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

You're looking at Good Times Restaurants Inc. (GTIM) and seeing a tale of two brands: the high-performing Bad Daddy's Burger Bar and the more challenged Good Times concept. Honestly, the company's $135 million in Fiscal Year 2025 revenue is defintely resilient, but the real story is Bad Daddy's $2.5 million Average Unit Volume (AUV) driving the bus while the entire operation struggles with a small footprint, capital constraints, and just +1.8% same-store sales growth. We need to cut through the noise and map out the clear risks and opportunities for this dual-brand operator, so let's dive into the full 2025 SWOT analysis.

Good Times Restaurants Inc. (GTIM) - SWOT Analysis: Strengths

Dual-brand strategy mitigates single-concept risk

You're looking for stability in the restaurant sector, and Good Times Restaurants Inc.'s (GTIM) dual-brand strategy is a major structural strength. They operate two distinct concepts: Bad Daddy's Burger Bar, which is a full-service, upscale casual dining experience, and Good Times Burgers & Frozen Custard, a quick-service restaurant (QSR) focused on drive-thru traffic. This isn't just two brands; it's a hedge against shifting consumer behavior.

When the economy slows, customers might trade down from full-service to QSR, or vice-versa when disposable income rises. GTIM captures both ends of the market, which smooths out the revenue volatility you see in single-concept operators. It's a smart way to manage risk.

• Bad Daddy's: Full-service, chef-driven menu, full bar.
• Good Times: Quick-service, drive-thru focus, natural ingredients.

Bad Daddy's Burger Bar average unit volume (AUV) is strong at $2.5 million

The financial firepower of the Bad Daddy's Burger Bar concept is undeniable. While the full-service segment has seen headwinds, this brand maintains a strong Average Unit Volume (AUV), which is the average annual sales per restaurant. Here's the quick math: based on recent fiscal data, the average weekly sales for Bad Daddy's were approximately $52,555.

Annualizing that puts the AUV at roughly $2,732,860. This figure significantly exceeds the $2.5 million benchmark and shows that their upscale, gourmet burger positioning-with items like the Birria Burger and signature cocktails-commands a premium price point and strong customer loyalty. This high AUV provides a solid foundation for profitability and future expansion capital.

Good Times Burgers & Frozen Custard has a defensible drive-thru focus

The Good Times Burgers & Frozen Custard brand offers a critical operational strength: a laser focus on the drive-thru. In the post-2020 environment, the drive-thru channel became non-negotiable for QSR success, driving a huge percentage of sales. Good Times is built around this model, giving them a structural advantage over concepts scrambling to adapt.

They are actively modernizing this core strength, with a system-wide redesign underway to update all units by 2026. Ten locations are slated for remodels in fiscal year 2025 alone, integrating digital menu boards and updated point-of-sale (POS) systems to enhance speed and efficiency. This investment ensures the brand remains competitive in the fast-paced QSR space.

Total Fiscal Year 2025 revenue reached $135 million, showing resilience

Despite a challenging operating environment marked by inflation and value-seeking customers, GTIM is projected to achieve a resilient total revenue for Fiscal Year 2025. While the full year is not yet closed, the company has demonstrated an ability to generate significant sales across its two concepts. The total projected revenue for FY 2025 is expected to hit approximately $135 million, a strong figure that underscores the scale of the business.

To be fair, this is a projection, but the first three quarters of FY 2025 already delivered $107.6 million in combined revenue, showing the core business is holding up. This consistent revenue base, even with same-store sales declines in Q2 and Q3 2025, provides the liquidity and scale needed to manage costs and invest in future growth initiatives, like the Bad Daddy's menu engineering efforts.

Good Times Restaurants Inc. (GTIM) - SWOT Analysis: Weaknesses

Limited geographic footprint, primarily concentrated in Colorado and the Southeast

Your growth potential is always tied to your physical reach, and for Good Times Restaurants, the geographic footprint remains a significant weakness. The Good Times Burgers & Frozen Custard concept is heavily concentrated in its home state, which limits revenue diversification and exposes the brand to regional economic shocks or local regulatory changes, like the minimum wage increases in Colorado.

As of late 2024, the company operated or franchised approximately 30 Good Times restaurants, with the vast majority of these locations primarily in Colorado. The company's other brand, Bad Daddy's Burger Bar, expands the overall company presence into the Southeast, but the core Good Times brand is still a regional player, not a national one. That's a tough spot to be in when you're competing with national chains.

• Good Times Restaurants: Approximately 30 locations, mostly in Colorado.
• Total Company Restaurants (Good Times and Bad Daddy's): Approximately 70 locations.
• Concentration risk is high in the Colorado market.

Small market capitalization limits access to growth capital and analyst coverage

A small market capitalization (market cap) presents a defintely real headwind for securing the capital needed for aggressive expansion. As of November 2025, Good Times Restaurants Inc.'s market cap hovered around $13.35 million, placing it firmly in the Nano-Cap category.

Here's the quick math on why this matters: A low market cap means the stock is less liquid (harder to buy and sell quickly without impacting the price) and often overlooked by institutional investors and major financial analysts. This lack of coverage keeps the stock price suppressed and makes raising substantial equity capital-say, for a multi-state expansion-both more expensive and more dilutive to existing shareholders.

Same-store sales growth was modest at -4.4% in Fiscal Year 2025 (YTD)

The most pressing financial weakness is the negative trend in same-store sales (SSS), which is a key measure of a restaurant chain's health. For the Good Times brand, the performance in Fiscal Year 2025 has been challenging. The year-to-date (YTD) same-store sales for the Good Times concept through the third quarter of Fiscal Year 2025 actually decreased by 4.4%.

This decline accelerated significantly, with the third fiscal quarter of 2025 seeing an even sharper drop of 9.0% for the Good Times brand. Declining SSS means the company is generating less revenue from its existing asset base, which puts immense pressure on restaurant-level operating margins, especially when food and labor costs are rising. This is a red flag for operational efficiency.

Good Times concept faces intense competition from larger QSR chains

The Quick Service Restaurant (QSR) burger segment is brutally competitive, and the Good Times concept is fighting giants with much deeper pockets for advertising and discounting. Management specifically noted that the brand is struggling against the 'continued discounting by our competitors' in the market.

When major QSR chains like McDonald's or Burger King launch aggressive value menus or promotional pricing, a smaller regional player like Good Times has a tough time competing on price without gutting its own margins. This competitive pressure, coupled with record-high ground beef costs seen in Q4 2025, forces the company to consider incremental menu price increases, which can further deter price-sensitive customers.

Good Times Restaurants Inc. (GTIM) - SWOT Analysis: Opportunities

You're looking for where Good Times Restaurants Inc. (GTIM) can truly drive shareholder value, and the answer is simple: shift the capital-intensive Bad Daddy's Burger Bar model to a capital-light one, and use menu engineering to stabilize the volatile check average. The company has the unit economics; it just needs to change the funding mechanism and perfect its labor tech rollout.

Accelerate Bad Daddy's franchising to reduce capital expenditure on expansion

The biggest opportunity is to pivot Bad Daddy's Burger Bar back to a serious franchising model. Right now, GTIM is doing the heavy lifting, which ties up cash. For context, the estimated initial investment for a single Bad Daddy's unit is between $590,000 and $1,382,000. Here's the quick math: if GTIM were to franchise just five units in fiscal year 2025 instead of owning them, it would save roughly $4.93 million in capital expenditure (using the midpoint investment of $986,000 per unit). That cash could be used for share repurchases or debt reduction.

Plus, a robust franchise model creates a predictable, high-margin revenue stream from royalty and ad fees. This is defintely a more scalable path.

Menu innovation at Bad Daddy's to drive check average and defend the premium positioning

Bad Daddy's is a premium brand, but it's competing in a casual dining segment where value is king, which is why Same-Store Sales (SSS) have been volatile, dropping 3.7% in Q2 2025. The opportunity is to use menu innovation (new items and pricing) to manage both traffic and check size. The introduction of limited-time Smash burgers, starting at $8.50, is smart because it brings in a value-conscious customer without cheapening the core gourmet offering.

The real win is leveraging the full bar and chef-driven items to push the average check (which was around $16.00 in 2015). The Q3 2025 results showed a 4.7% menu price increase helped margins, so the next step is to use high-margin, limited-time offers (LTOs) to layer on top of that base price increase.

• Feature high-margin bar items: Specialty cocktails and craft beer pairings boost the total check.
• Expand premium LTOs: Introduce a new $18-$20 gourmet burger LTO every quarter to test pricing elasticity at the high end.
• Use the $52,555 average weekly sales (Q3 2024) as the baseline to model a 3-5% check average increase solely from LTOs.

Strategic expansion into adjacent, high-growth US markets outside the current 40 locations

Bad Daddy's is currently concentrated in seven states, primarily in the Southeast and Colorado. The concept's small-box, full-service model with high sales per square foot makes it portable. The opportunity is to target adjacent, high-growth markets that share a similar demographic profile to their successful North Carolina and Georgia locations, but where competition is less saturated than in major coastal hubs.

A strategic, measured expansion-aiming for the announced 5-7 new units annually across both brands-should focus on markets with strong population growth and favorable real estate costs for their 3,300-3,600 sq. ft. footprint. These markets offer a lower cost of entry than established major metros.

• Target Florida's I-4 Corridor: High population growth and a strong casual dining culture.
• Look at Texas' secondary cities: Focus on Austin or San Antonio, not just Dallas/Houston.
• Move into Mid-Atlantic states: Virginia or Maryland offer a bridge market between the Carolinas and the Northeast.

Implement tech-driven labor scheduling to offset rising wage pressure

Labor costs are a persistent issue, even though Bad Daddy's managed to reduce them by 40 basis points to 34.3% of sales in Q2 2025, largely through efficiency and menu pricing. The key is to lock in those gains using technology, not just by cutting manager incentive pay.

The ongoing rollout of the new point-of-sale (POS) system is the perfect vehicle for this. A modern POS system, like the one being installed, is a data engine. The opportunity lies in using its advanced scheduling and forecasting tools to minimize non-productive labor hours (labor creep).

This means moving beyond basic clock-in/out functionality to predictive scheduling based on sales forecasts and guest traffic patterns. This helps offset the external pressure of rising minimum wages without sacrificing guest experience.

• Integrate POS data: Use the new system's data to forecast labor needs in 15-minute increments, not just hourly.
• Pilot digital ordering kiosks: Introduce automation in high-volume, quick-service Good Times locations first, then assess if a limited version can reduce front-of-house labor needs at Bad Daddy's.
• Reduce turnover: Use the improved employee experience from the new, intuitive POS to lower the high restaurant sector turnover rate, which is currently around 70% annually.

Good Times Restaurants Inc. (GTIM) - SWOT Analysis: Threats

You're looking at a classic small-cap restaurant dilemma: the market is growing, but your margins are shrinking, and the competition is huge. The biggest threats to Good Times Restaurants Inc. (GTIM) in the 2025 fiscal year are the macro-economic squeeze on your operating costs and the relentless pressure from larger, better-capitalized fast-casual chains.

Persistent food and labor inflation eroding already thin restaurant operating margins

The cost of keeping the lights on and the grills hot is the single most immediate threat to profitability. We're seeing a significant divergence in performance between your two brands, with Good Times Burgers & Frozen Custard taking the brunt of the cost increases. For the third fiscal quarter of 2025 (Q3 FY2025), the labor and food inflation hit Good Times hard, driving the restaurant-level operating profit margin down to just 11.2%, a drop of 530 basis points (bps) year-over-year.

The core issue is that you're facing high-single-digit cost inflation on key inputs like ground beef and labor, but you can't raise menu prices enough to compensate without killing demand. For Good Times, payroll and benefits costs climbed to 34.2% of sales in Q3 FY2025, up from 32.7% in the prior year quarter, plus labor costs rose 150 bps year-over-year due to wage inflation and sales deleveraging. The Bad Daddy's Burger Bar concept managed to hold its own with a steady restaurant-level margin of 14.4%, but even that is a thin cushion when ground beef prices are still elevated.

Economic slowdown impacting discretionary spending on casual dining (Bad Daddy's)

The consumer is defintely feeling the pinch, and that's hitting the more discretionary, higher-ticket Bad Daddy's concept. You're seeing value-oriented consumers trade down or simply eat out less. The proof is in the comparable sales numbers, which are a clear signal of this pressure. In Q3 FY2025, same-store sales for Bad Daddy's declined by 1.4%, while Good Times, which is more of a quick-service, lower-price point concept, saw a steeper drop of 9.0%.

This sales pressure is directly linked to competitor discounting and a general consumer shift toward lower-priced alternatives. When the economy slows, a $15-$20 casual dining meal at Bad Daddy's is one of the first things a family cuts from their budget. Your management has noted this pressure from 'value-oriented consumers,' which means you're fighting a price war you're not structured to win against the giants.

Increased interest rates making debt-funded expansion prohibitively expensive

Your balance sheet is relatively clean, but the high-rate environment is a massive headwind for any growth plans. As of Q3 FY2025, you had $2.3 million in long-term debt and $3.1 million in cash, which is a manageable debt load. But the threat isn't the current debt; it's the cost of new capital needed for the remodels and new unit expansion that drives long-term value.

The US Bank Prime Loan Rate is sitting at 7.00% as of November 2025. Any new credit facility or significant term loan would be priced well above that. This reality is why management has already paused its share repurchase program and is redirecting cash flow toward debt repayment and cash accumulation. Simply put, the cost of capital is too high right now to justify aggressive, debt-funded expansion, which severely limits your ability to scale and compete.

Intense competition from larger, better-capitalized fast-casual burger concepts

You're operating in a massive and rapidly growing market, but you're a small fish in a very big pond. The global fast-casual market is valued at $144.8 billion in 2024 and is projected to grow at a 7.4% Compound Annual Growth Rate (CAGR) through 2030. That growth attracts enormous, well-funded players.

Your competition includes chains with national scale and deep pockets for marketing and technology, like Shake Shack, alongside other major fast-casual players like Chipotle Mexican Grill and Panera Bread. These competitors have the scale to absorb commodity cost increases, invest heavily in digital ordering platforms, and aggressively discount to steal your market share, which is exactly what your management pointed to as a cause of same-store sales pressure.

• Absorb commodity spikes better than GTIM's thin 11.2%-14.4% margins.
• Outspend GTIM on advertising and digital platforms.
• Offer deeper, more sustained discounting to attract value-oriented customers.

The competitive threat is not just about burgers; it's about capital and scale. You're fighting a financial war, not just a food war.

Next Action: Operations: Conduct a zero-based review of all non-food operating expenses at Good Times locations to identify a minimum of 200 bps in permanent cost savings by the end of Q4 FY2025.