Good afternoon, ladies and gentlemen. Welcome to the Good Times Restaurants Inc. Fiscal 2021 Third Quarter Earnings Call. By now, everyone should have access to the company's earnings release and 10-Q filing, which are available in the Investors section of the company's website. As a reminder, a part of today's discussion will include forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore, investors should not place undue reliance on them. And the company undertakes no obligation to update these statements to reflect the events or circumstances that might arise after this call. The company refers you to their recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial conditions, including risks related to the COVID-19 pandemic. Lastly, during today's call, the company will discuss non-GAAP measures, which they believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP and reconciliation to comparable GAAP measures available in our earnings release. And now, I would like to turn the call over to Ryan. Please go ahead, sir.

Thank you, Paul. And thank you all for joining us on the call today. We are pleased with the performance of both brands this quarter. The solid financial performance we reported doesn't fully do justice to the incredible efforts of our restaurant teams executing each of our concepts daily. As restrictions on dining rooms have eased, we bet been met with other challenges stemming from a tight labor market in the overall economy that have affected both of our concepts. This tight labor market has resulted in elevated wage rates at both brands, as we both strive to compete for talent and create an environment where our restaurant level compensations rewarding and meaningful for our managers and our team members. At our Good Times brand, we primarily focused on wage as a method of attracting hourly team members with a 10% increase in the average wage compared to the prior year. Whereas the Bad Daddies, we've implemented a multi-pronged approach including limited time retention bonuses, an hour employee holiday bonus program, as well as our increased wages to fairly reward employees in both tipped and non-tipped roles. Our backup house wage rate is up approximately 8% versus the prior year. And we expect this tight labor market to continue for some time. Yet despite the challenges in the external environment, we continue to focus on speed accuracy and consistent execution at our good times drive thru restaurants. We believe that this has helped us to retain near prior year volumes rolling over the closure of indoor dining and Colorado last year. We believe firmly that speed is a competitive advantage for us that's created repeat customers and long term loyalty that we expect to stay with us. Our ongoing strategy is to further improve upon speed, consistently executing in a…

[Operator Instructions] Our first question today will come from Roger Lipton with Lipton Financial Services. Please go ahead.

Hi, Ryan. Just interested in the comparisons of your some operating numbers from 2019, in terms of, if you have them near your fingertips, if not, we could give them another time but our mission in the cost of goods and labor in this most recent quarter versus the same quarter in 2019; just to get an idea of how the businesses changed over a couple of years.

Yes, so I don't have those numbers at my fingertips in terms of the margin numbers. However, what I would say is I believe on both concept, we've exceeded at least a couple 100 basis points of margin improvement on a quarter to quarter basis on a two year look back. I think what's more important kind of from a go forward basis is that kind of these metrics are more in line with what we expect for the future. Although certainly there are cost pressures that other restaurant companies are experiencing as are we, I think we feel confident that we'll be able to manage cost of sales reasonably well with menu price, and we think that our menu price is competitive, and actually, in the Bad Daddy system, I think we feel like we've got a little bit of room for additional price, we've been purposefully I wouldn't say slow, but controlled in many price adjustments. I think the labor is the challenge and that is kind of a function of rate driven by the lack of supply of talent in the market. But, kind of to your point, I think what you've seen is meaningful improvement, versus our financials, prior to the pandemic. And we have learned a lot about how to manage our business more effectively, more efficiently compared to 2019 and before.

Okay, well, that's, that would be the hope. So it sounds that way. One last question, what's the off premise percentage at Bad Daddies, how's that changed over the last couple of years?

So during, obviously, when we were completely when our dining rooms were completely shut down during the third quarter last year, we went to 100% mix. As on premises returned, our sales of off premise have remained strong. And we still have in terms of all methods of off premise, which currently include customer pickup delivery through the aggregators. And then we also offer delivery through our website, which is managed through third parties. All of those combined, we were running high 20% almost 30% mix in off premise.

And how much roughly what might had been running couple years ago?

We were running 12% to 14% off premise in 2019.

Okay, that's interesting. Thanks very much.

And our next question will come from William James with Maher Investment [ph]. Please go ahead.

Hi, Ryan, just going forward with regarding to Bad Daddy's. The CapEx involved in opening up a new Bad Daddy's divided by the run rate EBIDTA at the restaurant level. Is the payback, they're going to be running 3 to 3.5 times do you think?

Yes, I mean, I think the way the way we look at that is our model calls for investment net of landlord contribution of approximately about approximately $1.3 million. Currently, we've seen some increase in construction costs due to due to tightness in the market just like everything else. And operating profits of high teens 16% to 17% on our target, we can generate restaurant level cash flow of approximately $400,000 so just shy of kind of three times or three year payback, just shy [ph] of that.

Great. Do you think the idea of going forward would be to keep the balance sheet just clean into just take all the excess cash flow and put them in these time paybacks of Bad Daddy's?

Yes, I think our approach from a growth perspective is primarily focused on Bad Daddy's. As I mentioned, I think our intent is to finance Bad Daddy's development primarily through cash flow, not to incur a meaningful amount of debt and to as you say, keep a rather clean balance sheet. That's our aim as it as it pertains to development.

And Ryan, you guys have really brought a refreshing pragmatic management to this company is just outstanding to see the EBIDTA finally materialize in the restaurant margins at the operating level materialize just so terrific job.

Thank you. I appreciate that.

[Operator Instructions] Our next question will come from [indiscernible]. Please go ahead.

Hi, how are you? Thanks for taking my question. I guess I had two questions. One was do you project that your restaurant level margins are going to kind of maintain the current run rate with the increase in costs but also by the normalization of demand?

So I think the best way to answer that, I think is long term, we do believe we'll be able to manage that I think there may be some short term volatility, in light of some of the extreme pressure that everybody is seeing in the market right now that we expect to continue, at least through the end of the far fiscal year. And I think there's the potential for it to continue through the end of the calendar year. But I do believe that long term, we believe that we'll be able to achieve these margins. But again, I think short term, there'll be some volatility.

Okay, thank you. And then my other question was, you know, obviously, the normalization has occurred more recently, and these things can take some time to develop in your restaurant. But how do you foresee kind of longer term, maybe three to five years out, the ability to grow?

Yes, I mean, I think the best way to explain that because that, because we're not really providing firm guidance, either for next year on a three to five year basis. But I would say that I think our expectation is that the lion's share of the growth would come from the Bad Daddy side of the portfolio. And, and there's a good chance that development primarily comes from a company owned. However, I think there's also the possibility that we could explore a combination of company and franchise owned model in the future.

Okay, thank you.

And this will conclude our question and answer session. I'd like to turn the conference back over to Ryan for any closing remarks.

Thanks Paul. As we've entered the homestretch for our fiscal year, we continue to develop a culture of both of our concepts that we believe will enable us to effectively compete in the labor market for high quality, talented individuals that share our values. The staffing market in our industry is currently as challenging as it has ever been. And I could not be more proud of the restaurant general managers and therefore management teams that both of our brands. As we continue to execute those brands continue to build an organization that creates loyal guests at good times, through the convenience and better fast food platform, including all natural beef and chicken, and that our Bad Daddy's brand through genuine hospitality, delicious scratch made burgers and salad in an all-inclusive environment. I could not be more proud to be a team member with more than 200 restaurant and capability leaders we have more than 2000 total employees that each day come to work to create great experiences for our customers. With that, we will conclude today's call. I thank you all for joining us today.

The conference is not included. Thank you for attending today's presentation. You may now disconnect your lines.