<SEC-DOCUMENT>0000825324-12-000005.txt : 20120716
<SEC-HEADER>0000825324-12-000005.hdr.sgml : 20120716
<ACCEPTANCE-DATETIME>20120314144827
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000825324-12-000005
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20120314

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:		CORRESP

	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>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<title>March 9, 2009</title>


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<p class=MsoNoSpacing align=center style='margin-bottom:24.0pt;text-align:center'>March 14, 2012</p>

<p class=MsoNoSpacing style='text-align:justify'>United
States Securities and Exchange Commission</p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>Washington, D.C. 20549</p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>Submitted Electronically with
Copy to Staff</p>

<p class=MsoNoSpacing style='margin-left:.5in;text-align:justify;text-indent:
-.5in'>Re: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Good Times
Restaurants, Inc.</p>

<p class=MsoNoSpacing style='margin-left:.5in;text-align:justify;text-indent:
-.5in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Form
10-K for the year ended September 30, 2011</p>

<p class=MsoNoSpacing style='margin-left:.5in;text-align:justify;text-indent:
-.5in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Filed
December 29, 2011</p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
12.0pt;margin-left:.5in;text-align:justify;text-indent:-.5in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; File No. 0-18590</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'>Good Times Restaurants, Inc. (the
&quot;Company&quot;, &quot;we&quot;, &quot;our&quot; or &quot;us&quot;) has received your letter dated February 27, 2012
containing comments on the Company's above referenced Annual Report on Form
10-K (the &quot;Form 10-K&quot;), filed by the Company with the Securities and Exchange
Commission (the &quot;Commission&quot;) on December 29, 2011. This letter on behalf of
the Company responds to each of the comments set forth in your letter.</p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>For convenience of reference, we
have set forth the Commission's comments in bold below, with the Company's
response following each comment.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Management's Discussion and
Analysis of Financial Condition and Results of Operations Liquidity and Capital
Resources, page 21</u></b></p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.25in;text-align:justify;text-indent:-.25in'><b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>We
note your disclosure that as of September 30, 2011 you had a working capital deficit
of $488,000 due to normal recurring accounts payable and accrued liabilities.&nbsp;
Please revise to expand your discussion of the reasons for the working capital
deficit, such as the fact that this is common in the restaurant industry
because restaurant sales are collected in cash and accounts payable for food
and paper products are paid at a later date.</b></p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>We will expand our discussion of
any working capital deficit in future filings to include the following: <i>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 and possibly increase as new Good Times restaurants
are opened.</i></p>

<p class=MsoNoSpacing style='text-align:justify'><b><u>Critical Accounting Policies and Estimates, page 24</u></b></p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Impairment of Long-Lived Assets,
page 25</u></b></p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.25in;text-align:justify;text-indent:-.25in'><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>We
note your disclosure that an impairment analysis was performed on a restaurant
by restaurant basis at September 30, 2011 and the sales projection assumptions
used in the analysis were as follows: fiscal 2012 sales are projected to
increase 3% to 5% with respect to fiscal 2011, for fiscal years 2013 to 2024
you have used annual increases of 2% to 3%.&nbsp; In light of the fact that restaurant
sales and total net revenues, as presented on the statement of operations, have
decreased consistently for each fiscal year since fiscal 2008, please explain
to us why you believe it is appropriate to project sales increases for future
periods.</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Please refer to Item 1 on page 3 &quot;Recent Developments&quot;:</p>



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<p class=MsoHeader>United States Securities and Exchange Commission</p>

<p class=MsoHeader>March 14, 2012</p>

<p class=MsoNormal style='margin-bottom:12.0pt'>Page 2 of 6</p>



<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><i>&quot;We experienced fairly dramatic same store sales
declines immediately after the beginning of the recession in the spring of 2008
that continued through late spring of 2010 after several consecutive years of
same store sales increases.&nbsp; Beginning in June 2010 our same store sales trends
began to flatten out and have increased for sixteen consecutive months through
November 2011, including an increase of 6.2% in fiscal 2011. We have
experienced increases in both customer traffic and our average transaction
amount as a result of the implementation of more price choice for our guests
across our menu and ongoing new product initiatives discussed below in &quot;Concept
and Business Strategy.&quot;</i></p>

<p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><u>Additionally</u>:
While our total restaurant sales have declined from year to year due to
restaurant closures and sales of restaurants, our same store restaurant sales
have increased in every month since August of 2010, through and including
February 2012. Through the first five months of fiscal 2012 as of February
2012, our same store restaurant sales have increased 4.7% from the same prior
year period. Given the results and trends leading to projected sales increases
of 3% to 5% in fiscal 2012 we believe the 2% to 3% increases in fiscal 2013 to
2024 are appropriate.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Audited Financial Statements</u></b></p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Statements of Operations, page
F-4</u></b></p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.25in;text-align:justify;text-indent:-.25in'><b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>We
note from the statement of operations that you disclose net loss, income (loss)
from non-controlling interests, and net loss applicable to common stockholders.&nbsp;
Please note that the line item titled &quot;net loss applicable to common
stockholders&quot; should be revised to &quot;net loss of attributable to Good Times
Restaurants, Inc.&quot; or &quot;net loss attributable to Parent&quot; to be consistent with
the guidance in ADC 810-10-50.&nbsp; Please revise accordingly.</b></p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>We will revise our future filings
to read &quot;Net loss attributable to Good Times Restaurants Inc&quot;.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Statements of Stockholders'
Equity, page F-5</u></b></p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.25in;text-align:justify;text-indent:-.25in'><b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>It is
not clear from the statement of stockholders' equity or the notes to the financial
statements, how the amounts recorded in non-controlling interest in
Partnerships for fiscal 2010 and 2011 were calculated or determined.&nbsp; Further,
it does not appear from the statement of stockholders' equity that you
appropriately allocated net loss to the non-controlling interests.&nbsp; Please
revise the notes to the financial statements to explain to us the nature of the
transactions during fiscal 2010 and 2011 which resulted in changes to the
non-controlling interests.&nbsp; Also, please revise your notes to include the
disclosures set forth in ASC 810-10-50-1A(d).</b></p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'>There were no unusual
transactions in the period which affected the non-controlling interests in
partnerships. The non-controlling interest is adjusted each period to reflect
the limited partner's share of income or loss and any cash distributions to the
limited partner in the corresponding period. We will revise our disclosure in
future filings to read as follows:</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><u>Principles of Consolidation</u> - The consolidated financial
statements include the accounts of Good Times, its subsidiary and one limited
partnership, in which the Company exercises control as general partner. The
Company owns an approximate 51% interest in the partnership, is the sole
general partner, and receives a management fee prior to any distributions to
the limited partner.&nbsp; Because the Company owns an approximate 51% interest in
the partnership and exercises complete management control over all decisions
for the partnership, except for certain veto rights, the financial statements of
the partnership are consolidated into the Company's financial statements.&nbsp; The
equity interest of the unrelated limited partner is shown on the accompanying
consolidated balance sheet in the stockholders' equity section as a
non-controlling interest <b>and is adjusted each period to reflect the limited
partner's share of the net income or loss as well as any cash distributions to
the limited partner for the period. The limited partner's share of the net
income or loss in the partnership is shown as non-controlling interest income
or expense in the accompanying consolidated statement of operations.</b> All
inter-company accounts and transactions are eliminated.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Statements of Cash Flows, page
F-6</u></b></p>



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<p class=MsoHeader>United States Securities and Exchange Commission</p>

<p class=MsoHeader>March 14, 2012</p>

<p class=MsoNormal style='margin-bottom:12.0pt'>Page 3 of 6</p>



<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.25in;text-align:justify;text-indent:-.25in'><b>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>We
note that the cash flows from operating activities section of the statement of
cash flows includes the presentation of net cash used in operating activities
from continuing operations and net cash used in operating activities from
discontinued operations.&nbsp; Please confirm to us that you do not have any cash
flows from investing or financing activities of discontinued operations for
fiscal years 2011 and 2010.&nbsp; If you do have cash flows related to investing or
financing activities of discontinued operations, please revise to separately
present each amount within the applicable section of the statement of cash
flows.&nbsp; Please note that it is not appropriate to present cash flows from
operating, investing, and financing activities of the discontinued operations
all within the operating cash flow category.&nbsp; Please advise or revise
accordingly.</b></p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>There were no material investing
or financing cash flows related to discontinued operations as all cash flows
were from operating activities for fiscal years 2011 and 2010.</p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'><b><u>Notes to the Financial Statements</u></b></p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Note 1. Organization and Summary
of Significant Accounting Policies Principles of Consolidation, page F-7</u></b></p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.25in;text-align:justify;text-indent:-.25in'><b>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>We
note your disclosure that in June 2010 you sold your interest in one limited
partnership to the limited partner and then entered into a franchise agreement
with the limited partner who now operates the restaurant as a franchisee.&nbsp;
Please explain to us how you accounted for this transaction.&nbsp; Also, please tell
us if this sale of the limited partnership relates to the same restaurant
classified in discontinued operations in Note 3.</b></p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'>Prior to the sale of the
restaurant the limited partnership was consolidated in the financial statements
of Good Times Restaurants Inc, and the equity interest of the unrelated limited
partner was shown on the consolidated balance sheet in the stockholders' equity
section as a non-controlling interest. The limited partner's share of the net
income or loss in the partnership was shown as non-controlling interest income
or expense in the consolidated statement of operations. The sale was accounted for as a
sale of assets with the corresponding loss on sale recorded in the consolidated
statement of operations.</p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>The sale does not relate to the
restaurant classified in discontinued operations.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Impairment of Long-Lived Assets,
page F-8</u></b></p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.25in;text-align:justify;text-indent:-.25in'><b>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>We
note your disclosure that in fiscal 2010 you closed two company operated
restaurants resulting in total charges of $396,000.&nbsp; Please explain to us and
disclose in the notes to the financial statements, the method you used to
determine this impairment charge and also tell us where this amount is included
in the statement of operations.&nbsp; See guidance in ASC 360-10-50-2.&nbsp; Also, please
revise Note 10 to include the disclosures required by ASC 820-10-50-5 for
assets such as this that are measured at fair value on a non-recurring basis.</b></p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>We have reviewed the disclosure
requirements of ASC 360-10-50-2 and 820-10-50-5 and at this time we do not believe
these disclosures are relevant to aid the reader in understanding the financial
statements as the charges were included in discontinued operations at the time.
We will consider the additional disclosures when and if we have impairments in
the future.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Note 3. Discontinued Operations,
page F-11</u></b></p>



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<p class=MsoHeader>United States Securities and Exchange Commission</p>

<p class=MsoHeader>March 14, 2012</p>

<p class=MsoNormal style='margin-bottom:12.0pt'>Page 4 of 6</p>



<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.25in;text-align:justify;text-indent:-.25in'><b>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>We
note that during fiscal 2010 you closed two locations: one in Commerce City,
Colorado and one in Denver, Colorado.&nbsp; We also note that you have presented the
results of operations for these two locations as discontinued operations.&nbsp;
Please explain to us why you believe it is appropriate to present the closure
of these restaurants as discontinued operations.&nbsp; As part of your response,
please explain to us how you considered any migration of revenues from these
restaurants as discussed in ASC 205-20-55-7.&nbsp; Also, we note from your
disclosure in MD&amp;A on page 21 that the gain on restaurant assets in 2011 is
related to the gain on sale of two company-owned restaurants in February and
May 2011 and the sale of one co-developed building related to a restaurant
closed in fiscal 2010.&nbsp; Please tell us if the sale of the co-developed building
related to a restaurant closed in fiscal 2010 refers to the same closed
restaurant accounted for as discontinued operations in Note 3.&nbsp; If so, please
tell us why you believe it is appropriate to present the gain related to this
sale in continuing operations.&nbsp; Additionally, please explain to us why the two
company-owned restaurants sold in fiscal 2011 do not appear to be presented as
discontinued operations.&nbsp; As part of your response, please explain to us how
you evaluate the sale or closure of a restaurant for treatment as discontinued
operations versus presentation in continuing operations.</b></p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>The Company evaluates discontinued operations under
guidance provided in ASC 205-20-45-1, which provides the following:</p>

<p class=MsoListParagraph style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:38.9pt;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The results of operations of a
component of an entity that either has been disposed of or is classified as
held for sale under the requirements of paragraph 360-10-45-9, shall be
reported in discontinued operations in accordance with paragraph 205-20-45-3 if
both of the following conditions are met:</p>

<ul style='margin-top:0in' type=disc>
 <ol style='margin-top:0in' start=1 type=1>
  <li class=MsoNormal style='text-align:justify'>The
      operations and cash flows of the component have been (or will be)
      eliminated from the ongoing operations of the entity as a result of the
      disposal transaction.</li>
  <li class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'>The entity will not have any significant
      continuing involvement in the operations of the component after the
      disposal transaction.&quot;</li>
 </ol>
</ul>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>Additionally, per 205-20-55-3 (Description of the
Four-Step Process):</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.5in;text-align:justify'>The
following steps, presented as questions, may be used to evaluate whether the
two conditions of paragraph 205-20-45-1 are met.&nbsp; These steps are also depicted
in a flow chart (see paragraph 205-20-55-25).&nbsp; The steps are as follows:</p>

<ul style='margin-top:0in' type=disc>
 <ol style='margin-top:0in' start=3 type=1>
  <li class=MsoNormal style='text-align:justify'>Are
      continuing cash flows expected to be generated by the ongoing entity?</li>
  <li class=MsoNormal style='text-align:justify'>Do
      the continuing cash flows result from a migration or continuation of
      activities?</li>
  <li class=MsoNormal style='text-align:justify'>Are
      the continuing cash flows significant?</li>
  <li class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'>Does the ongoing entity have significant
      continuing involvement in the operations of the disposed component?&quot;</li>
 </ol>
</ul>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In fiscal 2010, Good Times closed two store locations
and incurred an impairment charge of approximately $396,000 and a loss from
operations of approximately $194,000 or a total of $590,000.&nbsp; The closure of
these stores was deemed to be discontinued operations at the time based on the
Company's policy for evaluating continuing operations.&nbsp; Prior to 2011 the
Company evaluated operations at the restaurant level.&nbsp; However with the closing
of additional restaurants and the relatively small size of the Company and its
market it was determined that significant costs, including advertising and
management oversight, covered only a relatively small region in which all
restaurants were located. Therefore, in fiscal 2011, the Company reevaluated
their analysis of operations and determined that these general costs could not
be specifically assigned in a meaningful fashion to specific restaurants as
before and concluded that a regional concept should be adopted in evaluating
discontinued operations.</p>

<p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'>In fiscal 2011, the Company sold two stores, which
resulted in minimal gains and had operating losses of $76,000.&nbsp; Additionally,
in the first quarter of fiscal 2012, the Company sold another restaurant for a
minimal gain which had a relatively insignificant loss from operations.&nbsp; Based
on our current policy, the company believes these operations relative to our
cost structure should be reflected in continuing operations.</p>



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<p class=MsoHeader>United States Securities and Exchange Commission</p>

<p class=MsoHeader>March 14, 2012</p>

<p class=MsoNormal style='margin-bottom:12.0pt'>Page 5 of 6</p>



<p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'>Given the apparent inconsistency in treatment of
locations closed or sold from fiscal 2010 through 2012, the company also
evaluated whether additional disclosure was required in its 2011 Form 10K and
concluded based on the relative immateriality and the change to a preferential
analysis of operations along with the fact that substantive disclosure is
provided in MD&amp;A as to the operations on a restaurant level, such
disclosure was not required. The company further believes the disclosure within
MD&amp;A at the restaurant level and the impact of closures on its current
analysis is more in line with the industry disclosures.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Note 4. Debt and Capital Leases,
page F-12</u></b></p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.25in;text-align:justify;text-indent:-.25in'><b>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b><b>We
note your disclosure that you received notice from Wells Fargo Bank in December
2011 indicating that you were not in compliance with certain covenants of the
credit agreement.&nbsp; We also note that you entered into an amendment to the
credit agreement and waiver of defaults that waived the current covenant
defaults and modified the loan covenants and note terms.&nbsp; Please revise to
discuss in MD&amp;A whether the Company expects to comply with its technical
debt covenants in future periods and discuss in MD&amp;A and the notes to the
Company's financial statements the potentially adverse consequences to the Company
in the event it is unable to do so and cannot obtain waivers of covenant
violations from its lender.&nbsp; Additionally, please explain to us and in the
notes to your financial statements, how you have accounted for the
modifications to the note terms in accordance with ASC 470-50-40.</b></p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'>We have revised our disclosure of
the Wells Fargo technical debt covenants in our 10Q for the three month period
ending December 31<sup>st</sup>, 2011, filed on February 14, 2012 to read as
follows:</p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'><i>While no assurances can be given
that the Company will be able to achieve these covenants, the Company believes
that through additional financing, improved EBITDA performance and other
alternatives the Company is currently pursuing, it will be able to remain in
compliance with the amended covenants. If not, and if the bank elected to
accelerate the note, it could adversely impact future operations.</i></p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><u>Additional comment on covenant
compliance</u>:</p>

<p class=MsoListParagraph style='margin-top:0in;margin-right:0in;margin-bottom:
12.0pt;margin-left:0in;text-align:justify'>At
the time we restructured our debt the Company established covenants it believed
to be realistically attainable. &nbsp;Through our first fiscal quarter of 2012 and
based on our projections, we believe we will be able to achieve our EBITA debt coverage
ratio covenant as of June 30, 2012, but this will be further evaluated when we
file our second quarter 10Q for the period ending March 31, 2012. The Company
is also required to have additional equity as of December 31, 2012. The Company
is working on a number of alternatives in this regard and anticipates meeting
the covenant requirement for minimum equity of $2,500,000 and maintain its
NASDAQ listing requirements.</p>

<p class=MsoListParagraph style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:0in;text-align:justify'><u>Regarding
the note modification</u>:</p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>We do not believe the
modifications to the note terms with Wells Fargo qualified as an exchange of
debt instruments as described in ASC 470-50-40, as the new terms were not
substantially different than the old terms. There were no changes in deferred
financing costs. There was no change in the interest rate, only a change in the
future principal amortization and modifications to the technical debt
covenants. Therefore there was no accounting change required. We believe we
have properly disclosed the modifications in the notes to our financial
statements.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Note 7. Financing Transactions,
page F-14</u></b></p>



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<p class=MsoHeader>United States Securities and Exchange Commission</p>

<p class=MsoHeader>March 14, 2012</p>

<p class=MsoNormal style='margin-bottom:12.0pt'>Page 6 of 6</p>



<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
6.0pt;margin-left:.5in;text-align:justify;text-indent:-.25in'><b>10. We note your disclosure that
in January 2010 you entered into an agreement to amend your loan with PFGI II
LLC in which the maturity date was extended, the interest rate was increased
and the monthly payments of principal and interest are payable beginning
January 31, 2010.&nbsp; Please tell us and explain in the notes to your financial
statements, how you have accounted for this debt modification in accordance
with ASC 470-50-40.</b></p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>We do not believe the
modifications to the note terms with PFGI II LLC qualified as an exchange of
debt instruments as described in ASC 470-50-40, as the new terms were not
substantially different than the old terms. There were no changes in deferred
financing costs. The warrants issued with the amendment were properly recorded
and disclosed. Therefore there was no accounting change required. We believe we
have properly disclosed the modifications in the notes to our financial
statements.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'><b><u>Note 11. Stockholders Equity,
page F-17</u></b></p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
12.0pt;margin-left:.5in;text-align:justify;text-indent:-.25in'><b>11. We note your disclosure of
the assumptions used to estimate the fair value of the stock option grants
during 2011.&nbsp; Please revise Note 11 to disclose the assumptions used to
estimate the fair value of the stock options granted for each year in which an
income statement is provided.&nbsp; See ASC 718-10-50-2(f)</b></p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>We will revise our note in future
filings to include the assumptions used to estimate the fair value of stock
options granted for each year in which an income statement is presented.</p>

<p class=MsoNoSpacing style='margin-bottom:6.0pt;text-align:justify'>In connection with our response
to your comments, we acknowledge that:</p>

<p class=MsoNoSpacing style='margin-left:.5in;text-align:justify;text-indent:
-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the Company
and its management &nbsp;is responsible for the adequacy and accuracy of the
disclosure in our filings;</p>

<p class=MsoNoSpacing style='margin-left:.5in;text-align:justify;text-indent:
-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Staff
comments or changes to disclosure in response to Staff comments do not
foreclose the Commission from taking action with respect to the filing; and</p>

<p class=MsoNoSpacing style='margin-top:0in;margin-right:0in;margin-bottom:
12.0pt;margin-left:.5in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the Company
may not assert Staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.</p>

<p class=MsoNoSpacing style='margin-bottom:12.0pt;text-align:justify'>If you have any additional
questions or comments, please feel free to contact me directly at 303-384-1411
or Sue Knutson at 303-384-1424.</p>

<p class=MsoNoSpacing style='text-align:justify'>Sincerely,</p>

<p class=MsoNoSpacing style='text-align:justify'><i>/s/ Boyd E. Hoback</i></p>

<p class=MsoNoSpacing style='text-align:justify'>Boyd
E. Hoback</p>

<p class=MsoNoSpacing style='text-align:justify'>President
and CEO, Good Times Restaurants Inc.</p>



<p class=MsoNoSpacing style='text-align:justify'>cc:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Linda
Cvrkel, Branch Chief</p>

<p class=MsoNoSpacing style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Claire
Erlanger</p>



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