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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Mar. 26, 2017	May 05, 2017
Document and Entity Information:
Entity Registrant Name	RAVE RESTAURANT GROUP, INC.
Entity Trading Symbol	rave
Document Type	10-Q
Document Period End Date	Mar. 26, 2017
Amendment Flag	false
Entity Central Index Key	0000718332
Current Fiscal Year End Date	--06-25
Entity Common Stock, Shares Outstanding		10,656,551
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 26, 2017	Mar. 27, 2016	Mar. 26, 2017	Mar. 27, 2016
REVENUES
REVENUES:	$ 14,081	$ 15,262	$ 44,329	$ 45,109
COSTS AND EXPENSES:
Cost of sales	12,644	13,770	39,898	39,259
General and administrative expenses	2,141	1,885	6,219	5,148
Franchise expenses	893	924	2,729	2,732
Pre-opening expenses	29	115	95	851
Loss on sale of assets	345	0	1,044	0
Impairment of long-lived assets and other lease charges	(123)	(165)	5,243	845
Bad debt	72	(80)	423	151
Interest expense	37	1	39	4
Total costs and expenses	16,038	16,450	55,690	48,990
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES	(1,957)	(1,188)	(11,361)	(3,881)
Income tax expense	5	3	24	2,637
Income (loss) from discontinued operations, net of taxes	$ 0	$ (39)	$ 2	$ (99)
LOSS PER SHARE OF COMMON STOCK - BASIC:
Loss from continuing operations	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.63)
Income (loss) from discontinued operations	0.00	0.00	0.00	(0.01)
Net loss	(0.18)	(0.12)	(1.07)	(0.64)
LOSS PER SHARE OF COMMON STOCK - DILUTED:
Loss from continuing operations	(0.18)	(0.12)	(1.07)	(0.63)
Income (loss) from discontinued operations	0.00	0.00	0.00	(0.01)
Net loss	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.64)
Weighted average common shares outstanding - basic	10,657	10,315	10,602	10,312
Weighted average common and potential dilutive common shares outstanding	10,657	10,315	10,602	10,312

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 26, 2017	Jun. 26, 2016
CURRENT ASSETS
Cash and cash equivalents	$ 2,373	$ 873
Accounts receivable, less allowance for bad debts accounts of $471 and $198, respectively	2,576	2,780
Notes receivable	85	167
Inventories	132	197
Income tax receivable	194	194
Property held for sale	811	0
Prepaid expenses and other	727	430
Total current assets	6,898	4,641
LONG-TERM ASSETS
Property, plant and equipment, net	4,427	12,979
Long-term notes receivable	206	382
Deposits and other	463	503
Total assets	11,994	18,505
CURRENT LIABILITIES
Accounts payable - trade	4,327	3,815
Short-term debt	1,000	0
Accrued expenses	1,331	1,220
Deferred rent	192	160
Deferred revenues	386	304
Total current liabilities	7,236	5,499
LONG-TERM LIABILITIES
Convertible notes	2,758	0
Deferred rent, net of current portion	1,511	1,710
Deferred revenues, net of current portion	1,375	1,440
Other long-term liabilities	21	453
Total liabilities	12,901	9,102
COMMITMENTS AND CONTINGENCIES (See Note 3)
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; authorized 26,000,000 shares; issued 17,775,951 and 17,460,951 shares, respectively; outstanding 10,656,551 and 10,341,551 shares, respectively	178	175
Additional paid-in capital	26,848	25,778
Retained earnings (accumulated deficit)	(3,297)	8,086
Treasury stock at cost Shares in treasury: 7,119,400	(24,636)	(24,636)
Total shareholders' equity	(907)	9,403
Total liabilities and shareholders' equity	$ 11,994	$ 18,505

CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICALS - USD ($) $ in Thousands	Mar. 26, 2017	Jun. 26, 2016
Parentheticals
Allowance for bad debts accounts	$ 471	$ 198
Common Stock, Par Value	$ 0.01	$ 0.01
Common Stock, Shares Authorized	26,000,000	26,000,000
Common Stock, Shares Issued	17,775,951	17,460,951
Common Stock, Shares Outstanding	10,656,551	10,341,551
Treasury Stock, shares	7,119,400	7,119,400

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Mar. 26, 2017	Mar. 27, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (11,383)	$ (6,617)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization	2,117	1,955
Impairment of long-lived assets	4,773	845
Stock compensation expense	143	135
Deferred income taxes	0	2,593
Loss on sale/disposal of assets	1,044	1
Provision for bad debt	423	151
Changes in operating assets and liabilities:
Notes and accounts receivable	39	842
Inventories	65	(60)
Accounts payable - trade	512	1,241
Accrued expenses	(321)	794
Deferred rent	(167)	(97)
Deferred revenue	17	0
Prepaid expenses and other	(294)	360
Cash (used in) provided by operating activities	(3,032)	2,143
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets	102	14
Capital expenditures	(258)	(7,624)
Cash used in investing activities	(156)	(7,610)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock	0	768
Proceeds from stock options	806	7
Proceeds from issuance of convertible notes	2,882	0
Net change in short-term debt	1,000	0
Cash provided by financing activities	4,688	775
Net increase (decrease) in cash and cash equivalents	1,500	(4,692)
Cash and cash equivalents, beginning of period	873	5,727
Cash and cash equivalents, end of period	2,373	1,035
CASH PAYMENTS FOR:
Interest	25	1
Income taxes - net	$ 29	$ 0

Summary of Significant Accounting Policies

9 Months Ended

Mar. 26, 2017

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(1)

Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All appropriate intercompany balances and transactions have been eliminated.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Fiscal Quarters

The three and nine month periods ended March 26, 2017 and March 27, 2016, each contained 13 weeks and 39 weeks, respectively.

Revenue Recognition

The Company recognizes revenue when products are delivered and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. The Company's Norco division sells food and supplies to franchisees on trade accounts under terms common in the industry. Food and supply sales revenues, including shipping and handling costs, are recognized upon delivery of the product. Revenue from restaurant sales is recognized when food and beverage products are sold. The Company reports revenue net of sales taxes collected from customers and remitted to governmental taxing authorities.

Franchise revenue consists of income from license fees, royalties, and area development and foreign master license fees. License fees are recognized as income when there has been substantial performance under the agreement by the Company. Domestic license fees are generally recognized at the time the restaurant is opened. Foreign master license fees are generally recognized upon execution of the agreement as all material services relating to the sale have been substantially performed by the Company and the fee has been collected. Royalties are recognized as income when earned.

Impairment of Long-Lived Assets and Other Lease Charges

The Company reviews long-lived assets for impairment when events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use of the assets compared to their carrying values. If impairment is recognized, the carrying value of the impaired asset is reduced to its fair value, based on discounted estimated future cash flows.

Stock-Based Compensation

The Company accounts for stock options using the fair value recognition provisions of the authoritative guidance on share-based payments. The Company uses the Black-Scholes formula to estimate the value of stock-based compensation for options granted to employees and directors and expects to continue to use this acceptable option valuation model in the future. The authoritative guidance also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow.

Restricted Stock Units

Compensation cost is measured as an amount equal to the fair value of the restricted stock units on the date of grant and is expensed over the vesting period if achievement of the performance criteria is deemed probable, with the amount of the expense recognized based on the best estimate of the ultimate achievement level.

Use of Management Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect its reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. The Company bases its estimates on historical experience and other various assumptions that it believes are reasonable under the circumstances. Estimates and assumptions are reviewed periodically and actual results could differ materially from estimates.

Reclassification

Certain items have been reclassified in the prior year financial statements to conform to current year presentation.

Convertible Notes

9 Months Ended

Mar. 26, 2017

Convertible Notes:

Convertible Notes

(2)

Convertible Notes

On March 3, 2017, the Company approved a proposed rights offering to its existing shareholders and, in connection therewith, declared a dividend of subscription rights ("Rights") to holders of record of its common stock as of December 21, 2016, to purchase 4% Convertible Senior Notes due 2022, par $100 ("Notes"). Shareholders were issued 0.2817% of a Right per share of the common stock held on the record date (i.e., one Right for each 355 shares); provided, however, that the number of Rights was rounded to the nearest whole number and no fractional Rights were issued. Each whole Right entitled the holder to purchase one Note at the par value of $100 each. The Notes are convertible into shares of common stock at a conversion price of $2.00 per share (i.e., 50 shares of common stock per Note). The rights offering was completed on March 3, 2017. Shareholders exercised subscription rights to purchase all 30,000 of the Company’s Notes offered at the par value of $100 per convertible note, resulting in gross offering proceeds to the Company of $3.0 million.

The Notes have been issued in book-entry form represented by a permanent global certificate deposited with The Depository Trust Company (“DTC”). Beneficial interests in the convertible notes will be shown on, and transfers will be effected through, records maintained by DTC. The convertible notes are not listed for trading on any exchange but are DTC-eligible for over-the-counter trading.

The Notes bear interest at the rate of 4% per annum on the principal or par value of $100 per note, payable annually in arrears on February 15 of each year, commencing February 15, 2018. Interest is payable in cash or, at the Company’s discretion, in shares of Company common stock. The Notes mature on February 15, 2022, at which time all principal and unpaid interest will be payable in cash or, at the Company’s discretion, in shares of Company common stock. The Notes are secured by a pledge of all outstanding equity securities of our two primary direct operating subsidiaries.

Noteholders may convert their notes to common stock effective February 15, May 15, August 15 and November 15 of each year, unless the Company sooner elects to redeem the notes. The conversion price is $2.00 per common share of stock. Accrued interest will be paid through the effective date of the conversion in cash or, at the Company’s sole discretion, in shares of Company common stock.

The Company determined that the notes contained a beneficial conversion feature of $0.1 million since the market price of the Company’s common stock was higher than the effective conversion price of the notes when issued. The beneficial conversion feature and the issuance costs of the notes aggregated $0.2 million and are considered a debt discount and are accreted into interest expense using the effective interest method over the debt maturity period. As of March 27, 2016, the debt discount balance was $0.2 million. For the three months ended March 27, 2016, accreted interest expense was $3 thousand.

Commitments and Contingencies

9 Months Ended

Mar. 26, 2017

Commitments and Contingencies {1}

Commitments and Contingencies

(3)

Commitments and Contingencies

On April 22, 2009, the Company’s board of directors amended the stock purchase plan first adopted on May 23, 2007, and previously amended on June 2, 2008, to increase the number of shares of common stock the Company may repurchase to a total of 3,016,000 shares. As of March 26, 2017, up to an additional 848,425 shares could be purchased under the plan.

The Company is subject to various claims and legal actions in the ordinary course of its business. The Company believes that all such claims and actions currently pending against it are either adequately covered by insurance or would not have a material adverse effect on the Company’s annual results of operations, cash flows or financial condition if decided in a manner that is unfavorable to the Company.

Impairment and other lease charges

9 Months Ended

Mar. 26, 2017

Impairment and other lease charges:

Impairment and other lease charges

(4)

Impairment and other lease charges

The Company reviews on a quarterly basis its long-lived assets for impairment and the estimated lease obligations for closed stores or abandoned sites. The Company determined there were recoveries to prior lease termination charges of $0.1 million and $0.2 million for the fiscal quarters ended March 26, 2017 and March 27, 2016 as a result of negotiated settlements with landlords. For the nine months ended March 26, 2017, the Company recognized impairment charges of $4.7 million related to 14 underperforming Company-owned Pie Five locations, nine of which were closed during the third quarter. Additionally, the Company recognized lease termination expenses of $0.5 million attributable to previously executed leases for 16 locations no longer deemed desirable for future development of Company-owned Pie Five units. For the nine months ended March 27, 2016, the Company recognized impairment and lease termination charges of $0.8 million related to three underperforming Company-owned Pie Five units.

Stock-Based Compensation

9 Months Ended

Mar. 26, 2017

Stock-Based Compensation

Stock-Based Compensation

(5) Stock-Based Compensation

Stock Options

For the three months ended March 26, 2017, and March 27, 2016, the Company recognized stock-based compensation expense related to stock options of $20,000 and $45,000, respectively. For the nine month periods ended March 26, 2017, and March 27, 2016, the Company recognized stock-based compensation expense related to stock options of $70,000 and $135,000, respectively. As of March 26, 2017, unamortized stock-based compensation expense was $0.1 million.

The following table summarizes the number of shares of the Company’s common stock subject to outstanding stock options:

	Nine Months Ended
<	March 26, 2017	March 27, 2016

Outstanding at beginning of year	847,556	871,798

Granted	50,000	42,786
Exercised	(315,000)	(3,000)
Forfeited/Canceled/Expired	(104,500)	(39,111)

Outstanding at end of period	478,056	872,473

Exercisable at end of period	358,056	563,537

Restricted Stock Units

For the three months ended March 26, 2017 and March 27, 2016, the Company recognized stock-based compensation expense related to restricted stock units in the amount of $33,000 and $0, respectively. For the nine months ended March 26, 2017 and March 27, 2016, the Company recognized stock-based compensation expense related to restricted stock units in the amount of $73,000 and $0, respectively. As of March 26, 2017, unamortized stock-based compensation expense related to restricted stock units was $0.5 million.

A summary of the staus of restricted stock units as of March 26, 2017, and changes during the nine months then ended is presented below:

Number of Restricted Stock Units

Unvested at June 26, 2016	79,620
Granted	536,310
Vested	-
Forfeited	(123,030)
Unvested at March 26, 2017	492,900

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

Earnings per Share (EPS)

9 Months Ended

Mar. 26, 2017

Earnings per Share (EPS)

Earnings per Share (EPS)

(6)

Earnings per Share (EPS)

The following table shows the reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation (in thousands, except per share amounts).

	Three Months Ended		Nine Months Ended
	March 26,	March 27,	March 26,	March 27,
	2017	2016	2017	2016
Loss from continuing operations	$ (1,962)	$ (1,191)	$ (11,385)	$ (6,518)
Income (loss) from discontinued operations	-	(39)	2	(99)
Net loss available to common stockholders	$ (1,962)	$ (1,230)	$ (11,383)	$ (6,617)

BASIC:
Weighted average common shares	10,657	10,315	10,602	10,312

Loss from continuing operations per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.63)
Income (loss) from discontinued operations per common share	-	-	-	(0.01)
Net loss per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.64)

DILUTED:
Weighted average common shares	10,657	10,315	10,602	10,312
Stock options	-	-	-	-
Weighted average common shares outstanding	10,657	10,315	10,602	10,312


Loss from continuing operations per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.63)
Income (loss) from discontinued operations per common share	-	-	-	(0.01)
Net loss per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.64)

For the three and nine months ended March 26, 2017, options to purchase 358,056 shares of common stock were excluded from the computation of diluted EPS because they would have an anti-dilutive effect due to the net losses incurred. For the three and nine months ended March 25, 2016, options to purchase 563,537 were excluded for the same reason.

Closed restaurants and discontinued operations

9 Months Ended

Mar. 26, 2017

Closed restaurants and discontinued operations

Closed restaurants and discontinued operations

(7) Closed restaurants and discontinued operations

In April, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which modifies the definition of discontinued operations to include only disposals of an entity that represent strategic shifts that have or will have a major effect on an entity’s operation and requires entities to disclose information about disposals of individually significant components that do not meet the definition of discontinued operations. The standard was effective prospectively for annual and interim periods beginning after December 15, 2014, with early adoption permitted. This pronouncement did not have a material impact on our condensed consolidated financial statements.

The authoritative guidance on “Accounting for Costs Associated with Exit or Disposal Activities,” requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. This authoritative guidance also establishes that fair value is the objective for initial measurement of the liability.

Discontinued operations included income/loss from a leased building associated with a Company-owned restaurant closed in a prior year.

- Definition

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Income Taxes

9 Months Ended

Mar. 26, 2017

Income Taxes:

Income Taxes

(8) Income Taxes

The Company accounts for income taxes under the provisions of ASC 740, Accounting for Income Taxes. Under ASC 740, deferred tax assets and liabilities for the expected future tax consequences of transactions and events are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company has open tax years for the U.S. federal return from fiscal year 2012 forward and fiscal year 2011 for various state purposes.

Accounting Standards Update No. 2105-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, issued on November 20, 2015, eliminates the requirement for entities that present a classified statement of financial position to classify deferred tax assets and liabilities as current and noncurrent, and instead required that they classify all deferred tax assets and liabilities as noncurrent. The Company is making an early adoption of this accounting standard on a prospective basis.

For the three months ended March 26, 2017, income tax expense of $5 thousand represents an income tax benefit of $0.5 million calculated at a rate consistent with the 34% statutory U.S. federal rate offset by an income tax expense of $0.5 million related to a valuation allowance for deferred tax assets and state taxes of $5 thousand. For the three months ended March 27, 2016, income tax expense was $3 thousand.

For the nine months ended March 26, 2017, income tax expense represents an income tax benefit of $3.9 million calculated at a rate consistent with the 34% statutory U.S. federal rate offset by an income tax expense of $3.9 million related to recording a valuation allowance for deferred tax assets of $3.9 million and state taxes of $24 thousand. For the nine months ended March 27, 2016, income tax expense was $2.6 million.

The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. The Company assesses whether a valuation allowance should be established against its deferred tax assets based on consideration of all available evidence, using a “more likely than not” standard. In assessing the need for a valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. In making such assessment, more weight is given to evidence that can be objectively verified, including recent cumulative losses. Future sources of taxable income are also considered in determining the amount of the recorded valuation allowance. Based on the Company’s review of this evidence at March 26, 2017, management determined that a full valuation allowance against all of the Company’s deferred tax assets at March 26, 2017 was appropriate. There was approximately $8.7 million of deferred tax assets at March 26, 2017.

Related Party Transactions

9 Months Ended

Mar. 26, 2017

Related Party Transactions

Related Party Transactions

(9) Related Party Transactions

On February 20, 2014, the Company entered into an Advisory Services Agreement (the “Agreement”) with NCM Services, Inc. (“NCMS”) pursuant to which NCMS will provide certain advisory and consulting services to the Company. NCMS is indirectly owned and controlled by Mark E. Schwarz, the Chairman of the Company. The term of the Agreement commenced December 30, 2013, and continues quarterly thereafter until terminated by either party. Pursuant to the Agreement, NCMS was paid an initial fee of $150,000 and earns quarterly fees of $50,000 and an additional fee of up to $50,000 per quarter (not to exceed an aggregate of $100,000 in additional fees). The quarterly and additional fees are waived if the Company is not in compliance with all financial covenants under its primary credit facility or to the extent that payment of those fees would result in non-compliance with such financial covenants.

On December 22, 2016, the Company obtained a $1.0 million loan from its largest shareholder, Newcastle Partners, LP ("Newcastle"), evidenced by a Promissory Note. The loan bears interest at 10% per annum and was originally due and payable on April 30, 2017. On May 8, 2017, the Company renewed and extended the Promissory Note on the same terms until the earlier of September 1, 2017, or the Company’s receipt of at least $2.0 million in additional debt or equity capital. Newcastle is an affiliate of the Company's Chairman, Mark E. Schwarz.

Segment Reporting

9 Months Ended

Mar. 26, 2017

Segment Reporting

Segment Reporting

(10)

Segment Reporting

Summarized in the following tables are net sales and operating revenues, operating income and geographic information (revenues) for the Company’s reportable segments for the three and nine month periods ended March 26, 2017 and March 27, 2016 (in thousands). Operating income reported below excludes income tax provision and discontinued operations.

		Three Months Ended		Nine Months Ended
		March 26,	March 27,	March 26,	March 27,
		2017	2016	2017	2016
Net sales and operating revenues:
Franchising and food and supply distribution		$ 10,042	$ 9,756	$ 31,164	$ 29,895
Company-owned restaurants		4,039	5,506	13,165	15,214
	Consolidated revenues	$ 14,081	$ 15,262	$ 44,329	$ 45,109

Depreciation and amortization:
Franchising and food and supply distribution		$ 2	$ 6	$ 11	$ 18
Company-owned restaurants		436	760	1,762	1,778
	Combined	438	766	1,773	1,796
Corporate administration and other		140	71	344	159
	Depreciation and amortization	$ 578	$ 837	$ 2,117	$ 1,955

Income (loss) from continuing operations before taxes:
Franchising and food and supply distribution		$ 484	$ 550	$ 1,944	$ 2,061
Company-owned restaurants		(1,039)	(1,192)	(9,074)	(3,905)
	Combined	(555)	(642)	(7,130)	(1,844)
Corporate administration and other		(1,402)	(546)	(4,231)	(2,037)
	Loss from continuing operations before taxes	$ (1,957)	$ (1,188)	$ (11,361)	$ (3,881)

Geographic information (revenues):
United States		$ 13,955	$ 15,228	$ 43,902	$ 44,685
Foreign countries		126	34	427	424
	Consolidated total	$ 14,081	$ 15,262	$ 44,329	$ 45,109
<

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599

+ Details

Accounting Policies (Policies)	9 Months Ended
Accounting Policies (Policies)	Mar. 26, 2017
Accounting Policies:
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All appropriate intercompany balances and transactions have been eliminated.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Fiscal Quarters	Fiscal Quarters The three and nine month periods ended March 26, 2017 and March 27, 2016, each contained 13 weeks and 39 weeks, respectively.
Revenue Recognition	Revenue Recognition The Company recognizes revenue when products are delivered and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. The Company's Norco division sells food and supplies to franchisees on trade accounts under terms common in the industry. Food and supply sales revenues, including shipping and handling costs, are recognized upon delivery of the product. Revenue from restaurant sales is recognized when food and beverage products are sold. The Company reports revenue net of sales taxes collected from customers and remitted to governmental taxing authorities. Franchise revenue consists of income from license fees, royalties, and area development and foreign master license fees. License fees are recognized as income when there has been substantial performance under the agreement by the Company. Domestic license fees are generally recognized at the time the restaurant is opened. Foreign master license fees are generally recognized upon execution of the agreement as all material services relating to the sale have been substantially performed by the Company and the fee has been collected. Royalties are recognized as income when earned.
Impairment of Long-Lived Assets and Other Lease Charges, Policy	Impairment of Long-Lived Assets and Other Lease Charges The Company reviews long-lived assets for impairment when events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use of the assets compared to their carrying values. If impairment is recognized, the carrying value of the impaired asset is reduced to its fair value, based on discounted estimated future cash flows.
Share-based Compensation, Policy	Stock-Based Compensation The Company accounts for stock options using the fair value recognition provisions of the authoritative guidance on share-based payments. The Company uses the Black-Scholes formula to estimate the value of stock-based compensation for options granted to employees and directors and expects to continue to use this acceptable option valuation model in the future. The authoritative guidance also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow.
Restricted Stock Units	Restricted Stock Units Compensation cost is measured as an amount equal to the fair value of the restricted stock units on the date of grant and is expensed over the vesting period if achievement of the performance criteria is deemed probable, with the amount of the expense recognized based on the best estimate of the ultimate achievement level.
Use of Management Estimates	Use of Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect its reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. The Company bases its estimates on historical experience and other various assumptions that it believes are reasonable under the circumstances. Estimates and assumptions are reviewed periodically and actual results could differ materially from estimates.
Reclassification	Reclassification Certain items have been reclassified in the prior year financial statements to conform to current year presentation.

Schedule of Summary of Outstanding Stock Options (Tables)

9 Months Ended

Mar. 26, 2017

Schedule of Summary of Outstanding Stock Options

Schedule of Summary of Outstanding Stock Options

The following table summarizes the number of shares of the Company’s common stock subject to outstanding stock options:

	Nine Months Ended
<	March 26, 2017	March 27, 2016

Outstanding at beginning of year	847,556	871,798

Granted	50,000	42,786
Exercised	(315,000)	(3,000)
Forfeited/Canceled/Expired	(104,500)	(39,111)

Outstanding at end of period	478,056	872,473

Exercisable at end of period	358,056	563,537

Schedule of Summary of Restricted Stock Units

A summary of the staus of restricted stock units as of March 26, 2017, and changes during the nine months then ended is presented below:

Number of Restricted Stock Units

Unvested at June 26, 2016	79,620
Granted	536,310
Vested	-
Forfeited	(123,030)
Unvested at March 26, 2017	492,900

Schedule of reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation (Tables)

9 Months Ended

Mar. 26, 2017

Schedule of reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation

Schedule of Earnings Per Share, Basic and Diluted

	Three Months Ended		Nine Months Ended
	March 26,	March 27,	March 26,	March 27,
	2017	2016	2017	2016
Loss from continuing operations	$ (1,962)	$ (1,191)	$ (11,385)	$ (6,518)
Income (loss) from discontinued operations	-	(39)	2	(99)
Net loss available to common stockholders	$ (1,962)	$ (1,230)	$ (11,383)	$ (6,617)

BASIC:
Weighted average common shares	10,657	10,315	10,602	10,312

Loss from continuing operations per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.63)
Income (loss) from discontinued operations per common share	-	-	-	(0.01)
Net loss per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.64)

DILUTED:
Weighted average common shares	10,657	10,315	10,602	10,312
Stock options	-	-	-	-
Weighted average common shares outstanding	10,657	10,315	10,602	10,312


Loss from continuing operations per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.63)
Income (loss) from discontinued operations per common share	-	-	-	(0.01)
Net loss per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.64)

Schedule of Segment Reporting (Tables)

9 Months Ended

Mar. 26, 2017

Schedule of Segment Reporting (Tables):

Schedule of Segment Reporting Information, by Segment

		Three Months Ended		Nine Months Ended
		March 26,	March 27,	March 26,	March 27,
		2017	2016	2017	2016
Net sales and operating revenues:
Franchising and food and supply distribution		$ 10,042	$ 9,756	$ 31,164	$ 29,895
Company-owned restaurants		4,039	5,506	13,165	15,214
	Consolidated revenues	$ 14,081	$ 15,262	$ 44,329	$ 45,109

Depreciation and amortization:
Franchising and food and supply distribution		$ 2	$ 6	$ 11	$ 18
Company-owned restaurants		436	760	1,762	1,778
	Combined	438	766	1,773	1,796
Corporate administration and other		140	71	344	159
	Depreciation and amortization	$ 578	$ 837	$ 2,117	$ 1,955

Income (loss) from continuing operations before taxes:
Franchising and food and supply distribution		$ 484	$ 550	$ 1,944	$ 2,061
Company-owned restaurants		(1,039)	(1,192)	(9,074)	(3,905)
	Combined	(555)	(642)	(7,130)	(1,844)
Corporate administration and other		(1,402)	(546)	(4,231)	(2,037)
	Loss from continuing operations before taxes	$ (1,957)	$ (1,188)	$ (11,361)	$ (3,881)

Geographic information (revenues):
United States		$ 13,955	$ 15,228	$ 43,902	$ 44,685
Foreign countries		126	34	427	424
	Consolidated total	$ 14,081	$ 15,262	$ 44,329	$ 45,109
<

Convertible Notes (Details) - USD ($)	9 Months Ended
Convertible Notes (Details) - USD ($)	Mar. 27, 2016	Mar. 03, 2017
Convertible Notes Details
Gross proceeds of convertible senior notes		$ 3,000,000
Interest rate of the notes		4.00%
Maturity date of the notes	February 15, 2022
Notes are convertible into shares of common stock at a conversion price per share		$ 2.00
Beneficial conversion feature	$ 100,000
Beneficial conversion feature and the issuance costs of the notes	200,000
Debt discount balance	200,000
Accreted interest expense	$ 3,000

Commitments and Contingencies (Details) - shares	Mar. 26, 2017	Jun. 02, 2008
Commitments and Contingencies Details
Common stock shares may be repurchased		3,016,000
Additional shares could be purchased the plan	848,425

Impairment and other lease charges (Details) - USD ($)	9 Months Ended
Impairment and other lease charges (Details) - USD ($)	Mar. 26, 2017	Mar. 27, 2016
Impairment and other lease charges Details
Recoveries to prior lease termination charges	$ 100,000	$ 200,000
Recognized impairment charges	4,700,000
Recognized lease termination expenses	$ 500,000
Recognized impairment and lease termination charges		$ 800,000

Stock Option Stock-Based Compensation (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 26, 2017	Mar. 27, 2016	Mar. 26, 2017	Mar. 27, 2016
Stock-Based Compensation Narrative Details
Stock-based compensation recognized	$ 20,000	$ 45,000	$ 70,000	$ 135,000
Unamortized stock-based compensation expense			$ 100,000

Stock-Based Compensation (Details) - shares	9 Months Ended
Stock-Based Compensation (Details) - shares	Mar. 26, 2017	Mar. 27, 2016
Stock-Based Compensation Details
Outstanding at beginning of year	847,556	871,798
Granted	50,000	42,786
Exercised	(315,000)	(3,000)
Forfeited/Canceled/Expired	(104,500)	(39,111)
Outstanding at end of period	478,056	872,473
Exercisable at end of period	358,056	563,537

Restricted Stock Units Stock-Based Compensation (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 26, 2017	Mar. 27, 2016	Mar. 26, 2017	Mar. 27, 2016
Restricted Stock Units Stock-Based Compensation Narrative Details
Stock-based compensation expense related to restricted stock units	$ 33,000	$ 0	$ 73,000	$ 0
Unamortized stock-based compensation expense related to restricted stock units			$ 500,000

Summary of the status of restricted stock units (Details)	Mar. 26, 2017 shares
Summary of the status of restricted stock units Details
Unvested at June 26, 2016	79,620
Granted	536,310
Vested	0
Forfeited	(123,030)
Unvested at March 26, 2017	492,900

Earnings per Share (EPS) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 26, 2017	Mar. 27, 2016	Mar. 26, 2017	Mar. 27, 2016
Earnings per Share (EPS) Details
Loss from continuing operations	$ (1,962)	$ (1,191)	$ (11,385)	$ (6,518)
Income (loss) from discontinued operations	0	(39)	2	(99)
Net loss available to common stockholders	$ (1,962)	$ (1,230)	$ (11,383)	$ (6,617)
BASIC:
Weighted average common shares	10,657	10,315	10,602	10,312
Loss from continuing operations per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.63)
Income (loss) from discontinued operations per common share	0.00	0.00	0.00	(0.01)
Net loss per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.64)
DILUTED:
Weighted average common shares diluted	10,657	10,315	10,602	10,312
Stock options	0	0	0	0
Weighted average common shares outstanding	10,657	10,315	10,602	10,312
Loss from continuing operations per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.63)
Income (loss) from discontinued operations per common share	0.00	0.00	0.00	(0.01)
Net loss per common share	$ (0.18)	$ (0.12)	$ (1.07)	$ (0.64)

Earnings per Share (EPS) (Narrative) (Details) - shares	3 Months Ended		9 Months Ended
Earnings per Share (EPS) (Narrative) (Details) - shares	Mar. 26, 2017	Mar. 27, 2016	Mar. 26, 2017	Mar. 27, 2016
Earnings per Share (EPS) Narrative Details
Options to purchase shares of common stock excluded from computation of diluted shares	358,056	563,537	358,056	563,537

Income Taxes (Details) - USD ($)	3 Months Ended	9 Months Ended
Income Taxes (Details) - USD ($)	Mar. 26, 2017	Mar. 26, 2017
Income Taxes Details
Income tax benefit	$ 500,000	$ 3,900,000
Statutory U.S. federal rate	34.00%	34.00%
Income tax expense	$ 500,000	$ 3,900,000
Valuation allowance for deferred tax assets	500,000	3,900,000
State taxes	$ 5,000	$ 24,000

Deferred tax assets (Details)	Mar. 26, 2017 USD ($)
Deferred tax assets Details
Deferred tax assets	$ 8,700,000

Related Party Transactions (Details) - USD ($)	Mar. 26, 2017	Dec. 22, 2016
Related Party Transactions Details
NCMS was paid an initial fee	$ 150,000
Earns quarterly fees	50,000
Additional fee per quarter	50,000
Aggregate amount not to be exceeded in additional fees	$ 100,000
Amount of loan obtained from the largest shareholder		$ 1,000,000
Interest rate per annum on the loan		10.00%

Segment Reporting And Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 26, 2017	Mar. 27, 2016	Mar. 26, 2017	Mar. 27, 2016
Net sales and operating revenues:
Franchising and food and supply distribution	$ 10,042	$ 9,756	$ 31,164	$ 29,895
Company-owned restaurants	4,039	5,506	13,165	15,214
Consolidated revenues	14,081	15,262	44,329	45,109
Depreciation and amortization:
Franchising and food and supply distribution	2	6	11	18
Company-owned restaurants	436	760	1,762	1,778
Combined	438	766	1,773	1,796
Corporate administration and other	140	71	344	159
Depreciation and amortization	578	837	2,117	1,955
Income (loss) from continuing operations before taxes:
Franchising and food and supply distribution	484	550	1,944	2,061
Company-owned restaurants	(1,039)	(1,192)	(9,074)	(3,905)
Combined	(555)	(642)	(7,130)	(1,844)
Corporate administration and other	(1,402)	(546)	(4,231)	(2,037)
Loss from continuing operations before taxes	(1,957)	(1,188)	(11,361)	(3,881)
Geographic information (revenues):
United States	13,955	15,228	43,902	44,685
Foreign countries	126	34	427	424
Consolidated total	$ 14,081	$ 15,262	$ 44,329	$ 45,109