Company: BTBDW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001477932-25-002248
Chunk: 160

Company: BT Brands, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1B
Chunk 160
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3. This increase was due primarily to continued price inflation on input costs, including food and labor, and the matters discussed in the “Cost of Sales,” “Labor Costs,” and “Occupancy and Other Operating Cost” sections below.

The impact of cost increases and the addition, including non-BTND restaurants during the year, may be detailed as follows:

Restaurant operating costs for the period ended December 31, 2023 $13,210,129 Increase in food and paper costs  8,412 Increase in labor costs  670,223 Increase in occupancy and operating cost  210,880 Restaurant operating costs for the period ended December 29, 2024 $14,099,644 

Costs of Sales - food and paper:

The cost of food and paper sales for 2024 decreased to 37.8% of restaurant sales from 39.8% in 2023. The decrease is the net result of menu price increases at all locations during the year, offset by a moderate inflationary cost environment, where we saw a slight rise in beef and paper and lower costs for some other items. Because of its coffee-focused menu, PIE has significantly lower food and paper costs than our other restaurants.

Labor Costs:

In 2024, labor and benefits costs increased to 41.3% of restaurant sales from 38.8% in 2023. The increase results from higher wages for hourly employees and managers in all of our markets and an unfavorable utilization of the fixed portion of labor costs. Also, PIE and Keegan’s businesses run higher labor costs than BTND. In addition, we added a senior culinary person at PIE to focus on new menu development. Payroll costs are semi-variable, meaning that they do not decrease proportionally to decreases in revenue; thus, they increase as a percentage of restaurant sales when there is a decrease.

Occupancy and Other Operating Costs:

For 2024, occupancy and other costs increased to 16.0% of sales, or $2,355,806, compared to $2,154,611, or 15.3% of restaurant sales in 2023, principally as a result of the addition of Schnitzel Haus as a leased location during the year.

Depreciation and Amortization Costs:

For 2024, depreciation and amortization costs increased 24.1%, or $144,320, to $742,860 (5.0% of sales) from $598,