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<SEC-DOCUMENT>0000825324-06-000015.txt : 20060809
<SEC-HEADER>0000825324-06-000015.hdr.sgml : 20060809
<ACCEPTANCE-DATETIME>20060809110114
ACCESSION NUMBER:		0000825324-06-000015
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20060630
FILED AS OF DATE:		20060809
DATE AS OF CHANGE:		20060809

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GOOD TIMES RESTAURANTS INC
		CENTRAL INDEX KEY:			0000825324
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING PLACES [5812]
		IRS NUMBER:				841133368
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-18590
		FILM NUMBER:		061015691

	BUSINESS ADDRESS:	
		STREET 1:		601 CORPORATE CIRCLE
		CITY:			GOLDEN
		STATE:			CO
		ZIP:			80401
		BUSINESS PHONE:		3033841400

	MAIL ADDRESS:	
		STREET 1:		601 CORPORATE CIRCLE
		CITY:			GOLDEN
		STATE:			CO
		ZIP:			80401

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PARAMOUNT VENTURES INC
		DATE OF NAME CHANGE:	19900205
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>qsb3rdquarter06.htm
<DESCRIPTION>FORM OF 10QSB FOR QUARTER ENDED JUNE 30, 2006
<TEXT>
<HTML>
<HEAD>
<META ="Content-Type" CONTENT="text/html; charset=windows-1252">
<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>UNITED STATES</TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080">

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD VALIGN="TOP">
<B><FONT FACE="Arial"><P ALIGN="CENTER">UNITED STATES</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">Washington, D.C. 20549</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<B><FONT FACE="Arial"><P ALIGN="CENTER">FORM 10-QSB</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">THE SECURITIES EXCHANGE ACT OF 1934</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">For quarterly period ended: <U>June 30, 2006</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">Commission file number: <U>0-18590</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Arial"><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC.</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(Exact name of registrant as specified in its charter)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Arial"><P ALIGN="CENTER">NEVADA</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(State or other jurisdiction of incorporation or organization)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Arial"><P ALIGN="CENTER">84-1133368</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(I.R.S. Employer Identification No.)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Arial"><P ALIGN="CENTER">601 CORPORATE CIRCLE, GOLDEN, CO 80401</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(Address of principal executive offices)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Arial"><P ALIGN="CENTER">(303) 384-1400 </U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(Issuer's telephone number)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(Former name, former address and former fiscal year, since last report.)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">[X] Yes [ ] No</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<DL>
<DT>&nbsp;</DT>
</DL></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><FONT FACE="Arial"><P ALIGN="CENTER">APPLICABLE ONLY TO CORPORATE ISSUERS </B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">Total number of shares of stock outstanding at August 9, 2006.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Arial"><P ALIGN="CENTER">3,779,792 SHARES OF COMMON STOCK, .001 PAR VALUE</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">Transitional Small Business Disclosure Format (check one): [ ] Yes [X ] No</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial"><H4>&nbsp;</H4>
<H4>Form 10-QSB</H4>
<B><P>Quarter Ended June 30, 2006</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=631>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<B><U><FONT FACE="Arial"><P>INDEX</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT FACE="Arial"><P ALIGN="RIGHT">PAGE</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<B><FONT FACE="Arial"><P>PART I - FINANCIAL INFORMATION</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 1.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Financial Statements</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Condensed Consolidated Balance Sheets -</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">3</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P>June 30, 2006 and September 30, 2005</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P>Condensed Consolidated Statements of Operations - </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">4</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P>For the three and nine months ended June 30, 2006 and 2005</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P>Condensed Consolidated Statements of Cash Flow -</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">5 - 6</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P>For the three and nine months ended June 30, 2006 and 2005</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Notes to Condensed Consolidated Financial Statements</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">7 - 8</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 2.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Management's Discussion and Analysis</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">8 - 14</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 3.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Quantitive and Qualitive Disclosures About Market Risk</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">14</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 4.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Controls and Procedures</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">14 - 15</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<B><FONT FACE="Arial"><P>PART II - OTHER INFORMATION</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 1.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Legal Proceedings</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">15</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 2.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Changes in Securities and Use of Proceeds</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">15</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 3.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Defaults Upon Senior Securities</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">15</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 4.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Submission of Matters to a Vote of Security Holders</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">15</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 5.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Other Information</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">15</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Item 6.</FONT></TD>
<TD WIDTH="74%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Exhibits and Reports on Form 8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">15</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<B><FONT FACE="Arial"><P ALIGN="JUSTIFY">SIGNATURES</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">15</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<B><FONT FACE="Arial"><P ALIGN="JUSTIFY">CERTIFICATIONS</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">Exhibit 31.1</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="74%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">Exhibit 32.1</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial"><P ALIGN="CENTER">2</P>
<B><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">CONDENSED CONSOLIDATED BALANCE SHEETS</P>
<P ALIGN="CENTER">ASSETS (Unaudited)</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=684>
<TR><TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">June 30,</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">September 30,</B></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2006</B></U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2005</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">CURRENT ASSETS:</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Cash and cash equivalents</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$2,009,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$1,763,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Available-for-sale investments</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,900,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Receivables and other</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">290,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">192,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Inventories</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">160,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">132,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Notes receivable</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">78,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">68,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Total current assets</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,537,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,055,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">PROPERTY AND EQUIPMENT, at cost:</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Land and building</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,538,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,696,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Leasehold improvements</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,383,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,826,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Fixtures and equipment</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">6,810,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,729,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">14,731,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">12,251,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>&#9;Less accumulated depreciation and amortization</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(8,116,000)</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(7,412,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">6,615,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,839,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>OTHER ASSETS:</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Notes receivable, net of current portion</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">364,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">486,000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Deposits and other assets</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">141,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">51,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">505,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">537,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">TOTAL ASSETS</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$9,657,000</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$9,431,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">LIABILITIES AND STOCKHOLDERS' EQUITY</P></B></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=690>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">CURRENT LIABILITIES:</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial"><PRE>&#9;Current maturities of long-term debt</PRE></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$ 225,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$ 217,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Accounts payable</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">468,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">363,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Deferred income</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">99,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">48,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Other accrued liabilities</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">849,000</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">705,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Total current liabilities</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,641,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,333,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>LONG-TERM LIABILITIES:</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>&#9;Debt, net of current portion</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">352,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">522,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Deferred liabilities</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,057,000</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">957,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;Total long-term liabilities</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,409,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,479,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>MINORITY INTERESTS IN PARTNERSHIPS</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">789,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">620,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>STOCKHOLDERS' EQUITY:</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Convertible preferred stock, $.01 par value; 5,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2006 and 1,240,000 shares issued and outstanding at September 30, 2005</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">&nbsp;</P>
<P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">&nbsp;</P>
<P ALIGN="RIGHT">12,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Common stock, $.001 par value; 50,000,000 shares authorized, 3,779,412 shares issued and outstanding as of June 30, 2006 and 2,497,647 shares issued and outstanding as of September 30, 2005</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">&nbsp;</P>
<P ALIGN="RIGHT">3,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">&nbsp;</P>
<P ALIGN="RIGHT">2,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Capital contributed in excess of par value</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,139,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,053,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Accumulated deficit</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(11,324,000)</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(11,068,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total stockholders' equity</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,818,000</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,999,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$9,657,000</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$9,431,000</U></FONT></TD>
</TR>
</TABLE>
</P>

<FONT FACE="Arial"><P ALIGN="CENTER">See accompanying notes to condensed consolidated financial statements</P>
<P ALIGN="CENTER">3</P>
<B><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</P>
<P ALIGN="CENTER">(Unaudited)</P>
</B><H5 ALIGN="CENTER">&#9; &#9; </H5></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=5 WIDTH=738>
<TR><TD WIDTH="50%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial"><P ALIGN="CENTER">Three Months Ended June 30,</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial"><P ALIGN="CENTER">Nine Months Ended June 30,</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2006</B></U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2005</B></U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2006</B></U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2005</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>NET REVENUES:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Restaurant sales, net</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$5,510,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$4,482,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$14,311,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$11,870,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Franchise revenues</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">178,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">125,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">439,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">330,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Total revenues</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,688,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,607,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">14,750,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">12,200,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>RESTAURANT OPERATING COSTS:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Food &amp; packaging costs</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,669,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,478,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,511,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,961,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Payroll &amp; other employee benefit costs</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,670,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,320,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,683,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,780,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Occupancy &amp; other operating costs</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">944,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">755,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,703,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,108,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Accretion of deferred rent</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">8,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">28,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">29,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Opening costs</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">40,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">69,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">116,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">75,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Depreciation &amp; amortization</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">243,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">201,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">704,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">588,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Total restaurant operating costs</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,574,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,834,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">12,745,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">10,541,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>General &amp; administrative costs</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">381,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">356,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,156,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,080,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Advertising costs</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">325,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">287,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">865,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">845,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>(Gain) loss on sale of restaurant building and equipment</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(13,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(9,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(51,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(17,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>INCOME (LOSS) FROM OPERATIONS</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">421,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">139,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">35,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(249,000)</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>OTHER INCOME &amp; (EXPENSES):</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Minority income (expense), net</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(103,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(94,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(161,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(130,000)</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Interest, net</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">23,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">20,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">71,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">29,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Other, net</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(50,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(23,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(139,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(71,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Total other income &amp; (expenses)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(130,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(97,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(229,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(172,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>NET INCOME (LOSS)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$291,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$42,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($194,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($421,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Less imputed preferred stock dividend</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">533,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$291,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$42,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($194,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($954,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$.10</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$.02</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.07)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.40)</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS USED IN PER SHARE CALCULATION</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>BASIC</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,833,906</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,409,132</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,616,459</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,374,372</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>DILUTED</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,996,696</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,514,173</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">N/A</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">N/A</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial"><P ALIGN="CENTER">See accompanying notes to condensed consolidated financial statements</P>
<P ALIGN="CENTER">4</P>
<B><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</P>
<P ALIGN="CENTER">(Unaudited)</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=5 WIDTH=732>
<TR><TD WIDTH="51%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial"><P ALIGN="CENTER">Three Months Ended June 30,</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial"><P ALIGN="CENTER">Nine Months Ended June 30,</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2006</B></U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2005</B></U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2006</B></U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2005</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>CASH FLOWS FROM OPERATING ACTIVITIES:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP"><DIR>

<FONT FACE="Arial" SIZE=2><P>Net income (Loss)</DIR>
</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$291,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$42,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($194,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($421,000)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP"><DIR>

<FONT FACE="Arial" SIZE=2><P>Adjustments to reconcile net income (loss) to net cash provided by</P>
<P>(used in) operating activities:</DIR>
</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Depreciation and amortization</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">243,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">210,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">704,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">599,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Accretion of deferred rent</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">8,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">28,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">29,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Minority interest</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">103,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">94,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">161,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">130,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Recognition of deferred (gain) on sale of restaurant building</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(9,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(6,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(24,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(17,000)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Loss (gain) on sale of restaurant equipment</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(3,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(3,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(27,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Changes in operating assets and liabilities:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>(Increase) decrease in:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Receivables and other</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(36,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">30,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(98,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(54,000)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Inventories</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(13,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(8,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(28,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(14,000)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Deposits and other</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(4,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(10,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(15,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">25,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>(Decrease) increase in:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Accounts payable</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">260,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">147,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">225,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">174,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Accrued liabilities and deferred income</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(86,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(144,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">135,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">173,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Net cash provided by operating activities</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">754,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">363,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">867,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">622,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>CASH FLOWS USED IN INVESTING ACTIVITIES</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Payments for the purchase of property and equipment</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(979,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(1,515,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(2,491,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(1,824,000)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Sale of investments</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,900,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Proceeds from sale of assets</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">14,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Loans made to franchisees and to others</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(74,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Payments received on loans to franchisees and to others</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">46,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">13,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">109,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">37,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Net cash used in investing activities</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(933,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(1,502,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(542,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(1,787,000)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>CASH FLOWS FROM FINANCING ACTIVITIES:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Principal payments on notes payable, capital leases, and long-term debt</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(53,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(52,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(162,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(155,000)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Repayments on line-of-credit</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(305,000)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Net proceeds from preferred stock offering</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(4,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(42,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(18,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,680,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Proceeds from exercise of options</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">269,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">93,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">334,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Contributions from minority interests in partnerships</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">230,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">245,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Distributions paid to minority interests in partnerships</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(128,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(98,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(237,000)</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(185,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Net cash provided by (used in) financing activities</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">63,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">77,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(79,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,369,000</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial"><P ALIGN="CENTER">See accompanying notes to condensed consolidated financial statements</P>
<P ALIGN="CENTER">5</P>
<B><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</P>
<P ALIGN="CENTER">(Unaudited)</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=5 WIDTH=732>
<TR><TD WIDTH="50%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial"><P ALIGN="CENTER">Three Months Ended June 30,</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=3>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial"><P ALIGN="CENTER">Nine Months Ended June 30,</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2006</B></U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2005</B></U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2006</B></U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2005</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($116,000)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($1,062,000)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$246,000</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$1,204,000</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>CASH AND CASH EQUIVALENTS, beginning of period</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$2,125,000</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$4,062,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$1,763,000</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$1,796,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>CASH AND CASH EQUIVALENTS, end of period</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$2,009,000</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$3,000,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$2,009,000</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$3,000,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Cash paid for interest</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$11,000</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$15,000</U></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$38,000</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$49,000</U></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial"><P ALIGN="CENTER">See accompanying notes to condensed consolidated financial statements</P>
<P ALIGN="CENTER">6</P>
<P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</P>
<P ALIGN="CENTER">(Unaudited)</P>
<P ALIGN="CENTER">&nbsp;</P>
</B><P>1.&#9;UNAUDITED FINANCIAL STATEMENTS</P>
<P ALIGN="JUSTIFY">In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position of the Company as of June 30, 2006, the results of its operations and its cash flows for the three and nine month periods ended June 30, 2006. Operating results for the three and nine month periods ended June 30, 2006 are not necessarily indicative of the results that may be expected for the year ending September 30, 2006.</P>
<P ALIGN="JUSTIFY">The condensed consolidated balance sheet as of September 30, 2005 is derived from the audited financial statements, but does not include all disclosures required by United States generally accepted accounting principles. As a result, these financial statements should be read in conjunction with the Company's Form 10-KSB for the fiscal year ended September 30, 2005.</P>
<I><P>Reclassification:</I> Certain prior quarter balances have been reclassified to conform to the current quarter's presentation. Such reclassifications had no effect on the net income (loss).</P>
<I><P ALIGN="JUSTIFY">Stock-based compensation disclosures:</I> We apply APB Opinion 25 and related interpretations in accounting for stock options and warrants which are granted to employees. Accordingly, no compensation cost has been recognized for grants of options and warrants to employees since the exercise prices were not less than the fair value of our common stock on the grant dates. Had compensation cost been determined based on the fair value at the grant dates for awards under those plans consistent with the method of SFAS No. 123, our net loss and net loss per share would have been changed to the pro forma amounts indicated below.</P>
<H4>&#9;</H4></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=5 WIDTH=672>
<TR><TD WIDTH="48%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">Three Months Ended June 30,</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">Nine Months Ended June 30,</FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP"><DIR>

<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2006</DIR>
</B></U></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP"><DIR>

<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2005</DIR>
</B></U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2><DIR>

<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2006</DIR>
</B></U></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2005</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Net income (loss) - as reported</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$291,000</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$42,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($194,000)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($954,000)</FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Effect of employee stock-based compensation per</P>
<P>SFAS 123</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(26,000)</U></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(25,000)</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(102,000)</U></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(66,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Net income (loss) applicable to common stock</P>
<P>(pro forma)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">265,000</U></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,000</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(296,000)</U></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(1,020,000)</U></FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Income (loss) per common share - as reported</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Basic and Diluted:</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$.10</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$.02</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.07)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.40)</FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Per share effect of employee stock-based</P>
<P>compensation per SFAS 123</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.01)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.01)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.04)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.03)</FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Income (loss) per share applicable to common stock</P>
<P>(pro forma)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Basic and Diluted:</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$.09</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$.01</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.11)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">($.43)</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial"><P>&nbsp;</P>
<P>The assumptions used in calculating the fair value of options granted during the period are as follows:</P>
</FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=5 WIDTH=570>
<TR><TD WIDTH="44%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">Three Months Ended June 30,</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">Nine Months Ended June 30,</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="TOP">
<B><U><FONT FACE="Arial"><P ALIGN="CENTER">2006</B></U></FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<B><U><FONT FACE="Arial"><P ALIGN="CENTER">2005</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Expected volatility</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">58%</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">68%</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Risk-free interest rate</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">4.19%</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">4.14%</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Expected dividends</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">Expected terms (in years)</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">5 - 10</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="RIGHT">5 - 10</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial"><P ALIGN="CENTER">7</P>
<P ALIGN="CENTER">&nbsp;</P>
<P>2.&#9;CONTINGENT LIABILITY</P>
<P ALIGN="JUSTIFY">We remain contingently liable on various restaurant leases that were previously sold. We are also a guarantor on a Small Business Administration loan to a franchisee. We have never experienced any losses nor do we anticipate any future losses from these contingent liabilities.</P>
<P ALIGN="JUSTIFY">3.&#9;STOCK TRANSACTIONS</P>
<P>Preferred Conversion. On June 8, 2006 the entire 1,240,000 shares of outstanding Series B Preferred Stock were converted to 1,240,000 shares of common stock, pursuant to the mandatory conversion provision of the Certificate of Designations, Preferences, and Rights of Series B Convertible Preferred Stock.</P>
<H4>ITEM 2.&#9;MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION</H4>
<B><P>AND RESULTS OF OPERATIONS FOR THE COMPANY</P>
<U><P>General</P>
</B></U><P ALIGN="JUSTIFY">This Form 10-QSB contains or incorporates by reference forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended. Also, documents subsequently filed by us with the SEC and incorporated herein by reference may contain forward-looking statements. We caution investors that any forward-looking statements made by us are not guarantees of future performance and actual results could differ materially from those in the forward-looking statements as a result of various factors, including but not limited to the following:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(I)&#9;We compete with numerous well established competitors who have substantially greater financial resources and longer operating histories than we do. Competitors have increasingly offered selected food items and combination meals, including hamburgers, at discounted prices, and continued discounting by competitors may adversely affect revenues and profitability of Company restaurants.</P>
<P ALIGN="JUSTIFY">(II)&#9;We may be negatively impacted if we experience consistent same store sales declines. Same store sales comparisons will be dependent, among other things, on the success of our advertising and promotion of new and existing menu items. No assurances can be given that such advertising and promotions will in fact be successful.</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">We may also be negatively impacted by other factors common to the restaurant industry such as: changes in consumer tastes away from red meat and fried foods; increases in the cost of food, paper, labor, health care, workers' compensation or energy; inadequate number of hourly paid employees; and/or decreases in the availability of affordable capital resources. We caution the reader that such risk factors are not exhaustive, particularly with respect to future filings.</P>
<I><P ALIGN="JUSTIFY">Preferred Stock Offering</P>
</I><P ALIGN="JUSTIFY">On February 10, 2005 we closed on the private placement of a total of 1,240,000 shares of Series B Preferred Stock for $2.50 per share, including 60,000 shares issued to one of the investors in consideration for advice and assistance with respect to the sale of 1,000,000 shares of the Series B Preferred Stock. A current significant stockholder purchased 180,000 of the shares of Series B Preferred Stock. The aggregate purchase price for the 1,180,000 shares issued for cash was $2,950,000. Net proceeds of approximately $2,666,000 include $133,336 paid to Eric W. Reinhard (Board Chairman) for a fee related to raising capital. We had certain mandatory conversion rights which were exercised on June 8, 2006. The preferred shares accrued dividends at the rate of 6% per annum beginning on the first anniversary of the issuance of the shares. A declared dividend of $25,000 for the period from February 10, 2006 to March 31, 2006 was paid on May 15, 2006. Upon the mandatory conversion of the prefe
rred shares to common shares on June 8, 2006 dividends of $35,000 were paid for the period April 1, 2006 to June 8, 2006. The Series B Preferred Stock had a beneficial conversion feature because the quoted market price of Good Times Restaurants' common stock on the commitment date was higher than the conversion price of $2.50. The imputed preferred stock dividend at the commitment date was $533,000 (1,240,000 shares multiplied by the difference in the market value at the commitment date of $2.93 and the conversion price of $2.50). This amount was reflected in the September 30, 2005 10-KSB filing as a reduction of net income available to common stockholders. We are using the net proceeds from the preferred stock offering for the development of new restaurants and for the refurbishment of existing restaurants.</P>
<P ALIGN="CENTER">8</P>
<I><P ALIGN="JUSTIFY">Development</P>
</I><P ALIGN="JUSTIFY">We had forty-five restaurants open at June 30, 2006 of which twenty-two were franchised or licensed, eight were joint-ventured and fifteen were company-owned compared to forty restaurants open at June 30, 2005, of which twenty were franchised or licensed, eight were joint-ventured and twelve were company-owned.</P>
<P ALIGN="JUSTIFY">During fiscal 2005 we opened one new company-owned Good Times restaurant in Aurora, Colorado in September 2005. In April, 2005 we purchased one existing Good Times restaurant from a franchisee and converted it to a company-owned restaurant under the co-brand format in June 2005.</P>
<P ALIGN="JUSTIFY">During fiscal 2006 we opened one company-owned Good Times restaurant in December 2005 and purchased an additional franchised restaurant and converted it to a company-owned restaurant under the co-brand format in February 2006. Two franchised co-branded restaurants opened in Colorado and North Dakota in December and January, respectively. One licensed Good Times restaurant opened in the Pepsi Center arena in December 2005. We remodeled one existing company-owned restaurant to add a Daz Bog coffee kiosk in December 2005. In June 2006 one franchised Good Times restaurant opened in Colorado Springs, Colorado and in early July 2006 a non-traditional joint-ventured Good Times without drive-thru opened in Downtown Denver, Colorado.</P>
<P ALIGN="JUSTIFY">We anticipate opening two to three additional company-owned restaurants in Colorado during the remainder of 2006, two of which will be developed under the co-brand format. We anticipate purchasing one additional restaurant from a franchisee. We also anticipate finalizing contracts on property for additional company-owned restaurants for opening in 2007.</P>
<P ALIGN="JUSTIFY">We anticipate opening five to six additional franchised restaurants in 2006 in Colorado, North Dakota, Montana and Wyoming, five of which will be developed under the co-brand format. Our co-brand test agreement with Taco John's International for the evaluation and determination of additional co-brand development expires in October, 2006 and we are currently negotiating a structure for further development beyond the test agreement, however there can be no assurance that such an agreement will be completed.</P>
<P ALIGN="JUSTIFY">We expect to complete minor exterior remodeling and patio and landscape improvements on three existing company-owned restaurants during the remainder of 2006.</P>
<P ALIGN="JUSTIFY">The following presents certain historical financial information of our operations. This financial information includes results for the three and nine months ended June 30, 2005 and results for the three and nine months ended June 30, 2006.</P>
<B><U><P>Results of Operations</P>
</B></U><I><P>Net Revenues</P>
</I><P ALIGN="JUSTIFY">Net revenues for the three months ended June 30, 2006 increased $1,081,000 (23.5%) to $5,688,000 from $4,607,000 for the three months ended June 30, 2005. Same store restaurant sales increased $32,000 (.77%) during the three months ended June 30, 2006 for the restaurants that were open for the full three month periods ending June 30, 2006 and June 30, 2005. Restaurant sales increased $978,000 due to four new company-owned restaurants, one purchased from a franchisee in April 2005, one opened in September 2005, one opened in late December 2005 and, one purchased from a franchisee in November 2005. Restaurant sales increased $19,000 due to one non-traditional company-owned restaurant not included in same store sales. Our same store restaurant sales have continued to show positive trends over the last two years. We have had same store sales increases in each of the last ten quarters.</P>
<P ALIGN="CENTER">9</P>
<P ALIGN="JUSTIFY">Franchise revenues increased $53,000 to $178,000 from $125,000 for the three months ended June 30, 2006 due to an increase in franchise royalties and franchise fee income compared to the same prior year period. Same store franchise restaurant sales increased 1.5% during the three months ended June 30, 2006 for the franchise restaurants that were open for the full periods ending June 30, 2006 and June 30, 2005.</P>
<P ALIGN="JUSTIFY">Net revenues for the nine months ended June 30, 2006 increased $2,550,000 (20.9%) to $14,750,000 from $12,200,000 for the nine months ended June 30, 2005. Same store restaurant sales increased $98,000 (.87%) during the nine months ended June 30, 2006 for the restaurants that were open for the full nine month periods ended June 30, 2006 and June 30, 2005. Restaurants sales increased $2,330,000 due to the four new company-owned restaurants, and increased $15,000 due to one non-traditional company-owned restaurant not included in same store sales.</P>
<P ALIGN="JUSTIFY">Franchise revenues for the nine months ended June 30, 2006 increased $109,000 to $439,000 from $330,000 for the nine months ended June 30, 2005 due to increases in franchise royalties and franchise fee income. Same store franchise restaurant sales increased 1.99% during the nine months ended June 30, 2006 for the franchise restaurants that were open for the full periods ended June 30, 2006 and June 30, 2005. Two franchised co-brand restaurants, one in Ft. Collins, Colorado and one in Bismarck, North Dakota, and one franchised Good Times restaurant in Colorado Springs, Colorado were opened during the nine months ended June 30, 2006.</P>
<I><P>Restaurant Operating Costs</P>
</I><P ALIGN="JUSTIFY">Restaurant operating costs as a percent of restaurant sales were 83.0% during the three months ended June 30, 2006 compared to 85.5% in the same prior year period and were 89.1% during the nine months ended June 30, 2006 compared to 88.8% in the same prior year period.</P>
<P ALIGN="JUSTIFY">The changes in restaurant-level costs are explained as follows:</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=731>
<TR><TD WIDTH="58%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<B><FONT FACE="Arial"><P ALIGN="CENTER">Three Months Ended</P>
<U><P ALIGN="CENTER">June 30, 2006</B></U></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<B><FONT FACE="Arial"><P ALIGN="CENTER">Nine months Ended</P>
<U><P ALIGN="CENTER">June 30, 2006</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="21%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial"><P>&nbsp;</P>
<P>Restaurant-level costs for the period ended June 30, 2005</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">85.5%</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">88.8%</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial"><P>Decrease in food and packaging costs</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(2.7%)</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(1.9%)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial"><P>Increase in payroll and other employee benefit costs</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">.9%</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">.9%</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial"><P>Increase in occupancy and other operating costs</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">.2%</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">1.1%</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial"><P>Decrease in depreciation and amortization</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(.1%)</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">-</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial"><P>Increase (decrease) in opening costs</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">(.8%)</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">.2%</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial"><P>Restaurant-level costs for the period ended June 30, 2006</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">83.0%</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">89.1%</FONT></TD>
</TR>
</TABLE>

<I><FONT FACE="Arial"><P>&nbsp;</P>
<P>Food and Packaging Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended June 30, 2006 our food and packaging costs increased $191,000 to $1,669,000 (30.3% of restaurant sales) from $1,478,000 (33.0% of restaurant sales) compared to the same prior year period.</P>
<P ALIGN="JUSTIFY">For the nine months ended June 30, 2006 our food and packaging costs increased $550,000 to $4,511,000 (31.5% of restaurant sales) from $3,961,000 (33.4% of restaurant sales) compared to the same prior year period. Food and packaging costs decreased as a percentage of restaurant sales primarily due to: 1) limited menu price increases; 2) menu product engineering in portions and ingredients; 3) new product development; 4) new purchasing agreements; and, 5) increased vendor rebates in the current period compared to the same prior year period. We anticipate additional moderate decreases to food and packaging costs as a percentage of sales for the balance of fiscal 2006 from purchasing efficiencies and vendor rebates, however no assurances can be given that this will occur.</P>
<P ALIGN="CENTER">10</P>
<I><P ALIGN="JUSTIFY">Payroll and Other Employee Benefit Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended June 30, 2006 our payroll and other employee benefit costs increased $350,000 to $1,670,000 (30.3% of restaurant sales) from $1,320,000 (29.5% of restaurant sales) compared to the same prior year period. The increase in payroll and other employee benefit expenses is partially the result of increased sales for the period. Payroll and benefit costs are semi-variable and therefore increase or decrease as sales fluctuate. Additionally, the current three-month period ending June 30, 2006 includes four additional company-owned restaurants that represent $278,000 of the $350,000 increase compared to the same prior year period. The new restaurants operate at a higher labor cost as a percent of sales due to higher initial labor costs at new stores until they reach mature staffing levels. The two co-brand restaurants also have a higher labor cost as a percent of sales than Good Times single brand restaurants.</P>
<P ALIGN="JUSTIFY">For the nine months ended June 30, 2006 our payroll and other employee benefit costs increased $903,000 to $4,683,000 (32.7% or restaurant sales) from $3,780,000 (31.8% of restaurant sales) compared to the same prior year period. The current nine month period ending June 30, 2006 includes four additional company-owned restaurants that represent $748,000 of the $903,000 increase compared to the same prior year period.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<I><P ALIGN="JUSTIFY">Occupancy and Other Operating Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended June 30, 2006 our occupancy and other operating costs increased $189,000 to $944,000 (17.1% of restaurant sales) from $755,000 (16.8% of restaurant sales) compared to the same prior year period. For the three months ended June 30, 2006: 1) rent expense increased $77,000 from the same prior year period due to the addition of four company-owned restaurants. Rent expense will continue to increase as a percent of sales as new company-owned restaurants are developed due to higher rent associated with sale-leaseback operating leases; 2) bank fees increased $18,000 from the prior year period due to increased use of credit cards by our customers as well as the four additional company-owned restaurants; and, 3) utility costs increased $28,000 from the prior year period due to the four additional company-owned restaurants and an overall increase in the cost of utilities.</P>
<P ALIGN="JUSTIFY">For the nine months ended June 30, 2006 our occupancy and other operating costs increased $595,000 to $2,703,000 (18.9% of restaurant sales) from $2,108,000 (17.8% of restaurant sales) compared to the same prior year period. For the nine months ended June 30, 2006; 1) rent expense increased $268,000; 2) bank fees increased $42,000; and, 3) utility costs increased $100,000 from the same prior year period.</P>
<I><P ALIGN="JUSTIFY">Opening Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended June 30, 2006, new store opening costs were $40,000 (.70% of restaurant sales) compared to $69,000 (1.5% of restaurant sales) for the same prior year period. The costs in the current period are associated with a joint-ventured restaurant that opened in early July 2006 as well as a company-owned restaurant that will open in late July 2006. Each new company-owned restaurant developed in fiscal 2006 will have approximately $50,000 of pre-open expenses.</P>
<P ALIGN="JUSTIFY">For the nine months ended June 30, 2006 new store opening costs were $116,000 (.8% of restaurant sales) compared to $75,000 (.6% of restaurant sales) for the same prior year period. The costs in the current period are associated with a company-owned restaurant that opened in late December 2005, the remodeling of a company-owned restaurant in Silverthorne, Colorado to add a Dazbog co-branded coffee operation, a company-owned restaurant that was converted to the Taco John's International co-brand in February 2006 and two new restaurants opening in July 2006.</P>
<I><P>Depreciation and Amortization</P>
</I><P ALIGN="JUSTIFY">For the three months ended June 30, 2006 depreciation and amortization increased $42,000 to $243,000 (4.4% of restaurant sales) from $201,000 (4.5% of restaurant sales) compared to the same prior year period. The $42,000 increase in depreciation and amortization for the three months ended June 30, 2006 is due to the addition of four company-owned restaurants.</P>
<P ALIGN="JUSTIFY">For the nine months ended June 30, 2006 depreciation and amortization increased $116,000 to $704,000 (4.9% of restaurant sales) from $588,000 (5.0% of restaurant sales) compared to the same prior year period. The $116,000 increase for the nine months ended June 30, 2006 is due to the addition of four company-owned restaurants.</P>
<P ALIGN="CENTER">11</P>
<I><P ALIGN="JUSTIFY">General and Administrative Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended June 30, 2006, general and administrative costs increased $25,000 to $381,000 (6.7% of total revenues) from $356,000 (7.7% of total revenues) for the same prior year period. The increase in general and administrative costs is primarily attributable to an increase in health insurance costs compared to the same prior year period which included a one time credit of approximately $18,000. There were also increases in payroll costs and directors' and officers' liability insurance premiums compared to the same prior year period.</P>
<P ALIGN="JUSTIFY">For the nine months ended June 30, 2006 general and administrative costs increased $76,000 to $1,156,000 (7.8% of total revenues) from $1,080,000 (8.9% of total revenues) for the same prior year period. The increase over the same nine month prior year period is primarily attributable to increases in payroll and employee benefits and directors' and officers' liability insurance premiums.</P>
<I><P ALIGN="JUSTIFY">Advertising Costs</P>
</I><P ALIGN="JUSTIFY">For the three months ended June 30, 2006 advertising costs increased $38,000 to $325,000 (5.9% of restaurant sales) from $287,000 (6.4% of restaurant sales) for the same prior year period.</P>
<P ALIGN="JUSTIFY">For the nine months ended June 30, 2006 advertising costs increased $20,000 to $865,000 (6.0% of restaurant sales) from $845,000 (7.1% of restaurant sales) for the same prior year period.</P>
<P ALIGN="JUSTIFY">The decrease in advertising costs as a percentage of restaurant sales is due to a reduction in the contribution percentage paid to the local advertising cooperative. Contributions are made to the cooperative based on sales.</P>
<I><P>Income (Loss) From Operations</P>
</I><P ALIGN="JUSTIFY">We had income from operations of $421,000 in the three months ended June 30, 2006 compared to income from operations of $139,000 for the same prior year period.</P>
<P ALIGN="JUSTIFY">We had income from operations of $35,000 in the nine months ended June 30, 2006 compared to a loss from operations of ($249,000) for the same prior year period.</P>
<P ALIGN="JUSTIFY">The increase in the income from operations for the three and nine month periods is due primarily to the increases in net revenues and income from operations related to the four new company-owned restaurants, offset by other matters discussed in the "Restaurant Operating Costs" and "General and Administrative Costs" sections of Item 2.</P>
<I><P>Net Income (Loss)</P>
</I><P ALIGN="JUSTIFY">The net income was $291,000 for the three months ended June 30, 2006 compared to net income of $42,000 for the same prior year period. The change from the three month period ended June 30, 2005 to June 30, 2006 was primarily attributable to the increase in income from operations for the three months ended June 30, 2006, plus: 1) an increase in net interest income of $3,000 compared to the same prior year period; less 2) an increase in minority interest expense of $9,000 compared to the same prior year period; and, 3) an increase in other expenses of $27,000 compared to the same prior year period. The increase in other expenses is attributable to an increase in franchise support costs.</P>
<P ALIGN="JUSTIFY">The net loss was ($194,000) for the nine months ended June 30, 2006 compared to a net loss of ($421,000) for the same prior year period. For the nine month period ended June 30, 2006 minority interest expense increased $31,000 and other expenses increased $68,000 compared to the same prior year period. In addition, net interest income increased $42,000 for the nine months ended June 30, 2006 compared to the same prior year period. The increase in other expenses is primarily attributable to an increase in franchise support costs as well as a $17,000 legal expense related to the settlement of a minor civil suit.</P>
<P ALIGN="CENTER">12</P>
<B><U><P ALIGN="JUSTIFY">Liquidity and Capital Resources</P>
</B></U><I><P>Cash and Working Capital</P>
</I><P ALIGN="JUSTIFY">As of June 30, 2006, we had $2,009,000 cash and cash equivalents on hand. We currently plan to use the cash balance and cash generated from operations for increasing our working capital reserves and, along with additional debt financing, for the development of new company-owned restaurants. We believe that the current cash on hand and additional cash expected from operations in the balance of fiscal 2006 will be sufficient to cover our working capital requirements for fiscal 2006. </P>
<P ALIGN="JUSTIFY">As of June 30, 2006, we had working capital of $896,000. Because restaurant sales are collected in cash and accounts payable for food and paper products are paid two to four weeks later, restaurant companies often operate with working capital deficits. We anticipate that working capital deficits will be incurred in the future as new restaurants are opened.</P>
<I><P>Capital Expenditures</P>
</I><P ALIGN="JUSTIFY">On November 30, 2005 the Company purchased the land, building, improvements and equipment from a franchisee for $1,121,000, for a restaurant located in Colorado Springs, Colorado. The Company simultaneously sold the land, building and improvements (excluding the equipment) to a third party in a sale-leaseback transaction for $1,115,000 in net proceeds and was re-opened as a co-branded restaurant in February 2006 operating under the co-brand test agreement with Taco John's International. The sale-leaseback transaction resulted in a $96,000 gain which has been deferred and will be recognized in income over the life of the lease.</P>
<P ALIGN="JUSTIFY">We are also currently negotiating purchase and lease agreements for additional company-owned and franchise restaurants and are negotiating debt and sale-leaseback financing for the development of those restaurants. We anticipate opening two company-owned Good Times or co-branded restaurants in the remainder of 2006, and subsequent to the quarter end we purchased one existing restaurant from a franchisee. We also anticipate increasing the level of reinvestment in existing company-owned and joint venture restaurants to upgrade the exterior building image and improve the patios.</P>
<I><P ALIGN="JUSTIFY">Financing</P>
</I><P ALIGN="JUSTIFY">In March 2006 we entered into an operating agreement to form a limited liability company with a third party, the intent of which is to jointly develop and operate a Good Times restaurant in downtown Denver, Colorado. We own 51% of the entity, will be the managing member and therefore we will fully consolidate the operations in our financial statements. We will contribute $255,000 to the limited liability company while the other member has contributed $245,000. The restaurant opened in early July 2006.</P>
<I><P ALIGN="JUSTIFY">Cash Flows</P>
</I><P ALIGN="JUSTIFY">Net cash provided by operating activities was $754,000 for the three months ended June 30, 2006. The net cash provided by operating activities for the three months ended June 30, 2006 was the result of net income of $291,000 and non-cash reconciling items totaling $463,000 (comprised of depreciation and amortization of $243,000, minority interest of $103,000, an increase in accounts payable of $260,000 and a net decrease in other operating assets and liabilities of $143,000).</P>
<P ALIGN="JUSTIFY">Net cash provided by operating activities was $363,000 for the three months ended June 30, 2005. The net cash provided by operating activities for the three months ended June 30, 2005 was the result of net income of $42,000 and non-cash reconciling items totaling $321,000 (comprised of depreciation and amortization of $210,000, minority interest of $94,000, a decrease in accounts payable of $147,000, a decrease in accrued and other liabilities of $144,000, and increases in operating assets and liabilities totaling $14,000).</P>
<P ALIGN="JUSTIFY">Net cash used in investing activities for the three months ended June 30, 2006 was $933,000 which reflects payments of $979,000 for the purchase of property and equipment (including $924,000 for new store development; $34,000 for patio improvements; and, $21,000 for miscellaneous restaurant related capital expenditures) and $46,000 in principal payments received on loans to franchisees.</P>
<P ALIGN="CENTER">13</P>
<P ALIGN="JUSTIFY">Net cash used in investing activities for the three months ended June 30, 2005 was $1,502,000, which reflects $1,410,000, for new restaurant development costs, $105,000 for miscellaneous restaurant related capital expenditures and $13,000 in principal payments received on loans to franchisees.</P>
<P ALIGN="JUSTIFY">Net cash provided by financing activities for the three months ended June 30, 2006 was $63,000, which includes principal payments on notes payable and long term debt of $53,000; distributions to minority interests in partnerships of $128,000; contributions from minority interests of $230,000; and, paid in capital activity of $18,000, related to the exercise of stock options.</P>
<P ALIGN="JUSTIFY">Net cash provided by financing activities for the three months ended June 30, 2005 was $77,000, which includes principal payments on notes payable and long term debt of $52,000, distributions to minority interests in partnerships of $98,000, paid in capital activity of $269,000 related to the exercise of stock options and paid in capital activity of ($42,000) related to expenses for the preferred stock offering.</P>
<I><P ALIGN="JUSTIFY">Subsequent Events</P>
</I><P ALIGN="JUSTIFY">On July 1, 2006 we entered into an agreement to purchase the assets and operations of a franchised restaurant in Aurora, Colorado. The total purchase price will be approximately $320,000 which includes cash payments of approximately $244,000 and the forgiveness of a $76,000 note receivable that currently exists between us and the franchisee. On the accompanying condensed consolidated financial statements the $76,000 note receivable has been reclassified into deposits and other assets.</P>
<I><P>Contingencies</P>
</I><P ALIGN="JUSTIFY">We are contingently liable on several ground leases that have been subleased or assigned to franchisees. We have never experienced any losses nor do we anticipate any future losses from these contingent lease liabilities. We are also a guarantor on a Small Business Administration loan to a franchisee of approximately $235,000, which is collateralized by a first security interest on the building, equipment and operating assets of the restaurant and the personal guarantee of the franchisee.</P>
<B><U><P ALIGN="JUSTIFY">Impact of Inflation</P>
</B></U><P ALIGN="JUSTIFY">We experienced a significant impact from inflation in the commodity costs for beef, chicken, dairy and produce during fiscal 2004. We experienced a moderation in the costs of most of these commodities during fiscal 2005 and year to date in fiscal 2006. It is anticipated that we will take moderate price increases in the future, which may or may not be sufficient to recover increased commodity costs or increases in other operating expenses.</P>
<B><U><P ALIGN="JUSTIFY">Seasonality</P>
</B></U><P ALIGN="JUSTIFY">Revenues of the Company are subject to seasonal fluctuation based primarily on weather conditions adversely affecting restaurant sales in January, February and March.</P>
<B><P>ITEM 3.&#9;QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</P>
</B><P ALIGN="JUSTIFY">There were no material changes in our exposure to market risk for the quarter ended March 31, 2006.</P>
<B><P>ITEM 4.&#9;CONTROLS AND PROCEDURES</P>
</B><P ALIGN="JUSTIFY">We maintain a system of disclosure controls and procedures that are designed for the purposes of ensuring that information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Controller, who currently performs the functions of principal financial officer for the Company, as appropriate to allow timely decisions regarding required disclosures.</P>
<P ALIGN="JUSTIFY">We have carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and the Controller, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and the Controller concluded that our disclosure controls and procedures are effective for the purposes discussed above as of the end of the period covered by this report. There have been no significant changes in our internal controls or in other factors that could significantly affect these controls during the quarter ended June 30, 2006.</P>
<P ALIGN="CENTER">14</P>
<B><P ALIGN="CENTER">GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES</P>
</B><P>Part II.&#9;Other Information</P><DIR>
<DIR>
<DIR>

<P>Item 1.&#9;Legal Proceedings</P></DIR>
</DIR>
</DIR>

<P>Good Times Restaurants is subject to legal proceedings which are incidental to its business. These legal proceedings are not expected to have a material impact on the Company.</P><DIR>
<DIR>
<DIR>

<P>Item 2.&#9;Changes in Securities and Use of Proceeds</P></DIR>

<P>None.</P><DIR>

<P>Item 3.&#9;Defaults Upon Senior Securities</P></DIR>

<P>None.</P></DIR>

<P>Item 4.&#9;Submission of Matters to a Vote of Security Holders</P>
<P>&#9;None</P><DIR>
<DIR>

<P>Item 5.&#9;Other Information</P></DIR>

<P>None.</P><DIR>

<P>Item 6.&#9;Exhibits and Reports on Form 8-K</P></DIR>

<P>(a)&#9;Exhibits. The following exhibits are furnished as part of this report:</P></DIR>
</DIR>

<P>&#9;<U>Exhibit No.</U>&#9;<U>Description</P><DIR>
<DIR>

</U><P>*31.1&#9;Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350</P>
<P>*32.1&#9;Certification of Controller pursuant to 18 U.S.C. Section 1350</P>
<P>*32.1&#9;Certification of Chief Executive Officer and Controller pursuant to Section 906</P></DIR>
</DIR>

<P>*filed herewith</P>
<B><P ALIGN="CENTER">SIGNATURES</P>
</B><P ALIGN="JUSTIFY">In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=617>
<TR><TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP">
<B><FONT FACE="Arial"><P>GOOD TIMES RESTAURANTS INC.</B></FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="JUSTIFY">DATE: August 9, 2006</FONT></TD>
<TD WIDTH="61%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP"><DIR>

<U><FONT FACE="Arial"><P>/s/Boyd E. Hoback</DIR>
</U></FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP"><DIR>

<FONT FACE="Arial"><P>Boyd E. Hoback</P>
<P>President and Chief Executive Officer</DIR>
</FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP"><DIR>

<U><FONT FACE="Arial"><P>/s/Susan M. Knutson</DIR>
</U></FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP"><DIR>

<FONT FACE="Arial"><P>Susan M. Knutson</P>
<P>Controller</DIR>
</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial"><P ALIGN="JUSTIFY">15 </P></FONT></BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906 CERT
<SEQUENCE>2
<FILENAME>certofceoandcontroller.htm
<DESCRIPTION>CERTIFICATION OF CEO AND CONTROLLER
<TEXT>
<HTML>
<HEAD>
<META ="Content-Type" CONTENT="text/html; charset=windows-1252">
<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>Exhibit 32</TITLE>
</HEAD>
<BODY>

<U><FONT FACE="Microsoft Sans Serif" SIZE=2><P>Exhibit 32.1</P>
</U><B><P ALIGN="CENTER">CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, </P>
<P ALIGN="CENTER">AS ADOPTED PURSUANT TO</P>
<P ALIGN="CENTER">SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</P>
</B>
<P ALIGN="JUSTIFY">In connection with the Quarterly Report on Form 10-QSB of Good Times Restaurants Inc. (the &quot;Company&quot;) for the period ended June 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the &quot;Report&quot;), I, Boyd E. Hoback, Chief Executive Officer and Susan M. Knutson, Controller of the Company, hereby certifies, pursuant to and solely for the purpose of 18 U.S.C. &nbsp;1350, as adopted pursuant to &nbsp;906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:</P>
<P ALIGN="JUSTIFY">(1)&#9;The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and</P>
<P ALIGN="JUSTIFY">(2)&#9;The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>Boyd E. Hoback&#9;Susan M. Knutson</P>
<P>Chief Executive Officer&#9;Controller (principal financial officer)</P>
<P>August 9, 2006&#9;August 9, 2006</P>
</FONT><FONT FACE="Microsoft Sans Serif"></FONT></BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>3
<FILENAME>certofceo.htm
<DESCRIPTION>CERTIFICATION OF CEO
<TEXT>
<HTML>
<HEAD>
<META ="Content-Type" CONTENT="text/html; charset=windows-1252">
<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>Exhibit 31</TITLE>
</HEAD>
<BODY>

<U><FONT FACE="Arial" SIZE=2><P>Exhibit 31.1</P>
</U><B><P ALIGN="CENTER">CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER</P>
</B><DIR>

<P ALIGN="JUSTIFY">I, Boyd E. Hoback, certify that:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">1.&#9;I have reviewed this quarterly report on Form 10-QSB of Good Times Restaurants Inc.;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">2.&#9;Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">3.&#9;Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">4.&#9;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">a)&#9;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</P>
<P ALIGN="JUSTIFY">b)&#9;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>
<P ALIGN="JUSTIFY">c)&#9;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">5.&#9;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY"><A NAME="OLE_LINK1">a)&#9;All significant deficiencies in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</P>
<P ALIGN="JUSTIFY">b)&#9;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.</P></DIR>
</DIR>
</DIR>

<P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P>&nbsp;</P>
<P>Boyd E. Hoback</P>
<I><P>President and Chief Executive Officer</P>
</I><P>August 9, 2006</P></FONT></BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>4
<FILENAME>certofcontroller.htm
<DESCRIPTION>CERTIFICATION OF CONTROLLER
<TEXT>
<HTML>
<HEAD>
<META ="Content-Type" CONTENT="text/html; charset=windows-1252">
<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>Exhibit 31</TITLE>
</HEAD>
<BODY>

<U><FONT FACE="Microsoft Sans Serif" SIZE=2><P>Exhibit 31.1</P>
</U><B><P ALIGN="CENTER">CERTIFICATION OF THE CONTROLLER</P>
</B><DIR>

<P ALIGN="JUSTIFY">I, Susan M. Knutson, certify that:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">1.&#9;I have reviewed this quarterly report on Form 10-QSB of Good Times Restaurants Inc.;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">2.&#9;Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">3.&#9;Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">4.&#9;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">a)&#9;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</P>
<P ALIGN="JUSTIFY">b)&#9;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>
<P ALIGN="JUSTIFY">c)&#9;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">5.&#9;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">a)&#9;All significant deficiencies in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</P>
<P ALIGN="JUSTIFY">b)&#9;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.</P>
<P ALIGN="JUSTIFY"></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P></DIR>
</DIR>
</DIR>

<P>Susan M. Knutson</P>
<I><P>Controller</P>
</I><P>August 9, 2006</P></FONT></BODY>
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</DOCUMENT>
</SEC-DOCUMENT>
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