ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On
The Company applied for the PPP Loan and received the amount of the PPP Loan
prior to the issuance of the recent guidance from the
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
Reference is made to the disclosure under Item 1.01 above which is hereby incorporated by reference into this Item 2.03.
ITEM 8.01. OTHER MATERIAL EVENTS.
We are reporting that since the implementation of "stay-at-home" and dining room
closure orders in mid-March due to the rapidly evolving COVID-19 outbreak,
operations at our Company-owned restaurants and our franchisees' restaurants
have been disrupted. Only three of our four Company-owned restaurants are
currently open, and those three Company-owned restaurants are only offering food
through take-out and delivery as we are prohibited from offering dine-in seating
and service at our restaurants. The majority of our franchised locations have
been temporarily closed due to their locations in venues that are closed (such
as shopping malls and movie theaters) or venues operating at significantly
reduced traffic (such as airports and highway travel plazas). Such closures and
disruptions have materially impacted revenues at our Company-owned restaurants
with significant declines since the middle of
We also expect to realize declines in sales and profits from our Branded Product Program during this period as many of our customers operate in venues that are currently closed and may be slow to reopen, such as professional sports venues, amusement parks, shopping malls and movie theaters.
During
The primary manufacturer of our hot dogs,
Also, in light of the rapidly evolving coronavirus (COVID-19) outbreak, the
Company is also filing this Current Report on Form 8-K for the purpose of
supplementing the risk factors disclosed in Item 1A of its Annual Report on Form
10-K for the fiscal year ended
Pandemics or disease outbreaks, such as the current novel coronavirus (COVID-19 virus) pandemic may disrupt our business, which could materially affect our operations and results of operations.
Pandemics or disease outbreaks such as the current novel coronavirus (COVID-19
virus) pandemic, have and may continue to impact customer traffic at
company-owned and franchised restaurants, may make it more difficult to staff
our company-owned and restaurants of our franchisees, may affect sales and
profits from our Branded Product Program as many of our customers operate in
venues that are currently closed and may be slow to reopen, such as professional
sports venues, amusement parks, shopping malls and movie theaters, and, in more
severe cases, may cause a temporary inability to obtain supplies, increase
commodity costs or continue to cause full and partial closures of our affected
company-owned and franchised restaurants, sometimes for prolonged periods of
time. The Company and its franchisees have implemented closures, modified hours
or reductions in on-site staff, resulting in cancelled shifts for some of the
restaurant employees. These changes and any additional changes may materially
adversely affect our business or results of operations, and may impact our
liquidity or financial condition, particularly if these changes are in place for
a significant amount of time. In addition, our operations could be disrupted if
any of our employees or employees of the Company's franchisees, suppliers and
business partners were or are suspected of having COVID-19 or other illnesses
since this could require the Company, its franchisees, its suppliers or its
business partners to quarantine some or all such employees, close and disinfect
restaurant and other facilities or, in the case of our suppliers, delay in
delivering the Company's products. If a significant percentage of the Company's
workforce or the workforce of our franchisees, our suppliers and business
partners are unable to work, including because of illness or travel or
government restrictions in connection with pandemics or disease outbreaks
(including the current COVID-19 pandemic), the Company's operations may be
negatively impacted, potentially materially adversely affecting the Company's
business, liquidity, financial condition or results of operations. Furthermore,
such viruses may be transmitted through human contact, and the risk of
contracting viruses has caused and could continue to cause employees or guests
to avoid gathering in public places, which has had, and could further have,
adverse effects on restaurant and other guest traffic or the ability to
adequately staff restaurants. The Company could also be adversely affected if
government authorities continue to impose restrictions on public gatherings,
human interactions, operations of restaurants or mandatory closures, seek
voluntary closures, restrict hours of operations or impose curfews, restrict the
import or export of products or if suppliers issue mass recalls of products.
Currently, several states and municipalities in the
Forward-Looking Statements
Except for historical information contained in this report, the matters
discussed are forward looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended that involve risks and uncertainties. Words
such as "anticipate", "believe", "estimate", "expect", "intend", and similar
expressions identify forward-looking statements, which are based on the current
belief of the Company's management, as well as assumptions made by and
information currently available to the Company's management. Among the factors
that could cause actual results to differ materially include but are not limited
to: the status of our licensing and supply agreements, including the impact of
our supply agreement for hot dogs with
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