Good Times Restaurants Inc. (GTIM): PESTLE Analysis [Nov-2025 Updated]

You need a clear map of the external forces shaping Good Times Restaurants Inc. (GTIM) right now, especially with the mixed financial signals from the first three quarters of fiscal year 2025. The core takeaway is this: the fast-casual segment is defintely a growth engine, but GTIM's unit economics are under severe pressure from rising labor and commodity costs, which is why same-store sales are slipping. We need to look beyond the menu and see the macro risks and opportunities.

Political Factors: Geopolitical Volatility and Regulatory Watch

Political uncertainty is a real cost for GTIM. Geopolitical tensions, for instance, don't just feel distant; they directly increase commodity price volatility, which hits GTIM's core beef costs. Plus, we have to watch the federal level-a new US administration could bring sudden, disruptive shifts in trade or labor policy that change the cost of doing business overnight.

Also, state-level politics matter a lot more now. Local focus on food sourcing and supporting local businesses can be a compliance hurdle or a new marketing opportunity. Honestly, continued federal scrutiny on franchise models is the key political risk for the Bad Daddy's Burger Bar expansion strategy. Franchise regulation is the silent killer here.

Economic Factors: Growth Engine vs. Margin Pressure

The good news is the market itself is strong. The US fast-casual market is forecast to grow at a Compound Annual Growth Rate (CAGR) of 13.7% from 2025 through 2029. That's a huge tailwind.

But GTIM is fighting a headwind on costs. While Q3 2025 revenue was a solid $37.0 million, same-store sales dropped 2.4% year-over-year. Rising ground beef costs are anticipated to increase throughout fiscal year 2025, which will keep squeezing margins. Here's the quick math: if your main input cost rises faster than your menu price, your profit shrinks fast.

Still, consumers are trading down from expensive full-service dining, which favors GTIM's value proposition. The company reported a Q3 2025 net income of $1.5 million, showing management is defintely keeping a tight lid on costs despite the lower sales traffic.

Sociological Factors: The Health and Convenience Shift

Consumer tastes keep evolving, and GTIM is well-positioned for the shift toward fresh, high-quality, and customizable meals over traditional fast food. Health-conscious diners are driving demand for transparent sourcing and nutritional information, which is a core strength for the Bad Daddy's brand.

Younger demographics prioritize convenience. This drives the need for efficient online ordering and delivery options, which GTIM must nail to capture that traffic. Plus, there is a growing public expectation for Corporate Social Responsibility (CSR)-what you do for the community now impacts customer loyalty. Good values mean better sales.

Technological Factors: Automation and Digital Efficiency

Technology is no longer a luxury; it's a required cost-saver. The industry-wide push to adopt Artificial Intelligence (AI) for customer service and predictive analytics is key to managing inventory and reducing waste. GTIM is actively reviewing and working to improve its online ordering experience to boost traffic-that's the most important tech focus right now.

Accelerated investment in digital ordering channels and integrated Point of Sale (POS) systems is critical for efficiency and data capture. Also, automation of back-of-house tasks like inventory and scheduling is necessary to mitigate those high labor costs. You can't out-hire the problem; you have to tech-solve it.

Legal Factors: Wage Laws and Compliance Costs

The legal environment is directly impacting the P&L (Profit and Loss). Increasing state and local minimum wage laws directly pressure GTIM's labor costs, which were already 34.3% of sales in Q2 2025. For example, new state laws, like Illinois's $15.00 per hour minimum wage for 18+ starting January 1, 2025, raise the operating floor for every competitor.

Stricter food safety and allergen disclosure regulations require continuous staff training and procedural updates-it's a non-stop compliance cost. Also, compliance with evolving data privacy laws is crucial for their digital ordering platforms. A data breach is a legal and financial disaster.

Environmental Factors: Sustainability as a Revenue Driver

Environmental concerns are moving from a PR issue to a revenue driver. Customer loyalty can increase by 10-15% for restaurants with strong sustainability practices, so this is a clear opportunity. The industry trend toward smarter waste management, including composting and waste-tracking software, is essential for operational efficiency.

There is growing regulatory and consumer pressure to phase out single-use plastics for compostable or reusable packaging. Plus, the need for energy-efficient kitchen equipment will lower utility costs and reduce the carbon footprint. What this estimate hides is the initial capital expenditure for the equipment, but the long-term savings are clear.

Finance: Draft a detailed 12-month commodity hedge strategy for ground beef by next Friday.

Good Times Restaurants Inc. (GTIM) - PESTLE Analysis: Political factors

Geopolitical tensions increase commodity price volatility, impacting GTIM's core beef costs

The political landscape in 2025 is directly translating into higher costs for Good Times Restaurants Inc. (GTIM), especially for their core product: beef. Geopolitical tensions have intensified trade uncertainty, and new tariffs are compounding a domestic supply crunch. This creates significant volatility in the Cost of Goods Sold (COGS).

For context, US wholesale lean beef (92% to 94% lean) averaged USD 9.52 per kilogram (kg) in July 2025. That's a staggering 11.61% year-on-year (YoY) rise, which is a massive headwind for a burger-centric business like GTIM. The political decisions driving this are clear:

• A 50% tariff increase on Brazilian beef imports was imposed in August 2025, immediately restricting a major source of US supply.
• Global beef production is projected to contract by 2% in 2025, driven by factors like disease and herd liquidation, a trend exacerbated by trade policy uncertainty.
• The National Restaurant Association has noted that wholesale food costs have increased by nearly 5% since last year, a number that will only be pushed higher by these new tariffs.

You're seeing the direct result of trade policy on your plate, and GTIM's ability to manage this volatility-as they did with improved food and beverage costs at Bad Daddy's Burger Bar in Q1 2025-is defintely a key performance indicator.

Regulatory uncertainty from a new US administration could lead to sudden shifts in trade or labor policy

A new US administration brings a fresh wave of regulatory uncertainty, particularly in labor and tax policy, which directly impacts GTIM's operational expenses and capital planning. The most immediate and concrete impact is on labor costs for salaried staff. The Department of Labor's (DOL) new overtime rule, effective January 1, 2025, raised the salary threshold for overtime exemption.

This means any salaried manager earning less than $1,128 per week, or $58,656 per year, is now eligible for overtime pay. For a restaurant company operating on thin margins, this is a clear cost pressure that requires immediate staffing and compensation model adjustments. Also, the Tax Cuts and Jobs Act (TCJA) provisions are expiring at the end of 2025. This affects capital expenditure planning, as the bonus depreciation rate for business property has already phased down to 20% in 2025, reducing the tax benefit of new restaurant equipment purchases compared to prior years.

Key Federal Regulatory Shifts Impacting GTIM in FY2025

Policy Area	Change/Regulation	FY2025 Impact/Metric
Labor Cost (DOL)	New Overtime Exemption Threshold	Salaried staff below $58,656/year are now eligible for overtime.
Capital Expenditure (Tax)	Bonus Depreciation Phase-Out	Tax deduction for new equipment is only 20% (down from 100% previously).
Trade/Supply Chain (Tariffs)	Increased Tariffs on Imports	New 50% tariff on Brazilian beef; contributes to 11.61% YoY rise in US lean beef prices.

State-level political focus on food sourcing and local business support can create new opportunities or compliance hurdles

GTIM operates across multiple states-Bad Daddy's Burger Bar, for example, has 40 locations in seven states including North Carolina and Colorado, while Good Times Burgers & Frozen Custard is primarily in Colorado and Wyoming. This geographic diversity means state and local politics are just as important as federal. We are seeing a trend toward hyper-local food politics that GTIM must navigate.

Some states are creating compliance hurdles, while others are offering opportunities:

• Colorado: Enacted new legislation in 2025, including HB 1059 for food waste reduction and SB 285 for food establishment inspection fees, adding new compliance layers.
• Tennessee: Expanded its Meat Inspection Act in 2025, which could open up new, locally-sourced meat supply options for the three Bad Daddy's Burger Bar locations there, but only if local suppliers meet the new federal-equivalent inspection standards.
• Texas: Banned the sale of cell-cultured protein starting September 1, 2025. While GTIM is not currently using this, such a political stance signals a preference for traditional, natural products, aligning well with Good Times Burgers & Frozen Custard's existing 100% all-natural burgers and chicken sandwiches positioning.

These state-by-state variations mean a one-size-fits-all compliance and sourcing strategy won't work.

Continued federal scrutiny on franchise models could affect Bad Daddy's Burger Bar's expansion strategy

The franchise model, which GTIM utilizes for a portion of its Good Times Burgers & Frozen Custard locations and licenses for one Bad Daddy's Burger Bar location, remains a political hot potato at the federal level. The core issue is the potential for a broader definition of 'Joint Employer' (an employer who is jointly liable for the labor violations of its franchisee), which would fundamentally change the risk profile of the franchise business model.

The National Labor Relations Board (NLRB) has been operating without a full quorum for most of 2025, which has slowed the pace of key labor rulings. Still, the underlying political pressure to hold franchisors more accountable for franchisee labor practices persists. For Bad Daddy's Burger Bar, which has a strategy for expansion, any regulatory shift that increases the franchisor's liability would raise the cost and complexity of licensing new units. This could slow the pace of capital-light growth, forcing GTIM to rely more heavily on company-owned expansion, which is a much higher capital outlay. The current count is 40 Bad Daddy's Burger Bar locations owned or licensed, but future growth hinges on a stable regulatory definition of that licensing relationship.

Good Times Restaurants Inc. (GTIM) - PESTLE Analysis: Economic factors

The US fast-casual market is forecast to grow at a CAGR of 13.7% from 2025-2029.

The macro-economic environment for the fast-casual segment is defintely a tailwind for Good Times Restaurants Inc. The broader US fast-casual market is projected to grow at a compound annual growth rate (CAGR) of 13.7% from 2025 through 2029, adding an estimated $84.5 billion in market size. This indicates a strong, sustained consumer preference for this dining model, which blends the quality of full-service with the speed and price point of quick-service. This is a massive opportunity you can't ignore.

GTIM's Q3 2025 revenue was $37.0 million, but same-store sales dropped 2.4% year-over-year.

While the market is growing, Good Times Restaurants is facing a near-term challenge in capturing that growth. Total revenue for the third fiscal quarter of 2025 was $37.0 million, a 2.4% decrease compared to the same period last year. The underlying issue is traffic, evidenced by the drop in same-store sales (SSS). Same-store sales for the company's two brands diverged sharply in Q3 2025, showing where the pressure points are.

Here's the quick math on the sales decline:

• Bad Daddy's Burger Bar (Upscale Casual): SSS decreased 1.4%.
• Good Times Burgers & Frozen Custard (Quick-Service): SSS decreased 9.0%.

The steep decline at the Good Times brand signals that even within the fast-casual space, the value proposition is under intense scrutiny from consumers.

Rising ground beef costs are anticipated to increase throughout fiscal year 2025, squeezing margins.

The biggest near-term risk to profitability is commodity inflation, specifically ground beef. The company has flagged that both concepts are facing record-high ground beef prices into the fourth fiscal quarter of 2025. For context, the average price for a pound of 100% ground beef reached an all-time high average of $6.31 in August 2025, a 14% rise since the start of the year. The USDA predicted beef and veal prices to increase by 6.3% overall in 2025. This cost pressure directly impacts your food and packaging costs, which were already 31.5% of restaurant sales at the Good Times brand in Q3 2025.

Consumer trade-down from full-service dining favors the fast-casual value proposition.

Despite the internal sales challenges, the underlying economic trend of consumer trade-down is a clear opportunity. As inflation and interest rates continue to pressure household budgets, diners are moving away from expensive, full-service restaurants-like Bad Daddy's Burger Bar's upscale casual model-and into more value-oriented, fast-casual or quick-service concepts. You see this in the market's overall 13.7% CAGR forecast. Bad Daddy's, with its higher price point, is feeling the pinch, but the Good Times brand is perfectly positioned to capture the value-seeking customer, provided its operations and marketing can execute. The pressure from value-oriented consumers is real, so you need to lean into the 'value' part of the fast-casual equation.

The company reported a Q3 2025 net income of $1.5 million, showing cost control despite lower sales.

The good news is that management is controlling what it can. Despite the revenue decline, the company reported a Q3 2025 net income attributable to common shareholders of $1.5 million. This profitability, even with sales dipping, highlights effective cost control and a reduction in general and administrative (G&A) expenses, which declined to $2.2 million (or 5.9% of revenues) in the quarter. This focus on operational efficiency is crucial when facing margin compression from high commodity costs.

Here is a snapshot of the key financial metrics for the quarter:

Metric	Q3 Fiscal Year 2025 Value	Year-over-Year Change
Total Revenue	$37.0 million	-2.4%
Net Income (Attributable to Common Shareholders)	$1.5 million	N/A (Shows profitability)
Bad Daddy's Same-Store Sales	N/A	-1.4%
Good Times Same-Store Sales	N/A	-9.0%
Adjusted EBITDA	$2.2 million	N/A

Finance: Draft a margin-protection plan by Friday that models the impact of a 15% ground beef cost increase, identifying where a menu price increase is unavoidable.

Good Times Restaurants Inc. (GTIM) - PESTLE Analysis: Social factors

The social landscape in 2025 shows a clear divergence in consumer behavior, forcing quick-service and fast-casual brands like Good Times Restaurants Inc. (GTIM) to adapt their core model. Simply put, people are demanding higher quality, more information, and better access. Your investment thesis must account for how GTIM's dual-brand strategy-Bad Daddy's Burger Bar and Good Times Burgers & Frozen Custard-is navigating these powerful, non-negotiable shifts.

Strong consumer preference for fresh, high-quality, and customizable meals over traditional fast food.

The market is moving decisively toward quality and customization, a trend that has fueled the fast-casual segment's projected growth of $84.5 billion between 2025 and 2029. Consumers, particularly millennials, are prioritizing fresh, trendy, and customizable options, especially in protein and portion sizes. This is a direct challenge to the traditional, fixed-menu QSR model.

GTIM's two brands address this in different ways. Bad Daddy's Burger Bar, positioned as a full-service, chef-driven concept, is inherently aligned with this demand for gourmet, customizable burgers and chopped salads. The Good Times brand is attempting to bridge the gap by emphasizing its use of 100% all-natural burgers and chicken sandwiches and its new 'Colorado Native Burgers' campaign, which focuses on quality and local roots. They are even testing new processes, like smashing patties and shredding lettuce in-house, to signal freshness. The pressure is real, though; Good Times' same-store sales decreased 9.0% in the third fiscal quarter of 2025, suggesting the QSR brand is struggling more with the value-vs-quality equation.

Health-conscious diners are increasingly seeking transparent sourcing and nutritional information.

Transparency is no longer a niche marketing angle; it's a baseline expectation. As of 2023, 76% of consumers stated that transparency is important in their food purchasing decisions, and 43% of diners are willing to pay a premium for sustainable dishes. This demand covers everything from ingredient lists to ethical sourcing and food safety.

GTIM has a strong narrative here, which they need to amplify. Their menu features 'responsibly raised beef and chicken with no added hormones and no antibiotics.' This clean-label approach is a key defense against competitors. The table below outlines how GTIM's stated practices align with the core transparency demands of the 2025 consumer.

2025 Consumer Transparency Demand	GTIM's Alignment/Action	Strategic Impact
Willingness to pay more for sustainable/ethical food (43% of diners)	Use of responsibly raised beef and chicken (no added hormones/antibiotics)	Justifies menu price increases (Good Times Q3 2025 average menu price was 3.8% higher than 2024)
Demand for fresh/whole-food ingredients	In-house preparation, such as bringing in fresh whole produce and shredding lettuce by shift	Enhances product quality and counters the perception of traditional fast food.
Need for clear sourcing/nutritional data (76% prioritize transparency)	New brand campaign includes a fresh website and matching mobile app redesign	Provides a platform to communicate sourcing details and nutritional information clearly.

Younger demographics prioritize convenience, driving demand for efficient online ordering and delivery options.

The experience has to be seamless, or you lose the sale. Convenience is king for younger diners, with one in five consumers reporting they ordered restaurant delivery more often in 2025 than the year prior. For GTIM, this means their off-premise execution must be flawless.

The company is investing capital to meet this digital demand. They have updated all company-owned Good Times locations with digital menu boards and completed a system-wide update of point-of-sale (POS) systems. Furthermore, the new marketing push includes a fresh website and mobile app redesign, which is critical for streamlining the online ordering experience. This focus on digital infrastructure is a necessary response to declining same-store sales, which were down 4.4% year-to-date for the Good Times brand as of Q3 2025.

Growing public expectation for corporate social responsibility (CSR) and community engagement.

Consumers want to buy from brands that align with their values. For a regional player like GTIM, which operates 30 Good Times restaurants primarily in Colorado and 40 Bad Daddy's Burger Bar locations across its system, local community engagement is defintely a core asset.

GTIM's stated core value is 'Community,' focusing on supporting local charities and building strong neighborhood relationships. The new 'Colorado Native Burgers' campaign for the Good Times brand is a strategic move to lean into this social factor, emphasizing their Colorado roots to build deeper, more authentic local loyalty. This local-first approach is key to driving traffic in a competitive QSR environment where total revenues for the company were $143.40 million over the last twelve months ending July 1, 2025.

• Actively support local initiatives and charities.
• Build strong relationships within the neighborhoods served.
• New marketing campaign leverages 'Colorado roots' for local appeal.

Good Times Restaurants Inc. (GTIM) - PESTLE Analysis: Technological factors

Technology is no longer a back-office expense for Good Times Restaurants Inc.; it is the primary tool for combating margin compression and declining traffic, especially at the Good Times brand, which saw a same-store sales decrease of 9.0% in the fiscal 2025 third quarter. The company is making targeted, strategic investments in customer-facing AI and core digital infrastructure to drive efficiency and improve the guest experience.

Industry-wide push to adopt AI for customer service and predictive analytics to manage inventory and waste.

The Quick-Service Restaurant (QSR) sector's push into Artificial Intelligence (AI) is a necessity, not a luxury, and Good Times is a significant early mover. The Good Times Burgers & Frozen Custard brand is pioneering the use of conversational AI by deploying the Valyant AI voice-activated order taker in its drive-thrus, a critical channel for QSRs. This AI system directly addresses the labor shortage and speed-of-service challenges, which are key drivers of customer satisfaction.

Initial results from this AI deployment are compelling, showing a reported 50% reduction in wait time for customers during high-traffic periods [cite: 3 from previous search]. This is a clear, quantifiable efficiency gain that translates directly into higher throughput and better traffic retention. While the company has not disclosed specific AI-driven inventory and waste management figures for 2025, the industry expectation is that AI-powered forecasting can reduce food waste by up to 20%.

Here's the quick math on AI's impact:

• Reduce drive-thru wait time by 50% (Valyant AI).
• Increase order accuracy, cutting remakes and food waste.
• Free up human labor to focus on food prep and customer service.

GTIM is actively reviewing and working to improve its online ordering experience to boost traffic.

Digital channels are the new frontline for customer acquisition, and GTIM is actively overhauling its digital presence in fiscal 2025. The company is launching a fresh website and mobile app as a core component of its new marketing strategy. This investment is crucial because a friction-free digital experience is directly correlated with higher average check sizes and increased customer loyalty.

The goal is to capture more direct-to-consumer orders, reducing reliance on high-commission third-party delivery marketplaces. The improved digital platform must integrate seamlessly with the newly updated Point-of-Sale (POS) systems to ensure operational efficiency from click to kitchen.

Accelerated investment in digital ordering channels and integrated Point of Sale (POS) systems is critical for efficiency.

The foundation for any modern restaurant operation is a unified digital infrastructure. Good Times has completed a system-wide update of its Point-of-Sale (POS) systems and installed digital menu boards across all company-owned locations [cite: 9 from previous search]. This modernization is the necessary plumbing to support the new mobile app and website, ensuring orders flow instantly and accurately to the kitchen.

What this investment hides is the long-term cost-saving potential. An integrated POS system reduces order errors, simplifies end-of-day reconciliation, and provides the granular data needed for predictive analytics. The total depreciation and amortization cost for the fiscal 2025 third quarter was $982 thousand, reflecting the ongoing capital deployment into these foundational assets, including remodels and equipment.

Automation of back-of-house tasks like inventory and scheduling is necessary to mitigate high labor costs.

The most significant pressure point for GTIM remains labor cost. For the Good Times brand, payroll and employee benefit costs rose to 34.2% of sales in the fiscal 2025 third quarter, up from 32.7% in the prior year quarter. This cost inflation makes back-of-house automation an imperative, not an option.

The AI drive-thru is a clear front-of-house automation win, but the next phase must focus on kitchen and inventory. Automated scheduling software (Workforce Management) and predictive inventory systems are essential to: 1) reduce the time managers spend on non-customer-facing tasks, and 2) eliminate food waste by accurately forecasting demand. The company's commitment to 'taking swift action to reduce restaurant-level costs' confirms this focus on operational efficiency is a top priority.

Technological Initiative	2025 Status/Action	Quantifiable Impact/Metric
AI Customer Service	Deployment of Valyant AI voice order taker in drive-thrus (Good Times brand).	50% reduction in customer wait time during peak hours [cite: 3 from previous search].
Digital Ordering Channel	Launch of fresh website and mobile app in fiscal 2025.	Aims to increase direct digital sales and reduce third-party commission costs.
Core Infrastructure	System-wide update of Point-of-Sale (POS) systems and installation of digital menu boards completed [cite: 9 from previous search].	Q3 2025 Depreciation & Amortization of $982 thousand reflects ongoing capital investment.
Labor Cost Mitigation	Focus on reducing restaurant-level costs.	Good Times brand Q3 2025 Payroll/Benefits Cost: 34.2% of sales (Up from 32.7% in prior year).

Good Times Restaurants Inc. (GTIM) - PESTLE Analysis: Legal factors

Increasing state and local minimum wage laws directly pressure GTIM's labor costs, which were 34.3% of sales in Q2 2025.

The patchwork of state and local wage laws creates a significant, quantifiable headwind for Good Times Restaurants Inc., particularly since labor is one of the largest operational expenses. You are seeing this play out directly in your financials: the company's consolidated payroll and benefits costs for fiscal Q2 2025 stood at an impactful 34.3% of total revenues. That is a huge chunk of your sales, and any mandated increase hits the bottom line hard.

The core of the pressure comes from the local level. While the Colorado statewide minimum wage rose to $14.81 per hour on January 1, 2025, the real shockwave is in key metropolitan areas. For instance, in Denver, where the Good Times brand is heavily concentrated, the non-tipped minimum wage jumped to $18.81 per hour. This forces a wage floor increase for nearly all employees, not just those at the minimum, as you must maintain internal pay equity.

Here's the quick math on the wage floor shift in a primary operating area:

Jurisdiction	Effective Date	Non-Tipped Minimum Wage	Tipped Minimum Wage (Employer Base)
Colorado (Statewide)	Jan 1, 2025	$14.81/hour	$11.79/hour
Denver, CO (Local)	Jan 1, 2025	$18.81/hour	$15.79/hour

New state laws, like Illinois's $15.00 per hour minimum wage for 18+ starting January 1, 2025, raise the operating floor.

Even if Good Times Restaurants Inc. doesn't operate a store in every state with a high minimum wage, these laws set a national expectation for QSR (Quick Service Restaurant) labor. The Illinois statewide minimum wage for workers 18 and older reached $15.00 per hour on January 1, 2025. This final step in a multi-year phase-in serves as a benchmark for the minimum operating cost in any new market the company might consider for its Bad Daddy's Burger Bar expansion.

The key takeaway is that the days of relying on the federal minimum wage of $7.25 per hour are long gone. Every new lease negotiation and every quarterly forecast must account for a local minimum wage that is often more than double the federal rate, which is defintely a challenge for margin control.

Stricter food safety and allergen disclosure regulations require continuous staff training and procedural updates.

The legal risk from food safety is shifting from simply preventing contamination to mandatory consumer disclosure. A major trend is the push for detailed allergen labeling, exemplified by California's Allergen Disclosure for Dining Experiences Act (SB 68), signed in October 2025. This law, effective July 1, 2026, requires chain restaurants with 20 or more locations (which includes the Bad Daddy's brand) to disclose the presence of the nine major food allergens on their menus.

Compliance here means a massive operational overhaul, not just a menu reprint. You need to ensure:

• Sourcing data on all nine major allergens (milk, eggs, peanuts, tree nuts, fish, shellfish, wheat, soy, and sesame) for every ingredient.
• Implementing new back-of-house procedures to prevent cross-contact.
• Mandatory, continuous staff training to manage customer inquiries and prep procedures.

This is a compliance cost that will spread beyond California, as other states often adopt similar legislation after a major market like California leads the way.

Compliance with evolving data privacy laws is crucial for their digital ordering platforms.

As Good Times Restaurants Inc. expands its digital footprint-including a fresh website and mobile app redesign for the Good Times brand in late 2025-it significantly increases its exposure to data privacy regulations. Laws like the California Consumer Privacy Act (CCPA) and its amendments mean the company is collecting and processing personal information (PI) on a large scale, especially through digital ordering and loyalty programs.

The legal focus is on consumer rights, including the right to know what data is collected and the right to request deletion (the 'right to be forgotten'). Failure to comply with these evolving standards carries severe financial penalties. The cost of a data breach in the hospitality industry is estimated to average $2.94 million, making proactive investment in secure, compliant digital platforms a non-negotiable legal requirement.

Good Times Restaurants Inc. (GTIM) - PESTLE Analysis: Environmental factors

Customer Loyalty Can Increase by 10-15% for Restaurants with Strong Sustainability Practices

The environmental factor is no longer a 'nice-to-have' for Quick Service Restaurants (QSRs) and casual dining; it's a primary driver of customer choice and, crucially, loyalty. You need to see this as a revenue opportunity, not just a cost center. Data from 2025 shows that 67% of customers prefer dining at restaurants committed to sustainability. This preference translates directly to your bottom line.

For Good Times Restaurants Inc., with its Good Times Burgers & Frozen Custard and Bad Daddy's Burger Bar brands, adopting clear, visible sustainability practices can drive a significant lift. We project that a successful, well-communicated program could boost customer loyalty and repeat visits by the target range of 10% to 15%. Furthermore, 72% of consumers are willing to pay more at sustainable restaurants, with 18% prepared to pay an additional 6-10% for a meal that aligns with their eco-friendly values. Honestly, this is free money if you execute well.

Industry Trend Toward Smarter Waste Management, Including Composting and Waste-Tracking Software

The biggest environmental win you can capture right now is waste reduction, especially food waste. It's a 1,300% ROI opportunity, so pay attention. The US food waste management market is projected to reach $28.15 billion in 2025, driven by technology and regulation.

For every $1 a company dedicates to combating food waste, it can anticipate a substantial $14 return on investment (ROI). This massive return comes from lower purchasing costs, reduced disposal fees, and operational efficiency gains. Good Times Restaurants Inc. should immediately implement waste-tracking software (like Winnow or Leanpath) to identify where the waste is happening-prep, spoilage, or plate scrapings.

Waste Management Action	2025 Industry Trend/Benefit	GTIM Financial Impact
AI-Driven Waste Tracking	Enhanced operational efficiency; real-time reduction at source.	Potential 1,300% ROI on initial investment in waste reduction.
Composting Programs	Growing regulatory pressure in states like Colorado; diverts organic waste from landfills.	Reduces waste disposal fees (which can be a significant restaurant-level cost).
Surplus Food Donation	Enforced by dining restaurants and supermarkets; leverages donation platforms.	Tax benefits for donations and reduced disposal volume.

Growing Regulatory and Consumer Pressure to Phase Out Single-Use Plastics for Compostable or Reusable Packaging

The regulatory landscape for single-use plastics is changing fast, and the pressure is moving from a few coastal cities to entire states, including those where Good Times Restaurants Inc. operates. The shift to compostable packaging is no longer optional; it's a matter of compliance and brand reputation.

States like California and New York have already enacted bans on items like polystyrene food containers and plastic cutlery, with similar restrictions coming into force across multiple US regions in 2025. Your packaging strategy must be future-proofed against these bans.

• 60% of US consumers are willing to pay more for eco-friendly disposable plates.
• New regulations in 2025 mandate the use of sustainable materials like biodegradable plastics or compostable alternatives.
• Bans specifically target single-use items like plastic straws, cutlery, and polystyrene foam containers.

Switching to certified compostable tableware made from materials like bagasse (sugarcane fiber) or cornstarch is the clear action. This change will defintely increase your packaging costs in the near term, but it mitigates the far greater risk of non-compliance fines and customer backlash.

Need for Energy-Efficient Kitchen Equipment to Lower Utility Costs and Reduce the Carbon Footprint

Utility costs are a major component of restaurant-level operating expenses, often accounting for up to 10% of total operating expenses. Commercial kitchens are energy hogs, using 2.5 to 3 times more energy per square foot than other commercial spaces. The opportunity here is immediate cost savings.

By investing in ENERGY STAR®-certified equipment, Good Times Restaurants Inc. can cut overall energy costs by up to 20%. For instance, upgrading to commercial induction cooktops is a smart move; they use up to 70% less energy than traditional cooking methods and also reduce kitchen heat, improving staff comfort and cutting HVAC (heating, ventilation, and air conditioning) costs.

This isn't just about saving money; it's about operational resilience. Energy-efficient equipment experiences fewer breakdowns, reducing maintenance costs and downtime, plus it hedges against future energy price volatility.

Finance: draft a 5-year CapEx plan for replacing all non-ENERGY STAR® fryers and refrigeration units by Q4 2026.