News

Good Times acquires Bad Daddy's burger bar concept

April 15, 2013

Good Times Restaurants Inc. today announced that it has entered into a series of agreements with Bad Daddy's International LLC and Bad Daddy's Franchise Development LLC for the exclusive development rights for Bad Daddy's Burger Bar restaurants in Colorado, additional development rights for Arizona and Kansas, and the ownership of 48 percent of the franchisor entity, Bad Daddy's Franchise Development LLC.

The company said that it will develop and operate new Bad Daddy's Burger Bar restaurants through a wholly owned subsidiary under a license agreement with Bad Daddy's Franchise Development LLC, with its first restaurants planned in Denver this year. Good Times will own 48 percent of the franchisor and will provide the franchisor with management services to it under a separate management services agreement.

Bad Daddy's Burger Bar is a full-service, upscale, "small box" restaurant concept operating mostly in inline locations featuring a chef-driven menu of gourmet signature burgers, chopped salads, appetizers and sandwiches with a full bar and a focus on a selection of craft microbrew beers. Bad Daddy's has received both local and national accolades and was most recently named a top 25 burger in the U.S. by USA Today. There are four restaurants open and a fifth in the Charlotte, N.C., airport operated by HMS Host with three additional restaurants in development.

"We have spent the last year looking for the right acquisition and growth opportunity and have reviewed over two dozen concepts that can help transform Good Times into a robust growth company," said David Dobbin, chairman of Good Times.

Criteria included a differentiated concept with wide consumer appeal and high loyalty; industry-leading unit economics; and experienced management seeking accelerated growth.

"Bad Daddy's has each of those and more and we couldn't be more excited to partner with them to build restaurants for our own account and to own a significant portion of the franchisor as we ramp up franchised growth and development," Dobbin added.

The agreements include provisions for the first right of purchase of Bad Daddy's International and its 52 percent of Bad Daddy's Franchise Development in the event of a proposed transfer by Bad Daddy's entities and other terms that align the interests of Good Times and Bad Daddy's International.

Bad Daddy's is owned and operated by Dennis Thompson and Frank Scibelli. Thompson is the developer of multiple restaurant concepts having developed and taken public or sold Lone Star Steakhouse, Bailey's Sports Grille and Firebird's Wood Fired Grill. The Bad Daddy's Burger Bar Concept was created by Scibelli, who has also produced multiple award-winning restaurant concepts including Mama Ricotta's, Midwood Smokehouse and Paco's Tacos & Tequila.

Gary Heller of Heathcote Capital LLC provided advisory services to the company in connection with the Bad Daddy's transaction. Heller is a member of the company's board of directors.

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