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<SEC-DOCUMENT>0000825324-08-000025.txt : 20081229
<SEC-HEADER>0000825324-08-000025.hdr.sgml : 20081225
<ACCEPTANCE-DATETIME>20081229104120
ACCESSION NUMBER:		0000825324-08-000025
CONFORMED SUBMISSION TYPE:	10KSB
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20080930
FILED AS OF DATE:		20081229
DATE AS OF CHANGE:		20081229

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:		10KSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-18590
		FILM NUMBER:		081271393

	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>10KSB
<SEQUENCE>1
<FILENAME>final10ksbrevised21.htm
<TEXT>
<html>

<head>
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<p class=MsoNormal align=center style='margin-top:0in;margin-right:.7pt;
margin-bottom:12.0pt;margin-left:0in;text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='margin-top:0in;margin-right:.7pt;
margin-bottom:12.0pt;margin-left:0in;text-align:center'><b>&nbsp;</b></p>





<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal align=center style='margin-top:0in;margin-right:.7pt;
margin-bottom:12.0pt;margin-left:0in;text-align:center'><b>TABLE OF
CONTENTS</b></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=636
 style='width:477.0pt;margin-left:9.9pt;border-collapse:collapse'>
 <tr style='height:.2in'>
  <td width=570 valign=top style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=center style='margin-top:12.0pt;margin-right:0in;
  margin-bottom:12.0pt;margin-left:0in;text-align:center'><b>FORM 10-KSB
  - PART I</b></p>
  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:12.0pt;margin-right:0in;
  margin-bottom:12.0pt;margin-left:0in;text-align:right'><b>3 - 15</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Item
  1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Description of Business</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>3 - 14</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Item
  2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Description of Property</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>15 - 15</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Item
  3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legal Proceedings</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>15</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-left:45.6pt;text-indent:-45.6pt'>Item 4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Submission
  of Matters to a Vote of Security Holders</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>15</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 valign=top style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=center style='margin-top:12.0pt;margin-right:0in;
  margin-bottom:12.0pt;margin-left:0in;text-align:center'><b>PART II</b></p>
  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:12.0pt;margin-right:0in;
  margin-bottom:12.0pt;margin-left:0in;text-align:right'><b>16 - 23</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-left:45.6pt;text-indent:-45.6pt'>Item 5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Market
  for Common Equity and Related Stockholder Matters</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>16 - 17</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-left:45.6pt;text-indent:-45.6pt'>Item 6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Management's
  Discussion and Analysis of Financial Condition and Results of Operations</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>18 - 22</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Item
  7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>F1 - F15</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-left:45.6pt;text-indent:-45.6pt'>Item 8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes
  In and Disagreements with Accountants on Accounting and Financial Disclosure</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>23</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Item
  8A&nbsp;&nbsp;&nbsp;&nbsp; Controls and Procedures</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>23</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Item
  8B&nbsp;&nbsp;&nbsp;&nbsp; Other Information</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>23</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=570 valign=top style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'><b><br
  clear=all style='page-break-before:always'>
  </b>
  <p class=MsoNormal align=center style='margin-top:12.0pt;margin-right:0in;
  margin-bottom:12.0pt;margin-left:0in;text-align:center'><b>PART III</b></p>
  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:12.0pt;margin-right:0in;
  margin-bottom:12.0pt;margin-left:0in;text-align:right'><b>23 - 28</b></p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal style='margin-left:45.35pt;text-indent:-45.35pt'>Item 9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Directors,
  Executive Officers, Promoter, Control Persons and Corporate Governance;
  Compliance with Section 16(a) of the Exchange Act</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal align=right style='text-align:right'>23</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal>Item
  10&nbsp;&nbsp;&nbsp;&nbsp; Executive Compensation</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal align=right style='text-align:right'>24</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal style='margin-left:45.6pt;text-indent:-45.6pt'>Item 11&nbsp;&nbsp;&nbsp;&nbsp; Security
  Ownership of Certain Beneficial Owners and Management and Related Stockholder
  Matters</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal align=right style='text-align:right'>24</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal style='margin-left:45.6pt;text-indent:-45.6pt'>Item 12&nbsp;&nbsp;&nbsp;&nbsp; Certain
  Relationships, Related Transactions, and Director Independence</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal align=right style='margin-bottom:6.0pt;text-align:right'>24</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal>Item
  13&nbsp;&nbsp;&nbsp;&nbsp; Exhibits</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal align=right style='text-align:right'>24 - 27</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal style='margin-bottom:12.0pt'>Item 14&nbsp;&nbsp;&nbsp;&nbsp; Principal Accountant
  Fees and Services</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal align=right style='text-align:right'>27</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=570 style='width:427.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal>Signatures</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.1in'>
  <p class=MsoNormal align=right style='text-align:right'>28</p>
  </td>
 </tr>
</table>



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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal align=center style='text-align:center'><b>UNITED STATES
SECURITIES AND EXCHANGE COMMISSION</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>Washington</b><b>, D.C.</b><b>&nbsp;
20549</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>FORM 10-KSB</b></p>



<p class=MsoNormal align=center style='text-align:center'>(Mark One)</p>



<p class=MsoNormal align=center style='text-align:center'>(X)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES</p>

<p class=MsoNormal align=center style='text-align:center'>EXCHANGE ACT
OF 1934</p>



<p class=MsoNormal align=center style='text-align:center'>For the fiscal
year ended:&nbsp; <u>September 30, 2008</u></p>



<p class=MsoNormal align=center style='text-align:center'>OR</p>



<p class=MsoNormal align=center style='text-align:center'>(&nbsp; )&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES</p>

<p class=MsoNormal align=center style='text-align:center'>EXCHANGE ACT
OF 1934</p>



<p class=MsoNormal align=center style='text-align:center'>For the
transition period from ____________ to _____________</p>



<p class=MsoNormal align=center style='text-align:center'>Commission
file number: <u>000-18590</u></p>



<p class=MsoNormal align=center style='text-align:center'><b>Good Times
Restaurants Inc.</b></p>

<p class=MsoNormal align=center style='text-align:center'>(Name of small
business issuer in its charter)</p>

<p class=MsoNormal align=center style='text-align:center'><u>&nbsp;</u></p>

<p class=MsoNormal align=center style='text-align:center'><u>Nevada</u><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
84-1133368</u></p>

<p class=MsoNormal align=center style='text-align:center'>(State or
other jurisdiction of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (I.R.S. Employer</p>

<p class=MsoNormal align=center style='text-align:center'>incorporation
or organization)&nbsp;&nbsp;&nbsp;&nbsp; Identification No.)</p>



<p class=MsoNormal align=center style='text-align:center'><u>601 Corporate
Circle, Golden, Colorado&nbsp;&nbsp;&nbsp;&nbsp; 80401</u></p>

<p class=MsoNormal align=center style='text-align:center'>(Address of
principal executive offices)&nbsp;&nbsp;&nbsp;&nbsp; (Zip Code)</p>



<p class=MsoNormal align=center style='text-align:center'>Issuer's
telephone number:&nbsp; <u>(303) 384-1400</u></p>



<p class=MsoNormal align=center style='text-align:center'>Securities
registered under Section 12(b) of the Exchange Act:</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Title
of each class</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Name of each exchange
on which registered</u></p>

<p class=MsoNormal align=right style='margin-right:49.5pt;text-align:right'>Common Stock
$.001 par value, Preferred Stock $.01 par value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The NASDAQ Stock
Market, LLC</p>



<p class=MsoNormal align=center style='text-align:center'>(Title of
class)</p>



<p class=MsoNormal align=center style='text-align:center'>Securities
registered under Section 12(g) of the Exchange Act:</p>



<p class=MsoNormal align=center style='text-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.</p>

<p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>Yes&nbsp;&nbsp; [X]&nbsp;&nbsp;
No&nbsp;&nbsp; [&nbsp;&nbsp; ]</p>

<p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>Check if there
is no disclosure of delinquent filers in response to Item 405 of Regulation S-B
contained in this form, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB [X]</p>

<p class=MsoNormal align=center style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:center'>Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).</p>

<p class=MsoNormal align=center style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:center'>Yes [&nbsp;&nbsp; ]&nbsp;&nbsp;&nbsp;&nbsp; No [X]</p>



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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal align=center style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:center'>The issuer's revenues for its
most recent fiscal year ended September 30, 2008 were $25,882,000</p>

<p class=MsoNormal align=center style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:center'>As of December 15, 2008, the aggregate market value of the 1,945,818 shares of common stock held by
non-affiliates of the issuer, based on the closing sales price of the common
stock on December 15, 2008 of $1.30 per share as reported on the Nasdaq Capital
Market, was $2,529,563.</p>

<p class=MsoNormal align=center style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:center'>As of December 15, 2008, the issuer had 3,898,559 shares of common stock outstanding.</p>

<p class=MsoNormal align=center style='margin-top:12.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:center'><b>DOCUMENTS
INCORPORATED BY REFERENCE</b></p>

<p class=MsoNormal align=center style='margin-top:6.0pt;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:center'>The information required by
Items 9 through 13 of Part III of this form is incorporated by reference from
the issuer's definitive proxy statement to be filed with the SEC not later than
120 days after the end of the fiscal year covered by this form in connection
with the issuer's annual meeting of shareholders to be held on January 26, 2009.</p>

<p class=MsoFooter>Transitional
Small Business Disclosure Format&nbsp; Yes [&nbsp;&nbsp;&nbsp; ]&nbsp;&nbsp;&nbsp;&nbsp; No [X] </p>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:-.7pt;margin-bottom:
6.0pt;margin-left:0in'><b>PART
I</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Description of
Business.</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify;line-height:97%'><b>Overview:</b>
Good Times Restaurants Inc., a Nevada corporation (the &quot;Company&quot;),
was organized in 1987.&nbsp; The Company is essentially a holding company for its
wholly owned subsidiary, Good Times Drive Thru Inc., which is engaged in the
business of developing, owning, operating and franchising hamburger-oriented
drive-through restaurants under the name Good Times Burgers &amp; Frozen
Custard.&nbsp; Most of our restaurants are located in the front-range communities of
  Colorado but we also have franchised restaurants in Idaho, North Dakota and Wyoming.&nbsp; The terms &quot;Good Times&quot;, &quot;we&quot;, &quot;us&quot; and &quot;our&quot; where
used herein refer to the operations of Good Times Drive Thru Inc. and of the
Company.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify;line-height:97%'><b>Recent
Developments:</b> &nbsp;After several years of same store
sales growth, including several months of double digit growth in fiscal 2007
and early fiscal 2008, we experienced a dramatic change in our sales trends,
beginning in early calendar 2008 as the economy began to slow and competitive
pricing pressures intensified.&nbsp;&nbsp; Due to the dramatic decline in consumer
spending, the unprecedented rise in commodity costs and the upheaval in the
credit markets, we suspended most of our restaurant development under both the
dual brand format and under the Development Agreement with Zen Partners LLC
described below.&nbsp; We also had to slow the pace of development of company-owned
restaurants. </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify;line-height:97%'>As discussed
below in Concept and Business Strategy, we are focusing on regaining our same
store sales momentum, improving our core value proposition for the consumer and
evolving the brand to a more highly differentiated position in the marketplace.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify;line-height:97%'>The initial
store of a dual brand test with a large regional Mexican quick service
restaurant chain, Taco John's International, opened in the spring of 2004. We
converted two existing underperforming Good Times to the dual brand format in
June 2005 and February 2006 and we opened a new dual brand company-owned
restaurant in August 2006.&nbsp; Four additional franchised dual brand restaurants
were opened during fiscal 2006 in Colorado and North Dakota and two additional
franchised dual brand restaurants were opened during fiscal 2007 in Wyoming and   North Dakota.&nbsp; Initial sales at the test stores generally met or exceeded
expectations.&nbsp; However, operating costs were significantly higher than
anticipated and customer service measures were lower in the dual brand
operation, limiting its franchise expansion potential. &nbsp;In December 2007 we
granted permission for a North Dakota franchisee to terminate their Good Times
franchise agreements in the dual brand concept and effective December 2008 one
Wyoming dual brand franchise agreement will also be terminated. &nbsp;Our dual brand
test agreement expired in September 2008 by mutual agreement. However, one
additional franchised dual brand restaurant will open in December 2008 in
Sheridan, Wyoming.</p>

<p class=BodyText1 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'>On
 December 3, 2007, we entered into a development agreement with Zen Partners
LLC that is comprised of a Development Agreement, a Management Agreement and a
Site Selection, Construction Management and Pre-Opening Services Agreement.&nbsp;
David Grissen, a significant stockholder and a member of our board of
directors, has a 20% ownership interest in Zen Partners LLC.&nbsp; The agreements
provide for the development of up to twenty-five restaurants with a five year
development schedule for up to ten restaurants and an option to develop an
additional fifteen restaurants, exercisable any time during the initial five
year period.&nbsp; We will operate the restaurants utilizing our employees on the
same basis as we would company-owned restaurants; however, Zen Partners LLC
will provide all development and operating capital.&nbsp; For each restaurant that
is developed, we will receive a monthly management fee of 5% of gross operating
revenues for the restaurant, and a services fee of $25,000.&nbsp; We may provide a
limited lease guaranty on the initial three restaurants developed, for which we
will receive a lease guaranty fee equal to 1% of net sales of the restaurant
for so long as the lease guaranty is in effect.&nbsp; We may also arrange sale
leaseback transactions for sites of the restaurants developed, for which we
will receive a sale leaseback fee of $7,500 per restaurant.&nbsp; We will also participate
in the ongoing profitability of the restaurants by receiving an incentive fee
equal to (i) 30% of the incentive income (as defined in the Management
Agreement) per year until Zen Partners LLC has received a 25% return on its net
equity investment and (ii) 20% of the incentive income per year thereafter.&nbsp;
The total future amounts of these fees and participations, if any, to be
received by us, and the interest therein of David Grissen, in connection with
this transaction are not currently determinable.&nbsp; In August 2008 we announced
the suspension of development of Good Times restaurants with Zen Partners LLC. &nbsp;We
currently plan to reevaluate expansion discussion as conditions impacting our
sales trends, the macroeconomic environment and credit markets may change. </p>

<p class=BodyText1 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'><b>Concept
and Business Strategy:</b>
We operate with two different formats that have evolved over the course of our
history:&nbsp; a smaller, 880 square foot double drive thru building focused on
drive thru service and limited walk up service; and a newer 2,400 to 2,700
square foot, 70 seat dining room format that is the model for future stores.&nbsp;
We are currently further refining the prototype design to reduce development
costs and improve the return on investment model for company owned and
franchised restaurant expansion with a 2,000 square foot, 50 seat dining room
design that will carry forward all of the core design elements of our prior
prototype design.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The most reliable measure of customer loyalty is
their likelihood to recommend a restaurant brand.&nbsp; Our objective is to have
every customer and every employee want to recommend Good Times to their
friends.&nbsp; To achieve this, we have developed the following strategies.</p>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify;text-indent:0in'>&sect;&nbsp;&nbsp;
<i>Focus
on our most important drivers of success:</i></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:37.05pt;text-align:justify;text-indent:-19.95pt'>o&nbsp;&nbsp;&nbsp;
<i>Values.&nbsp;
</i>We
strive to build and develop behaviors and expectations around what we value
most throughout the company: integrity, continued improvement, customer loyalty
and respect for each other.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:37.05pt;text-align:justify;text-indent:-19.95pt'>o&nbsp;&nbsp;&nbsp;
<i>People.
</i>&nbsp;Beginning
with our Operating Partner Program, people are our strongest asset.&nbsp; We seek to
hire high quality people throughout and provide them with comprehensive
training programs to ensure that we deliver consistently superior products and
service.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:37.05pt;text-align:justify;text-indent:-19.95pt'>o&nbsp;&nbsp;&nbsp;
<i>Distinctive
quality.&nbsp; </i>We
strive to offer unique, highly distinctive tastes with the highest quality
ingredients available in the quick service restaurant category.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:37.05pt;text-align:justify;text-indent:-19.95pt'>o&nbsp;&nbsp;&nbsp;
<i>Excellent
systems. </i>&nbsp;We
strive to provide the best systems and processes in every area to free our
management to focus on leading their people.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.1pt;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
<i>Offer
high quality, unique menu items that provide exceptional value.&nbsp; </i>Our
restaurants feature menu items that are unique in the quick service segment,
and flavor profiles that are associated more with casual theme restaurants than
with fast food.&nbsp; Whenever possible, products support the brand umbrella of
&quot;fresh, high quality ingredients&quot; such as fresh frozen custard made fresh
throughout the day in every restaurant, 100% all natural Coleman beef, fresh
squeezed lemonade, fresh leaf lettuce, grilled honey cured bacon, sliced
Bermuda onions and toppings such as real guacamole,&nbsp; grilled pineapple and
saut&#233;ed mushrooms.&nbsp; Each menu category has signature recipes with fun,
irreverent names that build Good Times' non-traditional personality such as
Wild Fries with Wild Dippin Sauce, Big Daddy Bacon Cheeseburger, Mighty Deluxe,
Burnin' Buffalo Chicken and Cappuccino Mocha Joe, Raspberry Torte and
Strawberry Cheesecake Addiction Custard Spoonbenders.&nbsp; We use a culinary
consultant to assist in the ongoing development of new products and validate a
product's appeal through research, testing and customer feedback panels prior
to its rollout.&nbsp; We rolled out a new 100% all natural Coleman beef snack-sized
burger available in 3 packs and 5 packs called the Bambino Burger to appeal to
the more budget conscious consumer in May of 2007 which generated significant
sales growth until January of 2008.&nbsp; Consumer feedback has shown that the
product is unique and consumers use it for a different occasion than our
traditional products, but it has not been a viable substitute for competing $1
value menus.&nbsp; We do not offer a broad menu of $1 items and do not believe we
can compete effectively at that price with the major chains.&nbsp; We are making
significant changes to our entire menu to leverage our heritage of quality
products and to position the Good Times brand for a more unique and highly
differentiated consumer experience.&nbsp;&nbsp; Those product and system changes include
the following:</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-align:justify;text-indent:-.25in'>a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
introduction of fresh, never frozen, all natural, purebred Angus beef for all
of our burgers. &nbsp;The beef is Certified Humanely Raised, has never had
antibiotics or growth hormones and is vegetarian fed. </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-align:justify;text-indent:-.25in'>b.&nbsp;&nbsp;&nbsp;&nbsp; Increasing the
size of our hamburger patties by approximately 10% on a new split top, sponge
baked bun that is 20% heavier with increased portions of fresh produce.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-align:justify;text-indent:-.25in'>c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A permanently
reduced price for our core Deluxe Burger and Deluxe Cheeseburger for a stronger
value proposition.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-align:justify;text-indent:-.25in'>d.&nbsp;&nbsp;&nbsp;&nbsp; Establishing a
new fresh grilled, honey cured bacon burger category with new flavor profiles.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-align:justify;text-indent:-.25in'>e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reworking our
chicken category with 100% breast meat sandwiches and tenders with revised
flavor profiles that are unique to fast food.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-align:justify;text-indent:-.25in'>f.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Evaluating
homemade, hand-breaded onion rings.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-align:justify;text-indent:-.25in'>g.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Evaluating
homemade, fresh cut fries.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-align:justify;text-indent:-.25in'>h.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Raising the
sales and promotional activity of our fountain category of fresh squeezed
lemonades, fresh frozen custard treats, shakes, malts and floats.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-align:justify;text-indent:-.25in'>i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Re-training
every team member in every restaurant on every position with new standards.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Establish
a unique brand position in quick service restaurants</i>.&nbsp; We aspire
to have Good Times stand for &quot;providing food the way it used to be.&nbsp; Good Times
is bringing real food back to fast food with pure, wholesome food that tastes
the way food used to taste.&quot;&nbsp; Key brand support for that will include
attributes such as &quot;Fresh&quot;, &quot;All Natural&quot;, &quot;Fresh Grilled&quot;, &quot;Authentic&quot;,
&quot;Homemade&quot;, and &quot;Fresh Squeezed&quot; with a theme of fresh ingredients and hand
crafted food. </p>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.1pt;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
<i>Continually
improve our fast, friendly, personal customer service. </i>We strive to
optimize and personalize the interaction between our employees and customers,
particularly at the points of order and payment, to build a reputation as
having the friendliest service.&nbsp; We manage the face to face interaction with
our customers through extensive employee screening and hospitality training to
ensure their experience is punctuated by attentive, friendly service. &nbsp;During
fiscal 2009 we plan to introduce a new online screening and hiring system to reduce
our hourly employee turnover and hire for good service attitudes. &nbsp;Additionally,
we plan on introducing video training tools for the first time that will
enhance consistent execution of our quality standards. Speed of service through
our drive thru lanes is important to the consumers' need for convenience, but
is always secondary to delivering the highest quality product possible.&nbsp; We
monitor each car's service time and have developed incentive programs for
management and employees to maintain our quick service standards.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.1pt;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
<i>Build
customer loyalty through a unique brand experience.&nbsp; </i>In addition to
fast friendly service and great tasting products, we strive to maintain clean,
safe and appealing facilities with a particular emphasis on well groomed
landscaping, freshly painted exteriors and merchandising that highlights the
unique product attributes and flavors of our products.&nbsp; We believe that
everything the customer sees, smells, hears and feels influences their overall
impression and the reputation of Good Times and that Good Times' target
customer is seeking more out of even a quick service restaurant experience.&nbsp;
While providing an excellent value at an average check slightly over $5 per
person, we do not focus on offering the lowest price or the biggest portions.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.3pt;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
<i>Build
awareness of the Good Times Burgers &amp; Frozen Custard brand. </i>We believe
that Good Times has built substantial brand equity among our customers and has
become known for our quality, service and signature tastes, particularly within
the hamburger category.&nbsp; We believe there is significant opportunity to
continue to build that reputation within the hamburger category by continuing
to build a stronger overall value proposition and increase awareness of our
frozen custard and fountain category. As we continue to build out the Colorado market, we plan to increase our media advertising, raising our overall awareness
and building a highly differentiated brand personality.&nbsp; Our objective is to
create customer loyalty and affinity for Good Times.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.3pt;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
<i>Continually
improve our employees' knowledge and proficiency of our core processes. </i>Our customers'
experience is driven by the ability of our management and employees to
consistently execute clearly defined processes in every area of our business.&nbsp;
We believe that our employees' abilities and attitudes are directly related to
our ability to provide well designed service, production and operating
processes and effective training that allows them to continually learn, improve
and succeed.&nbsp; We train, test, certify and re-train all employees and management
on all of our core operating and management processes to continually improve
levels of proficiency.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Current fiscal year initiatives</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:18.7pt;text-align:justify;text-indent:-18.7pt'>1.&nbsp;&nbsp;&nbsp; <b>Consistently
Grow Same Store Sales:</b> We will continue to focus on comparable restaurant
sales driven by increases in guest counts and increases in the average guest
check.&nbsp; Same store sales decreased 1.6% in fiscal 2008 compared to fiscal 2007.
&nbsp;We experienced the largest decreases in the last four months of the year as
the macroeconomic environment deteriorated.&nbsp; We hope to increase guest counts
in fiscal 2009 through a multi-faceted approach to continually improve the Good
Times brand experience for our customers by:</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.35pt;text-align:justify;text-indent:-14.25pt'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Establishing
an improved core value proposition that is centered on the price/value
relationship of our Deluxe and Double Cheeseburgers.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.35pt;text-align:justify;text-indent:-14.25pt'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Expanding
our core consumer target to include more 16 to 29 year olds, who show a higher
affinity for all natural products and are amongst the heaviest users of quick
service restaurants.&nbsp; We will continue to orient our media advertising to this
core consumer group.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.35pt;text-align:justify;text-indent:-14.25pt'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Evolving
the Good Times brand position under a new umbrella of &quot;Back to Real Food.&quot;</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.35pt;text-align:justify;text-indent:-14.25pt'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Increasing
our level of discount offers to promote the trial of new and re-engineered
products.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.35pt;text-align:justify;text-indent:-14.25pt'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Improving
our execution on customer service and the delivery of our brand experience
through re-training of all of our employees on new standards and heightened
expectations.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.35pt;text-align:justify;text-indent:-14.25pt'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Continuing
to reinvest in our existing facilities with enhanced landscaping, patios and
exterior building finishes to improve the restaurants' curb appeal and
appearance.&nbsp; We plan to remodel select restaurants with finishes consistent
with our new restaurants so that we have a common image, regardless of the
format or age of the restaurant.</p>

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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.1pt;text-align:justify;text-indent:-17.1pt'>2.&nbsp;&nbsp;&nbsp; <b>Manage
Restaurant Operating Costs:</b> Fiscal 2008 was again a challenging macro environment
for food, paper and labor costs in the restaurant industry, with unprecedented
increases in commodity costs that affected most of our product ingredient
costs. We implemented a cumulative total weighted menu price increase of 4.8%
during fiscal 2008, but we experienced a weighted increase in the cost of our
food and paper ingredients of 12%, with the majority of those cost increases
coming in the last six months of the year, so our gross profit margin declined
..40% for the year.&nbsp; Although the consumer spending environment is heavily
weighted toward value and low price, we are limited in our ability to take
additional price increases. &nbsp;Colorado minimum wage increased from $5.15 to $6.85
per hour on January 1, 2007 and increased again to $7.02 on January 1, 2008, which increased our overall wage scale by approximately $.72 per employee
hour over the last two years.&nbsp;&nbsp; During fiscal 2008, we engineered labor hours
out of our system through improved efficiencies without affecting our service
levels and plan to continue to focus on reducing non-service hours.&nbsp; Typically,
our newly opened restaurants initially experience higher operating costs in
both dollars and percentage of revenues when compared to our restaurants open
for more than a year.&nbsp; Accordingly, sales volumes, timing of openings and initial
operating margins of any new restaurants are expected to have an impact on our
overall profitability until our restaurant operating base is large enough to
mitigate the impact of these opening costs and inefficiencies.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:22.5pt;text-align:justify;text-indent:-23.05pt'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>New
Restaurant Growth:</b>&nbsp; Our newer prototype model stores located on high
profile pad sites in big box retail and strip centers in higher income
demographic areas are performing consistently above the average of our older
stores. While we still believe that we can add an additional 10 to 15
restaurants in Colorado over the next several years as sites become available,
our ability to effectively finance those new stores is driven by our sales
growth and profitability, so we have slowed the acquisition of new sites.&nbsp; We
closed on one restaurant site in late 2008 and have it fully titled and
permitted for development, but we will wait until we see an improvement in our
sales trends and operating cash flow before we develop the site.&nbsp; We suspended
our developer-owner and company-owned development in Nebraska due to the
dramatic shift in the credit markets and the inability for us and our developer
partners to access acceptable debt financing.&nbsp; Good Times continues to offer
franchises for the development of additional Good Times restaurants, however we
are not actively marketing for new franchisees and we terminated our Vice
President of Franchise Development in late 2008.&nbsp; We hope to resume an
accelerated franchise development program based on the success of our branding
initiatives, development of the smaller prototype building and improvement in
the macro-economic environment.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Expansion strategy and site selection:</b> Our longer
term strategy is to become a super regional brand in select contiguous markets,
maximizing our overall brand awareness and distribution, marketing and
operational efficiencies. </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We plan on developing our new prototype restaurant
design on sites that are on or adjacent to big box or grocery store anchored
shopping centers in high activity and employment areas.&nbsp; Our site selection for
new restaurants is oriented toward slightly higher income demographic areas
than many of our urban locations and most of our targeted trade areas are in
relatively high growth areas of the Denver, Colorado Springs and northern Colorado markets.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We lease most of our sites.&nbsp; When we do purchase
and develop a site, we intend to sell the developed site into the
sale-leaseback market under a long term lease.&nbsp; Our primary site objective is
to secure a suitable site, with the decision to buy or lease as a secondary
objective.&nbsp; Our site criteria includes a mix of substantial daily traffic,
density of at least 30,000 people within a three mile radius, strong daytime
population and employment base, retail and entertainment traffic generators,
good visibility and easy access.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Restaurant locations:</b> We currently
operate and franchise a total of fifty-two Good Times restaurants, of which
forty-eight are in Colorado, with forty-three in the Denver greater
metropolitan area, three in Colorado Springs, one in Grand Junction and one in
Silverthorne.</p>

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 <tr>
  <td width=234 valign=top style='width:175.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>
  </td>
  <td width=59 valign=bottom style='width:43.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Total</b></p>
  </td>
  <td width=95 valign=top style='width:71.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Denver</b><b>, CO</b></p>
  <p class=MsoNormal align=center style='text-align:center'><b>Greater
  Metro</b></p>
  </td>
  <td width=74 valign=bottom style='width:55.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Colorado</b></p>
  <p class=MsoNormal align=center style='text-align:center'><b>Other</b></p>
  </td>
  <td width=54 valign=bottom style='width:40.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Idaho</b></p>
  </td>
  <td width=78 valign=bottom style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Wyoming</b></p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>North
    Dakota</b></p>
  </td>
 </tr>
 <tr>
  <td width=234 valign=top style='width:175.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Good
  Times co-owned &amp; co-developed</p>
  </td>
  <td width=59 valign=top style='width:43.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp; 27</p>
  </td>
  <td width=95 valign=top style='width:71.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 24</p>
  </td>
  <td width=74 valign=top style='width:55.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>3</p>
  </td>
  <td width=54 valign=top style='width:40.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=234 valign=top style='width:175.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Good
  Times franchised</p>
  </td>
  <td width=59 valign=top style='width:43.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp; 17</p>
  </td>
  <td width=95 valign=top style='width:71.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14</p>
  </td>
  <td width=74 valign=top style='width:55.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>2</p>
  </td>
  <td width=54 valign=top style='width:40.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=234 valign=top style='width:175.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Dual
  brand co-owned</p>
  </td>
  <td width=59 valign=top style='width:43.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3</p>
  </td>
  <td width=95 valign=top style='width:71.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3</p>
  </td>
  <td width=74 valign=top style='width:55.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=54 valign=top style='width:40.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=234 valign=top style='width:175.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Dual
  brand franchised</p>
  </td>
  <td width=59 valign=top style='width:43.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5</p>
  </td>
  <td width=95 valign=top style='width:71.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2</p>
  </td>
  <td width=74 valign=top style='width:55.8pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=54 valign=top style='width:40.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>2</p>
  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
 </tr>
 <tr>
  <td width=234 valign=top style='width:175.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>Total</p>
  </td>
  <td width=59 valign=top style='width:43.95pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp; 52</p>
  </td>
  <td width=95 valign=top style='width:71.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 43</p>
  </td>
  <td width=74 valign=top style='width:55.8pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>5</p>
  </td>
  <td width=54 valign=top style='width:40.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>2</p>
  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>1</p>
  </td>
 </tr>
</table>



<p class=MsoFooter align=center style='text-align:center'>6</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>





<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 align=left
 width=660 style='border-collapse:collapse;margin-left:6.75pt;margin-right:
 6.75pt'>
 <tr>
  <td width=660 valign=top style='width:495.0pt;padding:0in 5.4pt 0in 5.4pt'><br clear=all
  style='page-break-before:always'>
  <br clear=all style='page-break-before:always'>

  <p class=MsoNormal align=center style='margin-left:3.3in;text-align:center'><b>DECEMBER</b></p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 align=left
 width=660 style='border-collapse:collapse;margin-left:6.75pt;margin-right:
 6.75pt'>
 <tr>
  <td width=306 valign=top style='width:229.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=182 valign=top style='width:1.9in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>2007</b></p>
  </td>
  <td width=172 valign=top style='width:128.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>2008</b></p>
  </td>
 </tr>
 <tr>
  <td width=306 valign=top style='width:229.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Company-owned restaurants</p>
  </td>
  <td width=182 valign=top style='width:1.9in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>18</p>
  </td>
  <td width=172 valign=top style='width:128.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>21</p>
  </td>
 </tr>
 <tr>
  <td width=306 valign=top style='width:229.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Joint venture restaurants</p>
  </td>
  <td width=182 valign=top style='width:1.9in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>9</p>
  </td>
  <td width=172 valign=top style='width:128.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>9</p>
  </td>
 </tr>
 <tr>
  <td width=306 valign=top style='width:229.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Franchise operated restaurants</p>
  </td>
  <td width=182 valign=top style='width:1.9in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>27</p>
  </td>
  <td width=172 valign=top style='width:128.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>22</p>
  </td>
 </tr>
 <tr>
  <td width=306 valign=top style='width:229.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>Total
  restaurants</p>
  </td>
  <td width=182 valign=top style='width:1.9in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>54</p>
  </td>
  <td width=172 valign=top style='width:128.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>52</p>
  </td>
 </tr>
</table>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>In January 2008 a North Dakota franchise
terminated their Good Times franchise agreement in the dual brand concept and
has stopped selling Good Times products in their two locations.&nbsp; In March 2008
we purchased two Good Times restaurants from an existing franchisee.&nbsp; In June
2008 the Good Times franchisee operating at the University of Wyoming Food
  Court ceased operations when the contract to operate in the food court
expired.&nbsp; There are no plans for this franchisee to operate in another
location.&nbsp; In October 2008 we opened one new company-owned restaurant in
Firestone, Colorado.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Menu:</b> The menu of a
Good Times Burgers &amp; Frozen Custard restaurant is limited to hamburgers,
cheeseburgers, chicken sandwiches, french fries, onion rings, fresh squeezed
and frozen lemonades, soft drinks and frozen custard products.&nbsp; Each menu item
is made to order at the time the customer places the order and is not
pre-prepared.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The hamburger patty is prepared with specially
formulated and seasoned Coleman 100% natural beef, served on a 4 1/4 inch bun.&nbsp;
Coleman was acquired by Meyer All Natural Beef and as of January 2009 all of
our hamburgers will be made from fresh, all natural, pure bred Angus beef.&nbsp; Hamburgers
and cheeseburgers are garnished with fresh iceberg lettuce, fresh sliced sweet
red
onions,
mayonnaise,
mustard,
ketchup, pickles and fresh sliced tomatoes.&nbsp; Other specialty hamburger toppings
include guacamole, fresh grilled honey cured bacon, and proprietary sauces.&nbsp;
The chicken products include a spiced, battered whole muscle breast patty and a
grilled seasoned breast patty, both served with mayonnaise, lettuce and
tomatoes and Chicken Dunkers, whole breast meat breaded strips. Signature
chicken sandwiches include the Burnin' Buffalo, Tasty Teriyaki, Peppercorn
Ranch and Guacamole Chicken.&nbsp; Equipment has been automated and equipped with
compensating computers to deliver a consistent product and minimize variability
in operating systems.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>All natural Angus beef is raised without the use
of any hormones, antibiotics or animal byproducts that are normally used in the
open beef market.&nbsp; We believe that all natural beef delivers a better tasting
product and, because of the rigorous protocols and testing that are a part of
the Meyer processes, also may minimize the risk of any food-borne
bacteria-related illnesses. </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Fresh frozen custard is a premium ice cream
(requiring in excess of 10% butterfat content) with a proprietary vanilla blend
that is prepared from highly specialized equipment that minimizes the amount of
air that is added to the mix and that creates smaller ice crystals than other
frozen dairy desserts.&nbsp; The custard is scooped similarly to hard-packed ice
cream but is served at a slightly warmer temperature. The resulting product is
smoother, creamier and thicker than typical soft serve or hard-packed ice cream
products.&nbsp; Good Times serves the frozen custard in cups and cones, specialty
sundaes and &quot;Spoonbenders&quot;, a mix of custard and toppings, and we
anticipate it will continue to become a larger percentage of sales as we
continue to develop custard products and awareness.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Marketing &amp; Advertising:</b> Our marketing
strategy focuses on:&nbsp; 1) driving comparable restaurant sales through attracting
new customers and increasing the frequency of visits by current customers; 2)
communicating specific product news and attributes to build strong points of
difference from competitors; and 3) communicating a unique, strong and
consistent brand.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Media is an important component of building Good
Times' brand awareness and distinctiveness.&nbsp; We spent our advertising dollars
on both television and radio media during fiscal 2008.&nbsp; The Colorado market is
an expensive media market, so most of our advertising placement is not in prime
time but in early and late fringe, prime access and late news time slots.&nbsp; As
we continue to develop more and more distinctiveness to Good Times' brand and
increase penetration of the Colorado market, we anticipate we will continue to
use media advertising to increase overall awareness.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Another important component of our marketing
efforts is point-of-sale and on-site merchandising.&nbsp; We rotate new four color
product point-of-purchase displays every other month and support new product
introductions with extensive merchandising. Our restaurants with dining rooms
have back-lit and front-lit product displays, table tents and product messaging
throughout.&nbsp; Menu boards are kept fresh with new food photography and graphics
several times throughout the year.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>During fiscal 2006 we re-designed and expanded the
use of our website and have begun to use email marketing as a tool to build
customer loyalty.&nbsp; We have a marketing agreement with the Pepsi Center in Denver , Colorado to serve and promote Good Times' products in that venue.</p>

<p class=MsoFooter align=center style='text-align:center'>7</p>



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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>As we re-engineer several of our core products,
our marketing will also focus on generating new customer trials through street
marketing, public relations, direct response mail and charitable tie-ins. </p>

<p class=MsoFooter align=center style='text-align:center'>8</p>



<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Operations</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Restaurant Management:</b> We are
developing Operating Partners in most of our restaurants as we are able to
recruit qualified candidates.&nbsp; We believe that this is a distinct competitive
advantage that provides a higher level of service, quality control and
stability over time. The objective of the Operating Partner Program is to have
each partner develop a relationship with the employees, the customers and the
community at their restaurant and develop an ownership mentality with
commensurate rewards as sales increase over a longer period of time.&nbsp; The
program allows an Operating Partner to earn 25% of a restaurant's improvement
in cash flow over an established baseline.&nbsp; Each Good Times unit employs an
operating partner or a general manager, one to two assistant managers and
approximately 15 to 25 employees, most of whom work part-time during three
shifts.&nbsp; An eight to ten week training program is utilized to train restaurant
managers on all phases of the operation.&nbsp; Ongoing training is provided as
necessary. We believe that incentive compensation of our restaurant managers is
essential to the success of our business.&nbsp; Accordingly, in addition to a
salary, managerial employees may be paid a bonus based upon proficiency in
meeting financial, customer service and quality performance objectives tied to
a monthly scorecard of measures.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Operational systems and processes:</b> We believe
that we have some of the best operating systems and processes in the industry.&nbsp;
Detailed processes have been developed for hourly, daily, weekly and monthly
responsibilities that drive consistency across our system of restaurants and
performance against our standards within different day parts.&nbsp; We utilize a
labor program to determine optimal staffing needs of each restaurant based on
its actual customer flow and demand.&nbsp; We also employ several additional
operational tools to continuously monitor and improve speed of service, food
waste, food quality, sanitation, financial management and employee
development.&nbsp; We are moving toward automating and computerizing as many of
these systems as possible into an integrated, digital management system.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The order system at each Good Times restaurant is
equipped with an internal timing device that displays and records the time each
order takes to prepare and deliver.&nbsp; The total transaction time for the
delivery of food at the window is approximately 30 to 60 seconds during peak times.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We use several sources of customer feedback to
evaluate each restaurant's service and quality performance, including an
extensive, computerized secret shopper program, customer comment phone line,
telephone surveys and web site comments.&nbsp; Additionally, management uses both
its own primary consumer research for product development and to determine
customer usage and attitude patterns as well as third party market research
that evaluates Good Times' performance ratings on several different operating
attributes against key competitors.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Training:</b> We strive to
maintain quality and consistency in each of our restaurants through the careful
training and supervision of all our employees at all levels and the
establishment of, and adherence to, high standards relating to personnel
performance, food and beverage preparation and maintenance of our restaurants.&nbsp;
Each manager must complete an eight to ten week training program, be certified
on several core processes and is then closely supervised to show both comprehension
and capability before they are allowed to manage autonomously.&nbsp; All of our
training and development is based upon a &quot;train, test, certify, re-train&quot; cycle
around standards and operating processes at all levels.&nbsp; We conduct a
semi-annual performance review with each manager to discuss prior performance
and future performance goals.&nbsp; We have a defined weekly and monthly goal
setting process around service, employee development, financial management and
store maintenance goals for every restaurant.&nbsp; During fiscal 2009, we will
begin to develop additional video training tools to drive training efficiencies
and consistency.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Recruiting and retention:</b> We seek to
hire experienced restaurant managers and Operating Partners.&nbsp; We support
employees by offering competitive wages and benefits, including a 401(k) plan,
medical insurance, stock options for regional managers and incentives plans at
every level that are tied to performance against key goals and objectives.&nbsp; We
motivate and prepare our employees by providing them with opportunities for
increased responsibilities and advancement.&nbsp; We also provide various other
incentives, including vacations, car allowances, monthly performance bonuses
and monetary rewards for managers who develop future managers for our restaurants.&nbsp;&nbsp;
In fiscal 2009, we will implement an online screening and hiring tool that has
proven to reduce hourly employee turnover in the quick service restaurant
industry.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Franchising:</b> Good Times
has prepared prototype area rights and franchise agreements, a Uniform
Franchise Disclosure Document (&quot;UFDD&quot;) and advertising material to be utilized
in soliciting prospective franchisees.&nbsp; We seek to attract franchisees that are
experienced restaurant operators, well capitalized and have demonstrated the
ability to develop one to five restaurants.&nbsp; We currently review sites selected
for franchises and monitor performance of franchise units.&nbsp; We are not
currently soliciting new franchisees until later in fiscal 2009 or early 2010.</p>

<p class=MsoFooter align=center style='text-align:center'>9</p>



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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We estimate that it will cost a franchisee on
average approximately $750,000 to $1,100,000 to open a restaurant with dining
room seating, including pre-opening costs and working capital, assuming the
land is leased.&nbsp; A franchisee typically will pay a royalty of 4% of net sales,
an advertising materials fee of at least 1.5% of net sales, plus participation
in regional advertising up to an additional 4% of net sales, or a higher amount
approved by the advertising cooperative, and initial development and franchise
fees totaling $25,000 per restaurant.&nbsp; Among the services and materials which
we provide to franchisees are site selection assistance, plans and
specifications for construction of the Good Times Burgers and Frozen Custard
restaurants, an operating manual which includes product specifications and
quality control procedures, training, on-site opening supervision and advice
from time to time relating to operation of the franchised restaurants.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>After a franchise agreement is signed, we actively
work with and monitor our franchisees to ensure successful franchise operations
as well as compliance with Good Times systems and procedures.&nbsp; During the
development phase, we assist in the selection of sites and the development of
prototype and building plans, including all required changes by local
municipalities and developers.&nbsp; We provide an opening team of trainers to
assist in the opening of the restaurant and training of the employees.&nbsp; We
advise the franchisee on menu, management training, marketing, and employee
development.&nbsp; On an ongoing basis we conduct standards reviews of all franchise
restaurants in key areas including product quality, service standards,
restaurant cleanliness and sanitation, food safety and people development.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We have entered into thirteen franchise agreements
in the greater Denver metropolitan area.&nbsp; Fourteen franchise restaurants and
nine joint-venture restaurants are operating in the Denver metropolitan area
media market.&nbsp; Good Times franchise restaurants also operate in Colorado Springs and Grand Junction, Colorado and in Boise, Idaho.&nbsp; Dual branded
franchised restaurants operate in Cheyenne and Gillette, Wyoming, Ft. Collins and Windsor, Colorado, and Bismarck, North Dakota.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Management Information Systems:</b> Financial and
management control is maintained through the use of automated data processing
and centralized accounting and management information systems that we provide.&nbsp;
Sales, labor and cash data is collected daily via a restaurant back office
system which gathers data from the restaurant point-of-sale system.&nbsp; Management
receives daily, weekly and monthly reports identifying food, labor and
operating expenses and other significant indicators of restaurant performance.&nbsp;
We believe that these reporting systems are sophisticated and enhance our
ability to control and manage operations.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Food Preparation, Quality Control
&amp; Purchasing:</b>
We believe that we have some of the highest food quality standards in the quick
service restaurant industry.&nbsp; Our systems are designed to protect our food
supply throughout the preparation process.&nbsp; We inspect specific qualified
manufacturers and work together with those manufacturers to provide
specifications and quality controls.&nbsp; Our operations management teams are
trained in a comprehensive safety and sanitation course provided by the
National Restaurant Association.&nbsp; Minimum cook temperature requirements and
line checks throughout the day ensure the safety and quality of both burgers
and other items we use in our restaurants.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We currently purchase 100% of our restaurant food
and paper supplies from Yancey's Food Service.&nbsp; We do not believe that the
current reliance on this sole vendor will have any long-term material adverse
effect since we believe that there are a sufficient number of other suppliers
from which food and paper supplies could be purchased.&nbsp; We do not anticipate
any difficulty in continuing to obtain an adequate quantity of food and paper
supplies of acceptable quality and at acceptable prices.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Employees:</b> At December 15, 2008, we had approximately 536 employees of which 445 are part time hourly
employees and 91 are salaried employees working full time.&nbsp; We consider
our employee relations to be good.&nbsp; None of our employees are covered by a
collective bargaining agreement.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Competition:</b> The
restaurant industry, including the fast food segment, is highly competitive.&nbsp;
Good Times competes with a large number of other hamburger-oriented fast food
restaurants in the areas in which it operates.&nbsp; Many of these restaurants are
owned and operated by regional and national restaurant chains, many of which
have greater financial resources and experience than we do. &nbsp;Restaurant
companies that currently compete with Good Times in the Denver market include
McDonald's, Burger King, Wendy's, Carl's Jr. and Sonic.&nbsp; Double drive-through
restaurant chains such as Rally's Hamburgers and Checker's Drive-In
Restaurants, which currently operate a total of over 800 double drive-through
restaurants in various markets in the United States, are not currently
operating in Colorado.&nbsp; Management believes that these double drive-through
restaurant chains will not expand into Colorado based on their publicly
reported objectives and resources.&nbsp; Culver's is the only significant competitor
offering frozen custard as a primary menu item operating in the Denver and   Colorado Springs markets and has a significant presence in the targeted
Midwestern markets for expansion.&nbsp; Additional &quot;fast casual&quot; hamburger
restaurants are being developed in the Colorado market, such as Smashburger and
Five Guys, however, they do not have drive-through service and generate an
average per person check that is approximately 50% higher than Good Times.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Our management believes that we may have a
competitive advantage in terms of quality of product compared to traditional
fast food hamburger chains.&nbsp; Early development of our double drive-through
concept in Colorado has given us an advantage over other double drive-through
chains that may seek to expand into Colorado because of our brand awareness and
present restaurant locations.&nbsp; Nevertheless, we may be at a competitive
disadvantage to other restaurant chains with greater name recognition and
marketing capability.&nbsp; Furthermore, most of our competitors in the fast-food
business operate more restaurants, have been established longer, and have
greater financial resources and name recognition than we do.&nbsp; There is also
active competition for management personnel, as well as for attractive
commercial real estate sites suitable for restaurants.</p>

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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Trademarks</b>: Good Times
has registered its mark &quot;Good Times! Drive Thru Burgers&quot;(SM) with the
State of Colorado.&nbsp; We have also registered our mark &quot;Good Times Burgers &amp;
Frozen Custard&quot; federally and with the State of Colorado.&nbsp; Good Times received
approval of its federal registration of &quot;Good Times&quot; in 2003. &nbsp;In
addition we own trademarks or service marks that have been registered, or for
which applications are pending, with the United States Patent and Trademark
Office including but not limited to: &quot;Mighty Deluxe&quot;, &quot;Wild Fries&quot;,
&quot;Spoonbender&quot;, &quot;Chicken Dunkers&quot;, &quot;Big Daddy Bacon Cheeseburger&quot;, and
&quot;Wild Dippin' Sauce&quot;. Our trademarks expire between 2009 and 2015.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Government Regulation:</b> Each Good
Times restaurant is subject to the regulations of various health, sanitation,
safety and fire agencies in the jurisdiction in which the restaurant is
located.&nbsp; Difficulties or failures in obtaining the required licenses or
approvals could delay or prevent the opening of a new Good Times restaurant.&nbsp;
Federal and state environmental regulations have not had a material effect on
our operations. More stringent and varied requirements of local governmental
bodies with respect to zoning, land use and environmental factors could delay
or prevent development of new restaurants in particular locations.&nbsp; We are
subject to the Fair Labor Standards Act, which governs such matters as minimum
wages, overtime, and other working conditions.&nbsp; In addition, we are subject to
the Americans With Disabilities Act, which requires restaurants and other
facilities open to the public to provide for access and use of facilities by
the handicapped.&nbsp; Management believes that we are in compliance with the
Americans With Disabilities Act.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We are also subject to federal and state laws
regulating franchise operations, which vary from registration and disclosure
requirements in the offer and sale of franchises to the application of
statutory standards regulating franchise relationships.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Available Information:</b> Our Internet
website address is www.goodtimesburgers.com.&nbsp; We make available free of charge
through our website's investor relations information section our annual reports
on Form 10-KSB, quarterly reports on Form 10-QSB, current reports on Form 8-K,
and any amendments to those reports filed with or furnished to the SEC under
applicable securities laws as soon as reasonably practical after we
electronically file such material with, or furnish it to, the SEC.&nbsp; Our website
information is not part of or incorporated by reference into this Annual Report
on Form 10-KSB.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Special Note About Forward-Looking
Statements:</b>
From time to time the Company makes oral and written statements that reflect
the Company's current expectations regarding future results of operations,
economic performance, financial condition and achievements of the Company.&nbsp; We
try, whenever possible, to identify these forward-looking statements by using
words such as &quot;anticipate,&quot; &quot;assume,&quot; &quot;believe,&quot;
&quot;estimate,&quot; &quot;expect,&quot; &quot;intend,&quot; &quot;plan,&quot;
&quot;project,&quot; &quot;may,&quot; &quot;will,&quot; &quot;would,&quot; and
similar expressions&nbsp; Certain forward-looking statements are included in this
Form 10-KSB, principally in the sections captioned &quot;Description of
Business,&quot; and &quot;Management's Discussion and Analysis of Financial
Condition and Results of Operations.&quot;&nbsp; Forward-looking statements are
related to, among other things:</p>

<p class=MsoNormal style='margin-left:27.0pt;text-align:justify;text-indent:
- -13.5pt'>&sect;&nbsp; business objectives
and strategic plans;</p>

<p class=MsoNormal style='margin-left:27.0pt;text-align:justify;text-indent:
- -13.5pt'>&sect;&nbsp; operating
strategies;</p>

<p class=MsoNormal style='margin-left:27.0pt;text-align:justify;text-indent:
- -13.5pt'>&sect;&nbsp; our ability to
open and operate additional restaurants profitably and the timing of such
openings;</p>

<p class=MsoNormal style='margin-left:27.0pt;text-align:justify;text-indent:
- -13.5pt'>&sect;&nbsp; restaurant and
franchise acquisitions;</p>

<p class=MsoNormal style='margin-left:27.0pt;text-align:justify;text-indent:
- -13.5pt'>&sect;&nbsp; anticipated
price increases;</p>

<p class=MsoNormal style='margin-left:27.0pt;text-align:justify;text-indent:
- -13.5pt'>&sect;&nbsp; expected
future revenues and earnings, comparable and non-comparable restaurant sales,
results of operations, and future restaurant growth (both company-owned and
franchised);</p>

<p class=MsoNormal style='margin-left:27.0pt;text-align:justify;text-indent:
- -13.5pt'>&sect;&nbsp; estimated
costs of opening and operating new restaurants, including general and
administrative, marketing, franchise development and restaurant operating
costs;</p>

<p class=MsoNormal style='margin-left:27.0pt;text-align:justify;text-indent:
- -13.5pt'>&sect;&nbsp; anticipated
selling, general and administrative expenses and restaurant operating costs,
including commodity prices, labor and energy costs; </p>

<p class=MsoNormal style='margin-left:27.0pt;text-align:justify;text-indent:
- -13.5pt'>&sect;&nbsp; future capital
expenditures;</p>

<p class=MsoNormal style='margin-left:45.0pt;text-align:justify;text-indent:
- -.25in'>&sect;&nbsp; our
expectation that we will have adequate cash from operations and credit facility
borrowings to meet all future debt service, capital expenditure and working
capital requirements in fiscal year 2009;</p>

<p class=MsoNormal style='margin-left:45.0pt;text-align:justify;text-indent:
- -.25in'>&sect;&nbsp; the
sufficiency of the supply of commodities and labor pool to carry on our
business;</p>

<p class=MsoNormal style='margin-left:45.0pt;text-align:justify;text-indent:
- -.25in'>&sect;&nbsp; success of
advertising and marketing activities;</p>

<p class=MsoNormal style='margin-left:45.0pt;text-align:justify;text-indent:
- -.25in'>&sect;&nbsp; the absence of
any material adverse impact arising out of any current litigation in which we
are involved;</p>

<p class=MsoNormal style='margin-left:45.0pt;text-align:justify;text-indent:
- -.25in'>&sect;&nbsp; impact of the
adoption of new accounting standards and our financial and accounting systems
and analysis programs;</p>

<p class=MsoNormal style='margin-left:45.0pt;text-align:justify;text-indent:
- -.25in'>&sect;&nbsp; expectations
regarding competition and our competitive advantages;</p>

<p class=MsoNormal style='margin-left:45.0pt;text-align:justify;text-indent:
- -.25in'>&sect;&nbsp; impact of our
trademarks, service marks, and other proprietary rights; and</p>

<p class=MsoNormal style='margin-left:45.0pt;text-align:justify;text-indent:
- -.25in'>&sect;&nbsp; effectiveness
of our internal control over financial reporting.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Although we believe that the expectations reflected
in our forward-looking statements are based on reasonable assumptions, such
expectations may prove to be materially incorrect due to known and unknown
risks and uncertainties.</p>

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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>In some cases, information regarding certain
important factors that could cause actual results to differ materially from any
forward-looking statements appears together with such statement.&nbsp; In addition,
the factors described under Critical Accounting Policies and Estimates in Item
6 and Risk Factors in this Item 1, as well as other possible factors not
listed, could cause actual results to differ materially from those expressed in
forward-looking statements, including, without limitation, the following:
concentration of restaurants in certain markets and lack of market awareness in
new markets; changes in disposable income; consumer spending trends and habits;
increased competition in the quick service restaurant market; costs and
availability of food and beverage inventory; our ability to attract qualified
managers, employees, and franchisees; changes in the availability of capital or
credit facility borrowings; costs and other effects of legal claims by
employees, franchisees, customers, vendors, stockholders and others, including
settlement of those claims; effectiveness of management strategies and
decisions; weather conditions and related events in regions where our
restaurants are operated; and changes in accounting standards policies and
practices or related interpretations by auditors or regulatory entities.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>All forward-looking statements speak only as of
the date made.&nbsp; All subsequent written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly qualified in
their entirety by the cautionary statements.&nbsp; Except as required by law, we
undertake no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which it is made or to reflect the
occurrence of anticipated or unanticipated events or circumstances.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Risk Factors:</b> You should consider
carefully the following risk factors before making an investment decision with
respect to Good Times Restaurants' securities. You are cautioned that the risk
factors discussed below are not exhaustive.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>We have accumulated losses.</i></b> We have
incurred losses in every fiscal year since inception except 1999, 2002, 2006
and 2007.&nbsp; As of September 30, 2008 we had an accumulated deficit of
$12,160,000.&nbsp; We cannot assure you that we will not have a loss for the current
fiscal year ending September 30, 2009.&nbsp; As of September 30, 2008, we had a working capital deficit of $2,082,000.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>We must sustain same store sales
increases</i></b><b>.</b><i> </i>As we develop
additional restaurants, we expect that the increase in operating income
generated by those restaurants will improve our financial results.&nbsp; However, we
cannot assure you that we will sustain profitability on a consistent basis.&nbsp; We
must sustain same store sales increases in existing restaurants to sustain
profitability and we experienced declines in our same store sales in fiscal
2008.&nbsp; Sales increases will depend in part on the success of our advertising
and promotion of new and existing menu items and consumer acceptance.&nbsp; We
cannot assure that our advertising and promotional efforts will in fact be
successful.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>New restaurants, once opened, may not
be profitable, if at all, for several months</i></b><i>.</i>&nbsp; We
anticipate that our new restaurants will generally take several months to reach
normalized operating levels due to inefficiencies typically associated with new
restaurants, including lack of market awareness, the need to hire and train a
sufficient number of employees, operating costs, which are often materially
greater during the first several months of operation then thereafter,
pre-opening costs and other factors.&nbsp; Further, some, or all of our new
restaurants may not attain anticipated operating results or results similar to
those of our existing restaurants.&nbsp; We have experienced delays in opening some
of our restaurants and may experience delays in the future.&nbsp; In addition,
restaurants opened in new markets may open at lower average weekly sales
volumes than restaurants opened in existing markets, and may have higher
restaurant-level operating expense ratios than in existing markets.&nbsp; Sales at
restaurants opened in new markets may take longer to reach average annual
company-owned restaurant sales, if at all, thereby affecting the profitability
of these restaurants.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>Our operations are susceptible to the
cost of and changes in food availability which could adversely affect our
operating results.</i></b>&nbsp; Our profitability depends in part on our ability
to anticipate and react to changes in food costs.&nbsp; Various factors beyond our
control, including adverse weather conditions, governmental regulation,
production, availability, recalls of food products and seasonality may affect
our food costs or cause a disruption in our supply chain.&nbsp; We enter into annual
contracts with our beef and chicken suppliers.&nbsp; Our contracts for chicken are
fixed price contracts.&nbsp; Our contracts for beef are generally based on current
market prices plus a processing fee.&nbsp; Changes in the price or availability of
chicken or beef could materially adversely affect our profitability.&nbsp; We cannot
predict whether we will be able to anticipate and react to changing food costs
by adjusting our purchasing practices and menu prices, and a failure to do so
could adversely affect our operating results.&nbsp; In addition, because we provide
a &quot;value-priced&quot; product, we may not be able to pass along price
increases to our guests.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>The macroeconomic recession could
affect our operating results.</i></b>&nbsp; The current state of the economy and
decreased consumer spending has adversely affected our sales over the last year
and may continue to cause material negative sales trends.&nbsp; A continued shift in
consumer purchases toward $1 value menus, in our competitive segment, and a
proliferation of heavy discounting by our major competitors may also negatively
affect our sales and operating results.&nbsp; We currently do not offer a separate
value menu and anticipate selective discounting and price promotions which may
not drive increased customer traffic.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>Price increases may impact guest
visits.</i></b>&nbsp;
We may make price increases on selected menu items in order to offset increased
operating expenses we believe will be recurring. &nbsp;Although we have not
experienced significant consumer resistance to our past price increases, we
cannot provide assurance that this or other future price increases will not
deter guests from visiting our restaurants or affect their purchasing
decisions.</p>

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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>The hamburger restaurant market is
highly competitive</i></b><b>.</b> The hamburger restaurant market is
highly competitive.&nbsp; Our competitors include many recognized national and
regional fast-food hamburger restaurant chains such as McDonald's, Burger King,
Wendy's, Carl's Jr., Sonic and Culver's.&nbsp; We also compete with small regional
and local hamburger and other fast-food restaurants, many of which feature
drive-through service.&nbsp; Most of our competitors have greater financial
resources, marketing programs and name recognition.&nbsp; All of the major hamburger
chains have increasingly offered selected food items and combination meals at
discounted prices and have recently intensified their promotions of value
priced meals.&nbsp; Continued discounting by competitors may adversely affect the
revenues and profitability of our restaurants.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>Sites may be difficult to acquire.</i></b> Location of
our restaurants in high-traffic and readily accessible areas is an important
factor for our success.&nbsp; Drive-through restaurants require sites with specific
characteristics and there are a limited number of suitable sites available in
our geographic markets.&nbsp; Since suitable locations are in great demand, we may
not be able to obtain optimal sites at a reasonable cost.&nbsp; In addition, we
cannot assure you that the sites we do obtain will be successful.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>We may require additional financing</i></b><b>.</b> In order to
fully develop the Denver and Colorado Springs/Pueblo markets and to expand into
markets outside of Colorado, we will require additional financing.&nbsp; Although we
have recently obtained debt facilities for the borrowing of additional capital,
we cannot assure you that these facilities will adequately finance our planned
developments or that additional financing will be available on reasonable
terms.&nbsp; The current economic recession and status of the capital markets may
adversely affect our ability to acquire additional debt or equity financing for
new restaurant development, refinancing of existing agreements or for
additional working capital.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>If our franchisees cannot develop or
finance new restaurants, build them on suitable sites or open them on schedule,
our growth and success may be impeded.</i></b>&nbsp; Under our current form of
area development agreement, some franchisees must develop a predetermined
number of restaurants according to a schedule that lasts for the term of their
development agreement.&nbsp; Franchisees may not have access to the financial or
management resources that they need to open the restaurants required by their
development schedules, or may be unable to find suitable sites on which to
develop them.&nbsp; Franchisees may not be able to negotiate acceptable lease or
purchase terms for the sites, obtain the necessary permits and government
approvals or meet construction schedules.&nbsp; From time to time in the past, we have
agreed to extend or modify development schedules and we may do so in the
future.&nbsp; Any of these problems could slow our growth and reduce our franchise
revenues.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Additionally, our franchisees depend upon
financing from banks and other financial institutions in order to construct and
open new restaurants.&nbsp; If any franchisee experienced difficulty in obtaining
adequate financing, the lack of adequate availability of such financing could
adversely affect the number and rate of new restaurant openings by our franchisees
and adversely affect our future franchise revenues.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>Our franchisees could take actions
that could harm our business.</i></b>&nbsp; Franchisees are independent
contractors and are not our employees.&nbsp; We provide training and support to
franchisees; however, franchisees operate their restaurants as independent
businesses.&nbsp; Consequently, the quality of franchised restaurant operations may
be diminished by any number of factors beyond our control.&nbsp; Moreover,
franchisees may not successfully operate restaurants in a manner consistent
with our standards and requirements, or may not hire and train qualified
managers and other restaurant personnel.&nbsp; Our image and reputation, and the
image and reputation of other franchisees, may suffer materially and
system-wide sales could significantly decline if our franchisees do not operate
successfully.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>We depend on key management employees</i></b><b>.</b> We believe
our current operations and future success depend largely on the continued
services of our management employees, in particular Boyd E. Hoback, our
president and chief executive officer and Scott LeFever, our vice president of
operations.&nbsp; Although we have entered into an employment agreement with Mr.
Hoback, he may voluntarily terminate his employment with us at any time.&nbsp; In
addition, we do not maintain key-person insurance on Messrs. Hoback's or LeFever's
life.&nbsp; The loss of Messrs. Hoback's or LeFever's services, or other key
management personnel, could have a material adverse effect on our financial
condition and results of operations.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><i>Labor shortages could slow our growth
or harm our business.</i></b> Our success depends in part upon our ability to
attract, motivate and retain a sufficient number of qualified, high-energy
employees.&nbsp; Qualified individuals needed to fill these positions are in short
supply in some areas.&nbsp; The inability to recruit and retain these individuals
may delay the planned openings of new restaurants or result in high employee
turnover in existing restaurants, which could harm our business.&nbsp; Additionally,
competition for qualified employees could require us to pay higher wages to
attract sufficient employees, which could result in higher labor costs.&nbsp; Most
of our employees are paid on an hourly basis.&nbsp; The employees are paid in
accordance with applicable minimum wage regulations.&nbsp; Accordingly, any increase
in the minimum wage, whether state or federal, could have a material adverse
impact on our business.</p>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;margin-left:
0in;text-align:justify'><b><i>Nevada law and our articles of incorporation and bylaws
have provisions that discourage corporate takeovers and could prevent
stockholders from realizing a premium on their investment.</i></b> We
are subject to anti-takeover laws for Nevada corporations.&nbsp; These anti-takeover
laws prevent a Nevada corporation from engaging in a business combination with
any stockholder, including all affiliates and associates of the stockholder,
who owns 10% or more of the corporation's outstanding voting stock, for three
years following the date that the stockholder acquired 10% or more of the
corporation's voting stock, unless specified conditions are met.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Our articles of incorporation and our bylaws
contain a number of provisions that may deter or impede takeovers or changes of
control or management.&nbsp; These provisions:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.5in;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
authorize
our board of directors to establish one or more series of preferred stock, the
terms of which can be determined by the board of directors at the time of
issuance;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.5in;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
do
not allow for cumulative voting in the election of directors unless required by
applicable law.&nbsp; Under cumulative voting, a minority stockholder holding a sufficient
percentage of a class of shares may be able to ensure the election of one or
more directors;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.5in;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
state
that special meetings of our stockholders may be called only by the chairman of
the board, the president or any two directors, and must be called by the
president upon the written request of the holders of ten percent of the
outstanding shares of capital stock entitled to vote at such special meeting;
and</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.5in;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
provide
that the authorized number of directors is currently set at seven.</p>

<p class=BodyText5 style='margin-bottom:6.0pt;text-indent:0in'>These
provisions, alone or in combination with each other, may discourage
transactions involving actual or potential changes of control, including
transactions that otherwise could involve payment of a premium over prevailing
market prices to stockholders for their common stock.</p>

<p class=BodyText5 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'><b><i>Future changes in financial accounting standards may
cause adverse unexpected operating results and affect our reported results of
operations.</i></b>&nbsp; Changes in accounting standards can have a significant
effect on our reported results and may affect our reporting of transactions
completed before the change is effective.&nbsp; As an example, in 2006, we adopted
the change that requires us to record compensation expense in the statement of
operations for employee stock options using the fair value method.&nbsp; See Note 1 to
our Consolidated Financial Statements for further discussion.&nbsp; New
pronouncements and varying interpretations of pronouncements have occurred and
may occur in the future.&nbsp; Changes to existing rules or differing
interpretations with respect to our current practices may adversely affect our
reported financial results.</p>

<p class=BodyText5 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'><b><i>Our
NASDAQ Listing Is Important.</i></b><i>
</i>Our common
stock is currently listed for trading on the NASDAQ Capital Market.&nbsp; The NASDAQ
maintenance rules require, among other things, that our common stock price
remains above $1.00 per share and that we have minimum net tangible assets in
excess of $2 million.&nbsp; We were required to obtain shareholder approval in 1998
for a reverse stock split to maintain a sufficient per share price to preserve
our NASDAQ listing.</p>

<p class=BodyText5 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'><b><i>We
are subject to extensive government regulation that may adversely hinder or
impact our ability to govern various aspects of our business including our
ability to expand and develop our restaurants.</i></b>&nbsp; The restaurant industry is
subject to various federal, state and local government regulations, including
those relating to the sale of food.&nbsp; While in the past we have been able to
obtain and maintain the necessary governmental licenses, permits and approvals,
our failure to maintain these licenses, permits and approvals, including food
licenses, could adversely affect our operating results.&nbsp; Difficulties or
failures in obtaining the required licenses and approvals could delay or result
in our decision to cancel the opening of new restaurants.&nbsp; Local authorities
may suspend or deny renewal of our food licenses if they determine that our
conduct does not meet applicable standards or if there are changes in
regulations.</p>

<p class=BodyText5 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'>Various
federal and state labor laws govern our relationship with our employees and affect
operating costs.&nbsp; These laws govern minimum wage requirements, such as those to
be imposed by recently enacted legislation in Colorado, overtime pay, meal and
rest breaks, unemployment tax rates, workers' compensation rates, citizenship
or residency requirements, child labor regulations and sales taxes.&nbsp; Additional
government-imposed increases in minimum wages, overtime pay, paid leaves of
absence and mandated health benefits may increase our operating costs.</p>

<p class=BodyText5 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'>The
federal Americans with Disabilities Act prohibits discrimination on the basis
of disability in public accommodations and employment.&nbsp; Although our
restaurants are designed to be accessible to the disabled, we could be required
to make modifications to our restaurants to provide service to, or make
reasonable accommodations for, disabled persons.</p>

<p class=BodyText5 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'>We
are also subject to federal and state laws that regulate the offer and sale of
franchises and aspects of the licensor-licensee relationship.&nbsp; Many state
franchise laws impose restrictions on the franchise agreement, including
limitations on non-competition provisions and the termination or non-renewal of
a franchise.&nbsp; Some states require that franchise materials be registered before
franchises can be offered or sold in the state.</p>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=BodyText5 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'><b><i>Compliance
with changing regulation of corporate governance and public disclosure may
result in additional expenses.</i></b>&nbsp;
Keeping abreast of, and in compliance with, changing laws, regulations and
standards relating to corporate governance and public disclosure, including the
Sarbanes-Oxley Act of 2002, new SEC regulations and The NASDAQ&nbsp; Market rules,
has required an increased amount of management attention.&nbsp; We remain committed
to maintaining high standards of corporate governance and public disclosure.&nbsp;
As a result, we intend to invest all reasonably necessary resources to comply
with evolving standards, and this investment has resulted in and will continue
to result in increased general and administrative expenses and a diversion of
management time and attention from revenue-generating activities to compliance
activities.</p>

<p class=BodyText5 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'><b><i>Risks
related to internal controls.</i></b>&nbsp;
Public companies in the United States are required to review their internal
controls as set forth in the Sarbanes-Oxley Act of 2002.&nbsp; It should be noted
that any system of controls, however well designed and operated, can provide
only reasonable, and not absolute, assurance that the objectives of the system
are met.&nbsp; In addition, the design of any control system is based in part upon
certain assumptions about the likelihood of future events.&nbsp; Because of these
and other inherent limitations of control systems, there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions, regardless of how remote.&nbsp; If the internal controls put in
place by us are not adequate or in conformity with the requirements of the
Sarbanes-Oxley Act of 2002, and the rules and regulations promulgated by the
Securities and Exchange Commission, we may be forced to restate our financial
statements and take other actions which will take significant financial and
managerial resources, as well as be subject to fines and other government
enforcement actions.</p>

<p class=BodyText5 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-indent:0in'><b><i>Health
concerns relating to the consumption of beef, chicken or other food products
could affect consumer preferences and could negatively impact our results of
operations.</i></b>&nbsp;
Like other restaurant chains, consumer preferences could be affected by health
concerns about the avian influenza, also known as bird flu, or the consumption
of beef, the key ingredient in many of our menu items, or negative publicity
concerning food quality, illness and injury generally, such as negative
publicity concerning E. coli, &quot;mad cow&quot; or &quot;foot-and-mouth&quot;
disease, publication of government or industry findings concerning food
products served by us, or other health concerns or operating issues stemming
from one restaurant or a limited number of restaurants.&nbsp; This negative
publicity may adversely affect demand for our food and could result in a
decrease in guest traffic to our restaurants.&nbsp; If we react to the negative
publicity by changing our concept or our menu we may lose guests who do not
prefer the new concept or menu, and may not be able to attract a sufficient new
guest base to produce the revenue needed to make our restaurants profitable.&nbsp;
In addition, we may have different or additional competitors for our intended
guests as a result of a concept change and may not be able to compete
successfully against those competitors.&nbsp; A decrease in guest traffic to our
restaurants as a result of these health concerns or negative publicity or as a
result of a change in our menu or concept could materially harm our business.</p>

<p class=BodyText5 style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-indent:0in'><b>Item
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Description of Property.</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We currently lease approximately 3,700 square feet
of space for our executive offices in Golden, Colorado for approximately $55,000
per year.&nbsp; The lease is for a one year term ending September 2009. The space is
leased from The Bailey Company, a significant stockholder, at their corporate
headquarters.&nbsp; We anticipate extending the lease or leasing comparable space on
terms similar to our current lease.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>As of December 15, 2008, Good Times has an ownership interest in thirty Good Times units, all of which are located in Colorado.&nbsp; Nine of these restaurants are held in joint venture limited partnerships of
which Good Times is the general partner. &nbsp;Good Times has a 50% interest in
seven of the partnership restaurants, a 78% interest in one restaurant and a
51% interest in another restaurant.&nbsp; There are twenty one Good Times units that
are wholly owned by Good Times.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Most of our existing Good Times restaurants are a
combination of free-standing structures containing approximately 880 square
feet for the double drive thru format and approximately 2400 square feet for
our prototype building with a 70 seat dining room.&nbsp; In addition, we have
several restaurants that are conversions from other concepts in various sizes
ranging from 1700 square feet to 3500 square feet.&nbsp; The buildings are situated
on lots of approximately 18,000 to 50,000 square feet.&nbsp; Certain restaurants
serve as collateral for the underlying debt financing arrangements as discussed
in the Notes to Consolidated Financial Statements included in this report.&nbsp; We
intend to acquire new sites both through ground leases and purchase agreements
supported by mortgage and leasehold financing arrangements and through
sale-leaseback agreements.</p>

<p class=MsoNormal style='margin-top:6.0pt;text-align:justify'>All of the
restaurants are regularly maintained by our repair and maintenance staff as
well as by outside contractors, when necessary.&nbsp; We believe that all of our
properties are in good condition and that there will be a need for periodic
capital expenditures to maintain the operational and aesthetic integrity of our
properties for the foreseeable future, including recurring maintenance and
periodic capital improvements.&nbsp; All of our properties are covered up to
replacement cost under our property and casualty insurance policies and in the
opinion of management are adequately covered by insurance.</p>

<p class=MsoNormal style='margin-top:6.0pt;text-align:justify'><b>Item 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legal
Proceedings.</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:-1.45pt;margin-bottom:
12.0pt;margin-left:0in'>We
are not involved in any material legal proceedings.&nbsp; We are subject, from time
to time, to various lawsuits in the normal course of business.&nbsp; These lawsuits
are not expected to have a material impact.</p>

<p class=MsoNormal style='margin-right:-1.45pt'><b>Item 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Submission of
Matters to a Vote of Security Holders.</b></p>

<p class=MsoNormal style='margin-top:6.0pt'>No matters were submitted to a vote of
security holders during the fourth quarter of the fiscal year ended September 30, 2008.</p>

<p class=MsoFooter align=center style='text-align:center'>15</p>



<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt'><b>PART II</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Item 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Market for Common
Equity and Related Stockholder Matters.</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:12.0pt;
margin-left:0in;text-align:justify'>Shares of Good Times Restaurants Inc. common stock
are listed for trading on the NASDAQ Capital Market under the symbol &quot;GTIM.&quot;&nbsp; The following table presents the quarterly high and low bid prices for Good Times
Restaurants common stock as reported by the NASDAQ Capital Market for each
quarter within the last two fiscal years.&nbsp; The quotations reflect interdealer
prices, without retail mark-ups, markdowns or commissions and may not represent
actual transactions.</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:.45in;border-collapse:collapse'>
 <tr>
  <td width=300 valign=top style='width:225.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>2007</u></b></p>
  </td>
  <td width=306 valign=top style='width:229.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>2008</u></b></p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:.45in;border-collapse:collapse'>
 <tr>
  <td width=168 valign=top style='width:125.9pt;padding:0in 5.4pt 0in 5.4pt'><b><br
  clear=all style='page-break-before:always'>
  <br clear=all style='page-break-before:always'>
  </b>
  <p class=MsoNormal style='text-align:justify'><b><u>Quarter Ended</u></b></p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>High</u></b></p>
  </td>
  <td width=65 valign=top style='width:48.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>Low</u></b></p>
  </td>
  <td width=170 valign=top style='width:127.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'><b><u>Quarter Ended</u></b></p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>High</u></b></p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>Low</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=168 valign=top style='width:125.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>December
   31, 2006</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$6.89</p>
  </td>
  <td width=65 valign=top style='width:48.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$5.51</p>
  </td>
  <td width=170 valign=top style='width:127.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>December
   31, 2007</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$6.25</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$5.10</p>
  </td>
 </tr>
 <tr>
  <td width=168 valign=top style='width:125.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>March 31,
   2007</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$6.00</p>
  </td>
  <td width=65 valign=top style='width:48.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$4.75</p>
  </td>
  <td width=170 valign=top style='width:127.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>March 31,
   2008</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$6.25</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$4.99</p>
  </td>
 </tr>
 <tr>
  <td width=168 valign=top style='width:125.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>June 30,
   2007</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$6.00</p>
  </td>
  <td width=65 valign=top style='width:48.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$4.99</p>
  </td>
  <td width=170 valign=top style='width:127.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>June 30,
   2008</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$5.50</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$2.08</p>
  </td>
 </tr>
 <tr>
  <td width=168 valign=top style='width:125.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>September
   30, 2007</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$6.25</p>
  </td>
  <td width=65 valign=top style='width:48.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$3.95</p>
  </td>
  <td width=170 valign=top style='width:127.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>September
   30, 2008</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$3.50</p>
  </td>
  <td width=67 valign=top style='width:.7in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>$1.23</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>As of December 15, 2008 there were approximately 300 holders of record of Common Stock.&nbsp; However, management estimates that
there are not fewer than 1,390 beneficial owners of our Common Stock.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Dividend Policy:</b> We have never
paid dividends on our common stock and do not anticipate paying dividends in
the foreseeable future.&nbsp; In addition, we have obtained financing under
loan agreements that restrict the payment of dividends.&nbsp; Our ability to
pay future dividends will necessarily depend on our earnings and financial
condition.&nbsp; However, since restaurant development is capital intensive, we
currently intend to retain any earnings for that purpose.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Disclosure with Respect to the
Company's Equity Compensation Plans:</b> We maintain the 2008 Omnibus Equity
Incentive Compensation Plan, pursuant to which we may grant equity awards to
eligible persons, and have outstanding stock options granted under our 2001
Good Times Restaurants Stock Option Plan, 1992 Incentive Stock Option Plan and
1992 Non-Statutory Stock Option Plan.&nbsp; For additional information, see Note 11,
Stockholders' Equity, in the Notes to the Consolidated Financial Statements
included in this report. The following table gives information about equity
awards under our plans as of September 30, 2008.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Equity Compensation Plan Information</b></p>

<table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width=679
 style='border-collapse:collapse;border:none'>
 <tr>
  <td width=194 valign=top style='width:145.45pt;border:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'><b><br clear=all style='page-break-before:always'>
  </b>
  <p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>
  </td>
  <td width=152 valign=top style='width:114.0pt;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>(a)</b></p>
  </td>
  <td width=147 valign=top style='width:110.45pt;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>(b)</b></p>
  </td>
  <td width=186 valign=top style='width:139.5pt;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:3.0pt;text-align:center'><b>(c)</b></p>
  </td>
 </tr>
 <tr>
  <td width=194 valign=bottom style='width:145.45pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Plan category</b></p>
  </td>
  <td width=152 valign=bottom style='width:114.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Number of
  securities to be issued upon exercise of outstanding options, warrants &amp;
  rights</b></p>
  </td>
  <td width=147 valign=bottom style='width:110.45pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Weighted-average
  exercise price of outstanding options, warrants &amp; rights</b></p>
  </td>
  <td width=186 valign=bottom style='width:139.5pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:3.0pt;text-align:center'><b>Number of
  securities remaining available for future issuance under equity compensation
  plans (excluding securities reflected in column (a))</b></p>
  </td>
 </tr>
 <tr>
  <td width=194 valign=top style='width:145.45pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Equity
  compensation plans approved by security holders</p>
  </td>
  <td width=152 valign=bottom style='width:114.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>353,942</p>
  </td>
  <td width=147 valign=bottom style='width:110.45pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-left:1.55pt;text-align:center'>$4.04</p>
  </td>
  <td width=186 valign=bottom style='width:139.5pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:1.65pt;margin-bottom:.0001pt;text-align:center'>198,130</p>
  </td>
 </tr>
 <tr>
  <td width=194 valign=top style='width:145.45pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Total</p>
  </td>
  <td width=152 valign=bottom style='width:114.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>353,942</p>
  </td>
  <td width=147 valign=bottom style='width:110.45pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-left:1.55pt;text-align:center'>$4.04</p>
  </td>
  <td width=186 valign=bottom style='width:139.5pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:1.65pt;margin-bottom:.0001pt;text-align:center'>198,130</p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>16</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>






<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-left:.75in;text-indent:-.75in'><b>&nbsp;Selected
Financial Data.</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:12.0pt;
margin-left:0in;text-align:justify'>The selected financial data on the following pages
are derived from our historical financial statements and is qualified in its
entirety by such financial statements which are included in Item 7 hereof.</p>

<p class=MsoNormal align=center style='margin-top:.25in;margin-right:0in;
margin-bottom:6.0pt;margin-left:0in;text-align:center'><b>GOOD TIMES
RESTAURANTS INC. AND SUBSIDIARY</b></p>

<p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'>The following
presents certain historical financial information of the Company.&nbsp; This
financial information includes the combined operations of the Company and its
subsidiary for the fiscal years ended September 30, 2007 and 2008.</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=672
 style='margin-left:.9pt;border-collapse:collapse'>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-20.55pt;text-align:justify'><b>&nbsp;</b></p>
  </td>
  <td width=228 valign=top style='width:171.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:.05in;text-align:center'><b><u>September</u></b></p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=672
 style='margin-left:.9pt;border-collapse:collapse'>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-20.55pt;text-align:justify'><b>Operating
  Data:</b></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b><u>2008</u></b></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-right:.05in;text-align:center'><b><u>2007</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Restaurant
  sales</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$ 25,244,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>$&nbsp;&nbsp; 24,215,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Franchise
  fees and royalties</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 638,000</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 740,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Net Revenues</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp; 25,882,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp; 24,955,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'>Restaurant Operating Costs:</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;
  Food and packaging costs</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; 8,002,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7,589,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;
  Payroll and other employee benefit costs</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; 8,780,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,063,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;
  Occupancy and other operating costs</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; 4,881,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,393,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;
  New store pre-opening costs</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 38,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 118,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;
  Depreciation and amortization</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp; 1,283,000</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,223,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-bottom:12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total restaurant operating
  costs</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp; 22,984,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp; 21,386,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:-5.4pt'>&nbsp;&nbsp;&nbsp;&nbsp; Selling, General &amp;
  Administrative Expenses</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp; 3,567,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,226,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;
  Franchise Costs</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 312,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 161,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;
  Gain on disposal of restaurants and equipment</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (35,000)</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (17,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'>Income &nbsp;(Loss) from Operations</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'>($&nbsp;&nbsp;&nbsp; 946,000)</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt;margin-right:.05in;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 200,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'>Other Income and (expenses)</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp; Minority
  income (expense), net</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (113,000)</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (211,000)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;
  Interest income (expense), net</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (13,000)</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 40,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Total other income and (expenses)</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (126,000)</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (171,000)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'>Net Income (Loss) before Income
  Taxes</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'><u>($&nbsp; 1,072,000)</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt;margin-right:.05in;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 29,000</u></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt'> <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,000</u></p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal style='margin-top:0in;margin-right:.05in;margin-bottom:
  12.0pt;margin-left:0in'> <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-bottom:12.0pt'>Net Income (Loss)</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>($&nbsp; 1,076,000)</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 29,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Basic
  and Diluted Earnings (Loss) Per Share</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  .28)</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .01</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:.6pt;margin-bottom:
3.0pt;margin-left:0in'>Weighted
average shares and equivalents used in per share calculations</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=672
 style='margin-left:.9pt;border-collapse:collapse'>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Basic</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>&nbsp;&nbsp;&nbsp;&nbsp; 3,886,730</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:12.6pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,838,867</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Diluted</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.1pt'>&nbsp;&nbsp;&nbsp;&nbsp; 3,886,730</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:12.6pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,975,957</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:3.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><i>Balance Sheet Data:</i></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=673
 style='border-collapse:collapse'>
 <tr>
  <td width=445 valign=top style='width:333.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Working Capital</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>($&nbsp; 2,082,000)</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 532,000</p>
  </td>
 </tr>
 <tr>
  <td width=445 valign=top style='width:333.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Total assets</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp; 11,920,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp; 11,544,000</p>
  </td>
 </tr>
 <tr>
  <td width=445 valign=top style='width:333.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Minority Interest</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 584,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 751,000</p>
  </td>
 </tr>
 <tr>
  <td width=445 valign=top style='width:333.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Long-term debt</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 846,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 970,000</p>
  </td>
 </tr>
 <tr>
  <td width=445 valign=top style='width:333.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Stockholders' equity</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$&nbsp;&nbsp; 5,409,000</p>
  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:.05in'>$ &nbsp;&nbsp; 6,333,000</p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>17</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>






<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.75in;text-indent:-.75in'><b>Item 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Management's Discussion
and Analysis of Financial Condition and Results of Operations.</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Results of Operations</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Net Revenues:</b> Net revenues
for fiscal 2008 increased $927,000 (3.7%) to $25,882,000 from $24,955,000 for
fiscal 2007.&nbsp; Same store restaurant sales decreased $263,000 or (1.48%), during
fiscal 2008. Restaurants are included in same store sales after they have been
open a full fifteen months and only Good Times restaurants are included while
dual branded restaurants are excluded.&nbsp; Restaurant sales increased $90,000 due
to one non-traditional company-owned restaurant not included in same store
sales and increased $1,593,000 due to six new, acquired or dual branded
company-owned restaurants that were opened or acquired in fiscal 2007 and 2008.&nbsp;
Restaurant sales decreased $391,000 due to one company-owned restaurant sold to
a franchisee in May 2007. &nbsp;Net revenues decreased $102,000 in fiscal 2008 due
to a decrease in franchise fees of $70,000 and a decrease in franchise
royalties of $32,000.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Our third and fourth quarter same store restaurant
sales declines of 5.7% and 10.8%, respectively, reflect the adverse impact the
macroeconomic environment is having on consumers' discretionary spending and
the proliferation of heavy promotion of $1 value menus and discounting by
competitors. &nbsp;Additionally, we are comparing the 2008 sales declines to same
store sales increases of 10% and 11.9%, respectively, in the same quarters of
fiscal 2007 when we introduced Bambino Burgers.&nbsp; We had shown same store sales
growth in sixteen consecutive quarters leading into the third quarter of this
fiscal year.&nbsp; Our outlook for fiscal 2009 remains cautious as the economic
pressures may continue to impact consumer spending and we anticipate that we
will continue to face increased competitive pricing pressure.&nbsp; While we are
implementing several broad product and brand initiatives during fiscal 2009 to
improve our core value proposition, we are not planning to implement a broader
$1 menu and our sales may be adversely affected during the economic recession.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Total restaurant sales for Good Times and its
franchisees were $42,195,000 for fiscal 2008 compared to $42,304,000 for fiscal
2007.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Average restaurant sales (including double drive
thru restaurants and restaurants with dining rooms but excluding dual brand restaurants)
for fiscal 2007 and 2008 were as follows:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:28.2pt;border-collapse:collapse'>
 <tr style='height:15.9pt'>
  <td width=258 valign=top style='width:193.8pt;padding:0in 5.4pt 0in 5.4pt;
  height:15.9pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=95 valign=top style='width:71.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:15.9pt'>
  <p class=MsoNormal><b><u>Fiscal
  2008</u></b></p>
  </td>
  <td width=84 valign=top style='width:63.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:15.9pt'>
  <p class=MsoNormal><b><u>Fiscal
  2007</u></b></p>
  </td>
 </tr>
 <tr style='height:8.55pt'>
  <td width=258 valign=top style='width:193.8pt;padding:0in 5.4pt 0in 5.4pt;
  height:8.55pt'>
  <p class=MsoNormal>Company
  operated</p>
  </td>
  <td width=95 valign=top style='width:71.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:8.55pt'>
  <p class=MsoNormal style='margin-left:6.75pt'>$916,000</p>
  </td>
  <td width=84 valign=top style='width:63.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:8.55pt'>
  <p class=MsoNormal style='margin-left:6.75pt'>$930,000</p>
  </td>
 </tr>
 <tr style='height:10.35pt'>
  <td width=258 valign=top style='width:193.8pt;padding:0in 5.4pt 0in 5.4pt;
  height:10.35pt'>
  <p class=MsoNormal>Franchise
  operated</p>
  </td>
  <td width=95 valign=top style='width:71.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:10.35pt'>
  <p class=MsoNormal style='margin-left:6.75pt'>$801,000</p>
  </td>
  <td width=84 valign=top style='width:63.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:10.35pt'>
  <p class=MsoNormal style='margin-left:6.75pt'>$819,000</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:6.0pt;text-align:justify'>For factors
which may affect future results of operations, please refer to the section
entitled &quot;Current Fiscal Year Initiatives&quot; in Item 1 on pages 17-18 of this
report and a related discussion of planned product and system changes discussed
in the section entitled &quot;Concept and Business Strategy&quot; in Item 1 on pages 15-17
of this report.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Restaurant Operating Costs:</b> Restaurant
operating costs as a percent of restaurant sales were 91.1% for fiscal 2008
compared to 88.3% in fiscal 2007.</p>

<p class=MsoNormal style='text-align:justify'>The changes in restaurant-level costs
are explained as follows:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=660
 style='margin-left:5.4pt;border-collapse:collapse'>
 <tr>
  <td width=521 valign=top style='width:390.45pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText style='margin-right:-5.4pt'>Restaurant-level costs for the
  period ended September 30, 2007</p>
  </td>
  <td width=139 valign=top style='width:104.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:8.1pt;text-align:right'>88.3%</p>
  </td>
 </tr>
 <tr>
  <td width=521 valign=top style='width:390.45pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText style='margin-right:-5.4pt'>Increase in food and packaging costs</p>
  </td>
  <td width=139 valign=top style='width:104.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:8.1pt;text-align:right'>.4%</p>
  </td>
 </tr>
 <tr>
  <td width=521 valign=top style='width:390.45pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText style='margin-right:-5.4pt'>Increase in payroll and other
  employee benefit costs</p>
  </td>
  <td width=139 valign=top style='width:104.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:8.1pt;text-align:right'>1.5%</p>
  </td>
 </tr>
 <tr>
  <td width=521 valign=top style='width:390.45pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText style='margin-right:-5.4pt'>Increase in occupancy and other
  operating costs</p>
  </td>
  <td width=139 valign=top style='width:104.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:8.1pt;text-align:right'>1.2%</p>
  </td>
 </tr>
 <tr>
  <td width=521 valign=top style='width:390.45pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText style='margin-right:-5.4pt'>Decrease in pre-open costs</p>
  </td>
  <td width=139 valign=top style='width:104.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:.05in;text-align:right'>(.3%)</p>
  </td>
 </tr>
 <tr>
  <td width=521 valign=top style='width:390.45pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText style='margin-right:-5.4pt'>Depreciation and amortization costs</p>
  </td>
  <td width=139 valign=top style='width:104.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:2.05pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp; 0%</u></p>
  </td>
 </tr>
 <tr>
  <td width=521 valign=top style='width:390.45pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText style='margin-right:-5.4pt'>Restaurant-level costs for the
  period ended September 30, 2008</p>
  </td>
  <td width=139 valign=top style='width:104.55pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoBodyText align=right style='margin-right:8.1pt;text-align:right'>91.1%</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Food and Packaging Costs:</b> Food and
packaging costs for fiscal 2008 increased $413,000 from $7,589,000 (31.3% of
restaurant sales) in fiscal 2007 to $8,002,000 (31.7% of restaurant sales). We
experienced unprecedented increases in commodity costs including beef, bakery,
soft drinks, dairy and packaging costs with the majority of those increases
occurring in May through July 2008.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Our weighted food and packaging costs have
increased approximately 12% since the beginning of the fiscal 2008 year.&nbsp;
However, food and packaging costs increased only slightly as a percent of
restaurant sales due to menu price increases taken in October 2007 and May 2008.&nbsp;
The cumulative weighted menu price increases taken during the fiscal year were
approximately 4.8%.&nbsp; We anticipate limited price increases in fiscal 2009 with
continued cost pressure on several core commodities.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Payroll and Other Employee Benefit
Costs</b>:
For fiscal 2008 payroll and other employee benefit costs increased $717,000
from $8,063,000 (33.3% of restaurant sales) in fiscal 2007 to $8,780,000 (34.8%
of restaurant sales).</p>

<p class=MsoFooter align=center style='text-align:center'>18</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>






<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The increase in payroll and other employee benefit
costs for fiscal 2008 is primarily due to an increase in restaurant sales and
the addition of new and acquired company-owned restaurants opened in late
fiscal 2007 and during 2008, as well as a state mandated increase in the
minimum wages paid to hourly employees in January 2007 and 2008.&nbsp; Payroll and
benefit costs are semi-variable and therefore increase or decrease as sales
fluctuate. &nbsp;Additionally, 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.&nbsp; The three dual branded restaurants also have a
higher labor cost as a percent of sales than Good Times single brand
restaurants.</p>

<p class=MsoNormal style='margin-top:6.0pt;text-align:justify'>We have
reduced our labor hours allocation through increased efficiencies and improved
our sales per employee hour efficiencies on service hours, thereby eliminating
approximately $300,000 of annual fixed payroll costs.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Occupancy and Other Costs:</b> For fiscal
2008, occupancy and other costs increased $488,000 from $4,393,000 (18.1% of
restaurant sales) in fiscal 2007 to $4,881,000 (19.3% of restaurant sales).&nbsp;
The $488,000 increase in occupancy and other costs are primarily attributable
to:</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.1pt;text-align:justify;text-indent:-17.1pt'>&sect;&nbsp;
Increases
in building rent of $159,000 due to the new and purchased restaurants.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.1pt;text-align:justify;text-indent:-17.1pt'>&sect;&nbsp;
Increases
in bank fees of $50,000 due to a greater number of customer transactions using
credit cards in addition to credit card sales at the new and purchased restaurants.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.1pt;text-align:justify;text-indent:-17.1pt'>&sect;&nbsp;
Increases
in property taxes of $66,000 related to the new and purchased restaurants.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.1pt;text-align:justify;text-indent:-17.1pt'>&sect;&nbsp;
Increases
in utility costs of $114,000 related to the new and purchased restaurants, as
well as utility rate increases.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Occupancy costs may increase as a percent of sales
as new company-owned restaurants are developed due to higher rent associated
with sale-leaseback operating leases, as well as increased property taxes on
those locations.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>New Store Pre-opening Costs:</b> For fiscal
2008, new store pre-opening costs decreased $80,000 from $118,000 in fiscal 2007
to $38,000.&nbsp; New store pre-opening costs in fiscal 2008 are related to one new
company-owned restaurant that opened in October 2008.&nbsp; Fiscal 2007 new store
pre-opening costs were related to the opening of two new company-owned
restaurants.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Depreciation and Amortization Costs</b>: For fiscal
2008, depreciation and amortization costs increased $60,000 from $1,223,000 in
fiscal 2007 to $1,283,000.&nbsp; Depreciation costs increased due to the addition of
new company-owned restaurants in late fiscal 2007 and two restaurants acquired
from a franchisee in March 2008.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Selling, General and Administrative
Costs:</b>
For fiscal 2008, selling, general and administrative costs increased $342,000
from $3,226,000 (13.3% of restaurant sales) in fiscal 2007 to $3,567,000 (14.1%
of restaurant sales) in fiscal 2008.&nbsp; The increase in selling, general and
administrative costs are partially attributable to increased advertising costs,
which increased to $1,525,000 (6% of restaurant sales) for fiscal 2008 from $1,427,000
(5.9% of restaurant sales) for fiscal 2007, and an increase in general and
administrative costs, which increased to $2,042,000 (8.1% of restaurant sales)
for fiscal 2008 from $1,799,000 (7.4% of restaurant sales) for fiscal 2007 (as
explained below).</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The increase in advertising costs is due to the
increase in restaurant sales (contributions based on sales are made to the
advertising funds).</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We anticipate that fiscal 2009 advertising will
consist primarily of television advertising, on-site and point-of-purchase
merchandising totaling approximately 5.8% of restaurant sales.&nbsp; </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The $243,000 increase in general and
administrative cost is primarily attributable to:</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.3pt;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
Professional
services cost increase of $127,000 related to 1) the Company's Sarbanes Oxley
404 compliance of $62,000; 2) legal costs of $43,000 related to the Omaha,
Nebraska expansion and the Company's 2008 Omnibus Equity Incentive Compensation
Plan; and 3) $23,000 of costs related to a brand positioning research project.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:17.1pt;text-align:justify;text-indent:-.25in'>&sect;&nbsp;
Write
off of $81,000 in preliminary site costs related to the Omaha, Nebraska expansion.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:-.9pt;text-align:justify'>We have reduced planned selling, general and
administrative and franchise costs by approximately $450,000 for fiscal 2009
through the elimination of executive management positions, salary reductions
and professional services costs.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:-.9pt;text-align:justify'><b>Franchise Costs:</b> For fiscal
2008, franchise costs increased $151,000 from $161,000 (.6% of total revenues)
in fiscal 2007 to $312,000 (1.2% of total revenues).</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:-.9pt;text-align:justify'>The increase in franchise costs for fiscal 2008 is
attributable to the addition of a Vice President of Franchise Development hired
on October 1, 2007.&nbsp; This position was eliminated in July 2008 in conjunction
with Good Times' exit from the planned Omaha, Nebraska expansion.</p>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:-.9pt;text-align:justify'><b>Gain on disposal of restaurants and
equipment:</b>
For fiscal 2008, the gain on disposal of restaurants and equipment increased $18,000
to $35,000 from $17,000.&nbsp; The $35,000 gain on disposal of restaurants and equipment
in fiscal 2008 is from the partial recognition of deferred gains related to two
sale-leaseback transactions that were completed in fiscal 2004 and 2006.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:-.7pt;text-align:justify'><b>Income (Loss) from Operations:</b> The loss from
operations was $946,000 in fiscal 2008 compared to income from operations of $200,000
in fiscal 2007.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify;line-height:97%'><b>Net Income
(Loss):</b> Net loss was $1,076,000 for fiscal 2008 compared
to net income of $29,000 in fiscal 2007.&nbsp; The change from fiscal 2007 to fiscal
2008 was primarily attributable to the matters discussed in the &quot;Net
Revenues&quot;, &quot;Food and Packaging Costs&quot;, &quot;Selling, General
and Administrative Costs&quot; and &quot;Franchise Costs&quot; sections of Item
6.&nbsp; In addition, 1) minority interest expense decreased $98,000 due to
decreased income from restaurant operations of the joint venture restaurants
for fiscal 2008 and 2) net interest expense increased $43,000 in fiscal 2008
due to increased interest expense on debt and reduced earnings on cash reserves
in the current period.</p>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify;line-height:97%'><b>Liquidity
and Capital Resources</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Cash and Working Capital:</b> As of September 30, 2008, we had $1,414,000 of 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 for recurring capital expenditures.&nbsp; Management
believes that the current cash on hand and additional cash expected from
operations in fiscal 2009 will be sufficient to cover our working capital
requirements for fiscal 2009.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>As of September 30, 2008, we had a working capital deficit of $2,082,000 primarily from our development line-of-credit of
$2,180,000 shown as a current liability maturing in July 2009.&nbsp; We have a
fully-developed site that we are marketing for a sale-leaseback transaction
with expected net proceeds of approximately $1,600,000 which will be used to
reduce the line of credit. 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 Good Times
restaurants are opened.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'><b>Financing:</b> In May 2007,
the Company borrowed $1,100,000 from Wells Fargo Bank under a note payable with
an eight year term with a floating interest rate at .50% below prime.&nbsp; We
simultaneously entered into an interest rate swap transaction with Wells Fargo
Bank for the full $1,100,000 with a fixed interest rate of 7.7% for the full
eight year term coinciding with the note payable.&nbsp; Partial proceeds from the
loan were used to: 1) payoff our existing GE Capital notes payable of $398,000;
and 2) fund new store construction.&nbsp; The balance of the proceeds were used to
partially fund the purchase of two existing restaurants from a franchisee.&nbsp; We
anticipate that we will be in default of certain technical loan covenants as of
 December 31, 2008 on the Wells Fargo note and we are working with Wells Fargo
to modify these covenants based upon our fiscal 2009 plan and cash flow.&nbsp; We
have never been in payment default nor do we expect to be in the future.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'>On March 1, 2008, we purchased two restaurants from an existing franchisee for total consideration of
$1,330,000.&nbsp; We simultaneously sold the land, building and improvements related
to one of the restaurants in a sale-leaseback transaction, the proceeds of
which were used for the purchase of the restaurants.&nbsp; Net cash used in the
purchase transaction was $272,000.&nbsp; After accounting for both the acquisition
and the sale-leaseback, assets of $490,000 were recorded, a deferred gain of
$26,000 was recognized as a cost of the consideration and notes receivable due
from the franchisee of $250,000 were forgiven.&nbsp; We believe the $1,330,000
represents the fair value of the franchisee acquired.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'>In July 2008, we entered into a $2,500,000
promissory note with an unrelated third party (PFGI II, LLC).&nbsp; The promissory
note constitutes a revolving line-of-credit for the development of new
restaurants which may be advanced and repaid on a monthly basis from time to
time.&nbsp; Prior to maturity, no principal payments are required and monthly
payments of interest only at the prime rate plus 2% (with a minimum rate of 8%)
are due, with all unpaid principal due in July 2009.&nbsp; The loan is secured by
separate leasehold deeds of trust and security agreements related to six
company-owned restaurants and a first deed of trust on the property developed.&nbsp;
The total outstanding balance on the line of credit was $2,180,000 at September 30, 2008.&nbsp; Of the $2,180,000 outstanding balance, $1,574,000 is related to the
construction of one company-owned restaurant in Firestone, Colorado that opened
in October 2008.&nbsp; The restaurant is currently under contract for a
sale-leaseback.&nbsp; The remaining balance is related to a land purchase in Aurora, Colorado that will be either developed into a company-owned restaurant or sold in
fiscal 2009.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'>Additional commitments for the
development of new restaurants in fiscal 2009 will depend on the Company's
sales trends, cash generated from operations and our access to capital in the
sale-leaseback markets.</p>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'><b>Cash Flows:</b> Net cash
provided by operating activities was $619,000 for fiscal 2008 compared to $1,763,000
in fiscal 2007.&nbsp; The decreased net cash provided by operating activities for
fiscal 2008 was the result of net loss of $1,076,000 and non-cash reconciling
items totaling $1,695,000 (comprised principally of depreciation and
amortization of $1,283,000, minority interest of $113,000, $185,000 of non-cash
expenses associated with our planned exit activity from the Omaha, Nebraska
market and our stock option compensation expense and increases in operating
assets and liabilities totaling $114,000).</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Net cash used in investing activities in fiscal
2008 was $2,787,000 compared to $2,057,000 in fiscal 2007.&nbsp; The fiscal 2008
activity reflects payments for the purchase of property and equipment of $3,282,000,
proceeds from a sale-leaseback transaction of $747,000, net payments received
on loans made to franchisees of $20,000 and $272,000 used to purchase two
restaurants from a franchisee.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>Net cash provided by financing activities in
fiscal 2008 was $1,117,000 compared to $146,000 in fiscal 2007.&nbsp; The fiscal 2008
activity includes principal payments on notes payable and long term debt of $120,000,
net borrowings on the revolving line-of-credit of $1,430,000, distributions to
minority interests in partnerships of $297,000 and proceeds from the exercise
of stock options of $104,000.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Contingencies and Off-Balance Sheet
Arrangements:</b>
We are contingently liable on several ground leases that have been subleased or
assigned to franchisees.&nbsp; We have never experienced any losses nor do we
anticipate any future losses from these contingent lease liabilities.</p>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'><b>Critical Accounting Policies and
Estimates</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Notes Receivable:</b> We evaluate
the collectability of our note receivables from franchisees annually.&nbsp;
Historically, such amounts have been fully repaid and we believe the collateral
and guarantees are adequate to provide for future payments; therefore no
allowances for amounts estimated to be uncollectable have been provided.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Impairment of Long-Lived Assets:</b> We review our
long-lived assets annually for potential impairment as well as their estimated
remaining life. Historically, we have not been required to impair our long-term
assets nor revise their estimated life, however, the restaurant industry is
extremely competitive and we continue to be responsive to changes in its
operating environment.&nbsp; Therefore such estimates are considered significant and
subject to change.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Income Taxes:</b> The deferred
tax assets are reviewed periodically for recoverability, and valuation
allowances are adjusted as necessary.&nbsp; We believe it is more likely than not
that the recorded deferred tax assets will be realized.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Variable Interest Entities</b>: In December
2003, the Financial Accounting Standards Board (the &quot;FASB&quot;) finalized
FASB Interpretation No. 46R, Consolidation of Variable Interest Entities--An
Interpretation of ARB 51 (FIN 46R).&nbsp; FIN 46R expands the scope of ARB 51 and can require consolidation of &quot;Variable Interest Entities (VIEs).&quot;&nbsp; Once an
entity is determined to be a VIE, the party with the controlling financial
interest, the primary beneficiary, is required to consolidate it.&nbsp; We have
several franchisees with notes payable to the Company and after analysis we
have determined that, while these franchisees are Variable Interest Entities as
defined by FIN 46R, we are not the primary beneficiary of the entities, and
therefore they are not required to be consolidated under FIN 46R.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>New Accounting Pronouncements:</b> In September 2006,
the Financial Accounting Standards Board (&quot;FASB&quot;) issued Statement of Financial
Accounting Standards No. 157 (&quot;SFAS 157&quot;).&nbsp; The Statement defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles (&quot;GAAP&quot;), and expands disclosures about fair value
measurements.&nbsp; This Statement is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years.&nbsp; The adoption of SFAS 157 is not expected to have a
material effect on the Company's financial position, results of operations or
cash flows.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>In February 2007, the FASB issued SFAS No. 159.&nbsp;
&quot;The Fair Value Option for Financial Assets and Financial Liabilities -
including an amendment of FASB Statement No. 115&quot; (&quot;SFAS 159&quot;). SFAS 159
provides companies with an option to report selected financial assets and
financial liabilities at fair value.&nbsp; Unrealized gains and losses on items for
which the fair value option has been elected are reported in earnings at each
subsequent reporting date.&nbsp; SFAS 159 is effective for fiscal years beginning
after November 15, 2007 which will be effective for our fiscal year beginning October 1, 2008.&nbsp; The adoption of this statement is not expected to have a material impact
on the Company's financial position or results of operations.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>In December 2007, the FASB issued FASB Statement
No. 141 (revised 2007), &quot;Business Combinations&quot; (&quot;FAS 141 (R)&quot;), which
establishes accounting principles and disclosure requirements for all
transactions in which a company obtains control over another business.&nbsp; This
accounting pronouncement is effective for fiscal years beginning after December 15, 2008, which will effective for our fiscal year beginning October 1, 2009.&nbsp; We are currently evaluating the requirements of FAS 141 and have not yet determined
the impact on our financial statements.</p>

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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>In December 2007, the FASB issued FASB Statement
No. 160, &quot;Noncontrolling Interests in Consolidated Financial Statements and
amendment to ARB No. 51&quot; (&quot;FAS 160&quot;).&nbsp; This standard prescribes the accounting
by a parent company for minority interests held by other parties in a
subsidiary of the parent company.&nbsp; FAS 160 is effective for fiscal years
beginning after December 15, 3008, which will be effective for our fiscal year
beginning October 1, 2009.&nbsp; We are currently evaluating the requirements of FAS
160 and have not yet determined the impact on our financial statements.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>In March 2008, the FASB issued SFAS No. 161,
&quot;Disclosures about Derivative instruments and Hedging Activities&quot; (&quot;SFAS
161&quot;).&nbsp; SFAS 161 amends and expands the disclosure requirements in SFAS 133,
&quot;Accounting for Derivative Instruments and Hedging Activities&quot;.&nbsp; SFAS 161 is
effective for fiscal years and interim periods beginning after November 15, 2008, which will be effective for our interim period beginning January 1, 2009.&nbsp; We are currently evaluating the requirements of FAS 161 and have not yet
determined the impact on our financial statements.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Pre-approval of non-audit services:</b> On October 16, 2008, the Audit Committee of the Board of Directors of Good Times Restaurants
Inc. approved in advance certain non-audit services to be performed by Hein
&amp; Associates, Good Times' independent auditor.&nbsp; These non-audit services
are to consist primarily of corporate income tax compliance services.</p>

<p class=MsoFooter align=center style='text-align:center'>22</p>



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<p class=MsoHeader>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>



<p class=MsoFooter align=center style='text-align:center'>F-1</p>



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<p class=MsoNormal style='margin-bottom:.5in;text-align:justify'><b>Item 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial
Statements</b></p>





<p class=MsoNormal align=center style='text-align:center'>INDEX TO
FINANCIAL STATEMENTS</p>







<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>PAGE</u></p>
  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Report
  of Independent Registered Public Accounting Firm</p>
  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>F-2</p>
  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Consolidated
  Balance Sheet - September 30, 2008</p>
  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>F-3</p>
  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Consolidated
  Statements of Operations - For the Years Ended September 30, 2008 and 2007</p>
  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>F-4</p>
  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Consolidated
  Statements of Stockholders' Equity - For the Period from October 1, 2006</p>
  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>through
  September 30, 2008</p>
  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>F-5</p>
  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Consolidated
  Statements of Cash Flows - For the Years Ended September 30, 2008 and 2007</p>
  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>F-6</p>
  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=583 valign=top style='width:437.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Notes
  to Consolidated Financial Statements</p>
  </td>
  <td width=89 valign=top style='width:66.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='text-align:right'>F-7</p>
  </td>
 </tr>
</table>



<p class=MsoFooter align=center style='text-align:center'><b><i>See
accompanying notes to these consolidated financial statements.</i></b></p>

<p class=MsoFooter align=center style='text-align:center'>F-2</p>

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</div>



<br
clear=all style='page-break-before:always'>










<p class=MsoNormal align=center style='margin-top:12.0pt;text-align:center'>REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</p>









<p class=MsoNormal style='text-align:justify'>To the Stockholders and</p>

<p class=MsoNormal style='text-align:justify'>Board of Directors</p>

<p class=MsoNormal style='text-align:justify'>Good Times Restaurants, Inc.</p>

<p class=MsoNormal style='text-align:justify'>Golden, Colorado</p>





<p class=MsoNormal style='text-align:justify'>We have audited the accompanying
consolidated balance sheet of Good Times Restaurants, Inc. and Subsidiary as of
 September&nbsp;30, 2008, and the related consolidated statements of
operations, stockholders' equity, comprehensive income and cash flows for the
years ended September&nbsp;30, 2008 and 2007.&nbsp; These consolidated financial
statements are the responsibility of the Company's management.&nbsp; Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.</p>



<p class=MsoNormal style='text-align:justify'>We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States).&nbsp; Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement.&nbsp; An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.&nbsp;
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.</p>



<p class=MsoNormal style='text-align:justify'>In our opinion, the consolidated
financial statements referred to above present fairly, in all material
respects, the financial position of Good Times Restaurants, Inc. and Subsidiary
as of September&nbsp;30, 2008, and the results of their operations and their
cash flows for the years ended September&nbsp;30, 2008 and 2007, in conformity
with U.S. Generally Accepted Accounting Principles.</p>



<p class=MsoNormal style='text-align:justify'>We were not engaged to examine
management's assertion about the effectiveness of Good Times Restaurants, Inc's
internal control over financial reporting as of September 30, 2008 included in the accompanying <i>Management's Annual Report on Internal Control Over
Financial Reporting </i>included in Item 8A, and, accordingly, we do not
express an opinion thereon.</p>





<p class=MsoNormal style='text-align:justify'><b><i>HEIN</i></b><i> &amp; ASSOCIATES LLP</i> </p>



<p class=MsoNormal style='text-align:justify'>Denver, Colorado</p>

<p class=MsoNormal style='text-align:justify'>December 15,
 2008</p>



<p class=MsoFooter align=center style='text-align:center'><b><i>See
accompanying notes to these consolidated financial statements.</i></b></p>

<p class=MsoFooter align=center style='text-align:center'>F-3</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>












<p class=MsoNormal align=center style='text-align:center'>GOOD TIMES
RESTAURANTS INC. AND SUBSIDIARY</p>

<p class=MsoNormal align=center style='text-align:center'>CONSOLIDATED
BALANCE SHEET</p>

<p class=MsoNormal align=center style='text-align:center'>SEPTEMBER 30, 2008</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=612
 style='border-collapse:collapse'>
 <tr>
  <td width=612 valign=top style='width:459.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=center style='text-align:center'><u>ASSETS</u></p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=612
 style='border-collapse:collapse'>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Current Assets:</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Cash and cash equivalents</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>$1,414,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Receivables, net of allowance for
  doubtful accounts of $0</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>160,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Inventories</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>240,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Prepaid expenses and other</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>79,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Notes receivable</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'><u>35,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:51.45pt'>Total
  current assets</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  6.0pt;margin-left:7.5pt'>1,928,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Property and Equipment:</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Land and buildings</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>6,566,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Leasehold improvements</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>4,017,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Fixtures and equipment</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'><u>8,303,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>18,886,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Less accumulated depreciation</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:3.0pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'><u>(10,602,000</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>8,284,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Assets held for sale</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>1,574,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Other Assets:</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Notes receivable</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'>83,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Other</p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  0in;margin-left:7.5pt;margin-bottom:.0001pt'><u>51,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  6.0pt;margin-left:7.5pt'><u>134,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:6.0pt'>Total Assets </p>
  </td>
  <td width=192 valign=top style='width:143.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  6.0pt;margin-left:7.5pt'><u>$11,920,000</u></p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=612
 style='border-collapse:collapse'>
 <tr>
  <td width=612 colspan=3 valign=top style='width:459.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal><u>LIABILITIES
  AND STOCKHOLDERS' EQUITY</u></p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Current Liabilities:</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Current maturities of long-term debt
  and leases</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'>$2,304,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Accounts payable</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'>628,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Deferred income</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'>139,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Other accrued liabilities</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'><u>&nbsp;&nbsp; 939,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:51.45pt'>Total
  current liabilities</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  6.0pt;margin-left:0in'>4,010,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Long-Term Liabilities:</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Debt and leases, net of current
  portion </p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'>846,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Deferred and other liabilities</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'><u>1,071,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:51.45pt'>Total
  long-term liabilities</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  6.0pt;margin-left:0in'>1,917,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'>Minority
  Interests in Partnerships</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  3.0pt;margin-left:0in'>584,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'>Commitments and Contingencies   (Notes
  4 and 6)</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'><br
  clear=all style='page-break-before:always'>

  <p class=MsoNormal>Stockholders' Equity:</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=top style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:25.5pt;text-indent:-9.3pt'>Preferred
  stock, $.01 par value, 5,000,000&nbsp;shares authorized, none issued and
  outstanding</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=bottom style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'>-</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:25.5pt;text-indent:-9.3pt'>Common stock,
  $.01 par value; 50,000,000 shares authorized, 3,866,896 issued and
  outstanding</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=bottom style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'>4,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Accumulated other comprehensive loss</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=bottom style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'>(68,000)</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Capital contributed in excess of par
  value</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=bottom style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'>17,633,000</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Accumulated deficit</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=bottom style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:3.0pt'><u>(12,160,000</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:51.45pt'>Total
  stockholders' equity</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=bottom style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:7.5pt;margin-bottom:
  6.0pt;margin-left:0in'><u>&nbsp;&nbsp;
  5,409,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=420 valign=top style='width:315.2pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Total Liabilities and Stockholders' Equity</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=180 valign=bottom style='width:134.8pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-right:7.5pt'><u>$11,920,000</u></p>
  </td>
 </tr>
</table>



<p class=MsoFooter align=center style='text-align:center'><b><i>See
accompanying notes to these consolidated financial statements.</i></b></p>

<p class=MsoFooter align=center style='text-align:center'>F-4</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoFooter align=center style='text-align:center'>F-5</p>

<p class=MsoFooter align=center style='text-align:center'><i>See
accompanying notes to these consolidated financial statements.</i></p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>










<p class=MsoNormal align=center style='text-align:center'>GOOD TIMES
RESTAURANTS INC. AND SUBSIDIARY</p>

<p class=MsoNormal align=center style='text-align:center'>CONSOLIDATED
STATEMENTS OF OPERATIONS</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=599
 style='margin-left:51.45pt;border-collapse:collapse'>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=317 valign=top style='width:238.05pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=center style='text-align:center'>For the Years Ended</p>
  <p class=MsoNormal align=center style='text-align:center'>September 30,</p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=599
 style='margin-left:51.45pt;border-collapse:collapse'>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=top style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:38.55pt;margin-bottom:.0001pt;text-align:center'>2008</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=top style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:38.55pt;margin-bottom:.0001pt;text-align:center'>2007</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Net Revenues:</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=18 style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Restaurant sales</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>$25,244,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>$24,215,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Area development and franchise fees</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:34.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>70,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Franchise royalties </p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'><u>638,000</u></p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'><u>670,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:33.8pt'>Total
  net revenues</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:6.0pt;margin-left:16.05pt;text-align:right'>25,882,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:6.0pt;margin-left:12.0pt;text-align:right'>24,955,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Restaurant Operating Costs:</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Food and packaging costs</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>8,002,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>7,589,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Payroll and other employee benefit
  costs</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>8,780,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>8,063,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Restaurant occupancy costs</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>3,714,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>3,310,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Accretion of deferred rent</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>33,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>32,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Other restaurant operating costs</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>1,134,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>1,051,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>New store pre-opening costs</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>38,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>118,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Depreciation and amortization</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'><u>1,283,000</u></p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'><u>1,223,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:33.8pt'>Total
  restaurant operating costs</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:6.0pt;margin-left:16.05pt;text-align:right'><u>22,984,000</u></p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:6.0pt;margin-left:12.0pt;text-align:right'><u>21,386,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>General and administrative costs</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>2,042,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>1,798,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Advertising costs</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>1,525,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>1,427,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Franchise costs</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>312,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>161,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:25.5pt;text-indent:-9.3pt'>Gain on disposal of restaurants and
  equipment</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:6.0pt;margin-left:16.05pt;text-align:right'><u>(35,000</u>)</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:6.0pt'><u>&nbsp;</u></p>
  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:6.0pt;margin-left:12.0pt;text-align:right'><u>(17,000</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'>Income
  (Loss) From Operations</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:3.0pt;margin-left:16.05pt;text-align:right'>(946,000)</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'>200,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Other Income (Expenses):</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Interest income</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>67,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>99,000</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Interest expense</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>(80,000)</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(59,000)</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Minority interest in income of
  partnerships</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>(113,000)</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(211,000)</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
  margin-left:33.8pt'>Total
  other expenses, net</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:16.05pt;text-align:right'><u>(126,000</u>)</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'><u>(171,000</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
  margin-left:16.2pt;text-indent:-16.2pt'>Net Income &nbsp;(Loss) before Income Taxes</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:16.05pt;text-align:right'><u>(1,072,000)</u></p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'><u>29,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Income Tax Expense</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:3.0pt;margin-left:16.05pt;text-align:right'>4,000</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:25.5pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'>-</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'>Net Income &nbsp;(Loss)</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:16.05pt;text-align:right'><u>($1,076,000)</u></p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'><u>$29,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'>Basic and Diluted Income   (Loss) per Share</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:3.0pt;margin-left:16.05pt;text-align:right'>($0.28)</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'>$0.01</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-16.2pt'>Weighted Average Common Shares Outstanding:</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:.45in;text-indent:-16.2pt'>Basic</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>3,886,730</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>3,838,867</p>
  </td>
 </tr>
 <tr>
  <td width=276 valign=top style='width:207.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:.45in;text-indent:-16.2pt'>Diluted</p>
  </td>
  <td width=6 style='width:4.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=155 valign=bottom style='width:116.55pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:16.05pt;margin-bottom:.0001pt;text-align:right'>3,886,730</p>
  </td>
  <td width=18 valign=bottom style='width:13.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:16.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>3,975,957</p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>F-6</p>

<p class=MsoFooter align=center style='text-align:center'><i>See
accompanying notes to these consolidated financial statements.</i></p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal align=center style='text-align:center'>GOOD TIMES
RESTAURANTS INC. AND SUBSIDIARY</p>

<p class=MsoNormal align=center style='text-align:center'>CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY</p>

<p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>FOR THE PERIOD
FROM OCTOBER 1, 2006 THROUGH SEPTEMBER 30, 2008</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=930
 style='margin-left:-26.5pt;border-collapse:collapse'>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=144 valign=bottom style='width:1.5in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='text-align:center'>Preferred
  Stock</p>
  </td>
  <td width=138 valign=bottom style='width:103.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='text-align:center'>Common Stock</p>
  </td>
  <td width=146 valign=bottom style='width:109.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=80 valign=top style='width:60.0pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=88 valign=bottom style='width:66.0pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=142 valign=bottom style='width:106.5pt;padding:0in .5pt 0in .5pt'>

  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=930
 style='margin-left:-26.5pt;border-collapse:collapse'>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='text-align:center'>Issued</p>
  <p class=MsoNormal align=center style='text-align:center'>Shares</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='text-align:center'>Par</p>
  <p class=MsoNormal align=center style='text-align:center'>Value</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='text-align:center'>Issued</p>
  <p class=MsoNormal align=center style='text-align:center'>Shares</p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='margin-right:3.0pt;text-align:center'>Par</p>
  <p class=MsoNormal align=center style='margin-right:3.0pt;text-align:center'>Value</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='text-align:center'>Capital
  Contributed in Excess of Par Value</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='text-align:center'>Accumulated
  Deficit</p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='margin-right:4.0pt;text-align:center'>Accumulated
  Other Comprehensive Loss</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='text-align:center'>Comprehensive
  Income</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='text-align:center'>Total</p>
  </td>
 </tr>
 <tr style='height:15.65pt'>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:15.65pt'>

  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:13.0pt;text-indent:-13.0pt'>Balances,
  October 1, 2006</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:3.5pt;margin-bottom:.0001pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.0pt;
  margin-bottom:0in;margin-left:13.0pt;margin-bottom:.0001pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'>3,811,151</p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=center style='margin-right:3.0pt;text-align:center'>$&nbsp; 4,000</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'>$17,191,000</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-left:5.5pt;text-align:right'>$(11,113,000)</p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'>$0</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'>$0</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>$6,082,000</p>
  </td>
 </tr>
 <tr style='height:1.0pt'>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt;
  height:1.0pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt;
  height:1.0pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:8.5pt;margin-bottom:
  0in;margin-left:3.5pt;margin-bottom:.0001pt'><u>&nbsp;</u></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt;
  height:1.0pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.0pt;
  margin-bottom:0in;margin-left:13.0pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt;
  height:1.0pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt;
  height:1.0pt'>
  <p class=MsoNormal align=right style='margin-right:3.0pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:1.0pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:1.0pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:5.5pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt;
  height:1.0pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:1.0pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:1.0pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-9.0pt'>Stock option
  compensation cost</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'>-</p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'>84,000</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>84,000</p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-9.0pt'>Stock issued
  for exercised stock options</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'>55,745</p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'>164,000</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>164,000</p>
  </td>
 </tr>
 <tr>
  <td width=192 style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-left:22.5pt;text-align:right;
  text-indent:-9.0pt'>Comprehensive
  income (Loss)</p>
  </td>
  <td width=72 style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=96 style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>--</p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-9.0pt'><a
  name="_Hlk184521674">&nbsp;&nbsp;&nbsp; Net
  Income</a></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:5.5pt;margin-bottom:.0001pt;text-align:right'>29,000</p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'>29,000</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>29,000</p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=192 style='width:2.0in;padding:0in .5pt 0in .5pt;height:15.75pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-9.0pt'>&nbsp;&nbsp;&nbsp; Deferred
  hedging losses</p>
  </td>
  <td width=72 style='width:.75in;padding:0in .5pt 0in .5pt;height:15.75pt'>

  </td>
  <td width=72 style='width:.75in;padding:0in .5pt 0in .5pt;height:15.75pt'>

  </td>
  <td width=72 style='width:.75in;padding:0in .5pt 0in .5pt;height:15.75pt'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in .5pt 0in .5pt;height:15.75pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt;height:15.75pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt;height:15.75pt'>

  </td>
  <td width=96 style='width:1.0in;padding:0in .5pt 0in .5pt;height:15.75pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'>(26,000)</p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt;height:15.75pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt;height:15.75pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>(26,000)</p>
  </td>
 </tr>
 <tr>
  <td width=192 style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Comprehensive
  loss</p>
  </td>
  <td width=72 style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:3.5pt;margin-bottom:.0001pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=72 style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-right:8.0pt'><u>&nbsp;</u><u>_______</u></p>
  </td>
  <td width=72 style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:7.5pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:3.0pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:13.0pt;
  margin-bottom:0in;margin-left:5.5pt;margin-bottom:.0001pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=96 style='width:1.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'><u>(26,000)</u></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'><u>_________</u></p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:13.0pt;text-indent:-13.0pt'>Balances,
  September&nbsp;30, 2007</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:8.5pt;margin-bottom:
  0in;margin-left:3.5pt;margin-bottom:.0001pt'><u>&nbsp;</u></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.0pt;
  margin-bottom:0in;margin-left:13.0pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0</u></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'><u>3,866,896</u></p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:3.0pt;text-align:right'><u>$&nbsp;&nbsp; 4,000</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'><u>$17,439,000</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:5.5pt;margin-bottom:.0001pt;text-align:right'><u>$(11,084,000</u>)</p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'><u>$(26,000)</u></p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'><u>3,000</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'><u>$6,333,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-9.0pt'>Stock option
  compensation cost</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'>90,000</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>90,000</p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-9.0pt'>Stock issued
  for exercised stock options</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'>31,663</p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'>104,000</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>104,000</p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-9.0pt'>Comprehensive
  income (Loss)</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>--</p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-9.0pt'>&nbsp;&nbsp;&nbsp; Net
  Income (Loss)</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:5.5pt;margin-bottom:.0001pt;text-align:right'>(1,076,000)</p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'>(1,076,000)</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>(1,076,000)</p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-9.0pt'>&nbsp;&nbsp;&nbsp; Deferred
  hedging losses</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'>(42,000)</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'>(42,000)</p>
  </td>
 </tr>
 <tr>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Comprehensive
  loss</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:3.5pt;margin-bottom:.0001pt;text-align:right'><u>________</u></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.0pt;
  margin-bottom:0in;margin-left:13.0pt;margin-bottom:.0001pt;text-align:right'><u>_______</u></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:7.5pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:3.0pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:5.5pt;margin-bottom:.0001pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'><u>_________</u></p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'><u>(42,000)</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'><u>_________</u></p>
  </td>
 </tr>
 <tr style='height:5.4pt'>
  <td width=192 valign=top style='width:2.0in;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal style='margin-left:13.0pt;text-indent:-13.0pt'>Balances,
  September&nbsp;30, 2008</p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:3.5pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0</u></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.0pt;
  margin-bottom:0in;margin-left:13.0pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0</u></p>
  </td>
  <td width=72 valign=bottom style='width:.75in;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'><u>3,898,559</u></p>
  </td>
  <td width=66 valign=bottom style='width:49.5pt;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal align=right style='margin-right:3.0pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp; 4,000</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal align=right style='margin-right:8.5pt;text-align:right'><u>$17,633,000</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:4.0pt;
  margin-bottom:0in;margin-left:5.5pt;margin-bottom:.0001pt;text-align:right'><u>$(12,160,000</u>)</p>
  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:8.5pt;margin-bottom:.0001pt;text-align:right'><u>$(68,000)</u></p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal align=right style='margin-right:4.0pt;text-align:right'><u>$(1,115,000)</u></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in .5pt 0in .5pt;
  height:5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.5pt;
  margin-bottom:0in;margin-left:4.0pt;margin-bottom:.0001pt;text-align:right'><u>$5,409,000</u></p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>F-7</p>

<p class=MsoFooter align=center style='text-align:center'><i>See
accompanying notes to these consolidated financial statements.</i></p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<br
clear=all style='page-break-before:always'>












<p class=MsoNormal align=center style='text-align:center'>GOOD TIMES
RESTAURANTS INC. AND SUBSIDIARY</p>

<p class=MsoNormal align=center style='margin-bottom:12.0pt;text-align:center'>CONSOLIDATED
STATEMENTS OF CASH FLOWS</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=690
 style='margin-left:10.5pt;border-collapse:collapse'>

  <tr style='height:24.75pt'>
   <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt;
   height:24.75pt'>

   </td>
   <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt;
   height:24.75pt'>

   </td>
   <td width=234 valign=top style='width:175.5pt;padding:0in 1.5pt 0in 1.5pt;
   height:24.75pt'>
   <p class=MsoNormal align=center style='text-align:center'>For the Years Ended</p>
   <p class=MsoNormal align=center style='text-align:center'>September 30,</p>
   </td>
  </tr>

</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=690
 style='margin-left:10.5pt;border-collapse:collapse'>

  <tr>
   <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>

   </td>
   <td width=12 valign=top style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

   </td>
   <td width=108 valign=top style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
   <p class=MsoNormal align=center style='margin-top:0in;margin-right:7.5pt;
   margin-bottom:0in;margin-left:16.5pt;margin-bottom:.0001pt;text-align:center'><u>2008</u></p>
   </td>
   <td width=24 valign=top style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

   </td>
   <td width=102 valign=top style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
   <p class=MsoNormal align=center style='margin-top:0in;margin-right:7.5pt;
   margin-bottom:0in;margin-left:16.5pt;margin-bottom:.0001pt;text-align:center'><u>2007</u></p>
   </td>
  </tr>

 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Cash Flows from Operating
  Activities:</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=24 valign=top style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:7.5pt'>Net income (Loss)</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>$(1,076,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>$29,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:25.5pt;text-indent:-9.3pt'>Adjustments
  to reconcile net income (loss) to net cash provided by
  operating&nbsp;activities:</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:25.5pt'>Depreciation and amortization</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>1,283,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>1,223,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:25.5pt'>Accretion of deferred rent</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>33,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>32,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:25.5pt'>Minority interest expense</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>113,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>211,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:34.5pt;text-indent:-9.0pt'>Gain on disposal
  of property, restaurants and equipment</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(35,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>(17,000)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:34.5pt;text-indent:-9.0pt'>Stock option
  compensation cost</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>90,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>84,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:34.5pt;text-indent:-9.0pt'>Expenses
  associated with exit activity</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>95,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:34.5pt;text-indent:-9.0pt'>Changes in
  operating assets and liabilities:</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:34.5pt;text-indent:-9.0pt'>(Increase)
  decrease in:</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:39.0pt'>Receivables</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>42,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>(97,000)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:39.0pt'>Inventories</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>&nbsp;(35,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>13,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:39.0pt'>Prepaid expenses and other</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(40,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>4,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:39.0pt'>Deposits and other assets</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(3,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>(18,000)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:34.5pt;text-indent:-9.0pt'>(Decrease)
  increase in:</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:39.0pt'>Accounts payable</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>232,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>120,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:39.0pt'>Accrued and other liabilities</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(90,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>229,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:39.0pt'>Deferred franchise fees</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp; 10,000</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp; (50,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
  margin-left:44.2pt;text-indent:-10.4pt'>Net cash provided by operating
  activities</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'><u>619,000</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'><u>&nbsp;</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:7.5pt;text-align:right'><u>1,763,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>Cash Flows From Investing
  Activities:</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-8.7pt'>Payments for
  the purchase of property and equipment </p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(3,282,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>(3,738,000)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-13.5pt'>&nbsp;Proceeds
  from the sale of assets</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-13.5pt'>&nbsp;Proceeds
  from sale-leaseback transaction</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>747,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>1,580,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-13.5pt'>&nbsp;Purchase of
  franchisee</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(272,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
 </tr>
 <tr style='height:10.35pt'>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt;
  height:10.35pt'>
  <p class=MsoNormal style='margin-left:16.6pt;text-indent:-13.7pt'>&nbsp;Loans made
  to franchisees and to others</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt;height:10.35pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt;
  height:10.35pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(54,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt;
  height:10.35pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt;
  height:10.35pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:7.5pt;text-indent:-4.8pt'>&nbsp;Payments
  received on loans to franchisees and to others</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;&nbsp;&nbsp; 74,000</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp; 101,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
  margin-left:46.4pt;text-indent:-10.4pt'>Net cash used in investing
  activities</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'><u>(2,787,000</u>)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:7.5pt;text-align:right'><u>(2,057,000</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal>&nbsp;Cash Flows From Financing Activities:</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-8.7pt'>Principal
  payments on notes payable, capital leases, and long&#8209;term debt</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(870,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>(809,000)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-8.7pt'>Borrowings on
  notes payable and long-term debt</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>2,180,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>1,100,000</p>
  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt;
  height:.1in'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-8.7pt'>Proceeds
  (expenses) from preferred stock offering</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt;height:.1in'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt;
  height:.1in'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-8.7pt'>Proceeds from
  exercise of stock options</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>104,000</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>164,000</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-8.7pt'>Preferred
  dividends paid</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-8.7pt'>Distributions
  paid to minority interests in partnerships</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'>(297,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'>(319,000)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-8.7pt'>Contributions
  from minority interests in partnerships</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'><u>10,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
  margin-left:46.4pt;text-indent:-10.4pt'>Net cash provided by financing
  activities</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'><u>1,117,000</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'><u>&nbsp;</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:7.5pt;text-align:right'><u>146,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
  margin-left:16.2pt;text-indent:-16.2pt'>Net Change in Cash and Cash Equivalents</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:3.0pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'>(1,051,000)</p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:7.5pt;text-align:right'>(148,000)</p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:3.0pt;
  margin-left:16.2pt;text-indent:-16.2pt'>Cash and Cash Equivalents, beginning of year</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'><u>&nbsp;2,465,000</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'><u>&nbsp;</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:7.5pt;text-align:right'><u>2,613,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'>Cash and Cash Equivalents, end of year</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:3.0pt;margin-left:12.0pt;text-align:right'><u>$1,414,000</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-bottom:3.0pt'><u>&nbsp;</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:3.0pt;margin-left:7.5pt;text-align:right'><u>$2,465,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt;text-indent:-16.2pt'>Supplemental Disclosures of Cash Flow Information:</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'><a name="_Hlk216664756">Cash paid for
  interest</a></p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp; 111,000</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp; 106,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Purchase of equipment with debt</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp;&nbsp; 27,000</u></p>
  </td>
 </tr>
 <tr style='height:11.25pt'>
  <td width=444 valign=top style='width:333.0pt;padding:0in 1.5pt 0in 1.5pt;
  height:11.25pt'>
  <p class=MsoNormal style='margin-left:16.2pt'>Non-cash deferred hedging losses</p>
  </td>
  <td width=12 style='width:9.0pt;padding:0in 1.5pt 0in 1.5pt;height:11.25pt'>

  </td>
  <td width=108 valign=bottom style='width:81.0pt;padding:0in 1.5pt 0in 1.5pt;
  height:11.25pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:7.5pt;
  margin-bottom:0in;margin-left:12.0pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp;&nbsp; 42,000</u></p>
  </td>
  <td width=24 valign=bottom style='width:.25in;padding:0in 1.5pt 0in 1.5pt;
  height:11.25pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 1.5pt 0in 1.5pt;
  height:11.25pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:12.0pt;
  margin-bottom:0in;margin-left:7.5pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp;&nbsp; 26,000</u></p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>F-8</p>

<p class=MsoFooter align=center style='text-align:center'>See
accompanying notes to these consolidated financial statements<i>.</i></p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>





<u><br clear=all style='page-break-before:
always'>
</u>











<p class=Level1 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-indent:-.4in'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Organization and Summary of Significant Accounting
Policies</u>:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify'><u>Organization</u> - Good Times
Restaurants Inc. (Good Times or the Company) is a Nevada corporation. The
Company operates through its wholly owned subsidiary Good Times Drive Thru Inc.
(Drive Thru).</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify'>Drive Thru commenced operations in 1986 and, as of
 September&nbsp;30, 2008, operates twenty-nine&nbsp;company-owned and joint
venture drive-thru fast food hamburger restaurants.&nbsp; The Company's restaurants
are located in Colorado. In addition, Drive Thru has twenty-two franchises, eighteen
operating in Colorado, two in Wyoming, one in Idaho and one in North Dakota,
and is offering franchises for development of additional Drive Thru
restaurants.&nbsp; </p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify'><u>Principles of Consolidation</u> - The
consolidated financial statements include the accounts of Good Times, its
subsidiary and two limited partnerships, in which the Company exercises control
as general partner.&nbsp; The Company owns an approximate 51% interest in both
partnerships, is the sole general partner and receives a management fee prior
to any distributions to the limited partners.&nbsp; Because the Company owns an
approximate 51% interest in the partnerships and exercises complete management
control over all decisions for the partnerships, except for certain veto
rights, the financial statements of the partnerships are consolidated into the
Company's financial statements.&nbsp; The equity interests of the unrelated limited
partners are shown on the accompanying consolidated balance sheet as minority
interest, and the limited partners' shares of net income in the partnerships is
shown as minority interest expense in the accompanying consolidated statement
of operations. All inter-company accounts and transactions are eliminated.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify'><u>Accounting Estimates</u> - The
preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles requires management to make estimates and
assumptions that affect the amounts reported in these consolidated financial
statements and the accompanying notes.&nbsp; Actual results could differ from those
estimates.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify'><u>Reclassification</u> - Certain prior
year balances have been reclassified to conform to the current year's
presentation.&nbsp; Such reclassifications had no effect on the net income or loss.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify'><u>Cash and Cash Equivalents</u> - The Company
considers all highly liquid debt instruments purchased with an initial maturity
of three months or less to be cash equivalents.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify'><u>Accounts Receivable</u> - Accounts
receivable include uncollateralized receivables from our franchisees and our
advertising fund, due in the normal course of business, generally requiring
payment within thirty days of the invoice date. On a periodic basis the Company
monitors all accounts for delinquency and provides for estimated losses of
uncollectible accounts. Currently and historically there have been no
allowances for unrecoverable accounts receivable.<u> </u></p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify'><u>Inventories</u> - Inventories
are stated at the lower of cost or market, determined by the first-in,
first-out method, and consist of restaurant food items and related packaging
supplies.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify'><u>Property and Equipment</u> -
Depreciation is recognized using the straight-line method over the estimated
useful lives of the assets or the lives of the related leases, if shorter, as
follows:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:135.9pt;border-collapse:collapse'>
 <tr>
  <td width=204 valign=top style='width:153.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Buildings</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>15 years</p>
  </td>
 </tr>
 <tr>
  <td width=204 valign=top style='width:153.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Leasehold improvements</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>7-15 years</p>
  </td>
 </tr>
 <tr>
  <td width=204 valign=top style='width:153.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Fixtures and equipment</p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>3-8 years</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'>Maintenance and repairs are charged to
expense as incurred, and expenditures for major improvements are capitalized.&nbsp;
When assets are retired, or otherwise disposed of, the property accounts are
relieved of costs and accumulated depreciation with any resulting gain or loss
credited or charged to income.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'>Assets held for sale of $1,574,000
shown in the accompanying consolidated balance sheet is related to a site in Firestone,
  Colorado which has been developed and is being marketed in the sale
lease-back market.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>Impairment of Long-Lived Assets</u> - The Company
reviews undiscounted cash flows of each restaurant as compared to the net book
value of each restaurant's respective properties.&nbsp; If the undiscounted cash
flows of each restaurant are less than their respective net book values, the
respective properties are written down to their fair market values. To date we
have not written down any assets due to impairment.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>Sales of Restaurants and Restaurant
Equity Interests</u>
- - Sales of restaurants or non-controlling equity interests in restaurants
developed by the Company are recorded under either the full accrual method or
the installment method of accounting.&nbsp; Under the full accrual method, a gain is
not recognized until the collectibility of the sales price is reasonably
assured and the earnings process is virtually complete without further
contingencies.&nbsp; When a sale does not meet the requirements for income
recognition, the related gain is deferred until those requirements are met.&nbsp;
Under the installment method, the gain is incrementally recognized as principal
payments on the related notes receivable are collected.&nbsp; The Company's
accounting policy, with regards to the sale of restaurants, is in accordance
with SFAS No. 66.&nbsp; If the initial payment is less than the percentages set
forth, use of the installment method is required.&nbsp; </p>

<p class=MsoFooter align=center style='text-align:center'>F-9</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'>The Company's accounting for the sale
of restaurants is in accordance with SAB Topic 5-E because the risks and other
incidents of ownership have been transferred to the buyer.&nbsp; Specifically, a) no
continuing involvement by the Company exists in restaurants that are sold, b)
sales contracts and related income recognition are not dependant on the future successful
operations of the sold restaurants, and c) the Company is not involved as a
guarantor on the purchasers' debts.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>Deferred Liabilities</u> - Rent
expense is reflected on a straight-line basis over the term of the lease for
all leases containing step-ups in base rent.&nbsp; An obligation representing future
payments (which totaled $551,000 as of September&nbsp;30, 2008) is reflected in the accompanying consolidated balance sheet as a deferred liability.&nbsp; Also
included in the $1,071,000 deferred and other liability balance is a $452,000
deferred gain on the sale of the building and improvements of two Company-owned
restaurants in two separate sale leaseback transactions.&nbsp; The building and
improvements were subsequently leased back from the third party purchasers. The
gains will be recognized in future periods in proportion to the rents paid on
the fifteen and twenty year leases.&nbsp; The remaining balance represents a
deferred hedging loss liability of $68,000.&nbsp; </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>Opening Costs</u> - Opening
costs are expensed as incurred.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>Advertising</u> - The Company
incurs advertising expenses in connection with the marketing of its restaurant
operations.&nbsp; Advertising costs are expensed when the related advertising
begins.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>Franchise and Area Development Fees</u> - Individual
franchise fee revenue is deferred when received and is recognized as income
when the Company has substantially performed all of its obligations under the
franchise agreement and the franchisee has commenced operations.&nbsp; The Company's
commitments and obligations pursuant to the franchise agreements consist of a)
development assistance; including site selection, building specifications and
equipment purchasing and b) operating assistance; including training of
personnel and preparation and distribution of manuals and operating materials.&nbsp;
All of these obligations are effectively complete upon the opening of the
restaurant at which time the franchise fee and the portion of any development
fee allocable to that restaurant is recognized.&nbsp; There are no additional
material commitments or obligations.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'>The Company has not recognized any
franchise fees that have not been collected.&nbsp; The Company segregates initial
franchise fees from other franchise revenue in the statement of operations.&nbsp;
Revenues and costs related to company-owned restaurants are segregated from
revenues and costs related to franchised restaurants in the statement of
operations.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'>Continuing royalties from franchisees,
which are a percentage of the gross sales of franchised operations, are
recognized as income when earned.&nbsp; Franchise development expenses, which
consist primarily of legal costs and restaurant opening expenses associated
with developing and opening franchise restaurants, are expensed against the
related franchise fee income.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>Accounting for Notes Receivable</u> - The Company's
notes receivables are all due from Good Times franchisees, or franchise
advertising cooperatives. All of the notes receivable are collateralized by
real estate or equipment and certain of the notes are personally guaranteed by
the franchisees. The notes are all term notes with interest accruing at market
rates. The Company reviews the notes from time to time to access
collectability. The Company has determined that all notes receivable at September 30, 2008 are collectable and allowances for write-downs are not necessary.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'><u>Operating Partner Program</u> - Operating
Partners in a restaurant share in future increases of their restaurant's cash
flows above an established baseline, which is based on the preceding twelve
months' cash flow after full allocation of advertising and capital expenses.&nbsp;
This program is designed to figuratively put Operating Partners in the shoes of
an owner so that a portion of their compensation is derived solely from the
improvement in the financial performance of their respective restaurants.&nbsp; The
portion of cash flow increases allocable to the Operating Partners are expensed
as incurred on a quarterly basis, with a cumulative adjustment made for any
months where cash flows fall below the established baselines. Compensation
under this program is expensed to restaurant operations as incurred.&nbsp; No other
long term benefits accrue or vest to the Operating Partners in this program.&nbsp;
Operating Partners are employees at will and are subject to termination from
this program if certain operating, customer service and financial objectives
are not met.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'><u>Income Taxes</u> - Income
taxes are recorded in accordance with asset and liability approaches whereby&nbsp;
the recognition of deferred tax liabilities and assets are recorded for the
expected future tax consequences of temporary differences between the carrying
amounts and the tax bases of the Company's assets and liabilities. Valuation
allowances are provided for deferred tax assets if their recovery is more not
likely than not.</p>

<p class=MsoFooter align=center style='text-align:center'>F-10</p>

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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'><u>Net Income (Loss) Per Common Share</u> - The income
(loss) per share is presented in accordance with the provisions of SFAS
No.&nbsp;128, &quot;Earnings Per Share.&quot;&nbsp; Basic EPS is calculated by dividing the
income (loss) available to common stockholders by the weighted average number
of common shares outstanding for the period.&nbsp; Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock. Options for 81,364
shares of common stock were not included in computing diluted EPS for 2008
because their effects were anti-dilutive. Options for 137,090 shares of common
stock were included in computing diluted EPS for 2007 because they were
dilutive. </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'><u>Financial Instruments and
Concentrations of Credit Risk</u> - Credit risk represents the
accounting loss that would be recognized at the reporting date if
counterparties failed completely to perform as contracted.&nbsp; Concentrations of
credit risk (whether on or off balance sheet) that arise from financial
instruments exist for groups of customers or counterparties when they have
similar economic characteristics that would cause their ability to meet
contractual obligations to be similarly effected by changes in economic or
other conditions.&nbsp; Financial instruments with off-balance-sheet risk to the
Company include lease liabilities whereby the Company is contingently liable as
a guarantor of certain leases that were assigned to third parties in connection
with various sales of restaurants to franchisees (see Note&nbsp;5).&nbsp; </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'>Financial instruments potentially
subjecting the Company to concentrations of credit risk consist principally of
receivables.&nbsp; At September 30, 2008, notes receivable totaled $118,000 and are
due from six entities.&nbsp; Additionally, the Company has other current receivables
totaling $160,000, which includes $91,000 of franchise receivables.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'>The Company purchases 100% of its
restaurant food and paper from one vendor. The Company believes a sufficient
number of other suppliers exist from which food and paper could be purchased to
prevent any long-term, adverse consequences.&nbsp; </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'>The Company operates in one industry
segment, restaurants.&nbsp; A geographic concentration exists because the Company's
customers are generally located in the State of Colorado. </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'>The estimated fair values of financial
instruments are determined at discrete points in time based on relevant market
information.&nbsp; These estimates involve uncertainties and cannot be determined
with precision.&nbsp; The carrying amounts of all financial instruments approximate
fair value as a result of either the instrument's short-term maturities or
interest rates that approximate the Company's current expected borrowing and
lending rates. </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>Comprehensive Income (Loss</u>) -
Comprehensive income includes net income or loss, changes in certain assets and
liabilities that are reported directly in equity such as adjustments resulting
from unrealized gains or losses on held-to-maturity investments and certain
hedging transactions. See Note 10 for additional information. </p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>Stock-Based Compensation</u> - Effective October 1, 2006, the Company adopted the provisions of Statement of Financial Accounting
Standard (&quot;SFAS&quot;) No. 123(R), Share-Based Payment, using the modified
prospective application transition method. Under the provisions of SFAS 123(R),
stock-based compensation is measured at the grant date, based on the calculated
fair value of the award, and is recognized as an expense over the requisite
employee service period (generally the vesting period of the grant). See Note
10 for additional information.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'><u>Variable Interest Entities</u> - In December
2003, the FASB finalized FASB Interpretation No. 46R, &quot;Consolidation of
Variable Interest Entities - An Interpretation of ARB51&quot; (FIN 46R). FIN 46R
expands the scope of ARB51 and can require consolidation of &quot;variable interest
entities&quot; (VIEs).&nbsp; Once an entity is determined to be a VIE, the party with the
controlling financial interest, the primary beneficiary, is required to
consolidate it.&nbsp; The Company has several franchisees with notes payable to the
Company.&nbsp; These franchisees are variable interest entities as defined by FIN
46R, however, the Company is not the primary beneficiary of these entities.&nbsp;
Therefore they are not required to be consolidated under FIN 46R.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'><u>New Accounting Pronouncements</u> <a
name="OLE_LINK2">-</a> In September&nbsp;2006, the Financial Accounting
Standards Board (&quot;FASB&quot;) issued Statement of Financial Accounting Standards
No.&nbsp;157 (&quot;SFAS 157&quot;). The Statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(&quot;GAAP&quot;), and expands disclosures about fair value measurements.&nbsp; This
Statement is effective for financial statements issued for fiscal years
beginning after November&nbsp;15, 2007, and interim periods within those fiscal
years. The adoption of SFAS 157 is not expected to have a material effect on
the Company's financial position, results of operations or cash flows.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'>In February 2007, the FASB issued SFAS
No. 159, &quot;The Fair Value Option for Financial Assets and Financial Liabilities
- - including an amendment of FASB Statement No. 115&quot; (&quot;SFAS 159&quot;). SFAS 159
provides companies with an option to report selected financial assets and
financial liabilities at fair value. Unrealized gains and losses on items for
which the fair value option has been elected are reported in earnings at each
subsequent reporting date. SFAS 159 is effective for fiscal years beginning
after November&nbsp;15, 2007 which will be effective for our fiscal year
beginning October 1, 2008. The adoption of this statement is not expected to
have a material impact on the Company's financial position or results of
operations.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'>In December 2007, the FASB issued FASB
Statement No. 141 (revised 2007), &quot;Business Combinations&quot; (&quot;FAS 141(R)&quot;), which
establishes accounting principles and disclosure requirements for all
transactions in which a company obtains control over another
business.&nbsp;&nbsp;This accounting pronouncement is effective for fiscal
years beginning after December 15, 2008, which will be effective for our fiscal
year beginning October 1, 2009. We are currently evaluating the requirements of
FAS 141 and have not yet determined the impact on our financial statements.</p>

<p class=MsoFooter align=center style='text-align:center'>F-11</p>

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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'>In December 2007, the FASB issued FASB
Statement No. 160, &quot;Noncontrolling Interests in Consolidated Financial
Statements and amendment to ARB No. 51&quot; (&quot;FAS 160&quot;).&nbsp;&nbsp;This standard
prescribes the accounting by a parent company for minority interests held by
other parties in a subsidiary of the parent company.&nbsp;&nbsp;FAS 160 is
effective for fiscal years beginning after December 15, 2008, which will be effective for our fiscal year beginning October 1, 2009.&nbsp;&nbsp;We are currently evaluating the requirements of FAS 160 and have not yet
determined the impact on our financial statements.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'>In March 2008, the FASB issued SFAS
No. 161, &quot;Disclosures about Derivative Instruments and Hedging Activities&quot; <a
name="jump_exp_1"></a>(&quot;SFAS <a name="jump_exp_2"></a>161&quot;).&nbsp;&nbsp;<a
name="jump_exp_3"></a>SFAS <a name="jump_exp_4"></a>161 amends and expands the
disclosure requirements in SFAS 133, &quot;Accounting for Derivative Instruments and
Hedging Activities&quot;.&nbsp;&nbsp;<a name="jump_exp_5"></a>SFAS <a
name="jump_exp_6"></a>161 is effective for fiscal years and interim periods
beginning after November 15, 2008, which will be effective for our interim
period beginning January 1, 2009.&nbsp;We are currently evaluating the
requirements of FAS 161 and have not yet determined the impact on our financial
statements.</p>

<p class=Level1 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify;text-indent:-.4in;page-break-after:avoid'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Liquidity:</u></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'>As of September 30, 2008, we had $1,414,000 of 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 for recurring capital expenditures.&nbsp; We believe that the current
cash on hand and additional cash expected from operations in fiscal 2009 will
be sufficient to cover our working capital requirements for fiscal 2009.</p>

<p class=Level1 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify;text-indent:0in;page-break-after:avoid'>As of September 30, 2008, we had a working capital deficit of $2,082,000 primarily from our
development line-of-credit of $2,180,000 shown as a current liability maturing
in July 2009.&nbsp; We have a fully-developed site that we are marketing for a
sale-leaseback transaction with expected net proceeds of $1,600,000 which would
be used to reduce the line of credit.</p>

<p class=Level1 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify;text-indent:0in;page-break-after:avoid'>We have
reduced planned selling, general and administrative and franchise costs by
approximately $450,000 for fiscal 2009 through the elimination of executive
management positions, salary reductions and professional services costs. We
have also reduced our labor hours allocation through increased efficiencies and
improved our sales per man hour efficiencies on service hours, thereby
eliminating approximately $300,000 of annual fixed restaurant payroll costs.</p>

<p class=Level1 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify;text-indent:0in;page-break-after:avoid'>We anticipate
that we will be in default of certain technical loan covenants as of December 31, 2008 on the Wells Fargo note and we are working with Wells Fargo to modify
these covenants based upon our fiscal 2009 plan and cash flow.&nbsp; We have never
been in payment default nor do we expect to be in the future.</p>

<p class=Level1 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify;text-indent:-.4in;page-break-after:avoid'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Notes Receivable</u>:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify;page-break-after:avoid'>Notes
receivable consists of the following as of September 30, 2008:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=660
 style='margin-left:27.0pt;border-collapse:collapse'>
 <tr style='height:9.0pt'>
  <td width=558 valign=top style='width:418.5pt;padding:0in 0in 0in 0in;
  height:9.0pt'>
  <p class=MsoNormal style='margin-right:5.7pt;text-align:justify'>Notes
  receivable from franchisees related to installation of certain equipment;
  8.5% to 10% interest per annum; monthly payments of principal and interest
  are due in the amount of approximately $4,100; final payment due in 2011;
  collateralized by all fixtures and equipment of the related restaurants.</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in;
  height:9.0pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 0in 0in 0in;
  height:9.0pt'>
  <p class=MsoNormal align=right style='text-align:right'>60,000</p>
  </td>
 </tr>
 <tr style='height:9.0pt'>
  <td width=558 valign=top style='width:418.5pt;padding:0in 0in 0in 0in;
  height:9.0pt'>

  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in;
  height:9.0pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 0in 0in 0in;
  height:9.0pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr style='height:9.0pt'>
  <td width=558 valign=top style='width:418.5pt;padding:0in 0in 0in 0in;
  height:9.0pt'>
  <p class=MsoNormal style='margin-right:5.7pt;text-align:justify'>Other,
  various terms</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in;
  height:9.0pt'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 0in 0in 0in;
  height:9.0pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>58,000</u></p>
  </td>
 </tr>
 <tr style='height:9.0pt'>
  <td width=558 valign=top style='width:418.5pt;padding:0in 0in 0in 0in;
  height:9.0pt'>

  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in;
  height:9.0pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in 0in 0in 0in;height:9.0pt'>
  <p class=MsoNormal align=right style='text-align:right'>118,000</p>
  </td>
 </tr>
 <tr style='height:9.0pt'>
  <td width=558 valign=top style='width:418.5pt;padding:0in 0in 0in 0in;
  height:9.0pt'>
  <p class=MsoNormal>Less
  current portion</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in;
  height:9.0pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in 0in 0in 0in;height:9.0pt'>
  <p class=MsoNormal align=right style='text-align:right'><u>(35,000</u>)</p>
  </td>
 </tr>
 <tr style='height:9.0pt'>
  <td width=558 valign=top style='width:418.5pt;padding:0in 0in 0in 0in;
  height:9.0pt'>
  <p class=MsoNormal style='margin-top:6.0pt'>Notes receivable, net of current
  portion</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in;
  height:9.0pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in 0in 0in 0in;height:9.0pt'>
  <p class=MsoNormal align=right style='margin-top:6.0pt;text-align:right'><u>$83,000</u></p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>F-12</p>

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<p class=Level1 style='margin-top:12.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify;text-indent:-.4in'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Debt</u>:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=659
 style='margin-left:27.4pt;border-collapse:collapse'>
 <tr>
  <td width=557 valign=top style='width:418.1pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-top:12.0pt;margin-right:5.7pt;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify'>Note payable
  with PFGI II, LLC with monthly payments of interest (prime rate +2%, with a
  minimum rate of 8%, at September 30, 2008 the rate was 8.0%) with all unpaid
  principal due on July 10, 2009.&nbsp; The loan is secured by six Leasehold Deeds
  of Trust and <a name="OLE_LINK4">six Security Agreements</a> and Assignment
  of Rents and Fixture Filings related to those six corporate restaurants.&nbsp; The
  promissory note constitutes a revolving line of credit which may be advanced,
  repaid and re-advanced from time to time. The maximum available under the
  line is $2,500,000.</p>
  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='text-align:right'>$2,180,000</p>
  </td>
 </tr>
 <tr>
  <td width=557 valign=top style='width:418.1pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 0in 0in 0in'>

  </td>
 </tr>
 <tr>
  <td width=557 valign=top style='width:418.1pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-right:5.7pt;text-align:justify'>Note payable
  with Wells Fargo Bank, NA with payments of principal and interest (prime rate
  less .5%) due monthly and the final payment due in April 2015.&nbsp; The loan is
  secured by four Security Agreements related to four corporate restaurants.</p>
  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='text-align:right'>960,000</p>
  </td>
 </tr>
 <tr>
  <td width=557 valign=top style='width:418.1pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0in 0in 0in 0in'>

  </td>
 </tr>
 <tr>
  <td width=557 valign=top style='width:418.1pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='text-align:justify'>Other, various terms</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='text-align:right'><u>10,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=557 valign=top style='width:418.1pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='text-align:right'>3,150,000</p>
  </td>
 </tr>
 <tr>
  <td width=557 valign=top style='width:418.1pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='text-align:justify'>Less current portion</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='text-align:right'><u>(2,304,000</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=557 valign=top style='width:418.1pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:6.0pt;text-align:right'><u>$846,000</u></p>
  </td>
 </tr>
</table>

<p class=MsoBodyTextIndent style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:27.0pt;margin-bottom:.0001pt'>In conjunction
with the Wells Fargo Bank term loan, the Company entered into a variable to
fixed interest rate swap agreement with Wells Fargo Bank effective May 9, 2007,
with a notional amount of $1,100,000, a pay rate of 7.77% and a receive rate
based on the bank prime rate less .50%. The swap agreement has an eight-year
term and has the effect of normalizing the effective interest rate at 7.77%.</p>

<p class=MsoBodyTextIndent style='margin-left:27.0pt'>As of September 30, 2008, the fair value of the contract was a loss of $68,000. The change in the fair value
has been recorded in other comprehensive loss.</p>

<p class=MsoBodyTextIndent style='margin-top:6.0pt;margin-right:0in;margin-bottom:
12.0pt;margin-left:27.35pt'>As
of September 30, 2008, principal payments on debt became due as follows:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=360
 style='margin-left:100.5pt;border-collapse:collapse'>
 <tr>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center'>Years Ending</p>
  <p class=MsoNormal align=center style='text-align:center'>September
  30,</p>
  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in'>

  </td>
 </tr>
 <tr>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in'>

  </td>
 </tr>
 <tr>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center'>2009</p>
  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:.25in;
  margin-bottom:0in;margin-left:22.2pt;margin-bottom:.0001pt;text-align:right'>$ 2,304,000</p>
  </td>
 </tr>
 <tr>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center'>2010</p>
  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:.25in;
  margin-bottom:0in;margin-left:22.2pt;margin-bottom:.0001pt;text-align:right'>124,000</p>
  </td>
 </tr>
 <tr>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center'>2011</p>
  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:.25in;
  margin-bottom:0in;margin-left:22.2pt;margin-bottom:.0001pt;text-align:right'>134,000</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in;
  height:.2in'>
  <p class=MsoNormal align=center style='text-align:center'>2012</p>
  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in;
  height:.2in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:.25in;
  margin-bottom:0in;margin-left:22.2pt;margin-bottom:.0001pt;text-align:right'>144,000</p>
  </td>
 </tr>
 <tr>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center'>2013</p>
  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:.25in;
  margin-bottom:0in;margin-left:22.2pt;margin-bottom:.0001pt;text-align:right'>156,000</p>
  </td>
 </tr>
 <tr>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center'>Thereafter</p>
  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:.25in;
  margin-bottom:0in;margin-left:22.2pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;288,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:.25in;
  margin-bottom:0in;margin-left:22.2pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=210 valign=top style='width:157.2pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=top style='width:9.3pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=138 valign=top style='width:103.2pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:.25in;
  margin-bottom:0in;margin-left:22.2pt;margin-bottom:.0001pt;text-align:right'><u>$3,150,000</u></p>
  </td>
 </tr>
</table>

<p class=MsoBodyTextIndent style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:27.0pt;margin-bottom:.0001pt'>In connection
with the Wells Fargo Bank loan, the Company has agreed to certain covenants,
which include minimum tangible net worth, a total liabilities to tangible net
worth ratio and a fixed charge coverage ratio, as defined in the agreement. As
of September 30, 2008, the Company was in compliance with its loan covenants.</p>

<p class=Level1 style='margin-top:6.0pt;margin-right:0in;margin-bottom:0in;
margin-left:.4in;margin-bottom:.0001pt;text-align:justify;text-indent:-.4in'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Other Accrued Liabilities</u>:</p>

<p class=MsoBodyTextIndent style='margin-top:0in;margin-right:0in;margin-bottom:
12.0pt;margin-left:31.5pt'>Other
accrued liabilities consist of the following at September&nbsp;30, 2008:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=347
 style='margin-left:108.75pt;border-collapse:collapse'>
 <tr>
  <td width=217 valign=top style='width:162.9pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal>Wages
  and other employee benefits</p>
  </td>
  <td width=17 valign=top style='width:12.6pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=113 valign=top style='width:84.75pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:.25in;text-align:right'>$264,000</p>
  </td>
 </tr>
 <tr>
  <td width=217 valign=top style='width:162.9pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal>Taxes,
  other than income tax</p>
  </td>
  <td width=17 valign=top style='width:12.6pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=113 valign=top style='width:84.75pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:.25in;text-align:right'>542,000</p>
  </td>
 </tr>
 <tr>
  <td width=217 valign=top style='width:162.9pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal>Other</p>
  </td>
  <td width=17 valign=top style='width:12.6pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=113 valign=top style='width:84.75pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:.25in;text-align:right'><u>133,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=217 valign=top style='width:162.9pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=17 valign=top style='width:12.6pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=113 valign=top style='width:84.75pt;padding:0in 0in 0in 0in'>

  </td>
 </tr>
 <tr>
  <td width=217 valign=top style='width:162.9pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=17 valign=top style='width:12.6pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=113 valign=top style='width:84.75pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:.25in;text-align:right'><u>$939,000</u></p>
  </td>
 </tr>
</table>

<p class=Level1 style='margin-top:12.0pt;margin-right:0in;margin-bottom:12.0pt;
margin-left:0in;text-align:justify;text-indent:0in'><u>&nbsp;</u></p>

<p class=MsoFooter align=center style='text-align:center'>F-13</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<u><br clear=all style='page-break-before:always'>
</u>









<p class=Level1 style='margin-top:12.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify;text-indent:-.4in'>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Commitments and Contingencies</u>:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'>The Company's office space, and the
land and buildings related to the Drive Thru restaurant facilities are
classified as operating leases and expire over the next 16 years. Some leases
contain escalation clauses over the lives of the leases. Most of the leases contain
one to three five-year renewal options at the end of the initial term. Certain
leases include provisions for additional contingent rent payments if sales
volumes exceed specified levels. The Company paid no material contingent
rentals during fiscal 2008 and 2007.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:12.0pt;
margin-left:26.15pt;text-align:justify'>Following is a summary of operating
lease activities:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=432
 style='margin-left:1.5in;border-collapse:collapse'>
 <tr>
  <td width=252 valign=top style='width:189.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=174 valign=top style='width:130.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center'>Year Ended
  September 30,</p>
  <p class=MsoNormal align=center style='text-align:center'>2008</p>
  </td>
 </tr>
 <tr>
  <td width=252 valign=top style='width:189.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=174 valign=top style='width:130.5pt;padding:0in 0in 0in 0in'>

  </td>
 </tr>
 <tr>
  <td width=252 valign=top style='width:189.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal>Minimum
  rentals</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=174 valign=top style='width:130.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:40.5pt;text-align:right'>$2,379,000</p>
  </td>
 </tr>
 <tr>
  <td width=252 valign=top style='width:189.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal>Less
  sublease rentals</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=174 valign=top style='width:130.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:40.5pt;text-align:right'><u>(391,000</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=252 valign=top style='width:189.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=174 valign=top style='width:130.5pt;padding:0in 0in 0in 0in'>

  </td>
 </tr>
 <tr>
  <td width=252 valign=top style='width:189.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-left:.4in;text-indent:.4in'>Net rent
  paid</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=174 valign=top style='width:130.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-right:40.5pt;text-align:right'><u>$1,988,000</u></p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
12.0pt;margin-left:.3in;text-align:justify'>As of September&nbsp;30, 2008, future minimum rental commitments required under the Company's operating leases that
have initial or remaining noncancellable lease terms in excess of one year are
as follows:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=295
 style='margin-left:1.5in;border-collapse:collapse'>

  <tr>
   <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>
   <p class=MsoNormal style='page-break-after:avoid'>Years Ending September 30, 2008</p>
   </td>
   <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

   </td>
   <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>

   </td>
  </tr>

 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>

  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal style='page-break-after:avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2009</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal align=right style='margin-right:8.05pt;text-align:right;
  page-break-after:avoid'>$2,339,000</p>
  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal style='page-break-after:avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2010</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal align=right style='margin-right:8.05pt;text-align:right;
  page-break-after:avoid'>2,091,000</p>
  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal style='page-break-after:avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2011</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal align=right style='margin-right:8.05pt;text-align:right;
  page-break-after:avoid'>1,931,000</p>
  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal style='page-break-after:avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2012</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal align=right style='margin-right:8.05pt;text-align:right;
  page-break-after:avoid'>1,819,000</p>
  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal style='page-break-after:avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2013</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal align=right style='margin-right:8.05pt;text-align:right;
  page-break-after:avoid'>1,756,000</p>
  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal style='page-break-after:avoid'>&nbsp;&nbsp; Thereafter</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal align=right style='margin-right:8.05pt;text-align:right;
  page-break-after:avoid'><u>10,941,000</u></p>
  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal align=right style='margin-right:8.05pt;text-align:right;
  page-break-after:avoid'>20,877,000</p>
  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal style='page-break-after:avoid'>Less sublease rentals</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal align=right style='margin-right:8.05pt;text-align:right;
  page-break-after:avoid'><u>(3,026,000</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>

  </td>
 </tr>
 <tr>
  <td width=187 valign=top style='width:140.45pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .95pt 0in .95pt'>

  </td>
  <td width=102 valign=top style='width:76.5pt;padding:0in .95pt 0in .95pt'>
  <p class=MsoNormal align=right style='margin-right:8.05pt;text-align:right;
  page-break-after:avoid'><u>$17,851,000</u></p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.3in;text-align:justify'>The Company is contingently liable on several
ground leases that have been subleased or assigned to franchisees. The
subleased and assigned leases expire between 2009 and 2024. The Company has
never experienced any losses from these contingent lease liabilities.</p>

<p class=Level1 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify;text-indent:-.4in'>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Financing Transactions</u>:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.3in;text-align:justify'>In July 2006, the Company purchased the equipment
and improvements from a franchisee for total consideration of $329,000.&nbsp; The
assets of the restaurant were recorded on the Company's books at the fair
market value of $296,000, resulting in the recording of goodwill in the amount
of $33,000.&nbsp; In May 2007 the Company sold the restaurant to an unrelated third
party franchisee, resulting in the write off of the goodwill. The land,
building and improvements for this site were originally sold in a sale
lease-back transaction. We will remain contingently liable on that lease which
was subleased to the new franchisee. The Company has maintained ownership of
the fixtures and equipment and entered into a lease of those assets with the
franchisee.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:.3in;text-align:justify;line-height:97%'>In
May 2007 the Company borrowed $1,100,000 from Wells Fargo Bank under a note
payable with an eight year term with a floating interest rate at .50% below
prime.&nbsp; We simultaneously entered into an interest rate swap transaction with
Wells Fargo Bank for the full $1,100,000 with a fixed interest rate of 7.77%
for the full eight year term coinciding with the note payable.&nbsp; Partial proceeds
from the loan were used to: 1) payoff our existing GE Capital notes payable of
$398,000; and, 2) fund new store construction. The balance of the proceeds were
used to partially fund the purchase of an existing restaurant from a franchisee
and for working capital.</p>

<p class=MsoBodyText style='margin-top:6.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:.4in;text-align:justify;text-indent:-.4in;line-height:97%'>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Managed Limited Partnerships</u>:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.3in;text-align:justify'>Drive Thru is the general partner of two limited
partnerships that were formed to develop Drive Thru restaurants.&nbsp; Limited
partner contributions have been used to construct new restaurants.&nbsp; Drive Thru,
as a general partner, generally receives an allocation of approximately 51% of
the profit and losses and a fee for its management services.&nbsp; The limited
partners' equity has been recorded as a minority interest in the accompanying
consolidated financial statements.</p>

<p class=MsoFooter align=center style='text-align:center'>F-14</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<u><br clear=all style='page-break-before:always'>
</u>









<p class=Level1 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:22.5pt;text-align:justify;text-indent:-22.5pt;page-break-after:
avoid'>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Income Taxes</u>:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:22.5pt;text-align:justify'>Deferred tax assets (liabilities) are
comprised of the following at September 30, 2008:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=457
 style='margin-left:1.0in;border-collapse:collapse'>
 <tr>
  <td width=228 valign=bottom style='width:171.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt'>
  <h3>Current</h3>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt'>
  <h3>Long Term</h3>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'>Deferred
  assets (liabilities):</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=top style='width:72.65pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in .65pt 0in .65pt'>

  </td>
 </tr>
 <tr style='height:.1in'>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt;
  height:.1in'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'>Tax effect
  of net operating loss carry-forward</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt;
  height:.1in'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt;
  height:.1in'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt;
  height:.1in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:right'>$1,886,000</p>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'>Partnership
  basis difference</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:right'>124,000</p>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'>Deferred
  revenue</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:right'>183,000</p>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'>Property and
  equipment basis differences</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:right'>-</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:right'>57,000</p>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'>Other
  accrued liability difference</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:right'><u>7,000</u></p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'><u>&nbsp;</u></p>
  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:right'><u>-</u></p>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'>Net deferred
  tax assets</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:right'>7,000</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:right'>2,250,000</p>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'>Less
  valuation allowance*</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:right'><u>(7,000</u>)</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:right'><u>(2,250,000</u>)</p>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;</u></p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:right'><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=228 valign=top style='width:171.0pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal style='margin-left:22.5pt;text-indent:-22.5pt'>Net deferred
  tax assets</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=97 valign=bottom style='width:72.65pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:4.5pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in .65pt 0in .65pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in .65pt 0in .65pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.35pt;
  margin-bottom:0in;margin-left:13.5pt;margin-bottom:.0001pt;text-align:right'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</u></p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:22.3pt;text-align:justify'>*&nbsp;&nbsp;&nbsp;&nbsp; The valuation allowance increased
by $144,000 during the year ended September&nbsp;30, 2008.</p>

<p class=MsoNormal style='margin-left:22.5pt;text-align:justify'>The Company
has net operating loss carry-forwards of approximately $4,952,000 for income
tax purposes which expire from 2009 through 2028.&nbsp; The use of these net
operating loss carry-forwards may be restricted due to changes in ownership.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:22.3pt;text-align:justify'>Total income tax expense for the years
ended 2008 and 2007 differed from the amounts computed by applying the U.S.
Federal statutory tax rates to pre-tax income as follows:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=468
 style='margin-left:63.0pt;border-collapse:collapse'>
 <tr>
  <td width=240 valign=top style='width:2.5in;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center;page-break-after:
  avoid'>2008</p>
  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='text-align:center;page-break-after:
  avoid'>2007</p>
  </td>
 </tr>
 <tr>
  <td width=240 valign=top style='width:2.5in;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 0in 0in 0in'>

  </td>
  <td width=6 valign=top style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=114 valign=top style='width:85.5pt;padding:0in 0in 0in 0in'>

  </td>
 </tr>
 <tr>
  <td width=240 valign=top style='width:2.5in;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-left:19.05pt;text-indent:-19.05pt;
  page-break-after:avoid'>Total
  expense (benefit) computed by applying the U.S. Statutory rate (35%)</p>
  </td>
  <td width=12 valign=top style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>$(375,000)</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>$10,000</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=240 valign=bottom style='width:2.5in;padding:0in 0in 0in 0in;
  height:.2in'>
  <p class=MsoNormal style='page-break-after:avoid'>State income tax, net of
  federal tax benefit</p>
  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in;
  height:.2in'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 0in 0in 0in;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>&nbsp;(32,000)</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in 0in 0in 0in;
  height:.2in'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in 0in 0in 0in;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>1,000</p>
  </td>
 </tr>
 <tr>
  <td width=240 valign=bottom style='width:2.5in;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='page-break-after:avoid'>Effect of change in valuation
  allowance</p>
  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>144,000</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>&nbsp;55,000</p>
  </td>
 </tr>
 <tr style='height:.25in'>
  <td width=240 valign=bottom style='width:2.5in;padding:0in 0in 0in 0in;
  height:.25in'>
  <p class=MsoNormal style='page-break-after:avoid'>Change in partnership basis</p>
  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in;
  height:.25in'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 0in 0in 0in;
  height:.25in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>&nbsp;240,000</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in 0in 0in 0in;
  height:.25in'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in 0in 0in 0in;
  height:.25in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>-</p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=240 valign=bottom style='width:2.5in;padding:0in 0in 0in 0in;
  height:15.75pt'>
  <p class=MsoNormal style='page-break-after:avoid'>Permanent differences</p>
  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in;
  height:15.75pt'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 0in 0in 0in;
  height:15.75pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>&nbsp;57,000</p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in 0in 0in 0in;
  height:15.75pt'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in 0in 0in 0in;
  height:15.75pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'>41,000</p>
  </td>
 </tr>
 <tr>
  <td width=240 valign=bottom style='width:2.5in;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='page-break-after:avoid'>Other</p>
  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'><u>&nbsp;(
  34,000)</u></p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'><u>(107,000)</u></p>
  </td>
 </tr>
 <tr>
  <td width=240 valign=bottom style='width:2.5in;padding:0in 0in 0in 0in'>

  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 0in 0in 0in'>

  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in 0in 0in 0in'>

  </td>
 </tr>
 <tr>
  <td width=240 valign=bottom style='width:2.5in;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='page-break-after:avoid'>Provision for income taxes</p>
  </td>
  <td width=12 valign=bottom style='width:9.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=96 valign=bottom style='width:1.0in;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</u></p>
  </td>
  <td width=6 valign=bottom style='width:4.5pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=114 valign=bottom style='width:85.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:8.75pt;
  margin-bottom:0in;margin-left:9.0pt;margin-bottom:.0001pt;text-align:right;
  page-break-after:avoid'><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</u></p>
  </td>
 </tr>
</table>

<p class=Level1 style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify;text-indent:-.4in;page-break-after:avoid'>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Related Parties</u>:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:30.95pt;text-align:justify'>A significant stockholder has entered
into two franchise and management agreements with the Company.&nbsp; The Company
also leases office space from this stockholder under a lease agreement which
expires in 2009.&nbsp; Rent paid to the stockholder in 2008 and 2007 for office
space was $55,000 and $54,000, respectively.&nbsp; One of the Company's Board
members is a principal of the stockholder.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:30.95pt;text-align:justify'>The Bailey Company is also the owner
of two franchised Good Times Drive Thru restaurants which are located in Thornton and Loveland, Colorado.&nbsp; The Bailey Company has entered into two franchise and
management agreements with us, and payments under those agreements totaled approximately
$94,000 for the fiscal year ended September 30, 2008.</p>

<p class=Level1 style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify;text-indent:-.4in'>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Stockholders' Equity</u>:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:30.95pt;text-align:justify'><u>Preferred Stock</u> - The Company
has the authority to issue 5,000,000 shares of preferred stock.&nbsp; The Board of
Directors has the authority to issue such preferred shares in series and
determine the rights and preferences of the shares as may be determined by the
Board of Directors.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:30.95pt;text-align:justify'><u>Common Stock Dividend Restrictions</u> - As long as
at least two-thirds of the shares of common stock into which the Series B
Preferred Stock was converted remains held by the former holders of such
converted Series B Preferred Stock, without the written consent or affirmative
vote of the holders of three-quarters of the then outstanding votes of the
shares of the Series B Preferred Stock and the shares of the common stock, the
Company cannot institute any payment of cash dividends or other distributions
on any shares of common stock.</p>

<p class=MsoFooter align=center style='text-align:center'>F-15</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.7pt;text-align:justify'><u>Stock Option Plans</u> - The Company
has a 2008 Omnibus Equity Incentive Compensation Plan (the &quot;2008&nbsp; Plan&quot;), approved
by shareholders in fiscal 2008, which is the successor equity compensation plan
to the Company's 2001 Stock Option Plan (the &quot;2001&nbsp; Plan&quot;). &nbsp;As of September 30, 2008, 198,130 shares were available for future grants of nonqualified
stock options, incentive stock options, stock appreciation rights, restricted
stock, restricted stock units, performance shares, performance units and
stock-based awards.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.7pt;text-align:justify'>The 2008 Plan serves as the successor
to our 2001 Plan, as amended (the &quot;Predecessor Plan&quot;), and no further awards
shall be made under the Predecessor Plan from and after the effective date of
the 2008 Plan.&nbsp; All outstanding awards under the Predecessor Plan immediately
prior to the effective date of the 2008 Plan shall be incorporated into the
2008 Plan and shall accordingly be treated as awards under the 2008 Plan.&nbsp;
However, each such award shall continue to be governed solely by the terms and
conditions of the instrument evidencing such grant or issuance, and, except as
otherwise expressly provided in the 2008 Plan or by the Committee that
administers the 2008 Plan, no provision of the 2008 Plan shall affect or
otherwise modify the rights or obligations of holders of such incorporated
awards.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.5pt;text-align:justify'>Effective October 1, 2006, the Company
adopted the provisions of Statement of Financial Accounting Standard (&quot;SFAS&quot;)
No. 123(R), Share-Based Payment, using the modified prospective application
transition method. Under the provisions of SFAS 123(R), stock-based
compensation is measured at the grant date, based on the calculated fair value
of the award, and is recognized as an expense over the requisite employee
service period (generally the vesting period of the grant).</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.5pt;text-align:justify'>On August 3, 2006, the Company's Board
of Directors, upon the review and recommendation by the Compensation Committee
of the Board, approved the acceleration of the vesting, effective August 3,
2006, of outstanding unvested stock options to purchase a total of approximately
108,235 shares of the Company's common stock, representing all outstanding
unvested stock options granted under the Company's 2001 Stock Option Plan that
are held by current employees, including all executive officers of the Company.
Stock options held by the Company's non-employee members of the Board were not
accelerated. As a result, the accelerated options became fully vested on August 3, 2006. </p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.5pt;text-align:justify'>The Company measures the compensation
cost associated with share-based payments by estimating the fair value of stock
options as of the grant date using the Black-Scholes option pricing model. The
Company believes that the valuation technique and the approach utilized to
develop the underlying assumptions are appropriate in calculating the fair
values of the Company's stock options granted during fiscal 2008. Estimates of
fair value are not intended to predict actual future events or the value
ultimately realized by the employees who receive equity awards.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.5pt;text-align:justify'>Net income for the fiscal years ended September 30, 2008 and 2007 includes $90,000 and $84,000, respectively, of compensation
costs related to our stock-based compensation arrangements.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:31.5pt;text-align:justify'>During the fiscal year ended September 30, 2008, we granted 12,000 non-statutory stock options and 16,700 incentive
stock options both with exercise prices of $5.75. Of the 16,700 incentive
options issued 10,000 shares were forfeited in conjunction with the termination
of the company's VP of Franchise Development in August 2008. The per share
weighted average fair values were $3.26 for non-statutory stock option grants
and $3.10 for incentive stock option grants.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:26.15pt;text-align:justify'>In addition to the exercise and grant
date prices of the awards, certain weighted average assumptions that were used
to estimate the fair value of stock option grants are listed in the following
table:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=636
 style='margin-left:27.0pt;border-collapse:collapse'>
 <tr>
  <td width=180 valign=top style='width:135.0pt;padding:0in 0in 0in 0in'>

  </td>
  <td width=222 valign=top style='width:166.5pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>Incentive
  Stock Options</p>
  </td>
  <td width=234 valign=top style='width:175.5pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>Non-Statutory
  Stock Options</p>
  </td>
 </tr>
 <tr>
  <td width=180 valign=top style='width:135.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:4.5pt'>Expected
  term (years)</p>
  </td>
  <td width=222 valign=top style='width:166.5pt;border:none;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>6.0</p>
  </td>
  <td width=234 valign=top style='width:175.5pt;border:none;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>6.7</p>
  </td>
 </tr>
 <tr>
  <td width=180 valign=top style='width:135.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:4.5pt'>Expected
  volatility</p>
  </td>
  <td width=222 valign=top style='width:166.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>51%</p>
  </td>
  <td width=234 valign=top style='width:175.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>51%</p>
  </td>
 </tr>
 <tr>
  <td width=180 valign=top style='width:135.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:4.5pt'>Risk-free
  interest rate</p>
  </td>
  <td width=222 valign=top style='width:166.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>4.4%</p>
  </td>
  <td width=234 valign=top style='width:175.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>4.4%</p>
  </td>
 </tr>
 <tr>
  <td width=180 valign=top style='width:135.0pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
  margin-left:4.5pt'>Expected
  dividends</p>
  </td>
  <td width=222 valign=top style='width:166.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>0</p>
  </td>
  <td width=234 valign=top style='width:175.5pt;padding:0in 0in 0in 0in'>
  <p class=MsoNormal align=center style='margin-bottom:6.0pt;text-align:center'>0</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:0in;
margin-left:25.9pt;margin-bottom:.0001pt;text-align:justify'>We estimate
expected volatility based on historical weekly price changes of our common
stock for a period equal to the current expected term of the options. The
risk-free interest rate is based on the United States treasury yields in effect
at the time of grant corresponding with the expected term of the options. The expected
option term is the number of years we estimate that options will be outstanding
prior to exercise considering vesting schedules and our historical exercise
patterns.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'>SFAS 123(R) requires the cash flows
resulting from the tax benefits for tax deductions in excess of the
compensation expense recorded for those options (excess tax benefits) to be
classified as financing cash flows. These excess tax benefits were $0 for the
fiscal years ended September 30, 2008 and 2007.</p>

<p class=MsoFooter align=center style='text-align:center'>F-16</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:12.0pt;
margin-left:26.15pt;text-align:justify'>A summary of stock option activity
under our share-based compensation plan for the fiscal year ended September 30, 2008 is presented in the following table:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=636
 style='margin-left:.45in;border-collapse:collapse'>
 <tr style='height:.8in'>
  <td width=174 valign=top style='width:130.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.8in'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.8in'>
  <p class=MsoNormal align=center style='text-align:center'><u>Options</u></p>
  </td>
  <td width=126 valign=bottom style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.8in'>
  <p class=MsoNormal align=center style='text-align:center'>Weighted
  Average <u>Exercise Price</u></p>
  </td>
  <td width=132 valign=bottom style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.8in'>
  <p class=MsoNormal align=center style='margin-left:-.5pt;text-align:center'>Weighted
  Average Remaining Contractual Life <u>(Yrs.)</u></p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.8in'>
  <p class=MsoNormal align=center style='margin-left:-.5pt;text-align:center'>Aggregate <u>Intrinsic
  Value</u></p>
  </td>
 </tr>
 <tr>
  <td width=174 valign=bottom style='width:130.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Outstanding-beg
  of year</p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>366,905</p>
  </td>
  <td width=126 valign=bottom style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:8.1pt;margin-bottom:.0001pt;text-align:center'>$3.89</p>
  </td>
  <td width=132 valign=bottom style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=174 valign=bottom style='width:130.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Granted</p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;28,700</p>
  </td>
  <td width=126 valign=bottom style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:8.1pt;margin-bottom:.0001pt;text-align:center'>$5.75</p>
  </td>
  <td width=132 valign=bottom style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=174 valign=bottom style='width:130.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Exercised</p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>(31,663)</p>
  </td>
  <td width=126 valign=bottom style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:8.1pt;margin-bottom:.0001pt;text-align:center'>$3.26</p>
  </td>
  <td width=132 valign=bottom style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=174 valign=bottom style='width:130.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Forfeited
  or expired</p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;(10,000)</p>
  </td>
  <td width=126 valign=bottom style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:8.1pt;margin-bottom:.0001pt;text-align:center'>$5.75</p>
  </td>
  <td width=132 valign=bottom style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=174 valign=bottom style='width:130.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-right:8.3pt'>Outstanding Sept 30, 2008</p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>353,942</p>
  </td>
  <td width=126 valign=bottom style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:8.1pt;margin-bottom:.0001pt;text-align:center'>$4.04</p>
  </td>
  <td width=132 valign=bottom style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-left:-.5pt;text-align:center'>5.0</p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:26.1pt;
  margin-bottom:0in;margin-left:-.5pt;margin-bottom:.0001pt;text-align:right'>$32,000</p>
  </td>
 </tr>
 <tr>
  <td width=174 valign=bottom style='width:130.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=126 valign=bottom style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=132 valign=bottom style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=174 valign=bottom style='width:130.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Exercisable
  Sept 30, 2008</p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>299,744</p>
  </td>
  <td width=126 valign=bottom style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-top:0in;margin-right:8.1pt;
  margin-bottom:0in;margin-left:8.1pt;margin-bottom:.0001pt;text-align:center'>$3.64</p>
  </td>
  <td width=132 valign=bottom style='width:99.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='margin-left:-.5pt;text-align:center'>4.4</p>
  </td>
  <td width=102 valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:26.1pt;
  margin-bottom:0in;margin-left:-.5pt;margin-bottom:.0001pt;text-align:right'>$32,000</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
0in;margin-left:26.15pt;margin-bottom:.0001pt;text-align:justify'>As of September 30, 2008, the total remaining unrecognized compensation cost related to unvested
stock-based arrangements was $114,000 and is expected to be recognized over a
weighted average period of 2.75 years.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:12.0pt;
margin-left:26.15pt;text-align:justify'>The total intrinsic value of stock
options exercised during the fiscal year ended September 30, 2008 was $71,000. &nbsp;Cash received from stock option exercises for the fiscal year ended September 30, 2008 was $104,000.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:25.9pt;text-align:justify'><u>Accumulated Other Comprehensive Loss</u> - In May
2007, the Company entered into an interest rate swap agreement, designated as a
cash flow hedge, which hedges the Company's exposure to interest rate
fluctuations on the Company's floating rate $1,100,000 term loan. The Company
records the fair value of these contracts in the balance sheet, with the offset
to other comprehensive loss. The contract requires monthly settlements of the
difference between the amounts to be received and paid under the agreement, the
amount of which is recognized in current earnings as interest expense. See Note
Three for additional information.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.4in;text-align:justify;text-indent:-.4in'>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Retirement Plan</u>:</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:12.0pt;
margin-left:30.25pt;text-align:justify'>The Company has a 401(k) profit
sharing plan (the &quot;Plan&quot;).&nbsp; Eligible employees may make voluntary contributions
to the Plan, which are matched by the Company, in an amount equal to 25% of the
employee's contribution up to 6% of their compensation.&nbsp; The amount of employee
contributions is limited as specified in the Plan. The Company may, at its
discretion, make additional contributions to the Plan or change the matching
percentage.&nbsp; The Company made matching contributions of $30,000 and $31,000 in
fiscal 2008 and fiscal 2007 respectively.&nbsp; All matching contributions are made
in cash.</p>

<p class=MsoFooter align=center style='text-align:center'>F-17</p>

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<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-align:justify;text-indent:-1.0in'><b>Item 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes
In and Disagreements with Accountants on Accounting and Financial Disclosure.</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:12.0pt;
margin-left:0in;text-align:justify'>During the two most recent fiscal years, Good
Times Restaurants has not had any changes in or disagreements with its
independent accountants on matters of accounting or financial disclosure.</p>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'><b>Item 8A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Controls and
Procedures</b></p>

<p class=MsoNormal style='text-align:justify;background:white'><b>Conclusion
Regarding the Effectiveness of Disclosure Controls and Procedures </b></p>

<p class=MsoNormal style='margin-top:6.0pt;text-align:justify'>Based on an
evaluation of the Company's disclosure controls and procedures (as defined in
Rules&nbsp;13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as
amended), as of the end of the Company's fiscal year ended September&nbsp;30,
2008, the Company's Chief Executive Officer and Controller (its principal
executive officer and principal financial officer, respectively) have concluded
that the Company's disclosure controls and procedures were effective.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Management's Report on Internal
Control Over Financial Reporting </b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>We are
responsible for establishing and maintaining adequate internal control over
financial reporting (as defined in Rule&nbsp;13a-15(f) and 15d-15(f) under the Securities
and Exchange Act of 1934, as amended). We maintain a system of internal
controls that is designed to provide reasonable assurance in a cost-effective
manner as to the fair and reliable preparation and presentation of the
consolidated financial statements. </p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>We conducted an evaluation of the effectiveness of
our internal control over financial reporting as of September&nbsp;30, 2008. In making this evaluation, our management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (&quot;COSO&quot;) in Internal Control-Integrated Framework. This evaluation included a review of the
documentation of controls, evaluation of the design effectiveness of controls,
testing of the operating effectiveness of controls and a conclusion on this
evaluation. We have concluded that, as of September&nbsp;30, 2008, the Company's internal control over financial reporting was effective based on these
criteria.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify;background:white'>This Annual Report does not
include an attestation report of the Company's registered public accounting
firm regarding internal control over financial
reporting.&nbsp;&nbsp;Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management's report in this Annual
Report.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify;background:white'><b>Changes in Internal Control
over Financial Reporting</b></p>

<p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify;background:
white'>There
have been no significant changes in the Company's internal control over
financial reporting that occurred during the Company's fiscal quarter ended
September&nbsp;30, 2008 that have materially affected, or are reasonably likely
to materially affect, the Company's internal control over financial reporting. </p>

<p class=MsoNormal style='background:white'><b>Item 8B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other Information</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:12.0pt;
margin-left:0in;text-align:justify'>Nothing to report.</p>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'><b>PART III</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:1.0in;text-align:justify;text-indent:-1.0in'><b>Item 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Directors,
Executive Officers, Promoters and Control Persons, Corporate Governance;
Compliance with Section 16(a) of the Exchange Act</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The information required by this Item concerning
our directors and executive officers is incorporated by reference to the
information provided under the captions Item 1 for Voting &quot;Election of
Directors&quot; and &quot;Executive Officers&quot; in our definitive proxy
statement for the annual meeting of stockholders, to be held on January 26, 2009
and to be filed within 120 days from September 30, 2008.&nbsp; Information regarding
the Company's Code of Ethics, nominating procedures and Audit Committee is
incorporated by reference to the information provided under the captions &quot;Code
of Ethics,&quot; &quot;Nominee Selection Process&quot; and &quot;Board Committees&quot; in our
definitive proxy statement for the annual meeting of stockholders, to be held
on January 26, 2009 and to be filed within 120 days from September 30, 2008.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:12.0pt;
margin-left:0in;text-align:justify'>The information required by this Item concerning
compliance with Section 16(a) of the Securities Exchange Act of 1934 is
incorporated by reference to the information provided under the caption
&quot;Section 16(a) Beneficial Ownership Reporting Compliance&quot; in our
definitive proxy statement for the annual meeting of stockholders, to be held
on January 26, 2009 and to be filed within 120 days from September 30, 2008.</p>

<p class=MsoFooter align=center style='text-align:center'>23</p>

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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Item 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Executive
Compensation</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The information required by this Item is
incorporated by reference to the information provided under the captions
&quot;Directors' Compensation&quot; and &quot;Executive Compensation&quot; in
our definitive proxy statement for the annual meeting of stockholders to be
held on January 26, 2009 and to be filed within 120 days from September 30, 2008.</p>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
0in;margin-left:1.0in;margin-bottom:.0001pt;text-align:justify;text-indent:
- -1.0in'><b>Item
11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The information required by this Item concerning
security ownership of certain beneficial owners and management is incorporated
by reference to the information provided under the caption &quot;Ownership of
common stock by Principal Stockholders and Management&quot; in our definitive
proxy statement for the annual meeting of stockholders to be held on January
26, 2009 and to be filed within 120 days from September 30, 2008.</p>

<p class=MsoNormal style='text-align:justify'>The information required by this Item
concerning securities authorized for issuance under equity compensation plans
is incorporated by reference to the information provided under the caption
&quot;Disclosure with Respect to the Company's Equity Compensation Plan&quot;
in Part II - Item 5 - Market for Common Equity and Related Stockholder Matters,
included in this Form 10-KSB.</p>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'><b>Item 12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certain
Relationships, Related Transactions and Director Independence.</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The information required by this Item is
incorporated by reference to the information provided under the caption
&quot;Certain Relationships and Related Transactions&quot; in our definitive
proxy statement for the annual meeting of stockholders to be filed within 120
days from September 30, 2008.</p>

<p class=00BodyText5 style='text-align:justify;text-indent:0in'>The
information required by this Item concerning director independence is
incorporated by reference to the information provided under the captions
&quot;Nominee selection process&quot;, &quot;Nominees&quot; and &quot;Board Committees&quot; in our
definitive proxy statement for the annual meeting of stockholders to be filed
within 120 days from September 30, 2008.</p>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'><b>Item 13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'>The following exhibits are furnished as part of
this report:</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b><u>Exhibit</u></b><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Description</u></b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Articles
of Incorporation of the Registrant (previously filed on November 30, 1988 as Exhibit 3.1 to the registrant's Registration Statement on Form S-18 (File No.
33-25810-LA) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amendment
to Articles of Incorporation of the Registrant dated January 23, 1990
(previously filed on January 18, 1990 as Exhibit 3.1 to the registrant's
Current Report on Form 8-K (File No. 000-18590) and incorporated herein by
reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amendment
to Articles of Incorporation (previously filed as Exhibit 3.5 to the
registrant's Annual Report on Form 10-KSB for the fiscal year ended September
30, 1996 and (File No. 000-18590) incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restated
Bylaws of Registrant dated November 7, 1997 (previously filed as Exhibit 3.6 to
the registrant's Annual Report on Form 10-KSB for the fiscal year ended September 30, 1997 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restated
Bylaws of Registrant, amended as of August 14, 2007 (previously filed as Exhibit 3/1 to the registrant's current report on Form 8-K dated August 14, 2007 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificate
of Designations, Preferences, and Rights of Series B Convertible Preference
Stock of Good Times Restaurants Inc. (previously filed as Exhibit 1 to the
Amendment No. 6 to Schedule 13D filed by The Erie County Investment Co., The Bailey Company, LLLP and Paul T. Bailey (File No. 005-42729) on February 14, 2005 and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Form
of Promissory Note dated November 3, 1995 by and between AT&amp;T Commercial
Finance Corporation, Boise Co-Development Limited Partnership, Good Times Good
Times Inc. as general partner, and Good Times Restaurants Inc. as guarantor in
the amount of $254,625 (previously filed as Exhibit 10.34 to the registrant's
Annual Report on Form 10-KSB/A for the fiscal year ended September 30, 1995
(File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoFooter align=center style='text-align:center'>24</p>

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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Form
of Promissory Note dated November 3, 1995 by and between AT&amp;T Commercial
Finance Corporation, Boise Co-Development Limited Partnership, Good Times Good
Times Inc. as general partner, and Good Times Restaurants as guarantor in the
amount of $104,055 (previously filed as Exhibit 10.35 to the registrant's
Annual Report on Form 10-KSB/A for the fiscal year ended September 30, 1995
(File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Registration
Rights Agreement dated May 31, 1996 regarding registration rights of the common
stock issuable upon conversion of the Series A Convertible Preferred Stock
(previously filed as Exhibit 10.15 to the registrant's Annual Report on Form
10-KSB/A for the fiscal year ended September 30, 1995 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amendment
and Agreement regarding Series A Convertible Preferred Stock by and between
Good Times Restaurants Inc. and The Bailey Company dated December 3, 1997,
effective as of October 31, 1997 (previously filed as Exhibit 10.13 to the
registrant's Annual Report on Form 10-KSB for the fiscal year ended September
30, 1997 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Indemnification
by Dr. Kenneth Dubach to Good Times Good Times Inc. dated December 10, 1996
with respect to the promissory note of the Boise Co-Development Limited
Partnership dated November 3, 1995 in the original amount of $254,625 and the
promissory note dated November 3, 1995 in the original amount of $104,055
(previously filed as Exhibit 10.14 to the registrant's Annual Report on Form
10-KSB for the fiscal year ended September 30, 1997 (File No. 000-18590) and
incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Office
lease (previously filed as Exhibit 10.12 to the registrant's Annual Report on
Form 10-KSB for the fiscal year ended September 30, 1998 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Bailey Company Guaranty Agreement (previously filed as Exhibit 10.13 to the
registrant's Annual Report on Form 10-KSB for the fiscal year ended September 30, 1998 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1992
Incentive Stock Option Plan, as amended (previously filed as Exhibit 4.9 to the
registrant's Annual Report on Form 10-KSB for the fiscal year ended September 30, 1998 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1992
Non-Statutory Stock Option Plan, as amended (previously filed as Exhibit 4.10
to the registrant's Annual Report on Form 10-KSB for the fiscal year ended September 30, 1998 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Bailey Company Private Placement Letter Agreement dated March 12, 1999 (previously filed as Exhibit 10.1 to the registrant's Quarterly Report on Form 10-QSB
for the quarter ended March 31, 1999 (File No. 000-18590) and incorporated
herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Warrant
dated April 15, 1999 Issued to The Bailey Company, LLLP for the Purchase of
25,000 Shares of Common Stock of Good Times Restaurants Inc. (previously filed
as Exhibit 4.2 to Amendment No. 4 to Schedule 13D filed on June 7, 1999 by The
Bailey Company, LLLP, The Erie County Investment Co., and Paul T. Bailey (File
No. 005-42729) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Merrill
Lynch Commitment Letter dated November 17, 1999 for Line of Credit (previously
filed as Exhibit 10.18 to the registrant's Annual Report on Form 10-KSB for the
fiscal year ended September 30, 1999 (File No. 000-18590) and incorporated
herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GE
Capital Term Note dated November 14, 2001 (previously filed as Exhibit 10.15 to
the registrant's Annual Report on Form 10-KSB for the fiscal year ended September 30, 2001 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GE
Capital Note dated November 14, 2001 (previously filed as Exhibit 10.1 to the
registrant's Quarterly Report on Form 10-QSB for the quarter ended December 31, 2001 (File No. 000-18590 and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employment
Agreement dated October 3, 2001 between the registrant and Boyd E. Hoback</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Wells
Fargo Credit Agreement (previously filed as Exhibit 10.17 to the registrant's
Annual Report on Form 10-KSB for the fiscal year ended September 30, 2003 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Form
of Option Agreement (previously filed as Exhibit 10.18 to the registrant's
Annual Report on Form 10-KSB for the fiscal year ended September 30, 2004 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Form
of Option Grant Notice (previously filed as Exhibit 10.19 to the registrant's
Annual Report on Form 10-KSB for the fiscal year ended September 30, 2004 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoFooter align=center style='text-align:center'>25</p>

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<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash
Bonus Plan for Boyd Hoback (previously filed as Exhibit 10.20 to the
registrant's Annual Report on Form 10-KSB for the fiscal year ended September 30, 2004 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities
Purchase Agreements (previously filed on the registrant's Current Report on
Form 8-K dated January 3, 2005 (File No. 000-18590) and incorporated herein by
reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amendment
to Securities Purchase Agreement (previously filed as Exhibit 10.1 to the
registrant's Form 8-K Report dated January 27, 2005 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001
Stock Option Plan, as amended (previously filed as Exhibit 99.1 to the
registrant's Registration Statement on Form S-8 filed on May 23, 2005 (Registration No. 333-125150) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.1pt;text-align:justify;text-indent:-51.1pt'>10.23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Registration
Statement (previously filed on the registrant's Registration Statement on Form
S-3 filed on February 17, 2005 (Registration No. 333-122890) and incorporated
herein by reference</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.1pt;text-align:justify;text-indent:-51.1pt'>10.24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amendment
No. 1 to Registration Statement (previously filed on the registrant's
Registration Statement on Form S-3 filed on April 4, 2005 (Registration No. 333-122890) and incorporated herein by reference</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Conversion
of Series B Convertible Preferred Stock (previously filed as Exhibit 99.1 to
the registrant's Form 8-K Report dated June 8, 2006 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loan
Agreement and Promissory Note (previously filed as Exhibit 10.1 and 10.2 to the
registrant's Form 8-K Report dated August 7, 2006 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.27&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acceleration
of Vesting of Stock Options and Form of Resale Restriction Agreement
(previously filed as Exhibit 10.1 to the registrant's Form 8-K Report dated August 8, 2006 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.28&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expansion
of Loan Agreement and Promissory Note (previously filed as Exhibit 10.1 and
10.2 to the registrant's Form 8-K Report dated March 15, 2007 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.29&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loan
Agreement and Promissory Note (previously filed as Exhibit 10.1 and 10.2 to the
registrant's Form 8-K Report dated May 7, 2007 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.30&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amendment
No. 1 to Loan Agreement and Promissory Note (previously filed as Exhibit 10.1
and 10.2 to the registrant's Form 8-K Report dated May 10, 2007 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Development
Agreement (previously filed as Exhibit 10.1 to the registrant's Form 8-K Report
dated December 2, 2007 (File No. 000-18590) and incorporated herein by
reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.32&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Management
Agreement (previously filed as Exhibit 10.2 to the registrant's Form 8-K Report
dated December 2, 2007 (File No. 000-18590) and incorporated herein by
reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.33&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Site
Selection, Construction Management and Pre-Opening Services Agreement
(previously filed as Exhibit 10.3 to the registrant's Form 8-K Report dated December 2, 2007 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.34&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2008
Omnibus Equity Incentive Compensation Plan (previously filed as Exhibit 10.1 &nbsp;to
the registrant's Form 8-K Report dated January 29, 2008 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.35&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employment
Agreement of Boyd E. Hoback (previously filed as Exhibit 10.1 to the
registrant's Form 8-K Report dated January 29, 2008 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.36&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Letter
Agreement between Good Times Drive Thru Inc. and CEDA Enterprises, Inc. (previously
filed as Exhibit 10.1 to the registrant's Form 8-K Report dated March 12, 2008
(File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.37&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Letter
Agreement between Good Times Drive Thru Inc. and CEDA Enterprises, Inc. and CEJ
Investments, LLC (previously filed as Exhibit 10.2 to the registrant's Form 8-K
Report dated March 12, 2008 (File No. 000-18590) and incorporated herein by
reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.1pt;text-align:justify;text-indent:-51.1pt'>10.38&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amended
and Restated Loan Agreement (previously filed as Exhibit 10.1 to the
registrant's Form 8-K Report dated July 2, 2008 (File No. 000-18590) and
incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.39&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Promissory
Note by Good Times Drive Thru Inc. and Good Times Restaurants Inc. payable to PFGI II, LLC (previously filed as Exhibit 10.2 to the registrant's Form 8-K Report dated July 2, 2008 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoFooter align=center style='text-align:center'>26</p>

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clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>10.40&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Departure
of Management Employees, Transfer of Development Rights and Suspension of
Expansion (previously filed in the registrant's Form 8-K Report dated June 26, 2008 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Code
of Ethics (previously filed as Exhibit 14.1 to the registrant's Annual Report
on Form 10-KSB for the fiscal year ended September 30, 2003 (File No.
000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>21.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subsidiaries
of registrant (previously filed as Exhibit 21.1 to the registrant's Annual
Report on Form 10-KSB for the fiscal year ended September 30, 1998 (File No. 000-18590) and incorporated herein by reference)</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>23.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Consent
of HEIN &amp; ASSOCIATES LLP</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>31.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>31.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Certification
of Controller pursuant to 18 U.S.C. Section 1350</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:51.3pt;text-align:justify;text-indent:-51.3pt'>32.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Certification
of Chief Executive Officer and Controller pursuant to 18 U.S.C. Section 1350</p>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
12.0pt;margin-left:0in;text-align:justify'>*Filed herewith</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in;text-align:justify'><b>Item 14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Principal Accountant
Fees and Services</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:12.0pt;
margin-left:0in;text-align:justify'>The information required by this Item is
incorporated by reference to the information provided under the caption
&quot;Independent Public Accountants&quot; in our definitive proxy statement
for the annual meeting of stockholders to be filed within 120 days from September 30, 2008.</p>

<p class=MsoFooter align=center style='text-align:center'>27</p>

<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoNormal align=center style='margin-top:12.0pt;margin-right:0in;
margin-bottom:12.0pt;margin-left:0in;text-align:center'><b>SIGNATURES</b></p>

<p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'>In accordance
with Section 13 or 15(d) of the Exchange Act, the registrant caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=595
 style='border-collapse:collapse'>
 <tr>
  <td width=307 valign=top style='width:3.2in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-bottom:12.0pt'><b>GOOD TIMES&nbsp; RESTAURANTS INC.</b></p>
  </td>
 </tr>
 <tr style='height:24.9pt'>
  <td width=307 style='width:3.2in;padding:0in 5.4pt 0in 5.4pt;height:24.9pt'>
  <p class=MsoNormal align=center style='text-align:center'>Date:
  December 26, 2008</p>
  </td>
  <td width=288 valign=bottom style='width:3.0in;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:24.9pt'>
  <p class=MsoNormal>/s/
  Boyd E. Hoback</p>
  </td>
 </tr>
 <tr>
  <td width=307 valign=top style='width:3.2in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=288 valign=top style='width:3.0in;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Boyd
  E. Hoback</p>
  <p class=MsoNormal>President
  and Chief Executive Officer</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
12.0pt;margin-left:0in'>In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=596
 style='border-collapse:collapse'>
 <tr>
  <td width=255 valign=top style='width:191.2pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><i>/s/
  Eric W. Reinhard</i></p>
  </td>
  <td width=52 valign=top style='width:39.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><i>&nbsp;</i></p>
  </td>
  <td width=289 valign=top style='width:216.75pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:.55pt'><i>/s/ Boyd E. Hoback</i></p>
  </td>
 </tr>
 <tr style='height:37.95pt'>
  <td width=255 valign=top style='width:191.2pt;border:none;padding:0in 5.4pt 0in 5.4pt;
  height:37.95pt'>
  <p class=MsoNormal>Eric
  W. Reinhard, Chairman</p>
  <p class=MsoNormal>and
  Chief Development Officer</p>
  <p class=MsoNormal style='margin-bottom:6.0pt'>Date: December 26, 2008</p>
  </td>
  <td width=52 valign=top style='width:39.2pt;padding:0in 5.4pt 0in 5.4pt;
  height:37.95pt'>

  </td>
  <td width=289 valign=top style='width:216.75pt;border:none;padding:0in 5.4pt 0in 5.4pt;
  height:37.95pt'>
  <p class=MsoNormal style='margin-left:.55pt'>Boyd E. Hoback, Director </p>
  <p class=MsoNormal style='margin-left:.55pt'>and President and CEO</p>
  <p class=MsoNormal style='margin-left:.55pt'>Date: December 26, 2008</p>
  </td>
 </tr>
 <tr>
  <td width=255 valign=top style='width:191.2pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'><i>/s/ Geoffrey R. Bailey</i></p>
  </td>
  <td width=52 valign=top style='width:39.2pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=289 valign=top style='width:216.75pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'><i>/s/ Susan M. Knutson</i></p>
  </td>
 </tr>
 <tr style='height:35.7pt'>
  <td width=255 valign=top style='width:191.2pt;border:none;padding:0in 5.4pt 0in 5.4pt;
  height:35.7pt'>
  <p class=MsoNormal>Geoffrey
  R. Bailey, Director</p>
  <p class=MsoNormal>Date:
  December 26, 2008</p>
  </td>
  <td width=52 valign=top style='width:39.2pt;padding:0in 5.4pt 0in 5.4pt;
  height:35.7pt'>

  </td>
  <td width=289 valign=top style='width:216.75pt;border:none;padding:0in 5.4pt 0in 5.4pt;
  height:35.7pt'>
  <p class=MsoNormal>Susan
  M. Knutson, Controller and</p>
  <p class=MsoNormal>Principal
  Financial Officer</p>
  <p class=MsoNormal style='margin-bottom:6.0pt'>Date: December 26, 2008</p>
  </td>
 </tr>
 <tr>
  <td width=255 valign=top style='width:191.2pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'><i>/s/ Ron Goodson</i></p>
  </td>
  <td width=52 valign=top style='width:39.2pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=289 valign=top style='width:216.75pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'><i>/s/ Richard J. Stark</i></p>
  </td>
 </tr>
 <tr style='height:26.4pt'>
  <td width=255 valign=top style='width:191.2pt;border:none;padding:0in 5.4pt 0in 5.4pt;
  height:26.4pt'>
  <p class=MsoNormal>Ron
  Goodson, Director</p>
  <p class=MsoNormal style='margin-bottom:6.0pt'>Date: December 26, 2008</p>
  </td>
  <td width=52 valign=top style='width:39.2pt;padding:0in 5.4pt 0in 5.4pt;
  height:26.4pt'>

  </td>
  <td width=289 valign=top style='width:216.75pt;border:none;padding:0in 5.4pt 0in 5.4pt;
  height:26.4pt'>
  <p class=MsoNormal>Richard
  J. Stark, Director</p>
  <p class=MsoNormal>Date:
  December 26, 2008</p>
  </td>
 </tr>
 <tr>
  <td width=255 valign=top style='width:191.2pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'><i>/s/ David Grissen</i></p>
  </td>
  <td width=52 valign=top style='width:39.2pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt'><i>&nbsp;</i></p>
  </td>
  <td width=289 valign=top style='width:216.75pt;border:none;border-bottom:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
  0in;margin-left:.55pt;margin-bottom:.0001pt'><i>/s/ Alan A. Teran</i></p>
  </td>
 </tr>
 <tr>
  <td width=255 valign=top style='width:191.2pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>David
  Grissen, Director</p>
  <p class=MsoNormal>Date:
  December 26, 2008</p>
  </td>
  <td width=52 valign=top style='width:39.2pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=289 valign=top style='width:216.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='margin-left:.55pt'>Alan A. Teran, Director</p>
  <p class=MsoNormal style='margin-left:.55pt'>Date: December 26, 2008</p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>28</p>

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<DOCUMENT>
<TYPE>EX-99.906 CERT
<SEQUENCE>2
<FILENAME>exhibit321certceocont1.htm
<TEXT>
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<head>
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<title>_</title>


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<p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>

<p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>









<p class=MsoNormal align=right style='text-align:right'><b>Exhibit 32.1</b></p>

<p class=titlec align=center style='text-align:center'><b>CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,</b></p>

<p class=titlec align=center style='text-align:center'><b>AS ADOPTED PURSUANT
TO</b></p>

<p class=titlec align=center style='text-align:center'><b>SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002</b></p>

<p class=bodytext5 style='text-align:justify;text-indent:.5in'>In connection
with the Annual Report on Form 10-KSB of Good Times Restaurants Inc. (the
&quot;Company&quot;) for the fiscal year ended September 30, 2008 as filed with the
Securities and Exchange Commission on the date hereof (the &quot;Report&quot;), I, Boyd
E. Hoback, as Chief Executive Officer of the Company, and Susan M. Knutson, as
Controller of the Company, each hereby certifies, pursuant to and solely for
the purpose of 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge and belief:</p>

<p class=bodytext5 style='margin-left:.5in;text-align:justify;text-indent:-.5in'>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 class=bodytext5 style='margin-left:.5in;text-align:justify;text-indent:-.5in'>(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>/s/ Boyd E. Hoback</p>
  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>/s/ Susan M. Knutson</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Boyd E. Hoback</p>
  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Susan M. Knutson</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Chief Executive Officer</p>
  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Controller (principal financial officer)</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>December 26, 2008</p>
  </td>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>December 26, 2008</p>
  </td>
 </tr>
</table>



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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>3
<FILENAME>exhibit311certceo1.htm
<TEXT>
<html>

<head>
<!-- Document Prepared With E-Services, LLC HTML Software-->
<!-- Copyright 2006 E-Services, LLC.-->
<!-- All rights reserved EDGAR2.com -->



<title>_</title>


</head>

<body lang=EN-US>



<p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>

<p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>









<p class=MsoNormal align=right style='text-align:right'><b>Exhibit 31.1</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CERTIFICATION OF
THE CHIEF EXECUTIVE OFFICER</b></p>

<p class=MsoNormal style='margin-left:22.5pt;text-align:justify;text-indent:
- -22.5pt'>I, Boyd E. Hoback, certify that:</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I
have reviewed this annual report on Form 10-KSB of Good Times Restaurants Inc.;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, this 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 report;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, the financial statements, and other financial information
included in this 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 report;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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;
and</p>



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</div>



<br
clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
registrant's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><a name="OLE_LINK1">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All significant deficiencies and material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and</a></p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
control over financial reporting.</p>

<p class=MsoNormal>Date:&nbsp; December 26, 2008</p>



<p class=MsoNormal><u>/s/ Boyd E. Hoback</u></p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>Boyd E. Hoback</p>

<p class=MsoFooter>President and Chief Executive Officer</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>







</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>4
<FILENAME>exhibit312certofcontroller1.htm
<TEXT>
<html>

<head>
<!-- Document Prepared With E-Services, LLC HTML Software-->
<!-- Copyright 2006 E-Services, LLC.-->
<!-- All rights reserved EDGAR2.com -->



<title>_</title>


</head>

<body lang=EN-US>



<p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>

<p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>









<p class=MsoNormal align=right style='text-align:right'><b>Exhibit 31.2</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CERTIFICATION OF
THE CONTROLLER</b></p>

<p class=MsoNormal style='margin-left:22.5pt;text-align:justify;text-indent:
- -22.5pt'>I, Susan M. Knutson, certify that:</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I
have reviewed this annual report on Form 10-KSB of Good Times Restaurants Inc.;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, this 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 report;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based
on my knowledge, the financial statements, and other financial information
included in this 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 report;</p>

<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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;
and</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>










<p class=MsoNormal style='margin-left:.5in;text-align:justify;text-indent:-.5in'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
registrant's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):</p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><a name="OLE_LINK1">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All significant deficiencies and material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and</a></p>

<p class=MsoNormal style='margin-left:1.0in;text-align:justify;text-indent:
- -.5in'>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
control over financial reporting.</p>

<p class=MsoNormal>Date:&nbsp; December 26, 2008</p>



<p class=MsoNormal><u>/s/ Susan M. Knutson</u></p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>Susan M. Knutson</p>

<p class=MsoFooter>Controller</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>







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</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.14 OTH CONSENT
<SEQUENCE>5
<FILENAME>heinconsent1.htm
<TEXT>
<html>

<head>
<!-- Document Prepared With E-Services, LLC HTML Software-->
<!-- Copyright 2006 E-Services, LLC.-->
<!-- All rights reserved EDGAR2.com -->



<title>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</title>



</head>

<body lang=EN-US>

























<p class=MsoNormal align=center style='text-align:center'><b>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</b></p>







<p class=MsoNormal style='text-align:justify'>We
consent to the incorporation by reference of our report dated December 12, 2008,
accompanying the consolidated financial statements of Good Times Restaurants,
Inc., also incorporated by reference in the Form S-8 Registration Statements
with registration numbers 333-60813, 333-98407, and 333-125150 and Form S-3
Registration Statement 333-122890 of Good Times Restaurants, Inc., and to the
use of our name and the statements with respect to us, as appearing under the
heading &quot;Experts&quot; in the Registration Statements.</p>



<p class=MsoNormal style='text-align:justify'>/s/
Hein and Associates</p>



<p class=MsoNormal style='text-align:justify'><b><i>HEIN</i></b><i>
&amp; ASSOCIATES LLP</i> </p>



<p class=MsoNormal style='text-align:justify'>Denver, Colorado</p>

<p class=MsoFooter>December 23, 2008</p>

<div class=MsoNormal align=center style='text-align:center'>

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