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Contingent Liabilities and Liquidity | 9 Months Ended
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Jun. 29, 2021
Commitments and Contingencies Disclosure [Abstract] |
Contingent Liabilities and Liquidity | Note 9.Contingent Liabilities and Liquidity We remain contingently liable on various leases underlying restaurants that were previously sold to franchisees. We have never experienced any losses related to these contingent lease liabilities, however if a franchisee defaults on the payments under the leases, we would be liable for the lease payments as the assignor or sub-lessor of the lease. Currently we have not been notified nor are we aware of any leases in default by the franchisees, however there can be no assurance that there will not be in the future which could have a material effect on our future operating results. As previously disclosed in the Company’s Form 10-K for the fiscal year ended September 29, 2020, the Company is the defendant party to a lawsuit filed by White Winston Select Asset Funds, LLC and GT Acquisition Group, Inc. v. Good Times Restaurants, Inc, arising from the failed negotiations between plaintiffs and the Company for the sale of the Good Times Drive Thru division to plaintiffs. The lawsuit was initially filed on September 24, 2019 in Delaware Chancery Court and Company removed the case to federal court in the US District Court for the District of Delaware on November 5, 2019. As of June 30, 2021, the parties have completed fact discovery. On July 30, 2021, the plaintiffs moved the Court for leave to amend their complaint and add new causes of action and a claim for $18 million in damages. The Company opposes this motion on various grounds and will continue to vigorously pursue a full defense of this matter on the merits. While we believe the amended complaint is without merit, if the plaintiffs are successful, it could have a material impact to the Company. Additionally, in the normal course of business, there may be various claims in process, matters in litigation, and other contingencies brought against the company by employees, vendors, customers, franchisees, or other parties. Evaluating these contingencies is a complex process that may involve substantial judgment on the potential outcome of such matters, and the ultimate outcome of such contingencies may differ from our current analysis. We review the adequacy of accruals and disclosures related to such contingent liabilities in consultation with legal counsel. While it is not possible to predict the outcome of these claims with certainty, it is management’s opinion that potential losses associated with such contingencies would be immaterial to our financial statements.

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