quick counter transaction or a more involved casual dining experience.

Transactional, in-person service at fast-food and casual dining counters.

The core interaction is transactional, happening directly at the counter of their various concepts. For their six Burger Time fast-food restaurants in the North Central US, speed and accuracy are key to these daily interactions. Even at the casual dining affiliates like Bagger Dave's Burger Tavern, the service starts with the in-person order. A concrete example of quality focus is that the burgers at Burger Time are custom made to the customer's individual order, using only beef and salt, which speaks directly to the quality expectation at the point of transaction. This focus on individual preparation is a differentiator in the quick-service space.

Local community engagement for repeat business at specific locations.

Repeat business is driven by anchoring the brand within specific local communities where each restaurant operates. BT Brands, Inc. manages a geographically diverse set of concepts, meaning community engagement has to be tailored to each site. This includes locations like Keegan's Seafood Grille in Indian Rocks Beach, Florida, and Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts. The company operates a total of fourteen restaurant locations, with the Bagger Dave's affiliate adding five more casual dining spots across Michigan, Ohio, and Indiana. This physical presence is the foundation for local loyalty.

Direct customer feedback mechanisms at individual restaurant sites.

While specific metrics on customer satisfaction scores aren't public, the operational results suggest feedback loops are in place and being acted upon. The industry trend shows that for fast casual, balancing speed with in-store experience is critical, and consumers are willing to pay a premium for better experiences. The improvement in operational efficiency at BT Brands, Inc. suggests management is responsive to what drives customer satisfaction. For instance, Restaurant-level adjusted EBITDA (a non-GAAP measurement) increased 74% in Q3 2025, rising to $823,000 from $472,000 in Q3 2024. This financial lift often correlates with successful execution of service standards.

Building brand loyalty through consistent, quality food and service.

Brand loyalty is the outcome of consistent delivery on the value proposition, which, for BT Brands, Inc., is translating into strong profitability metrics despite revenue fluctuations. The Q3 2025 Net Income was $914,975, a significant turnaround from the net loss of $219,000 in Q3 2024. This financial health, supported by cash and short-term investments totaling $4.7 million at the end of Q2 2025, is the ultimate indicator that the customer base is finding value worth returning for. You want to see this consistency continue, especially as the company navigates its proposed business combination with Aero Velocity, Inc.

Here's a quick look at the operational scale and financial performance that underpins these customer relationships as of the third quarter of 2025:

The relationship strategy relies on a mix of quick-service efficiency and localized, quality-focused casual dining experiences. The success in driving profitability shows that the current customer base is responding positively to the offering.

• Focus on custom-made burgers using only beef and salt.
• Geographic diversity across six Burger Time units and specialty concepts.
• Strong operational leverage evidenced by 74% EBITDA growth.
• Cash position strengthened to $4.7 million by end of Q2 2025.

Finance: draft 13-week cash view by Friday.

BT Brands, Inc. (BTBD) - Canvas Business Model: Channels

The physical presence of BT Brands, Inc. (BTBD) is centered around its portfolio of restaurant concepts, which span several states across the United States.

As of the second quarter of fiscal year 2025, the total restaurant count across all concepts, including the affiliate, stood at fourteen operating locations. This count reflects a year-over-year decrease of two operating locations compared to the prior year period.

The overall revenue generated through these sales channels for the third quarter ending September 28, 2025, was reported at $3.85 million. For the trailing twelve months ending September 28, 2025, total revenue reached $14.04 million.

Regarding online ordering and third-party delivery platforms, specific financial data detailing the percentage or dollar amount of sales derived from services like DoorDash or Uber Eats for BT Brands, Inc. (BTBD) is not publicly itemized in recent reports.

Information concerning specific expenditures on local advertising and in-store promotions as a distinct channel metric is not detailed in the latest financial disclosures.

Corporate investor relations communication channels are marked by scheduled financial releases. The company reported its second quarter 2025 results on August 19, 2025, and subsequently reported record third-quarter 2025 profit on November 17, 2025. The projected date for the Q4 2025 Earnings Release is March 17, 2026.

• Q3 2025 Revenue: $3.85 million
• TTM Revenue (ending Sep 28, 2025): $14.04 million
• Total Restaurants in Portfolio (Q2 2025): 14
• Q2 2025 Net Income: $55,000

Finance: draft 13-week cash view by Friday.

BT Brands, Inc. (BTBD) - Canvas Business Model: Customer Segments

You're looking at the customer base for BT Brands, Inc. as of late 2025, right in the middle of a major strategic pivot. Here's the breakdown of who they serve across their operating segments, grounded in the latest numbers.

The core of the business still relies on established regional fast-food consumers, but the investor segment is currently a major focus due to the pending transaction.

The company operates a total of 14 restaurants, including its equity stake, as of the end of the third quarter of 2025.

Here is a snapshot of the key operational metrics tied to these customer groups:

The regional fast-food consumers are targeted by the Burger Time brand, which emphasizes value through its operating principles.

• Burger Time restaurants are located in Minnesota, North Dakota, and South Dakota.
• Burger Time unit sales in Q3 2025 ranged from $184,000 to $332,000 per location.
• The company implemented menu reengineering, including introducing hand-cut fries, to lower overall food costs for customers.

Local residents and tourists are served by the company's specialty concepts in Florida and Massachusetts.

• Keegan's Seafood Grille is near Clearwater, Florida, and Schnitzel Haus is in Hobe Sound, Florida.
• Pie In The Sky Coffee and Bakery is located in Woods Hole, Massachusetts.
• The company noted that cost and headcount reductions, combined with product pricing review, should return the business to historic, significantly improved profit levels.

Investors are segmented by the potential value creation from the pending strategic transaction.

• The company reported a Q3 2025 Net Income of $914,975, or $0.15 per share.
• The nine-month profit for 2025 was $0.10 per share.
• Cash and short-term investments totaled $4.7 million at the end of Q3 2025.

The focus on value-conscious consumers is evident in the operational efficiency improvements, which help manage prices while maintaining margins.

• Labor costs improved to 35.7% of sales, down from 39.8% the prior year.
• Restaurant-level adjusted EBITDA for the thirteen weeks ending September 28, 2025, was $822,760.
• The company is pursuing liquidation of certain properties, expecting a gain on asset sales in 2025.

BT Brands, Inc. (BTBD) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive the operations for BT Brands, Inc. as of late 2025. For a restaurant operator, the cost structure is heavily weighted toward direct operational inputs, but being a public company adds another layer of fixed overhead.

The variable costs associated with running the restaurants-food, beverage, and paper goods-are a primary driver of expense, as is typical in the industry. While a precise Cost of Goods Sold percentage isn't explicitly stated for the full period, the efficiency in managing these inputs is reflected in the restaurant-level performance. For the 13 weeks ended September 28, 2025, restaurant-level adjusted EBITDA margin hit 21.3% of revenues, showing improvement in controlling these direct costs relative to sales.

Labor is another major expense line. BT Brands, Inc. supports its operations with a team of 180 employees. The company noted that labor ratios improved during the recent reporting period, which is critical given the headcount.

As a publicly traded entity, BT Brands, Inc. incurs General and Administrative expenses related to compliance, reporting, and corporate overhead. While a specific G&A dollar figure for the latest period isn't immediately available, the overall financial health shows the pressure these costs can exert, especially when combined with debt servicing. The Interest Coverage ratio stood at -8.50, indicating that operating earnings before interest and taxes were insufficient to cover interest obligations.

Debt obligations contribute a fixed cost component. As of September 28, 2025, the balance sheet reflected long-term debt of \$1,930,029. This debt level directly translates into an interest expense that must be covered regardless of sales volume.

Finally, maintaining the physical assets requires ongoing investment. Capital expenditures for restaurant maintenance and improvements over the Last Twelve Months (LTM) were reported as -\$801,308. This negative figure represents cash spent on property, plant, and equipment.

Here is a snapshot of key cost-related financial metrics as of late 2025:

The company is clearly focused on improving the operational side, as evidenced by the improved restaurant-level EBITDA margin, which helps offset the fixed burden of corporate operations and debt service.

• High variable costs tied to food and paper goods.
• Labor expense driven by 180 employees.
• Fixed cost from long-term debt interest.
• Ongoing investment in property via CapEx of -\$801,308 LTM.

Finance: draft 13-week cash view by Friday.

BT Brands, Inc. (BTBD) - Canvas Business Model: Revenue Streams

You're looking at the core ways BT Brands, Inc. brings in money right now, late in 2025. It's a mix of steady restaurant sales and some one-time boosts. Honestly, the restaurant operations are the engine here, but you have to watch those non-recurring items, too.

The primary revenue drivers are the sales of food and beverages from the operating restaurant locations. As of the latest reports, BT Brands, Inc. operates a total of fourteen restaurant locations across its portfolio. This includes:

• Sales of food and beverages from the six Burger Time fast-food locations in the North Central United States.
• Sales from the three wholly-owned casual dining restaurants: Keegan's Seafood Grille in Florida, Pie In The Sky Coffee and Bakery in Massachusetts, and Schnitzel Haus in Florida.

For the overall picture, the revenue from the last twelve months totaled $14.04 million, based on the period ending September 28, 2025. That's the top-line number you need to anchor to. Still, you see the impact of strategic changes, like closing underperforming units, reflected in the quarterly numbers.

Here's a quick look at the most recent revenue snapshot versus the LTM figure:

You also have to account for the equity method income or loss from the 40.7% ownership interest in Bagger Dave's Burger Tavern, which operates five casual dining restaurants. This isn't direct sales revenue, but it hits the income statement. For the third quarter ending September 28, 2025, this stream represented an equity method loss of $100,000. That's a drag, not a boost, for this specific stream in Q3.

Then there are the non-recurring items. Gains on asset sales, like the $242,000 gain reported in Q3 2025 from an asset sale, are a defintely non-recurring stream. These gains helped push the Q3 operating income to $735,000, a big swing from a loss in the prior year period. Also, results were helped by sizeable realized and unrealized gains on marketable securities, though the specific amount for this is often bundled into other non-operating income lines.

To be fair, BT Brands, Inc. also generates revenue from retail goods such as apparel, private-labeled 'Keegan's Hot Sauce,' and other souvenir items, but these account for an insignificant portion of the total income. The real story is the core restaurant operations.

Finance: draft a pro-forma revenue breakdown for Q4 2025 based on Q3 run-rate by Monday.