Boyd Hoback - President and Chief Executive Officer Scott LeFever - Chief Operating Officer Susan Knutson - Controller.

Alex Fuhrman - Craig-Hallum Capital Group Tony Brenner - Roth Capital Partners Greg McKinley - Dougherty & Company John Ziegelman - Wolverine Asset Management.

Good morning ladies and gentlemen. Welcome to the Good Times Restaurants, Incorporated Fiscal 2015 First Quarter Earnings Call. As a reminder, a part of today's discussion will include forward-looking statements within the meaning of the federal securities laws.

These statements are commonly identified by words such as "anticipate," "continue," "plan," "expect," "intend," "should," "will," and other terms with similar meanings. These statements include but will not be limited to statements that reflect the company's current expectations with respect to the macroeconomic and competitive environment.

The financial conditions of the company, results of operations, plans, objectives, future performance including the company's initiatives and strategy, sales growth, operating margins, cost, expenses, deployment of capital, restaurant development and their remodels, new market deployment, franchise development, and other expectations within the course of this call.

Although the company believes the assumptions upon which preliminary or initial results, financial information and forward-looking statements are based are reasonable as of today's date, these forward-looking statements are not guarantees of future performance and therefore investors should not place undue reliance on them.

Also these statements are based on facts known and expected as of the date of this conference call, and the company undertakes no obligation to update these statements to reflect the events or circumstances that this might arise after this call.

Participants on the call today should refer to the Company's Form 10-K A and other filings with the SEC for a more detailed discussion of risk, uncertainties and other factors that could impact the Company's future operating results and financial conditions.

The Company has posted its fiscal first quarter press release and supplemental financial information related to the quarter's results on its website at www.goodtimesburgers.com in the Investors section. And now I would like to turn the call over to Mr. Boyd Hoback, President and CEO of Good Times. Please go ahead, sir..

Thank you, Amanda, and thanks everybody for joining us this morning. With me today are Su Knutson, our Controller and Scott LeFever, our Chief Operating Officer for Good Times. After we deliver our prepared remarks, we will be available for some Q&A.

We continue to see same-store sales growth at Good Times that is quite frankly beyond our expectations and beyond our plans. This was the 18th consecutive quarter of same-store sales growth with an 8% increase on top of last year’s increase of 17% in the first quarter.

That then accelerated to a same-store sales increase of 13% in January and that was on top of last year’s increase of 14%.

Though sales increases continue to be the results of a combination of transaction growth, which is really great news, average check growth which is driven by MenuMax shifts and some moderate price increases over the course of the last year, we took a little over 4% price increase cumulatively.

And just to set expectations, when we look back over our last two year and three year trends, our sales comps get a lot more difficult, beginning in our third fiscal quarter, which was double-digit growth on top of double-digit growth last year.

So, we certainly anticipate we’ll begin to moderate to single-digit same-store sales growth versus a triple double in the third quarter. But we’ve been expecting that for several quarters and we continue to be at our own expectations and hopefully we’ll continue to do so.

In addition, we have some very interesting and preliminarily some very encouraging products in test and development that support our brand umbrella of our core differentiating platform of 100% All-Natural beef and chicken and that’s combined with handcrafted and house-made menu items that are unique to and where we think are unique to the quick service category.

Our newest Good Times store that opened at the end of November is a remodeled Burger King and a trade area that we’ve been trying to get into for a long time and that continues to perform very, very well. It’s our second highest volume store with average weekly sales that are 40% to 50% over the system’s weekly average.

We have one additional Good Times store under construction that’s scheduled to open in April, a prototype building, ground up building and we are negotiating on additional Colorado sites for development both this year and in 2016.

As I mentioned in the last quarter’s call, our growth plan has been, first to leverage Good Times brand equity and awareness by building two to three stores here in Colorado as we can find good real estate while we lay the foundation for Bad Daddy's growth.

However, as I mentioned, we are also evaluating the opportunity to take Good Times beyond Colorado for both company-owned and franchise growth since the brand is performing so well and the unit economics are so strong.

We typically are not an owner of real estate since we can currently access a cap rate on leases below 7% in the 1031 sale leaseback market.

And, taking advantage of that pushes our cash-on-cash return on our operating investment to well over 40% on an average sales of $1.2 million on a new Good Times and that’s on our operating investment of around $360,000 to $375,000, which includes all of our pre-opening expense.

So even on a fully capitalized basis, without the benefit of the op balance sheet, lease leverage, we still have a very, very competitive store model compared to other QSR concepts and now it’s really a matter of how will that concept travel to new markets where we don’t have the brand equity as we continue to build out Colorado with new stores here.

We opened a new Bad Daddy's in early January. It’s also exceeded our sales expectation and its tracking as the second highest store in the system next to our Northglenn store. So we got the top two Bad Daddy’s store in the system right now.

Our Northglenn store, the restaurant operating level profit as we define that in our earnings release, at the Northglenn store it was 20% during the first quarter and that again includes approximate 3% labor hit we take in Colorado due to the higher tip credit minimum wage.

So, as we look forward into 2016, and we begin to put in sites into development for 2016 into our pipeline for our out of Colorado development, we hope to be able to capture an additional operating margin on top of that 20% that Northglenn performed within the first quarter.

That said, the sales level of these last two stores are significantly above the system average of around $2.5 million per store. So we are more than making up for that additional labor cost and the store economic model is proving to be really what we hoped it could be and it’s performing extremely well.

We’ve got four additional Bad Daddy’s in the pipeline and of those that we’ve got in development, two leases are signed and two are in the very late stage of finalizing lease terms.

On one of the deals we anticipate that one of these stores will have a rooftop patio and bar similar to what we did in Northglenn, which has really turned out to be a pretty compelling attribute for the concept, particularly for the suburban site where it’s unique to the trade area.

We believe we also now have a better understanding of where the Bad Daddy’s concept will perform the best which is that the concept we think is best suited for upscale retail suburban - not markets – not urban markets.

Where we get the opportunity to take market share from the older mainstream casual theme concepts and where there are significant traffic generators, particularly on the weekend, Thursday through Sunday generates a disproportionate amount of our weekly sales.

We also continue to dial-in the optimum size of the restaurant based on seating count, square footage, patio space. We want to maintain a small box model, but obviously maximize the sales opportunity and we are continuing to make refinements on that model.

The founders in Charlotte, Bad Daddy’s International opened their fourth in Charlotte at the 1st of the year as well, and that store is also performing very well in line with the other Charlotte stores.

Our franchisee in Greenville South Carolina is opening their second store in March which will be in Knoxville, Tennessee and that will be the 12th Bad Daddy’s open.

While we continue to have a lot of franchise interest and we’ve actually turned down some franchisees, most of the larger more sophisticated franchisees that we are talking to continue to want to see the concept being proven out in multiple markets which we are in doing in states.

However, given the strength of the unit economic model of Bad Daddy’s, we really believe that our greatest value will come from building company-owned restaurants and we are going to take a very cautious approach to franchising the concept franchisees.

This concept is a lot more complex to run given the breadth of the menus, the house-made quality standards, the prep-intensive nature of it and we don’t want to particularly early on in our development allow franchisees as well intended that they maybe we don’t want them to screw-up the concept.

We did file an S-3 shelf registration statement in January for the issuance of up to $75 million in common stock. We had $11.5 million in cash on our balance sheet as we ended the quarter.

So we really don’t need any additional financing for 2015 and for our business plan, but we want to be in a position to maximize our flexibility to be opportunistic to accelerate our growth for both Bad Daddy’s and Good Times as we move through 2015.

With both brands performing exceptionally well, we are really focused on accelerating our growth but with quality controlled growth and we’ll begin to provide more clarity on new unit expansion for 2016 as we progress through 2015 here and I will be able to give you more insight on a little bit longer horizon on our development plans.

If we meet our expectation for seven Bad Daddy’s open this year and 38 to 39 Good Times open by early fiscal 2016, our revenue run rate will be approaching $50 million and that does not include any new store development in 2016. So we feel like we’ve got both concepts really ready to run.

In addition to continuing to build strong internally generated cash flow, we also expect our inflection point for ongoing profitability will be around that same time meaning early 2016, as we continue in the remainder of 2015 to add some incremental G&A to support accelerated growth and as pre-open costs become less as a percentage of total revenues and as we continue to refine and improve our store level operating margins on both Good Times and on Bad Daddy’s.

I’d like to now turn it over for a minute to Scott, to review our Good Times results in the first quarter. .

Thanks, Boyd. As Boyd mentioned, we are continuing to drive our All-Natural handcrafted positioning, deeper and deeper while we focus on continuous improvement in our store level execution on quality, speed and friendly service. We rolled out our new black bean burgers in the first quarter to replace our Portobello Sandwich.

So we have a high-quality vegetarian option on our menu. Our flavored wings promotion ended in mid-January. We are rolling out our first television commercial focused on $2 breakfast burritos in March.

Breakfast has maintained its sales mix at around 8% to 9% to total mix, even as our overall store sales have grown, since we introduced breakfast in December of 2012.

After the breakfast television window, we have two additional television media windows planned for the balance of fiscal year, supported by a rotating point-of-purchase materials in each of our core menu categories, burgers, chicken, custard, sides and breakfast.

We believe our sales are not driven by the latest limited time offer, but by supporting our brand position as powerfully as we can by telling a holistic story across our menu.

We try to reinforce each product promotion, introduction with brand-level communications around All-Natural and handcrafted with specific product attributes, flavor, unique ingredients and quality [queues] [ph] and have multiple point of purchase materials with complementary product communications to those sales of these products, increase our average check and leverage seasonal opportunities.

Those point of purchase communications rotate approximately every six to eight weeks. In addition to the television advertising, we are putting more of our marketing budget into social and digital media, which includes curating our television ads into pre-rolls on YouTube and Hulu and Facebook advertising.

We are getting results and engagement levels with our customers that we believe are also a driver to our sales success. It’s a great way to tell our All-Natural, handcrafted brand story.

We have one significant product in test that is performing well and I can speak to in a couple more ready to go in test this year that we believe are unique to the QSR category and to continue our approach of stealing proven product ideas from fast casual, casual theme concepts around the country, adapting them to our brand and our need to maintain our speed of service and then building our own story around them.

We have been in a store level test within All-Natural, house-made pickle that we are executing in three different ways, house-made fried pickles, burn-in spears and there is a house-made pickle on all of our burgers.

While house-made pickles may not sound like a big idea, we think it can be far more meaningful than the product itself and the statement that it makes around our brand. The fried pickles are a big hit with the initial sales have exceeded our sales mix threshold for rollout and the customer response has been overwhelmingly positive.

So we plan to roll them out later this year. We have other items that are still in our product development process that we will speak to them as the year progresses.

We saw a spike in our cost of sales during the first quarter with a temporary seasonal increase in produce cost, plus we moved our annual juvenile diabetes research foundation charitable promotion to earlier in the year, which increased our discounts that historically have hit in the second quarter.

In addition, the unusual spikes in vegan, dairy and oil cost didn’t come down until later in the first quarter.

However those cost decreases and the promotional shift combined with a 1.6% price increase that we took in January and some gain in lower diesel cost that favorably affects our distribution cost, we believe it will lower our second quarter cost of sales by approximately 125 basis points.

All else being equal on the commodity front, we do expect our cost of sales remain slightly higher than fiscal 2014 for the remainder of 2015 due to high beef cost. Our beef cost were approximately $0.80 a pound higher than they were in first quarter last year.

For every $0.10 a pound in increased cost equates approximately a quarter point in cost of sales. So that $0.80 equates to 2% cost of sales increase. We have been reasonably aggressive in our price increases compared to our competitors and are elective stance to sacrifice transaction growth.

However, we anticipate continue to take a series of smaller price increases every four to six months. The new design of our Good Times has been very well received by the customers and continues to elevate Good Times against our QSR competitors.

We continue to make good progress in the re-imaging of our older drive-through stores and our redesign, on our remodel and several of our dining room stores for fiscal 2015 and 2016.

We have 11 drive-through stores completed and expect to have five additional drive-through only re-images and two dining room stores completed during the balance of fiscal 2015, because some of the remodels are more extensive than exterior only reimages, we anticipate additional sales increases from those remodels as they are more imapactful to customer experience and street-front image of those individual stores.

We also continue to work on our core operational execution initiatives for this year.

Our new POS system combined with our customer feedback through a new brand analytics are providing us with a new level of detail by using that data and feedback on our core initiatives to reduce our food waste, and continue our overall transaction time and increase throughput, particularly during the peak periods.

Improve our execution on quality of our core products and refine our staffing model for both improved customer service and labor management. Now, I’d like to turn it over to Su, who has got some more detail on financial performance for the first quarter. .

Thank you, Scott. As we said last quarter, we are primarily focused on our restaurant level performance while we add infrastructure, and G&A expenses to support expanded growth in new restaurants.

Good Times same-store sales increased 8% for the first quarter on top of 17% last year and this year included two record-setting cold snaps in both November and December. As Boyd mentioned, we did resume our double-digit trend with January same-store sales of 13% on top of 14% for the same quarter last year.

And that did include that 1.6% price increase in early January.

While our Good Times store level operating margin declined 50 basis points during the quarter, with the exception of food cost, all of our other store level operating expense margins improved by 2.1% by leveraging the same-store sales increases on our fixed and semi-variable cost including labor.

Our total payroll cost declined by 150 basis points from last year during the first quarter. So the spike in cost of sales is normalized, we are going to get – sorry – we are getting good profit flows through our incremental sales at the store level.

While it is an honeymoon opening period, we believe that the new Good Times restaurants will perform as sales levers significantly higher than the average system average particularly as we move into spring and summer based on what we know the seasonality of that trade area.

At these sales levels, we expect the restaurant-level operating profit margin to be approximately 20%. Our G&A expenses increased $211,000 during the quarter from last year consisting of higher cash and stock-based compensation expenses, investor relation expense, director expenses and legal and accounting expense.

Pre-opening expenses included one new Good Times that opened in November and one new Bad Daddy’s that opened on January 7, 2015. The largest component of the pre-opening is crew and management training. We continue to carry some excess management in Bad Daddy’s so that we have seasoned managers for the planned new stores.

Restaurant level operating profit as disclosed in the supplemental information in our first quarter press release increased 67,000 over the prior year to 950,000 for Good Times and was 110,000 for Bad Daddy's.

As Boyd mentioned, our third Bad Daddy’s opened on January 7 to very high volume and it continues to be the second highest volume store in the system. So we anticipate it will also have a very positive effect on our second quarter’s restaurant level profit – operating profit as well as our reported restaurant operating profit margin.

We have anticipated a fairly nominal effect from the Affordable Care Act requirements on Good Times in fiscal 2015 and had planned for a total expense of approximately $130,000 based on our employee census survey data and planned redesign completed.

However, the actual number of employees that signed up for insurance was less than 5% of those eligible. So we expect the impact to be much less than expected. In terms of our balance sheet and liquidity, we ended our first quarter with $11.5 million in cash and only $530,000 in long-term debt.

However, we also used $550,000 in cash during the quarter for the purchase of the land for our new Good Times. We plan to roll that land, site improvements and building costs into a sale-leaseback transaction upon the opening of that store in April.

With our planned remodel program for Good Times, one additional new Good Times and four additional new Bad Daddy’s, we anticipate we will still have over $7 million in cash on the balance sheet as we enter fiscal 2016.

And as Boyd mentioned, we expect to have an annualized revenue run rate approaching $50 million by early 2016 with significant growth in the pipeline. Now I would like to turn the call back over to Boyd. .

Thanks Su. We have two brands that are performing exceptionally well, with very strong performance of the new restaurants which have been extremely gratifying.

The new unit economic model for both concepts compares very favorably, we believe were some of the best emerging growth concepts in the industry right now, which really leads us to focus on primarily building company-owned restaurants this year and filling our pipeline for a very robust growth for 2016 and beyond for both concepts.

As I mentioned earlier, we’ll continue to provide more guidance and clarity on our growth plan as the year progresses and as the timing of these new stores off of a very small base has a disproportionate impact on our short-term results. So we are focused on setting our development platform for 2016.

We’ll have longer lead times on new stores and particularly given that this year’s stores are largely in new shopping center developments which impacts our planning and projections and unfortunately we are the tail on the dog on the development timing on some of those new stores.

We are also presenting at the Roth Capital 2015 Investment Conference in March and we continue to broaden the exposure of the company to the investment community. We appreciate your time with us today. With that operator, we will open the call for questions. .

Thank you. [Operator Instructions] Our first question comes from Alex Fuhrman with Craig-Hallum Capital. Your line is open..

Great. Thank you very much and congratulations on another great quarter and a great start to the calendar year here. I had a couple questions, first on the remodels and some of the refreshes that you’ve done. It sounds like you’ve got kind of the more substantial changes to the prototype that we are going to see over the course of the next year.

I mean, can you just give us a little bit of color on what those changes are going to look like and how that’s been different than maybe some of the lighter, less expensive refreshes that we’ve seen over the last year or two?.

Sure, hi, Alex. So far we’ve been focused on our older drive-through only stores and so that refresh and remodel has been largely exterior graphics, finishes adding stone wainscot, upgrading the patios with market lights and music, renewed signage that sort of thing.

Now we are moving into – to our second-generation store that have dining rooms and particularly some of our older stores. Over the course of time, we’ve taken and remodeled a couple of jack in the boxes and some other concepts and while there is some general brand consistency, it’s a little bit more of a mismatch.

And so we are now starting the remodeling on those stores that have dining rooms. Our newer stores that have dining rooms will still be a fairly light remodel, meaning it’s just primarily finishes but some of the older dining room stores require a little bit larger level of remodeling.

And so, rather than $50,000 or $60,000 cost to the remodeling, a few of these will be into the six figures. While it’s going to cost a little bit more, we also anticipate the impact is going to be a little bit more. We’ve tried to parse out the impact of the remodel so far and we’ve been on such a steep growth curve, it’s almost impossible to do so.

But we think that as we get upgraded consistency across the chain and these older stores get remodeled that are a little more impactful both to the street front image as well to the customer experience we think we are going to get a little bit better pop and be able to measure that pop a little bit more as we continue to remodel. .

Great, that’s helpful. Thank you. And then, if I could just ask quickly on food and packaging cost, I think it was 125 basis points, something like that that you expect that rate to come down in Q2 from Q1.

I mean, how much of the improvement from that Q1 level that you expect throughout the balance of the year? How much of that is the dairy and beef prices starting to moderate a little bit versus the impact that you are expecting to get from some of your small planned price increases?.

It’s about, add to that 125 basis points for example, some of that is the discounting shift that we won’t have in our second quarter. Every year we raise $40,000 or $50,000 for JDRF through the form of some coupon books that we give and sell to our customers. That will go away in our second quarter and typically that is to hit second quarter.

So that’s about a half-a-point. Our price increase that we took is about a half-a-point and then the balance will be commodity cost. Beef remains high, but Bacon has come way off, dairy has come way off and we are seeing some of the other commodities come down as well.

So we are hoping conservatively, we’ll see that 125 basis points, but that’s really the source of it. Our cost index for the first quarter was just highly unusual. We had a 13% weighted cost increase in our materials, in our costs for the first quarter, which we’ve really never seen before.

The other impact for the first quarter is we got caught in the California drought had a disproportionate impact on the produce market for about 60 days. So California ended up, the season ended up early before Mexican produce could catch up.

And so we had an act of God invoked on our contract on produce, so we had to eat that transition with really high cost for about 60 days. That’s also gone away and that’s been normalized. So the net effect on that, we think 125 basis points hopefully will be conservative and we’ll be able to improve on that. .

Really helpful, Boyd. Thank you very much and good luck..

Thank you. .

Our next question comes from Tony Brenner with Roth Capital Partners. Your line is open. .

Thank you. Good morning. One point of clarification, Boyd, you mentioned that Bad Daddy’s labor expense was inflated by 300 basis points from the increase in the minimum tip credit, but you also say that minimum tip credit in Colorado was increased in January.

Why would that have impacted your December quarter?.

Yes, no, that’s a good question, Tony. Let me clarify. It’s – we’ve had a higher tip credit minimum wage, last year it was around $5 versus the $2.13 minimum tip credit federally, that increased in Colorado to $5.21. That increase is not the genesis of the three point labor difference.

We’ve always been operating with about a three point labor hit in Colorado versus the federal tip credit minimum wage states. And really it’s just that difference between $5 and $2.13 and when you apply that to all our server, our host, and our bar hours, that tip credit is very significant.

So, I probably mis-phrased that it really has nothing to do with the shift in January. It’s just been a permanent embedded cost that we deal with in Colorado. Arizona has a similar one and there is only 19 states left that has this federal tip credit minimum wage.

[The states we’re] [ph] projecting to move into in 2016 are all federal minimum wage states and we anticipate being able to have some pick up..

Okay.

Are there – are you still negotiating with potential franchisees or area developers for Bad Daddy’s or has that been completely discontinued for the time being?.

No, we are continuing on negotiating and we’ve limited it to negotiating with, I think, the sophisticated well-capitalized guys. Honestly, a couple of concepts, concepts that we’ve been talking with have conflicted us out meaning they won’t let their franchisees develop Bad Daddy’s.

But we are continuing to negotiate with others and then we continue to intentionally kind of slow play that as I mentioned.

We don’t want to jump into franchising full board too early, both in terms of support, but also in terms of making sure that the concept has got really good trajectory and we think we’ve got a really good trajectory being established with company-owned stores.

So, with a high unit economic ROI model, we are also probably shifting our focus to more company-owned stores than franchised because we think that’s a better platform and ultimately a higher valuation for our shareholders. .

So that means that there may be a couple of franchise agreements this year or next or there is none for a while?.

No, we anticipate still we will have some franchise agreements signed in 2015. And I think, we’ll have some news that we’ll be able to talk about here, larger news on the development side here prior to next quarter’s call..

Okay, last question.

Boyd, what do you plan to do or can you do to improve that Cherry Creek location for Bad Daddy’s?.

Well, it continues to improve, Tony. We’ve had this quarter, this last quarter, we’ve had some record sales days. We had actually record sales weeks there and it continues to improve, we got it. It’s not reflected fully first quarter. We are getting that store very close to breaking even.

If you go down into that area, the development is just – again, I continue to talk about this as just massive. We are seeing on our week days, we are doing comparable sales to the system. It’s just that we don’t have that significant spike on the weekends where sales triple on the weekend days. That’s what we don’t have in that store.

So we are continuing, that will come as that development is cleaned up down there and finished up. I would anticipate that, you are going to be really happy with the sales level of that store as we move into the summer time. .

Okay, thank you very much..

Our next question comes from Greg McKinley with Dougherty & Company. Your line is now open..

Yes, thank you. Boyd, I wonder if you could help us understand how you are looking at the Good Times concept being portable outside of Colorado? You highlighted that your performance with that brand is warranting some exploration of building stores in new markets.

Could you walk us through how you are evaluating those markets and the timing on which we might look to see some of the development occur?.

Yes, we are looking, I mean, this whole discussion about franchise, if you look at the two concepts, honestly, Good Times is more – is better suited for franchising in a lot of respects than Bad Daddy’s does. Even though we think there is still a lot of opportunity on the Bad Daddy’s side with some good qualified franchisees.

Good Times being a Colorado home grown concept with all of our stores here, essentially in Colorado. We are looking at being a market or two with company-owned restaurants and then being able to use that as a platform for franchising of Good Times. We are still on the investigative process on that and evaluating a couple of different markets.

We want to maintain our same backdoor costs and so we are looking within the same distribution area that we’ve got with our mainline distributor. We are also evaluating markets based on the relevance of all-natural particularly, but when you look at markets like Omaha and Albuquerque and Salt Lake City and those markets are good.

Upper middle income markets which is our core consumer and where we think our all-natural handcrafted platform will play really well. That – the other part of it, Greg, honestly is kind of bandwidth.

We are looking at, how do we need to scale internally to be able to support that with growth and this year we’ll open five Bad Daddy’s and two to three new Good Times and so as we get that platform laid, looking at other resources to be able to lead the charge on the Good Times expansion out of Colorado. .

Yes, okay. Thank you. On the remodeling for Good Times, I think you shared in your prepared comments some metrics around how many you have remodeled, how many you are planning to.

Can you just restate that, so I make sure I have that correctly?.

Yes, we’ve remodeled 11 drive-throughs so far. Let me go back and just take a look at our notes, so I can make sure I say the same thing. We’ve We have remodeled 11 stores so far and we’ve got another five drive-through and two dining room stores this year and then in 2016 we’ll continue to remodel some of the other dining room stores.

So that by 2016 we’ll have all in Colorado and have up to the current brand standards..

Okay. And, I know you are producing really strong sales gains throughout your Good Times system.

Given that, are you able to measure customer response to the remodels or you can clearly identify sales with from what your investment is?.

No. I mean, particularly on the lower-end remodels, some of the non-remodel stores are on just a steeper sales curve. However, as we begin to invest a little bit more and more major remodeling, we do anticipate we’ll be able to evaluate the impact of those incremental dollars and so far it’s been just really tough to tell. .

Okay.

And, now that you’ve opened an additional real strong performing Bad Daddy’s, I wonder if you can just share with us whether it’s brand perception or operational lessons you’ve learned with Northglenn and now Aurora that may influence how you think about managing the brand going forward?.

Not sure I understand your question, but I think, I have to say with having two home run stores out of the blocks here, number one, we think we understand where they need to go from a site selection standpoint better than when we did our first store in Cherry Creek.

Two, I think we are understanding the unit economics model, both on the front-end investment as well as margin management and understanding the level of management that we need to have in the stores both in terms of number of salary management as well as the training that’s required. And so, there has been a great learning curve on that.

The ROI model is fantastic. And so, as long as we put them in the right place, and as long as we run them well, and as long as we don’t get too far out over our skis and overgrow our capacities, we think we are going to accelerate Bad Daddy’s here after 2015..

Okay. Very helpful. Thank you and then, just last question.

What do you feel, you need from a corporate infrastructure standpoint to support the growth you are targeting and how should we think about that from a G&A standpoint?.

We’ve got a couple key roles that were in the market for right now. One is a experienced public restaurant CFO and so I think you’ll see some news on that here before too long. The other piece is real estate development. We’ve got a really good operating team and we’ve got – we are developing good Ben’s drink on the op side.

As to the real estate side, that will also be bringing on an additional resource to lead the charge on getting a deep pipeline built for 2016 for both concepts honestly, for both Good Times and Bad Daddy’s. Those are the two key roles. So, I think, otherwise, we are in good shape.

We are leveraging all of our existing infrastructure in accounting and IT and HR and that sort of things. But it’s store level ops teams and then real estate and CFO..

Okay. Thank you and congratulations. .

Thanks, Greg. It sounds like you need to go to bed..

Yes. .

Thank you. [Operator Instructions] Our next question comes from John Ziegelman with Wolverine Asset Management. Your line is open..

Hi guys. .

Hey, John. .

How’s everything?.

Good..

One of the things that I feel is like an added benefit to our investment with you is kind of $50 oil and its effect on the consumer both having more change in their pocket and on your cost side of the equation.

You spend a lot of time talking about both same-store sales increases and lowering your costs and how those moving parts work? Is any of the $50 oil inside of those numbers and if not, can you speak to that?.

We’ve had a nominal effect on our distribution agreement. Diesel lag, gasoline pretty significantly and now it’s starting to drop. So we had some pick up on our distribution costs, but that’s not significant. We think and agree with you that $50 oil is probably having a bigger impact from a consumer standpoint.

There is no way for us to really measure and understand that other than it’s contributing, I think and really will be an unexpected positive for consumer spending, an extra $20 or $30 a week for our customer is very important. We tend to skew higher income anyway, so we are maybe a little bit less affected.

But, still when you look at what’s happening in casual dining right now, I think, it’s certainly having a positive effect. The good news on – the flip side of that Colorado has got such a broad based economy right now.

The damage that’s being done with $50 oil on the production side, we don’t think it’s going to have really much of any impact in Colorado. .

What about your suppliers’ transportation cost? I understand that, specifically diesel to you, but again, throughout the system, from livestock through hamburgers, you would think there would be more of a tangible impact already? We are seeing that in other positions. .

Yes, interestingly, commodity costs are certainly coming down to the extent that transportation has an influence on that. It could be one factor.

We have not seen it in the beef market yet, just because that’s so overwhelmingly impacted by the supply and demand and the herd counts and until those catch-up, I don’t think we’ll see a whole lot of movement down on the beef side.

But to the extent the lower transportation costs are embedded in what comes into our distributor, it’s certainly probably a positive, but I can’t quantify that. .

Okay, thank you. .

Thank you. I am showing no further questions. Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today's program. You may all disconnect. Everyone have a great day..