Nathan's Famous, Inc. Annual Report 2024

FY2024 Annual Report · Nathan's Famous, Inc.

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2 0 2 4 A N N U A L R E P O R T

(1) Our fiscal year ends on the last Sunday in March, which results in
a 52 or 53 week year. The fiscal year ended March 31, 2024 was on
the basis of a 53 week reporting period. The fiscal years ended
March 26, 2023, March 27, 2022, and March 28, 2021 were each on
the basis of a 52 week reporting period.
(2) Represents total revenues less (i) cost of sales; (ii) restaurant
operating expenses; (iii) general and administrative expenses;
(iv) depreciation and amortization and (v) advertising fund expense.
(3) EBITDA and Adjusted EBITDA are non-GAAP financial measures.
The Company has provided EBITDA and Adjusted EBITDA that
the Company believes will impact the comparability of its results
of operations. The Company believes that EBITDA and Adjusted
EBITDA are useful to investors to assist in assessing and under
standing the Company’s operating performance and underlying
trends in the Company’s business because EBITDA and Adjusted
EBITDA are (i) among the measures used by management in
evaluating performance and (ii) are frequently used by securities
analysts, investors and other interested parties as a common
performance measure. EBITDA and Adjusted EBITDA are not
recognized terms under US GAAP and should not be viewed
as alternatives to net income or other measures of financial
performance or liquidity in conformity with US GAAP.
Additionally, our definitions of EBITDA and Adjusted EBITDA
may differ from other companies. Analysis of results and outlook
on a non-US GAAP basis should be used as a complement to, and
in conjunction with, data presented in accordance with US GAAP.
Please see a reconciliation of EBITDA and Adjusted EBITDA to net
income in the Annual Report on Form 10-K for the fiscal year
March 31, 2024, included herein and in our filings with the
Securities and Exchange Commission for the fiscal years ending
2023, 2022, 2021, and 2020.
(4) EBITDA represents net income excluding (i) interest expense;
(ii) provision for income taxes and (iii) depreciation and
amortization expense.
(5) Adjusted EBITDA represents EBITDA excluding (i) loss on
disposal of property and equipment in fiscal 2023; (ii) loss on
debt extinguishment in fiscal 2024, fiscal 2023 and fiscal 2022
and (iii) share-based compensation.
CORPORATE PROFILE
Over one hundred years ago, Nathan’s began as a nickel
hot dog stand on Coney Island in 1916 and, over the past
century, has become a much-loved “New York institution”
that has evolved into a highly recognized brand
throughout the United States and the world.
Through our innovative points-of-distribution strategies,
Nathan’s products are marketed within our restaurant
system and throughout a broad spectrum of other
foodservice and retail environments. Our programs
provide for the sale of Nathan’s World Famous Beef Hot
Dogs, crinkle-cut French fries and other products across a
wide range of grocery retail and foodservice formats. In
total, Nathan’s products are marketed for sale in
approximately 79,000 locations, including supermarkets,
mass merchandisers and club stores, selected foodservice
locations and our Company-owned and franchised
restaurants throughout the United States and in eighteen
foreign countries.
Successful market penetration of our highly-recognized
valued brand and products, through a wide variety of
distribution channels, continues to provide new and
exciting growth opportunities.
2024 Financial Highlights
Total Revenues
($ in millions)
2024
$138.6
$130.8
2023
$114.9
2022
$75.8
2021
$103.3
2020
Income From Operations(2)
($ in millions)
2024
$32.5
$34.4
2023
$29.9
2022
$25.5
2021
$27.1
2020
Adjusted EBITDA(3)(5)
($ in millions)
2024
$34.8
$36.4
2023
$31.2
2022
$27.2
2021
$30.0
2020
Fiscal Year(1)
(In thousands, except share and per share amounts)
2024
2023
2022
2021
2020
Selected Consolidated Financial Data:
As reported
Total revenues
$138,610
$130,785
$114,882
$ 75,839
$103,325
Income from operations(2)
$32,506
$34,445
$ 29,863
$ 25,515
$ 27,172
Net income
$ 19,616
$ 19,623
$ 13,596
$ 11,075
$ 13,435
Income per share
Basic
$
4. 8 1
$
4.80
$
3.30
$
2.69
$
3.19
Diluted
$
4.80
$
4.80
$
3.30
$
2.69
$
3.19
Weighted average shares used in computing income per share
Basic
4,081
4,089
4,115
4,116
4,216
Diluted
4,087
4,090
4,115
4,116
4,216
Supplemental Non-GAAP information(3)
EBITDA(4)
$ 33,941
$ 35,681
$ 29,725
$ 27,109
$ 29,848
Adjusted EBITDA(5)
$34,843
$ 36,383
$
31,153
$ 27,225
$ 29,964

1
NATHAN’S FAMOUS, INC. 2024 ANNUAL REPORT
Fiscal 2024 was
another successful year
for Nathan’s Famous.
Shareholder’s Letter
Our business model is aimed at increasing the
number of distribution points for our signature
products in three distinct business channels.
As of March 31, 2024: (1) our consumer-packaged
goods were sold through more than 65,000
locations in supermarket/grocery channels in the
United States; (2) our bulk foodservice-packaged
goods were sold through 14,000 locations in
foodservice channels in North America; and
(3) we had four Company-owned restaurants
in the United States, as well as 230 franchised
restaurants and 196 virtual kitchens throughout
the world.
OPERATIONAL AND FINANCIAL
RESULTS:
On an overall basis, results for fiscal 2024
compared to fiscal 2023 were as follows:
(1) revenues were $138.6 Million, an increase
of 6%; (2) EBITDA1, a non-GAAP financial
measure, was $33.9 Million, a decrease of 4.9%;
(3) pre-tax income was $27.5 Million, an increase
of 2.4%; (4) net income was $19.6 Million, flat to
last year; and (5) diluted earnings per share were
$4.80, also flat to last year.
Product Licensing:
Our licensing program, which consists primarily of
the sale of Nathan’s Famous branded consumer
1Please see a reconciliation of EBITDA to net income in the Annual Report on Form 10-K for the fiscal year March 31, 2024 included herein.
packaged goods through supermarkets, club
stores and mass merchandisers, is the largest
part of our business today, both from the
perspective of profit contribution and points
of distribution. Overall, license royalties during
fiscal 2024 increased slightly to $33.6 Million
compared to fiscal 2023.
Our most significant licensing agreement is with
Smithfield Foods, Inc. and covers the sale of our
portfolio of consumer packaged and certain bulk
packaged Nathan’s Famous hot dog products to
retailers throughout the United States. In fiscal
2024, royalties earned under this agreement
increased slightly to $30.1 Million compared to
fiscal 2023.
Our licensing program includes additional
licenses to sell at retail Nathan’s Famous
crinkle cut french fries, beer batter onion
rings, mustards, pickles, franks ’n blankets,
mini bagel dogs and mozzarella sticks.
The Branded Products Program:
The Branded Products Program is our foodservice
sales program which features the bulk sale of
Nathan’s Famous hot dogs to the food service
industry. Our products are sold through the
Branded Products Program at over 14,000 points
of distribution, including several large national
and regional restaurant, movie theater and

convenience store chains, as well as thousands
of other locations including ballparks, arenas,
amusement parks, college campuses, hospitals,
casinos, resorts and school systems. Through
the Branded Products Program, we do business
with all of the major foodservice distributors in
the United States, including SYSCO Corporation,
US Foodservice, Inc., Performance Food Group
Company, McLane Company, Inc. and DOT Foods
as well as many regional distributors.
On a year-over-year basis for fiscal 2024, results
in the Branded Products Program were as follows:
(1) net sales of $86.5 Million, representing a 9.6%
increase; (2) operating profit of $10.5 Million,
representing a 6.4% decrease; and (3) a 2.4%
increase in the unit volume of products sold.
Beef prices surged early during fiscal 2024
and stayed at high levels longer than normal,
resulting in lower margins during the second
and third quarters of our year.
Restaurant Operations:
As of the end of fiscal 2024, our Restaurant
Operations consisted of four Company-owned
locations in the United States, as well as 230
franchised restaurants and 196 virtual kitchens
located throughout the world. Revenues from
Restaurant Operations in fiscal 2024 were flat
to last year at $16.5 Million.
RETURNING CAPITAL TO
SHAREHOLDERS:
The success of our current business model has
allowed us to return significant capital to our
shareholders. Since the early 2000s, we have
repurchased more than 5.2 million shares of our
common stock. At an average price of just over
$16.38 per share, we reduced our outstanding
share count by more than 50%, creating signifi
cant value for all of our shareholders.
In fiscal 2015, our capital return strategy shifted
to dividends. At that time, and again in fiscal
2018, we paid one-time special dividends to
all of our shareholders. Together, more than
$137 Million, or $30 per share, was returned
to shareholders through special dividends.
In fiscal 2019, we declared and paid the first
regular quarterly dividend in the Company’s
long history—$0.25 per share per quarter, or
$1.00 per share for the fiscal year. Since then, we
have steadily raised our quarterly dividend which
is currently $0.50 per share, or $2.00 per year.
In all, between stock buybacks and cash dividends,
more than $261 Million has been returned to
shareholders over the last 20 years—more than
eight times the Company’s market capitalization
of less than $30 Million at the beginning of those
20 years!
Additionally, underscoring our strong cash flow
generation over the last two years, we have reduced
our outstanding long-term debt by 60% through
the redemption of $90 Million principal amount
of our Senior Secured Notes due in 2025.
IN CONCLUSION
Our focused strategies, creative approaches,
and future opportunities should afford us with
the ability to continue to promote the Nathan’s
Famous brand and advance the sale of Nathan’s
Famous products through a broad variety of
environments and distribution channels. As we
seek to continue to expand and pursue profitable,
new opportunities, we will retain our steadfast
commitment to quality and endeavor to serve our
shareholders responsibly. We remain extremely
appreciative of your continued support.
2
NATHAN’S FAMOUS, INC. 2024 ANNUAL REPORT
Eric Gatoff
Chief Executive Officer

F O R M 1 0 - K
Nathan’s Famous, Inc.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2024
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File No. 001-35962

NATHAN’S FAMOUS, INC.
(Exact name of registrant as specified in its charter)
Delaware

11-3166443
(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

One Jericho Plaza, Jericho, New York

11753
(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

516-338-8500

Title of each class

Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.01 per share

NATH

The NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging
growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer
☐

Accelerated filer
☒

Non-accelerated filer
☐

Smaller reporting company
☒

Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the
registrant’s most recently completed second fiscal quarter – September 22, 2023- was approximately $198,703,000, which value, solely for the
purposes of this calculation excludes shares held by the registrant’s officers and directors. Such exclusion shall not be deemed a determination by
registrant that all such individuals are, in fact, affiliates of the registrant.

As of June 6, 2024, there were outstanding 4,084,615 shares of Common Stock, par value $.01 per share.

DOCUMENTS INCORPORATED BY REFERENCE– The information required by Part III, Items 10, 11, 12 and 13 is incorporated by reference
from the registrant’s definitive proxy statement for the 2024 Annual Meeting of Shareholders which is expected to be filed pursuant to Regulation
14A of the Securities Exchange Act of 1934 no later than 120 days after the conclusion of Nathan Famous, Inc.’s fiscal year ended March 31, 2024.

3
TABLE OF CONTENTS

PART I

Page

Item 1.
Business. ........................................................................................................................................................
4
Item 1A. Risk Factors. ................................................................................................................................................... 20
Item 1B. Unresolved Staff Comments. ......................................................................................................................... 35
Item 1C. Cybersecurity. ................................................................................................................................................ 35
Item 2.
Properties. ...................................................................................................................................................... 37
Item 3.
Legal Proceedings. ......................................................................................................................................... 37
Item 4.
Mine Safety Disclosures. ............................................................................................................................... 37

PART II

Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities. .................................................................................................................................................... 38
Item 6.
Reserved. ........................................................................................................................................................ 38
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. ........................ 39
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. ...................................................................... 50
Item 8.
Financial Statements and Supplementary Data. ............................................................................................. 51
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. ........................ 51
Item 9A. Controls and Procedures. ............................................................................................................................... 51
Item 9B. Other Information........................................................................................................................................... 52
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. .......................................................... 52

PART III

Item 10.
Directors, Executive Officers and Corporate Governance. ............................................................................ 54
Item 11.
Executive Compensation. ............................................................................................................................... 54
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. ...... 54
Item 13.
Certain Relationships and Related Transactions, and Director Independence. .............................................. 54
Item 14.
Principal Accountant Fees and Services. ....................................................................................................... 55

PART IV

Item 15.
Exhibits and Financial Statement Schedules. ................................................................................................. 56
Item 16.
Form 10-K Summary. .................................................................................................................................... 58

Signatures

Index to Financial Statements ....................................................................................................................................... F-1

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4
PART I

Forward-Looking Statements

This Annual Report on Form 10-K contains “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 1933, as amended, that involve risks
and uncertainties. You can identify forward-looking statements because they contain words such as “believes”, “expects”,
“projects”, “may”, “would”, “should”, “seeks”, “intends”, “plans”, “estimates”, “anticipates” or similar expressions that relate
to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs,
expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-
looking statements. In addition, we, through our senior management, from time to time make forward-looking public
statements concerning our expected future operations and performance and other developments. These forward-looking
statements are subject to known and unknown risks, uncertainties and other factors that may change at any time, and,
therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking
statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe
that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course,
it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements contained
in this Form 10-K are based upon information available to us on the date of this Form 10-K.

Item 1. Business.

As used herein, unless we otherwise specify, the terms “we,” “us,” “our,” “Nathan’s,” “Nathan’s Famous” and the
“Company” mean Nathan’s Famous, Inc. and its subsidiaries. References to the fiscal 2024 period mean the fiscal year ended
March 31, 2024 and references to the fiscal 2023 period mean the fiscal year ended March 26, 2023. In addition, references
to the “Notes”, “2025 Notes” or the “2025 Senior Secured Notes” refer to our $60,000,000 6.625% Senior Secured Notes due
2025 and references to the “2020 Notes” or the “2020 Senior Secured Notes” refer to the $135,000,000 10.000% Senior
Secured Notes which were redeemed on November 16, 2017.

We are a leading branded licensor, wholesaler and retailer of products marketed under our Nathan’s Famous brand,
including our popular Nathan’s World Famous Beef Hot Dogs. What began as a nickel hot dog stand on Coney Island in
1916 has evolved into a highly recognized brand throughout the United States and the world. Our innovative business model
seeks to maximize the points of distribution for and the consumption of Nathan’s World Famous Beef Hot Dogs, crinkle-cut
French fries and our other products across a wide-range of grocery retail and foodservice formats. Our products are currently
marketed for sale in approximately 79,000 locations, including supermarkets, mass merchandisers and club stores, selected
foodservice locations and our Company-owned and franchised restaurants throughout the United States and in eighteen
foreign countries. The Company considers itself to be in the foodservice industry and has pursued co-branding initiatives
within other foodservice environments. Our major channels of distribution are as follows:

●
Our licensing program contracts with certain third parties to manufacture, distribute, market and sell a broad
variety of Nathan’s Famous branded products including our hot dogs, sausages, frozen crinkle-cut French fries
and additional products through supermarkets, grocery channels and club stores throughout the United States.
As of March 31, 2024, packaged Nathan’s World Famous Beef Hot Dogs continued to be sold in supermarkets,
mass merchandisers and club stores including Walmart, Kroger, Ahold, Publix, Albertsons, Safeway, ShopRite,
Target, Sam’s Club, Costco and BJ’s Wholesale Club located in all 50 states. We earn revenue through royalties
on products sold by our licensees.

●
Our Branded Product Program provides foodservice operators in a variety of venues the opportunity to capitalize
on our Nathan’s Famous brand by marketing and selling certain Nathan’s Famous hot dog and specialty
products. We believe that the program has broad appeal to foodservice operators due to its flexibility to deliver
our products to a wide variety of distribution channels. In conjunction with the program, foodservice operators
are granted a limited use of the Nathan’s Famous trademark, as well as Nathan’s Famous point of purchase
materials. Unlike our licensing and franchise programs, we do not generate revenue from royalties, but rather
by selling our hot dog products either directly to foodservice operators or to various foodservice distributors
who resell the products to foodservice accounts.

●
Operating quick-service restaurants featuring Nathan’s World Famous Beef Hot Dogs, crinkle-cut French fries,
and a variety of other menu offerings, which operate under the name “Nathan’s Famous,” the name first used
at our original Coney Island restaurant which opened in 1916.

●
Our franchised restaurant operations are comprised predominately of our Nathan’s Famous concept, which
features a menu consisting of Nathan’s World Famous Beef Hot Dogs, crinkle-cut French fries and beverages
as well as other items. We earn royalties on sales at these franchise locations and virtual kitchens (existing
kitchens with no Nathan’s Famous branded storefront presence, used to fill online orders for delivery). In
addition to our traditional franchised restaurants and virtual kitchens, we enable approved foodservice operators
to offer a Nathan’s Famous menu of Nathan’s World Famous Beef Hot Dogs, crinkle-cut French fries,
proprietary toppings and a limited menu of other Nathan’s products through our Branded Menu Program
(“BMP”). We earn royalties on Nathan’s products purchased from Nathan’s approved distributors by our BMP
franchise operators.

We also own the Arthur Treacher’s Fish & Chips brand and trademarks. We use the Arthur Treacher’s Fish & Chips
brand, products and trademarks as a branded seafood menu-line extension for inclusion in certain Nathan’s Famous
restaurants.

Our Competitive Strengths

We believe that we benefit from the following competitive strengths:

Iconic Brand with Global Recognition

For over 100 years, we have cultivated Nathan’s Famous into an iconic brand with global recognition. From our
authentic origins on Coney Island to our popular Nathan’s Famous Hot Dog Eating Contest, the Nathan’s Famous brand has
become synonymous with premium hot dogs enjoyed throughout the year including cookouts, and July 4th celebrations. Over
time, we have continued expanding the number and types of points of distribution for Nathan’s Famous products by
leveraging our highly recognizable brand.

The Frank of Choice

Since our beginnings as a nickel hot dog stand in 1916, we have focused on creating the best premium hot dog.
Using premium cuts of meat, our proprietary spice mix and based on a recipe originally developed in 1916, our hot dogs have
a unique flavor and texture that consumers are drawn to.

Our hot dogs have received numerous awards and recognition from critics and reviewers.

Recognition as an award-winning hot dog has strengthened our brand and created a devoted fan base. We believe
that our high brand awareness allows us to sell hot dogs at a premium price compared to competing brands across all channels
of distribution.

Multi-Channel Business Model Provides Diversified Revenue Streams

We believe that our flexible business model enables us to diversify across multiple channels of distribution and
customers. Our products are distributed through supermarkets, mass merchandisers, club stores, Company-owned restaurants,
franchised restaurants, virtual kitchens, food service distributors and other food service operators such as gas stations, movie
theaters and sporting venues. We believe that there is potential to increase our sales by converting sales of non-branded
products throughout the foodservice industry.

High Margin Licensing Revenue Streams

We earn stable and high-margin revenue through multiple licensing programs. Through licensing programs with
such companies as Smithfield Foods, Inc., and Lamb Weston, Inc., over fifteen Nathan’s Famous branded SKUs are sold
through grocery retail channels. All of our licensing agreements combined produced $33,581,000 and $33,455,000 of high
margin revenue for fiscal 2024 and 2023, respectively.

6
Business Strategies

Our primary strategies include the following:

Leverage Nathan’s Famous brand and iconic products to grow sales – We believe that our brand is widely
recognized by virtue of our long history and broad geographic footprint, which allows us to enjoy high consumer awareness
in the United States and abroad and allows us the opportunity to grow in markets and channels where the brand is known but
has not yet achieved optimal market penetration. We believe that our highly visible brand and reputation for high quality
products have allowed us to expand our food offerings beyond our signature hot dogs and command a premium price across
our portfolio of products.

Retail licensing – We expect that our retail licensing program may continue to grow, centered around our licensing
program with Smithfield Foods, Inc. Smithfield Foods, Inc. brings superior sales and marketing resources to our brand
through its national scale, broad distribution platform, strong retail relationships and research and development infrastructure
capable of developing and introducing new products. As a result of our partnership with Smithfield Foods, Inc., we expect
Nathan’s Famous products to continue penetrating the grocery, mass merchandising and club channels by expanding points
of distribution in targeted, underpenetrated regions and through the development of new products. We believe Smithfield
Foods, Inc. expects to continue to leverage this relationship with continued full-scale marketing efforts, both inside and
outside of stores, highlighted by exciting customer events and brand representation and support of our Nathan’s Famous Hot
Dog Eating Contests.

We may offer the licensing of other signature products to other qualified manufacturers.

Branded Products – We expect to continue the growth of our Branded Products Program through the addition of
new accounts and venues. We believe that the flexible design of the Branded Products Program makes it well positioned for
sales to all business channels in the broad foodservice industry. We intend to keep targeting sales to a broad line of foodservice
distributors, which we believe complements our continuing focus on sales to various foodservice retailers. We continue to
believe that as consumers look to brands and products with high standards, and integrity with the superior quality of the food
that they purchase, there is great potential to increase our sales by converting existing sales of non-branded products to
Nathan’s branded products throughout the foodservice industry.

Franchising – We expect to continue to market our franchise program and Branded Menu Program to large,
experienced and successful operators with the financial and business capability to develop multiple franchise locations, as
well as to individual-owner operators with evidence of restaurant management experience, net worth and sufficient capital.
We also expect to continue developing master franchise programs in foreign countries.

Company-owned restaurants – We may selectively consider opening new Company-owned restaurants on an
opportunistic basis. We may also consider new opportunities in both traditional and captive market settings.

Improve Company-owned restaurant profitability – In fiscal 2023 and fiscal 2024, our Company-owned restaurants
were impacted by commodity and labor inflation. Additionally, on January 1, 2024, the minimum hourly wage in New York
City, Long Island and Westchester increased from $15.00 to $16.00 impacting all of our Company-owned restaurants. We
continue to focus on managing our expenses in the operation of our Company-owned restaurants, with a particular emphasis
on cost of goods sold, including food costs, paper costs and labor costs while not sacrificing on overall quality and service
that our customers expect. We continue to explore opportunities and strategies to help mitigate the impact on our operations.

Delivery Only Locations – We expect to continue our presence via delivery and virtual kitchens on an opportunistic
basis including additional opportunities from our virtual kitchen brand, Wings of New York. In fiscal 2024, we entered into
an exclusive agreement with Franklin Junction for the rights for all virtual restaurants worldwide.

These virtual kitchens have different rights and obligations than our traditional franchise agreements, including
royalty rates and advertising contribution rates, and the sales levels at these locations differs from the sales levels at our
traditional franchise restaurants.

7
Advertising and promotion – The Company continues to focus its efforts using a multiple pronged approach, with a
particular emphasis on geo-targeted, social media advertising to drive customers directly to online restaurant menus for ease
of ordering for delivery or pick-up. The online effort is focused on platforms including Facebook, Instagram and X (formerly
known as Twitter). Our marketing strategy focuses on our premium food offerings and limited time offerings to help drive
sales and customer traffic.

Product development – The Company collaborates with its licensees on potential new product offerings. New
products can increase revenue by expanding our customer base and continuing to build brand awareness.

Corporate History

We were incorporated in Delaware on July 10, 1992 under the name “Nathan’s Famous Holding Corporation” to act
as the parent of a Delaware corporation then-known as Nathan’s Famous, Inc. On December 15, 1992, we changed our name
to Nathan’s Famous, Inc., and our Delaware subsidiary changed its name to Nathan’s Famous Operating Corp. The Delaware
subsidiary was organized in October 1989 in connection with its re-incorporation in Delaware from that of a New York
corporation named “Nathan’s Famous, Inc.” The New York Nathan’s was incorporated on July 10, 1925, as a successor to
the sole-proprietorship that opened the first Nathan’s restaurant in Coney Island in 1916. On July 23, 1987, Equicor Group,
Ltd. merged with and into the New York Nathan’s in a “going private” transaction. The New York Nathan’s, the Delaware
subsidiary and Equicor may all be deemed to be our predecessors.

Fiscal Year

Our fiscal year ends on the last Sunday in March, which will result in a 52 or 53 week year. The fiscal year ended
March 31, 2024 was on the basis of a 53 week reporting period and the fiscal year ended March 26, 2023 was on the basis of
a 52 week reporting period.

Restaurant Operations

Company-owned restaurants

As of March 31, 2024, we operated four Company-owned restaurants (including one seasonal unit), within the New
York metropolitan area. Our seasonal location on the Coney Island Boardwalk was open from March 26, 2023 to October
29, 2023. It reopened for the summer season on March 21, 2024.

Three of our Company-owned restaurants range in size from approximately 3,500 square feet to 10,000 square feet
and have seating to accommodate between 60 and 125 customers. These restaurants are open seven days a week on a year-
round basis and are designed to appeal to consumers of all ages. We have established high standards for food quality,
cleanliness, and service at our restaurants and regularly monitor the operations of our restaurants to ensure adherence to these
standards.

Two of our Company-owned restaurants have contemporary service areas, seating, signage, and general decor. Our
Coney Island restaurant, which first opened in 1916, remains unique in its presentation and operations.

Our Company-owned restaurants typically carry a broader selection of menu items than our franchise restaurants
and generally attain sales levels higher than the average of our newer franchise restaurants. The non-core menu items at the
Company-owned restaurants, tend to have lower margins than the core menu.

Our Company-owned restaurants contributed $12,103,000 and $12,161,000 in revenue for fiscal 2024 and fiscal
2023, respectively. Customer traffic at our Company-owned restaurants during the fiscal 2024 period decreased by
approximately 2% over the fiscal 2023 period.

Our Coney Island flagship location has been open for over 100 years and is the home of the annual Nathan’s Hot
Dog Eating Contest, which has been broadcast on ESPN each 4th of July since 2004 and achieved more than one million
viewers in fiscal 2024.

8
We continue to focus on digital and social media initiatives, as well as direct mail, to enhance the customer
experience; to increase customer traffic; and to promote off-premise capabilities. We believe that these initiatives play an
important role in creating a more seamless and more efficient customer experience and meeting consumer expectations for
speed and convenience.

Franchise Operations

At March 31, 2024, our franchise system, including our Branded Menu Program, consisted of 230 locations
operating in 17 states and 13 foreign countries. It also included 196 virtual kitchens located in 17 states and 6 foreign
countries.

Our franchise operations contributed $4,356,000 and $4,292,000 in revenue for fiscal 2024 and fiscal 2023,
respectively. We experienced higher sales across our franchise system including airport locations, highway travel plazas and
movie theaters.

Our franchise system includes among its franchisees such well-known companies as Applegreen USA Welcome
Centres, LLC, HMS Host, Areas USA, National Amusements, Inc., Hershey Entertainment & Resorts Company, and
Bruster’s Real Ice Cream. We continue to seek out and to market our franchising programs to larger, experienced and
successful operators with the financial and business capability to develop multiple franchise locations, as well as to individual
owner-operators with evidence of restaurant management experience, net worth and sufficient capital.

During the fiscal 2024 period, no single franchisee accounted for over 10% of our consolidated revenue. At March
31, 2024, Applegreen USA Welcome Centres, LLC operated seven franchised locations within highway travel plazas and
HMS Host operated four franchised locations, including three units at airports, and one unit within a mall. Additionally, 23
mobile carts were registered to operate in New York, NY. Twelve Bruster’s Real Ice Cream shops were selling Nathan’s
products under our Branded Menu Program.

During the fiscal 2024 period, 17 franchised locations opened, including seven Branded Menu Program locations.
Additionally, 19 franchised locations closed, including 11 Branded Menu Program locations.

Nathan’s Famous Concept and Menus

Our Nathan’s Famous concept is scalable, offering a wide range of facility designs and sizes, suitable to a vast
variety of locations, featuring a core menu consisting of Nathan’s World Famous Beef Hot Dogs, crinkle-cut French fries and
beverages. Nathan’s menu is designed to take advantage of site-specific market opportunities by adding complementary food
items to the core menu. The Nathan’s concept is suitable to stand-alone or can be co-branded with other nationally recognized
brands.

Nathan’s World Famous Beef Hot Dogs are flavored with our secret blend of spices created by Ida Handwerker in
1916, which historically have distinguished Nathan’s World Famous Beef Hot Dogs. Our hot dogs are prepared and served
in accordance with procedures which have not varied significantly since our inception over 100 years ago in our Company-
owned and franchised restaurants. Our signature crinkle-cut French fries are featured at each Nathan’s restaurant. We believe
the majority of sales in our Company-owned restaurants consist of Nathan’s World Famous Beef Hot Dogs, crinkle-cut
French fries and beverages.

Individual Nathan’s restaurants supplement their core menu of Nathan’s World Famous Beef Hot Dogs, crinkle-cut
French fries and beverages with a variety of other quality menu choices including: our fresh angus hamburgers and our hand-
dipped chicken. We have historically used the Arthur Treacher’s Fish & Chips brand, products and trademarks as a branded
seafood menu-line extension for inclusion in certain Nathan’s Famous restaurants.

We also partner with major third-party delivery service providers, such as DoorDash, UberEats, GrubHub, and
Postmates, providing multiple options for our guests to enjoy Nathan’s Famous products at home.

9
Nathan’s restaurant designs are available in a range of sizes from 300 to 4,000 square feet. We have also developed
various kiosks, mobile food carts, trucks and modular units. Our smaller units may not have customer seating areas, although
they may often share seating areas with other fast food or quick service outlets in food court settings. Other units generally
provide seating for 45 to 125 customers. Carts, kiosks and modular units generally carry only the core menu. Our food trucks
may carry the full Nathan’s Famous menu.

We believe that carts, kiosks, modular units and food court designs are particularly well-suited for placement in non-
traditional sites, such as airports, travel plazas, stadiums, schools, convenience stores, entertainment facilities, military
facilities, business and industry foodservice, within larger retail operations and other captive markets. Many of these settings
may also be appropriate for expanding our Branded Menu Program or Branded Product Program. All of these units feature
the Nathan’s Famous logo and utilize a contemporary design.

Nathan’s Standard Franchise Program

Franchisees are required to execute a standard franchise agreement prior to opening each Nathan’s Famous location.
Our current standard Nathan’s Famous franchise agreement provides for, among other things, a one-time $30,000 franchise
fee payable upon execution of the agreement, a monthly royalty payment based on 5.5% of restaurant sales and the
expenditure of up to 2.0% of restaurant sales on advertising. The initial term of the typical franchise agreement is 10 years,
with a 5-year renewal option by the franchisee, subject to conditions contained in the franchise agreement. We may offer
alternatives to the standard franchise agreement, having to do with the term, franchise royalties, fees or advertising
requirements.

Franchisees are approved on the basis of their business background, evidence of restaurant management experience,
net worth and capital available for investment in relation to the proposed scope of the development agreement.

We provide numerous support services to our Nathan’s Famous franchisees. We assist in and approve all site
selections. Thereafter, we provide architectural plans suitable for restaurants of varying sizes and configurations for use in
food court, in-line and free-standing locations. We also assist in establishing building design specifications, reviewing
construction compliance, equipping the restaurant and providing appropriate menus to coordinate with the restaurant design
and location selected by the franchisee.

We offer various training courses for management personnel of Company-owned and franchised restaurants. A
restaurant manager from each restaurant must successfully complete our mandated management training program. We also
offer additional operations and general management training courses for all restaurant managers and other managers with
supervisory responsibilities. We provide standard manuals to each franchisee covering training and operations, products and
equipment and local marketing programs. We also provide ongoing advice and assistance to franchisees. We meet with our
franchisees to discuss upcoming marketing events, menu development and other topics, each of which is designed to provide
individual restaurant and system-wide benefits.

Franchised restaurants are required to be operated in accordance with uniform operating standards and specifications
relating to the selection, quality and preparation of menu items, signage, decor, equipment, uniforms, suppliers, maintenance
and cleanliness of premises and customer service. All standards and specifications are developed by us to be applied on a
system-wide basis. We regularly monitor franchisee operations and inspect restaurants. Franchisees are required to furnish
us with monthly sales or operating reports which assist us in monitoring the franchisee’s compliance with its franchise
agreement. We make both announced and unannounced inspections of restaurants to ensure that our practices and procedures
are followed. We have the right to terminate a franchise if a franchisee does not operate and maintain a restaurant in
accordance with the requirements of its franchise agreement, including for non-payment of royalties, sale of unauthorized
products, bankruptcy or conviction of a felony.

A franchisee who desires to open multiple locations in a specific territory within the United States may enter into an
area development agreement under which we would expect to receive an area development fee based upon the number of
proposed locations which the franchisee is authorized to open. With respect to our international development, we generally
grant exclusive territorial rights in foreign countries for the development of Nathan’s locations based upon compliance with
a predetermined development schedule. Additionally, we may further grant exclusive manufacturing and distribution rights
in foreign countries, and we may require an exclusivity fee to be conveyed for such exclusive rights.

10
Nathan’s Branded Menu Program

Our Nathan’s Famous Branded Menu Program enables qualified foodservice operators to offer a Nathan’s Famous
menu of Nathan’s World Famous Beef Hot Dogs, crinkle-cut French fries, proprietary toppings, and a limited menu of other
Nathan’s products. Under the Branded Menu Program, the operator may use the Nathan’s Famous trademarks on signage and
as part of its menu boards. Additionally, the operator may use Nathan’s Famous paper goods and point of sale marketing
materials. Nathan’s also provides architectural and design services, training and operation manuals in conjunction with this
program. The operator provides Nathan’s with a fee and is required to sign a five-year agreement. We may offer alternatives
to the term of the typical Branded Menu Program agreement. Nathan’s does not collect a royalty based on the operator’s sales
and the operator is not required to report sales to Nathan’s as required by the standard franchise arrangements. Instead, the
Branded Menu Program operator is required to purchase products from Nathan’s approved distributors and we earn our
royalties from such purchases.

Arthur Treacher’s Fish & Chips

Arthur Treacher’s Fish-n-Chips, Inc. was originally founded in 1969. Arthur Treacher’s main product is its “Original
Fish-n-Chips,” consisting of fish fillets coated with a special batter prepared under a proprietary formula, deep-fried golden
brown, and served with English-style chips and corn meal “hush puppies.”

As of March 31, 2024, Arthur Treacher’s, as a co-brand, was included within 23 Nathan’s Famous restaurants.
Additionally, there are eight Arthur Treacher’s BMP locations.

International Development

As of March 31, 2024, Nathan’s Famous franchisees operated 77 locations in 13 foreign countries.

Through separate licensed manufacturing agreements, Nathan’s World Famous Beef Hot Dogs are currently
manufactured in Brazil, Germany and the United Arab Emirates.

We continue to pursue international expansion opportunities. During fiscal 2024, we opened franchised locations in
Egypt, Mexico and the United Arab Emirates.

We may seek to continue granting exclusive territorial rights for franchising and for the manufacturing and
distribution rights in foreign countries, and we expect to require that an exclusivity fee be conveyed for these rights. We plan
to develop the restaurant franchising system internationally through the use of master franchising agreements based upon
individual or combined use of our existing restaurant concepts and for the distribution of Nathan’s products.

The following table is a summary of our international operations for the fiscal years ended March 31, 2024 and
March 26, 2023: See Item 1A-“Risk Factors.”

March 31,

March 26,

2024

2023

Total revenue ........................................................................................................... $
5,405,000 $
5,898,000
Gross profit (a) ........................................................................................................ $
1,308,000 $
1,387,000

(a) Gross profit represents the difference between revenue and cost of sales.

11
Location Summary

The following table shows the number of our Company-owned and franchised restaurants in operation at March 31,
2024 and their geographical distribution:

Domestic Locations

Company

Franchise (1)

Total (1)
Connecticut ............................
-

3
Florida ....................................
-

21
Georgia ...................................
-

4
Kentucky ................................
-

2
Maryland ................................
-

1
Massachusetts ........................
-

4
Missouri .................................
-

1
Nevada ...................................
-

7
New Jersey .............................
-

22
New York ...............................
4

67
North Carolina .......................
-

4
Ohio .......................................
-

2
Pennsylvania ..........................
-

10
Rhode Island ..........................
-

2
South Carolina .......................
-

3
Texas ......................................
-

2
Virginia ..................................
-

2
Domestic Subtotal ..................
4

153

157

International Locations

Company

Franchise (1)

Total (1)
Brazil ......................................
-

3
Dominican Republic ..............
-

6
Egypt ......................................
-

3
France .....................................
-

8
Kazakhstan .............................
-

3
Kingdom of Saudi Arabia ......
-

10
Mexico ...................................
-

2
Panama ...................................
-

4
Philippines .............................
-

4
Spain ......................................
-

1
Ukraine ...................................
-

27
United Arab Emirates.............
-

4
United Kingdom .....................
-

2
International Subtotal .............
-

77
Grand Total ............................
4

230

234

(1) Units operating pursuant to our Branded Product Program and our virtual kitchens are excluded.

Branded Product Program

Our Branded Product Program contributed $86,489,000 and $78,884,000 in revenue in fiscal 2024 and fiscal 2023,
respectively. The total volume of hot dogs sold in the Branded Product Program achieved its highest historic levels in fiscal
2024 and increased by approximately 2% over fiscal 2023.

In fiscal 2024, we continued to experience inflationary pressures on commodity prices, including beef and beef
trimmings. Our average cost of hot dogs during fiscal 2024 was approximately 10% higher than during fiscal 2023. Our
average cost of hot dogs during fiscal 2023 was approximately 1.4% higher than fiscal 2022. We are unable to predict the
future cost of our hot dogs and expect to experience price volatility for our beef products during fiscal 2025.

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As of March 31, 2024, the Branded Product Program distributed product in all 50 states, the District of Columbia,
Puerto Rico, Canada, the U.S. Virgin Islands, Guam and Mexico. Pursuant to the Branded Product Program, Nathan’s World
Famous Beef Hot Dogs are being offered in national restaurant chains such as Auntie Anne’s, Hot Dog On A Stick, Johnny
Rockets and Lazy Dog; national movie theater chains such as Regal Entertainment, National Amusements and Cinemex in
Mexico; amusement parks such as Universal Studios; casino hotels such as Foxwoods Casino in Connecticut; convenience
store chains such as RaceTrac; and golf courses and country clubs. The Branded Products Program also distributes product
in professional sports arenas with Nathan’s World Famous Beef Hot Dogs being served in stadiums and arenas that host the
New York Yankees, New York Mets, Miami Marlins, Tampa Bay Rays, Brooklyn Nets, Dallas Cowboys, and Green Bay
Packers.

Additionally, our products are offered in numerous other foodservice operations including business office cafeterias,
snack bars and vending machines located in many different types of foodservice outlets and venues, including airports,
highway travel plazas, colleges and universities, gas and convenience stores, military installations, and Veterans
Administration hospitals throughout the United States.

Nathan’s expects to continue to seek out and evaluate a variety of alternative environments designed to maximize
and to grow our Branded Product Program.

Licensing Program

Pursuant to an agreement expiring in March 2032, Smithfield Foods, Inc., has been granted, among other things, (i)
the exclusive right and obligation to manufacture, distribute, market and sell “Nathan’s Famous” branded hot dogs, and
sausages in refrigerated consumer packages to be resold through retail channels (e.g., supermarkets, groceries, mass
merchandisers and club stores) within the United States, (ii) a right of first offer to license any other “Nathan’s Famous”
branded refrigerated meat products in consumer packages to be resold through retail channels within the United States, on
terms to be negotiated in good faith, (iii) the right and obligation to manufacture “Nathan’s Famous” branded hot dog and
sausage products in bulk for use in the food service industry within the United States, and (iv) the non-exclusive right and
obligation to supply “Nathan’s Famous” natural casing and skinless hot dogs in bulk for use in the “Nathan’s Famous”
restaurant system within the United States. The agreement provides for royalties on packaged products sold to supermarkets,
club stores and grocery stores, payable on a monthly basis to the Company equal to 10.8% of net sales, subject to minimum
annual guaranteed royalties. Pursuant to this agreement, Nathan’s earned royalties of approximately $28,456,000 in fiscal
2024 and $28,688,000 in fiscal 2023 representing approximately 21% and 22% of total revenues, respectively. We believe
our future operating results will continue to be substantially impacted by the terms and conditions of the agreement with
Smithfield Foods, Inc., but there can be no assurance thereof (See Item 1A - “Risk Factors”). Smithfield Foods, Inc. has also
licensed from us the right to manufacture and sell branded hot dogs and sausages to select foodservice accounts. Pursuant to
this arrangement, we earned royalties of $1,611,000 and $1,310,000 during the fiscal 2024 and 2023 periods,
respectively. The majority of these royalties were earned from one company. As of March 31, 2024, packaged Nathan’s
World Famous Beef Hot Dogs continued to be sold in supermarkets, mass merchandisers and club stores including Walmart,
Kroger, Ahold, Publix, Albertsons, Safeway, ShopRite, Target, Sam’s Club, Costco and BJ’s Wholesale Club located in all
50 states. We believe that the overall exposure of the brand and opportunity for consumers to enjoy the Nathan’s World
Famous Beef Hot Dog in their homes helps promote “Nathan’s Famous” restaurant patronage. Royalties earned under the
retail agreement, including the foodservice program, were approximately 90% of our fiscal 2024 period license revenues.

We license the manufacture of the proprietary spices which are used to produce Nathan’s World Famous Beef Hot
Dogs to Saratoga Specialties, Inc., a wholly-owned subsidiary of Solina. During fiscal 2024 and 2023, we earned royalties of
$1,371,000 and $1,298,000, respectively, from this license. Through this agreement, we control the manufacture of all
“Nathan’s Famous” branded hot dogs.

During fiscal 2024, our licensee, Lamb Weston Holdings, Inc., continued to produce and distribute Nathan’s Famous
frozen crinkle-cut French fries and onion rings. These products were distributed within 40 states, primarily on the East Coast,
Southwest and West Coast during fiscal 2024. During fiscal 2024 and 2023, we earned royalties of $1,528,000 and
$1,501,000, respectively, under this agreement. For the contract year ended in July 2023 we earned royalties of $995,000 in
excess of the annual minimum. Lamb Weston, Inc. continues to seek to further expand its market penetration throughout the
United States. Lamb Weston, Inc. exercised its fourth option to extend the license agreement through July 2028, pursuant to
which the minimum royalties will increase 5% annually.

13
During fiscal 2024, our licensee, Bran-Zan Holdings, LLC continued to produce and distribute miniature bagel dogs,
franks-in-a-blanket, mozzarella sticks, corn dog nuggets, other hors d’oeuvres and bottled mustard through club stores,
supermarkets, and other retail food stores. During fiscal 2024 and 2023, we earned royalties of $296,000 and $340,000,
respectively, under this agreement.

During fiscal 2024, our licensee, Hermann Pickle Packers, Inc. continued to produce and distribute Nathan’s Famous
pickles. During fiscal 2024 and 2023, we earned royalties of $319,000 and $318,000, respectively, under this agreement.

Provisions and Supplies

Nathan’s World Famous Beef Hot Dogs are primarily manufactured by Smithfield Foods, Inc. for sale by our
Branded Product Program, our restaurant system, and at retail. Smithfield Foods, Inc. and another hot dog manufacturer
supply the hot dogs for our Company-owned and franchised restaurants. All hot dogs are manufactured in accordance with
Nathan’s recipes, quality standards and proprietary spice formulations. Nathan’s believes that it has reliable sources of supply;
however, in the event of any significant disruption in supply, management believes that alternative sources of supply are
available. (See Item 1A- “Risk Factors”). Saratoga Specialties, Inc,. a wholly-owned subsidiary of Solina, produces Nathan’s
proprietary spice formulations, and we have, in the past, engaged Newly Weds Foods, Inc. as an alternative source of supply.
Our frozen crinkle-cut French fries have been produced primarily by Lamb Weston, Inc.

Most other Company provisions are purchased from multiple sources to prevent disruption in supply and to obtain
competitive prices. We approve all products and product specifications. We negotiate directly with our suppliers on behalf
of the entire system for all primary food ingredients and beverage products sold in the restaurants in an effort to ensure
adequate supply of high-quality items at competitive prices.

We currently utilize a cooperative distribution system pursuant to an agreement with UniPro Foodservice, Inc.,
National Distribution Alliance (formerly the Multi-Unit Group), which is comprised of institutional food and non-food
distributors organized to procure, distribute, and market food service and non-food merchandise for the distribution needs of
our domestic restaurant system. The initial term of the agreement was for five years through November 15, 2022. The
agreement was subsequently renewed through June 30, 2025, and continuing for two (2) successive one (1) year renewal
periods upon mutual consent. We believe this arrangement allows for more flexibility in expanding into new markets
throughout the United States, as well as proves to be cost efficient for our current franchisees. The strategic distribution
partners under this agreement include: DiCarlo Distributors, Inc., Tapia Brothers Co., Cheney Brothers, Inc., Feesers, Inc.,
Hillcrest Foods, Sutherland’s Foodservice, and Chain Distribution Services LLC. Our branded products are delivered to our
ultimate customers throughout the country by numerous distributors, including US Foodservice, Inc., SYSCO Corporation,
Performance Food Group Company, McLane Company, Inc. and DOT Foods.

Marketing, Promotion and Advertising

Nathan’s believes that an integral part of its brand marketing strategy is to continue to build brand awareness through
its complimentary points of distribution strategy of selling its signature products through Company-owned and franchised
restaurants (including virtual kitchens), the Branded Product Program, the Branded Menu Program, and through retail grocery
channels including supermarkets, mass merchandisers and club stores. We believe that as we continue to build brand
awareness and expand our reputation for quality and value, we will continue to seek to grow existing markets and expand
into new markets. The Nathan’s Famous brand continues to enjoy tremendous exposure and awareness from our Nathan’s
Famous Hot Dog Eating Contests. In 2023, we held regional contests in Kissimmee, Florida; Berea, Ohio; Dayton, Ohio;
Cincinnati, Ohio; Pleasanton, California and Washington, D.C. In 2024, we expect to hold regional contests in Grand Rapids,
Michigan; Cleveland, Ohio; San Francisco, California and Washington D.C. These regional contests culminate on July 4th as
the regional champions meet at our flagship restaurant in Coney Island for the national championship.

14
Nathan’s Famous continues to look to sports sponsorships as a strategic marketing opportunity to further brand
recognition. In addition to the branded signage opportunity, Nathan’s sells its Nathan’s World Famous Beef Hot Dogs and
crinkle-cut French fries. In many venues, Nathan’s World Famous Beef Hot Dogs and crinkle-cut French fries are sold at
Nathan’s concession stands and as menu items that are served in suites and throughout premium seating areas. Our current
professional sports sponsorships include:

●
Baseball: Yankee Stadium – New York Yankees; Citi Field – New York Mets; LoanDepot Park – Miami
Marlins; Tropicana Field – Tampa Bay Rays; and

●
Basketball: The Barclays Center – Brooklyn Nets; and

●
Football: AT&T Stadium – Dallas Cowboys; Lambeau Field – Green Bay Packers.

We believe that the Company’s overall sales and exposure have been complemented by the sales of Nathan’s World
Famous Beef Hot Dogs and other Nathan’s products through the publicity generated by our Hot Dog Eating Contests and our
affiliation with a number of high profile sports arenas. In addition to marketing our products at these venues, the Nathan’s
Famous brand has also been televised regionally, nationally and internationally.

We maintain an advertising fund for local, regional and national advertising under the Nathan’s Famous Systems,
Inc. Franchise Agreement. Nathan’s Famous franchisees are generally required to spend on local marketing activities or
contribute to the advertising fund up to 2.0% of restaurant sales for advertising and promotion. Franchisee contributions to
the advertising fund for national marketing support are generally based upon the type of restaurant and its location. The
difference, if any, between 2.0% and the contribution to the advertising fund are to be expended on local programs approved
by us as to form, content and method of dissemination. Certain franchisees, including those operating pursuant to our Branded
Menu Program were not obligated to contribute to the advertising fund during fiscal 2024. Some vendors that supply products
to the Company and our restaurant system also contribute to the advertising fund based upon purchases made by our
franchisees and at Company-owned restaurants.

In fiscal 2024, Nathan’s marketing efforts were largely focused on the annual July 4th Hot Dog Eating Contest and
its sports sponsorships, as well as digital and social media to drive customers directly to the online menus of our franchisees.
This included geo-targeted efforts and direct mail to generate awareness and sales through third party delivery platforms.

Nathan’s marketing efforts include employing an “always on” social media strategy to support the brand and
franchise operations through our centralized brand presence. The social media objectives include increasing our reach among
our core customer base, while building brand awareness amongst the engaged younger generation.

The objective of our Branded Product Program has historically been to seek to provide our foodservice operator
customers with value-added, premium quality products supported with differentiated point of sale materials and other forms
of operational support.

During fiscal 2024, Nathan’s marketing efforts for the Branded Product Program concentrated primarily on
participation in national industry trade shows, as well as regional and local distributor trade events. We have also advertised
our products in distributor and trade periodicals. New arrangements with Branded Product Program points of sale are achieved
through the combined efforts of Company personnel and a network of foodservice brokers and distributors who are also
responsible for direct sales to national, regional and “street” accounts.

During fiscal 2025, we may seek to further expand our internal marketing resources along with our network of
foodservice brokers and distributors. We may attempt to emphasize specific venues as we expand our broker network, focus
management and broker responsibilities on a regional basis and expand the use of sales incentive programs. We continue to
upgrade our social media platforms by enhancing and expanding our use of Facebook, Instagram and X (formerly known as
Twitter).

15
Human Capital

As of March 31, 2024, the Company employed 147 people, 32 of whom were corporate management and
administrative employees, 21 of whom were restaurant managers and 94 of whom were hourly full-time and part-time
foodservice employees.

As of March 31, 2024, approximately 49% of our employees were female and approximately 80% of our employee
population were comprised of racial and ethnic minorities.

We generally employ approximately 270-300 seasonal employees during the spring and summer months. Food
service employees at two Company-owned restaurants are currently represented by Local 1102 RWSDU UFCW AFL-CIO,
CLC, Retail, Wholesale and Department Store Union, under an agreement that expires on June 30, 2026. Employees at a
third Company-owned restaurant are represented by the same union pursuant to a different agreement that expires on
November 30, 2025.

Culture and Diversity

Creating and fostering inclusive work environments and teams allows us to create an engaging and welcoming
culture for our employees, which we believe positively affects the quality of products and experience we deliver to our
customers.

The Company works to ensure our recruiting and hiring initiatives are reaching a broad audience, so that our
workforce represents the communities in which we serve. We seek to provide opportunities for growth and development at
all levels of our organization.

Our workforce represents nearly all demographics, with diversity in age, race, ethnicity and gender. Specifically,
more employees identify as racial and ethnic minorities, than white.

We are committed to high standards of ethical, moral and legal business conduct and strive to be an open and honest
workplace, providing a positive work environment. To support this commitment, we have a Code of Conduct that provides
clear direction for behavioral expectations. We also provide annual training on sexual harassment. In addition, we maintain
an anonymous hotline, which includes an 800 number where our employees can report theft or fraudulent behavior.

Compensation and Benefits

The Company is committed to providing market-competitive and equitable pay and benefits to attract and retain
great talent. In addition to competitive hourly rates and base salaries, all management employees at our Company-owned
restaurants are eligible for performance-based cash incentive bonuses based on the attainment of certain financial metrics,
along with all corporate management and administrative employees, at the discretion of our Board of Directors.

The Company attempts to provide a range of benefits to its corporate and nonunion employees and their families,
including medical and prescription drug, dental and vision, long-term disability coverage, as well as a 401(k) savings plan
and flexible spending accounts. The Company has historically matched contributions to its 401(k) savings plan at a rate of
$0.25 per dollar contributed by the employee up to a maximum of 3% of the employee’s annual salary. The Company pays
the union medical and pension benefits on behalf of the union employees.

Talent Development

We offer various management training courses for management personnel of our Company-owned and franchised
restaurants. A restaurant manager from each restaurant must successfully complete our mandated management training
program.

16
Workplace Safety

We are committed to providing safe work environments and providing our employees with the resources they need
to promote their well-being. We are also committed to providing a safe and healthy environment for our restaurant patrons.
We remain focused on quality and cleanliness by reviewing cleaning procedures and maintaining an adequate supply of
cleaning materials. We promote a culture of safety awareness and strive to provide an environment that is free of hazards and
prevents accidents or injuries.

Government Regulation

We are subject to a Federal Trade Commission (“FTC”) regulation and several state laws that regulate the offer and
sale of franchises. We are also subject to a number of state laws which regulate substantive aspects of the franchisor-
franchisee relationship.

The FTC’s “Trade Regulation Rule Concerning Disclosure Requirements and Prohibitions Concerning Franchising
and Business Opportunity Ventures” (the “FTC Franchise Rule”) requires us to disclose certain information to prospective
franchisees. Fifteen states, including New York, also require similar disclosure. While the FTC Franchise Rule does not
require registration or filing of the disclosure document at the federal level, 14 states require franchisors to register the
disclosure document (or obtain exemptions from that requirement) before offering or selling a franchise in that state. The
laws of 17 other states require some form of registration (or a determination that a company is exempt or otherwise not
required to register) under “business opportunity” laws, which sometimes apply to franchisors such as the Company. These
laws have not precluded us from seeking or awarding franchisees in any given area.

Laws that regulate one or another aspect of the franchisor-franchisee relationship presently exist in 24 states as well
as Puerto Rico and the U.S. Virgin Islands. These laws regulate the franchise relationship by, for example, requiring the
franchisor to deal with its franchisees in good faith, prohibiting interference with the right of free association among
franchisees, limiting the imposition of standards of performance on a franchisee, and regulating discrimination among
franchisees. Although these laws may also restrict a franchisor in the termination of a franchise agreement by, for example,
requiring “good cause” to exist as a basis for the termination, advance notice to the franchisee of the termination, an
opportunity to cure a default, and repurchase of inventory or other compensation, these provisions have not had a significant
effect on our operations. Our international franchise operations are subject to franchise-related and other laws in the
jurisdictions in which our franchisees operate. These laws in the United States and overseas have not precluded us from
enforcing the terms of our franchise agreements, and we do not believe that these laws are likely to significantly affect our
operations. We do not believe that current geopolitical events (including the Russia-Ukraine conflict and the Israel-Hamas
war) have had or will have a serious impact on our operations.

We are not aware of any pending franchise legislation in the United States that we believe is likely to significantly
affect our operations.

Each Company-owned and franchised restaurant is subject to regulation as to operational matters by federal agencies
and to licensing and regulation by state and local health, sanitation, safety, fire, and other departments. An inability to obtain
or retain health department or other licenses could adversely affect our operations.

We are subject to the Federal Fair Labor Standards Act and various other federal and state laws that govern minimum
wages, overtime, working conditions, mandatory benefits, health insurance, and other matters. Other regulatory
interpretations (such as the National Labor Relations Board’s review of joint employment standards under the National Labor
Relations Act, the Labor Department’s review of the Fair Labor Standards Act, the Small Business Administration’s review
of independence standards applicable to reviewing franchisee loan applications, etc.) may have an impact on our overall
business as well, although we do not believe that these will significantly affect our operations.

Governmental authorities have placed an increased focus on environmental matters, particularly in the area of
climate change. We cannot predict the precise nature of these initiatives. However, we expect that they may impact our
business both directly and indirectly. There is a possibility that government initiatives, as well as the actual or perceived risks
of climate change, could have an impact on our business, which we cannot predict at this time (see Item 1A – “Risk Factors”).

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We are also subject to federal and state environmental regulations, which have not had a material effect on our
operations. More stringent and varied requirements of local governmental bodies with respect to zoning, land use and
environmental factors could delay or prevent development of new restaurants in particular locations. In addition, the federal
Americans with Disabilities Act of 1990 applies with respect to the design, construction, and renovation of all restaurants in
the United States.

Each company that manufactures, supplies, or sells our products is subject to regulation by federal agencies and to
licensing and regulation by state and local health, sanitation, safety, and other departments.

We may be subject to governmental imposed restrictions on our restaurant operations to reduce the spread of viruses,
such as those experienced as a result of the spread of COVID-19. Those formal and informal restraints, as well as consumer
behavior and other factors (such as supply chain issues), may have a material impact on our ability to operate our business at
least while those restrictions are in effect, which may possibly have a longer-term impact on our business and the demand for
our products and restaurant services.

We are also subject to the requirement that our restaurants post certain calorie content information for standard menu
items, pursuant to Section 4205 of the Patient Protection and Affordable Care Act of 2010. Some of our restaurants are subject
to similar requirements that are imposed by certain localities around the country.

Alcoholic beverage control regulations require that each restaurant that sells such products apply to a state authority
and, in certain locations, county and municipal authorities, for a license or permit to sell alcoholic beverages on the premises.
Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. Alcoholic beverage
control regulations relate to numerous aspects of the daily operations of the restaurants, including minimum age of customers
and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling, storage and dispensing
of alcoholic beverages. Three of our Company-owned restaurants offer beer or wine coolers for sale. Each of these restaurants
has current alcoholic beverage licenses permitting the sale of these beverages. We have never had an alcoholic beverage
license revoked.

We may be subject in certain states to “dram-shop” statutes, which generally provide a person injured by an
intoxicated person the right to recover damages from an establishment which wrongfully served alcoholic beverages to such
person. We carry liquor liability coverage as part of our existing comprehensive general liability insurance and have never
been named as a defendant in a lawsuit involving “dram-shop” statutes.

The Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, and rules promulgated thereunder by the Securities
and Exchange Commission (“SEC”) and the Nasdaq Stock Market have imposed substantial regulations and disclosure
requirements in the areas of corporate governance (including director independence, director selection and audit, corporate
governance and compensation committee responsibilities), equity compensation plans, auditor independence, pre-approval
of auditor fees and services and disclosure and internal control procedures. We are committed to industry best practices in
these areas.

We believe that we operate in substantial compliance with applicable laws and regulations governing our operations,
including the FTC Franchise Rule and state franchise laws.

Trademarks

We hold trademark and/or service mark registrations for NATHAN’S, NATHAN’S FAMOUS, NATHAN’S
FAMOUS and design, SINCE 1916 NATHAN’S FAMOUS and design, SINCE 1916 NATHAN’S FAMOUS, INC. and
design, THE ORIGINAL SINCE 1916 NATHAN’S FAMOUS and design, SINCE 1916 NATHAN’S FAMOUS THIS IS
THE ORIGINAL, THE ORIGINAL NATHAN’S FAMOUS, SINCE 1916 NATHAN’S FAMOUS and hot dog design in
color, SINCE 1916 NATHAN’S FAMOUS and hot dog, fries and drink design in color, and NATHAN’S FAMOUS
EXPRESS within the United States, with some of these marks holding corresponding foreign trademark and service mark
registrations in over 80 international jurisdictions, including Canada and China. We also hold various package design
registrations and other related marks, FROM A HOT DOG TO AN INTERNATIONAL HABIT, and MORE THAN JUST
THE BEST HOT DOG! and design, for restaurant services and some food items.

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We hold trademark and/or service mark registrations for the marks ARTHUR TREACHER’S (stylized), ARTHUR
TREACHER’S FISH & CHIPS (stylized), KRUNCH PUP and ORIGINAL within the United States. We hold service mark
registrations for ARTHUR TREACHER’S in China and Japan. We also hold service mark registrations for ARTHUR
TREACHER’S FISH & CHIPS in Canada, ARTHUR TREACHER’S FISH & CHIPS and design in Canada and Mexico,
and ARTHUR TREACHER’S FISH & CHIPS and design in Colombia, Costa Rica, Kuwait, Malaysia, Singapore and the
United Arab Emirates.

Our trademark and service mark registrations were granted and expire on various dates. We believe that these
trademarks and service marks provide significant value to us and are an important factor in the marketing of our products and
services. We believe that we do not infringe on the trademarks or other intellectual property rights of any third parties.

Seasonality

Our routine business pattern is affected by seasonal fluctuations, including the effects of weather and economic
conditions. Historically, sales from our Company-owned restaurants, principally at Coney Island, and franchised restaurants
and virtual kitchens from which franchise royalties are earned and the Company’s earnings have been highest during our first
two fiscal quarters, with the fourth fiscal quarter typically representing the slowest period. Routine seasonality is primarily
attributable to weather conditions in the marketplace for our Company-owned and franchised restaurants, which are
principally located in the Northeast of the United States. Additionally, revenues from our Branded Product Program and retail
licensing program generally follow similar seasonal fluctuations, although not to the same degree. We believe that future
revenues and profits will continue to be highest during our first two fiscal quarters, with the fourth fiscal quarter representing
the slowest period.

Competition

The fast-food restaurant industry is highly competitive and can be significantly affected by many factors, including
changes in local, regional or national economic conditions, supply chain challenges, changes in consumer tastes, consumer
concerns about the nutritional quality of quick-service food, as well as the increases in and the locations of, competing
restaurants.

Our restaurant system competes with numerous restaurants and drive-in units operating on both a national and local
basis, including major national chains with greater financial and other resources than ours. We also compete with local
restaurants and diners on the basis of menu diversity, food quality, price, size, site location and name recognition. There is
also active competition for management personnel, as well as for suitable commercial sites for Company-owned or franchised
restaurants.

We believe that our emphasis on our signature products and the reputation of these products for taste and quality set
us apart from our major competitors. Many fast-food companies have adopted “value pricing” and/or deep discount strategies.
Nathan’s markets our own form of “value pricing,” selling combinations of different menu items for a total price lower than
the usual sale price of the individual items and other forms of price sensitive promotions.

We also compete with many restaurant franchisors and other business concepts for the sale of franchises to qualified
and financially capable franchisees.

Our Branded Product Program competes directly with a variety of other nationally recognized hot dog companies
and other food companies; many of these entities have significantly greater resources than we do. Our products primarily
compete based upon price, quality and value to the foodservice operator and consumer. We believe that Nathan’s reputation
for superior quality, along with the ability to provide operational support to the foodservice operator, provides Nathan’s with
a competitive advantage.

Our retail licensing program for the sale of packaged foods within retail grocery channels including supermarkets
and club stores competes primarily on the basis of reputation, flavor, quality and price. In most cases, we compete against
other nationally recognized brands that may have significantly greater resources than those at our disposal.

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Segment Reporting

The Company is comprised of the following segments: (1) Branded Product Program, (2) Product licensing, and (3)
Restaurant operations. Refer to Footnote I, Segment Information, in the notes to our consolidated financial statements for
more information.

Available Information

We file reports with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and a proxy statement on Schedule 14A. The SEC also maintains a website at http://www.sec.gov that
contains reports, proxy and information statements and other information about issuers such as us that file electronically with
the SEC.

In addition, electronic copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K, proxy statement on Schedule 14A and amendments to those reports filed or furnished pursuant to Section 13(a)
or 15(d) under the Securities Exchange Act of 1934, as amended (“the Exchange Act”) are available free of charge on our
website, www.nathansfamous.com, as soon as reasonably practicable after we electronically file such material with, or furnish
it to, the SEC. The reference to our website address and the SEC website address do not constitute incorporation by reference
of the information contained on the website and should not be considered part of this document.

The Board of Directors (“the Board”) has also adopted, and we have posted in the Investor Relations section of our
website, written Charters for each of the Board’s standing committees. We will provide without charge a copy of the Charter
of any standing committee of the Board upon a stockholder’s request to us at Nathan’s Famous, Inc., One Jericho Plaza,
Second Floor - Wing A, Jericho, NY 11753, Attention: Secretary.

For financial information regarding our results of operations, please see our consolidated financial statements
beginning on page F-1.

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Item 1A.
Risk Factors.

Our business is subject to various risks. Certain risks are specific to certain ways we do business, such as through
Company-owned restaurants, franchised restaurants, virtual kitchens, branded products and retail, while other risks, such as
health-related or economic risks, may affect all of the ways that we do business.

Investors should carefully consider all of the information set forth in this Annual Report on Form 10-K, including
the following risk factors, before deciding to invest in any of the Company’s securities. The following risk factors are not
exhaustive. Additional risks and uncertainties not presently known to the Company may also adversely impact its business.
The Company’s business, financial condition, results of operations or prospects could be adversely affected by any of these
risks. In that case, the trading price of the Company’s common stock could decline. This Form 10-K also contains forward-
looking statements that involve risks and uncertainties. The Company’s results could materially differ from those anticipated
in these forward-looking statements as a result of certain factors, including the risks it faces described below and elsewhere.
See “Forward-Looking Statements” above.

Risks Related to Our Business and Operations

The COVID-19 pandemic previously impacted our business and could continue to adversely affect our business,
financial condition, and results of operations in the future.

COVID-19 had a substantial impact on our operations in fiscal 2021 and to a lesser extent in fiscal 2022 and fiscal
2023. In May 2023, the World Health Organization declared an end to the global health emergency. However, a recurrence
of COVID-19 or new variants of COVID-19 could substantially impact customer traffic at our Company-owned and
franchised restaurants, as well as sales to our Branded Product Program customers and royalties earned from our licensing
activities.

The Company cannot predict if new variants of COVID-19 will be discovered, what restrictions may be enacted by
local, state and the federal government, to what extent it can maintain off-premises sales volumes, whether it can maintain
sufficient staffing levels at our Company-owned restaurants, or if individuals will be comfortable congregating in our dining
rooms or public venues such as professional sports arenas, amusement parks, shopping malls or movie theaters, and what
long-lasting effects COVID-19 may have on the Company as a whole. The imposition of restrictions or a return to shutdowns
imposed by local, state and/or the federal government may have a material adverse effect on our business, results of operations
and financial condition. COVID-19 has heightened many of the other risks described in this Item 1A, “Risk Factors.”

Increases in the cost of food and paper products could harm our profitability and operating results.

General economic conditions, including increases in inflation, have adversely affected our food, commodity and
paper costs and may continue to do so. Our success and profitability depends on our customers willingness to pay higher
prices for our products across all channels of distribution and there is no assurance that they will do so.

Food and paper products represent approximately 25% to 30% of our cost of restaurant sales. We purchase large
quantities of beef and beef trimmings and our beef costs represent approximately 80% to 90% of our cost of sales. The market
for beef is particularly volatile and is subject to significant price fluctuations due to seasonal shifts, climate conditions,
industry demand, inflationary pressures and other macroeconomic factors beyond our control.

We may continue to experience increases in the cost of food, commodity and paper products which, in turn, may
adversely affect our business, results of operations and financial condition.

We cannot assure that our Company-owned restaurants or our franchised restaurants will be able to purchase its
food, commodity or paper products at reasonable prices, or that the cost of such food, commodity or paper products will
remain stable in the future.

We are unable to predict the future cost of our hot dogs and expect to experience price volatility for our beef products
during fiscal 2025. To the extent that beef prices increase as compared to earlier periods, it could impact our results of
operations. If the price of beef, beef trimmings or other food products that we use in our operations significantly increases,
particularly in the Branded Product Program, and we choose not to pass, or cannot pass, these increases on to our customers,
our operating margins will decrease and such decrease in operating margins could have a material adverse effect on our
business, results of operations or financial condition.

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From time to time, we have sought to lock in the cost of a portion of our beef purchases by entering into various
commitments to purchase hot dogs during certain periods in an effort to ensure supply of product at a fixed cost of product.
However, we may be unable to enter into similar purchase commitments in the future. In addition, we do not have the ability
to effectively hedge our beef purchases using futures or forward contracts without incurring undue financial cost and risk.

Price increases may impact customer visits.

The Company and our franchisees have increased prices on selected menu items in order to offset rising food and
commodity costs. Although we have not experienced significant resistance to our past price increases, future price increases
may deter customers from visiting our Company-owned and franchised restaurants, may decrease demand for our products
at our Company-owned and franchised restaurants and may adversely affect our restaurant operations.

Our licensing revenue and overall profitability is substantially dependent on our agreement with Smithfield
Foods, Inc. and the loss or a significant reduction of this revenue would have a material adverse effect on our financial
condition and results of operations.

We earned license royalties from Smithfield Foods, Inc. of approximately $30,067,000 in fiscal 2024 and
approximately $29,998,000 in fiscal 2023 representing 22% and 23% of total revenues, respectively. As a result of our
agreement with Smithfield Foods, Inc. which expires in 2032, we expect that most of our license royalties will be earned
from Smithfield Foods, Inc. for the foreseeable future. Accordingly, in the event that (i) Smithfield Foods, Inc. experiences
financial or operational difficulties, (ii) there is a disruption or termination of the Smithfield Foods, Inc. agreement or (iii)
there is a significant decrease in our license royalties from Smithfield Foods, Inc., it would have a material adverse effect on
our business, results of operations and financial condition.

A significant amount of our Branded Product Program revenue is from a small number of accounts. The loss of
any one or more of those accounts could harm our profitability and operating results.

A small number of our Branded Product Program customers account for a significant portion of our Branded Product
Program revenues. Sales to our five largest Branded Product Program customers were 77% and 76% of our Branded Product
Program revenues in fiscal 2024 and fiscal 2023, respectively. In the event that any one of these Branded Product Program
customers experience financial difficulties or, upon the expiration of their existing agreements, if applicable, are not willing
to do business with us in the future on terms acceptable to the Company, there could be a material adverse effect on our
business, results of operations and financial condition.

Smithfield Foods, Inc. currently has two manufacturing facilities producing different Nathan’s products and a
long-term significant interruption of a primary facility could potentially disrupt our operations.

Smithfield Foods, Inc. currently has two manufacturing facilities producing different Nathan’s products. A
temporary closure at either of these plants could potentially cause a temporary disruption to our source of supply, potentially
causing some or all of certain shipments to customers to be delayed. A longer-term significant interruption at either of these
production facilities, whether as a result of a natural disaster or other causes, could significantly impair our ability to operate
our business on a day-to-day basis while Smithfield Foods, Inc. determines how to make up for any lost production
capabilities, during which time we may not be able to secure sufficient alternative sources of supply on acceptable terms, if
at all. In addition, a long-term disruption in supply to our customers could cause our customers to determine not to purchase
some or all of their hot dogs from us in the future, which in turn would adversely affect our business, results of operations
and financial condition. Furthermore, a supply disruption or other events might affect our brand in the eyes of consumers and
the retail trade, which damage might negatively impact our overall business in general, which could result in a material
adverse effect on our business, results of operations or financial condition.

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The loss of one or more of our key suppliers could lead to supply disruptions, increased costs and lower operating
results.

We have historically relied on one supplier for the majority of our hot dogs and another supplier for a majority of
our supply of frozen crinkle-cut French fries for our restaurant system. An interruption in the supply of product from either
of these suppliers without our obtaining an alternative source of supply on comparable terms could lead to supply disruptions,
increased costs and lower operating results. We have an agreement with a secondary hot dog manufacturer that continues to
also supply natural casing hot dogs for our restaurant business.

In the event that the hot dog or French fry suppliers are unable to fulfill our requirements for any reason, including
due to a significant interruption in its manufacturing operations, whether as a result of a natural disaster or for other reasons,
such interruption could significantly impair our ability to operate our business on a day-to-day basis.

In the event that we are unable to find one or more alternative suppliers of hot dogs or French fries on a timely basis,
there could be a disruption in the supply of product to our Company-owned restaurants, franchised restaurants and Branded
Product Program accounts, which would damage our business, our franchisees and our Branded Product Program customers
and, in turn, negatively impact our financial results. In addition, any gap in supply to retail customers may result in lost license
royalties to us, which could have a significant adverse financial impact on our results of operations. Furthermore, any gap in
supply to retail customers may damage our brand in the eyes of consumers and the retail trade, which might negatively impact
our overall business in general and impair our ability to continue our retail licensing program.

Additionally, there is no assurance that any supplemental sources of supply would be capable of meeting our
specifications and quality standards on a timely and consistent basis or that the financial terms of such supply arrangement
will be as favorable as our present terms with our hot dog or French fry supplier, as the case may be.

Any of the foregoing occurrences may cause disruptions in the supply of our hot dog or French fry products and
may damage our franchisees and our Branded Product Program customers, which could result in a material adverse effect on
our business, results of operations or financial condition.

Our earnings and business growth strategy depend in large part on the success of our product licensees and
product manufacturers. Our reputation and the reputation of our brand may be harmed by actions taken by our product
licensees or product manufacturers that are otherwise outside of our control.

A significant portion of our earnings has come from royalties paid by our product licensees, such as Smithfield
Foods, Inc., Saratoga Food Specialties, Inc., a wholly-owned subsidiary of Solina, and Lamb Weston Holdings, Inc. Although
our agreements with these licensees contain numerous controls and safeguards, and we monitor the operations of our product
licensees, our licensees are independent contractors, and their employees are not our employees. Accordingly, we cannot
necessarily control the performance of our licensees under their license agreements, including without limitation, the
licensee’s continued best efforts to manufacture our products for retail distribution and our foodservice businesses, to timely
deliver the licensed products, to market the licensed products and to assure the quality of the licensed products produced
and/or sold by a product licensee. Any shortcoming in the quality, quantity and/or timely delivery of a licensed product is
likely to be attributed by consumers to an entire brand’s reputation, potentially adversely affecting our business, results of
operations and financial condition. In addition, a licensee’s failure to effectively market the licensed products may result in
decreased sales, which would adversely affect our business, results of operations and financial condition. Also, to the extent
that the terms and conditions of any of these license agreements change or we change any of our product licensees, our
business, results of operations and financial condition could be materially affected.

The quick-service restaurant business is highly competitive, and that competition could lower revenues, margins
and market share.

The quick-service restaurant business of the foodservice industry is intensely competitive with respect to taste
preferences, price, service, location, brand reputation, advertising and promotional initiatives, personnel, and the type and
quality of menu offerings. We and our franchisees compete with international, national, regional and local restaurant chains.
Other key competitive factors include the number and location of restaurants, quality and speed of service, attractiveness of
facilities, effectiveness of digital and social media engagement, and new product development. We anticipate competition
will continue to focus on quality, convenience and pricing. Many of our competitors have substantially larger marketing
budgets which may provide them with a competitive advantage. Changes in pricing or other marketing strategies by these
competitors can have an adverse impact on our sales, earnings and growth. For example, many of those competitors have
adopted “value pricing” strategies intended to lure customers away from other companies, including our Company.
Consequently, these strategies could have the effect of drawing customers away from companies which do not engage in

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discount pricing and could also negatively impact the operating margins of competitors which attempt to match their
competitors’ price reductions. Extensive price discounting in the quick-service restaurant business could have an adverse
effect on our financial results.

In addition, if patrons have a poor experience at a Company-owned or a franchised restaurant, we may experience a
decrease in customer counts which, in turn, may result in a decline in Company-owned restaurant sales or franchise royalties.

We and our franchisees compete within the foodservice market and the quick-service restaurant business not only
for customers but also for management and hourly employees and qualified franchisees. If we are unable to maintain our
competitive position, we could experience downward pressure on prices, lower demand for products, reduced margins, the
inability to take advantage of new business opportunities and the loss of market share.

All such competition may adversely affect our business, results of operations and financial condition.

Changes in economic, market and other conditions could adversely affect us and our franchisees, and thereby
our operating results.

The quick-service restaurant business is affected by changes in international, national, regional, and local economic
conditions, consumer preferences and spending patterns, demographic trends, consumer perceptions of food safety and health,
diet and nutrition, weather, traffic patterns, the type, number and location of competing restaurants, and the effects of war or
terrorist activities and any governmental responses thereto. Factors such as inflation, higher costs for each of food, labor,
benefits and utilities, the availability and cost of suitable sites, rising insurance rates, state and local regulations and licensing
requirements, legal claims, and the availability of an adequate number of qualified management and hourly employees also
adversely affect restaurant operations and administrative expenses. Our ability and our franchisees’ ability to finance new
restaurant development, to make improvements and additions to existing restaurants, and the acquisition of restaurants from,
and sale of restaurants to, franchisees is affected by economic conditions, including interest rates and other government
policies impacting land and construction costs and the cost and availability of borrowed funds.

Further, we are dependent upon consumer discretionary spending and are subject to changes in or uncertainty
regarding macroeconomic conditions in the United States and in other regions of the world. If the economy experiences a
downturn or there are other uncertainties regarding economic prosperity, or other negative global and local macroeconomic
conditions, consumer discretionary spending may be negatively impacted which may adversely affect our sales and operating
profit.

Current restaurant locations may become unattractive, and attractive new locations may not be available for a
reasonable price, if at all, which may reduce our revenue.

The success of any restaurant depends in substantial part on its location. There can be no assurance that current
locations will continue to be attractive as demographic patterns change. Neighborhood or economic conditions where
restaurants are located could decline in the future, thus resulting in potentially reduced sales in those locations. If we and our
franchisees cannot obtain desirable additional and alternative locations at reasonable prices, our results of operations would
be adversely affected.

Any perceived or real health risks related to the food industry could adversely affect our ability to sell our
products.

We are subject to risks affecting the food industry generally, including risks posed by the following: food spoilage
or food contamination; consumer product liability claims; product tampering; and the potential cost and disruption of a
product recall.

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Our products are susceptible to contamination by disease-producing organisms, or pathogens, such as salmonella,
norovirus, hepatitis A, trichinosis and generic E. coli. In addition, our beef products are also subject to the risk of
contamination from bovine spongiform encephalopathy. Because these pathogens are generally found in the environment,
there is a risk that these pathogens could be introduced to our products as a result of improper handling at the manufacturing,
processing, foodservice or consumer level. Our suppliers’ manufacturing facilities and products, as well as our franchisee
and Company-owned restaurant operations, are subject to extensive laws and regulations relating to health, food preparation,
sanitation and safety standards. Difficulties or failures in obtaining any required licenses or approvals or otherwise complying
with such laws and regulations could adversely affect our revenue. Furthermore, we cannot assure you that compliance with
governmental regulations by our suppliers or in connection with restaurant operations will eliminate the risks related to food
safety.

Events reported in the media, or incidents involving food-borne illnesses or food tampering, whether or not accurate,
can cause damage to our brand’s reputation and affect sales and profitability. Reports, whether true or not, of food-borne
illnesses (such as e-coli, avian flu, bovine spongiform encephalopathy, hepatitis A, trichinosis or salmonella) and injuries
caused by food tampering have in the past severely injured the reputations of participants in the quick-service restaurant
business and could in the future affect our business as well. Our brand’s reputation is an important asset to the business; as a
result, anything that damages our brand’s reputation could immediately and severely hurt system-wide sales and, accordingly,
revenue and profits. If customers become ill from food-borne illnesses or food tampering, we could also be forced to
temporarily close some, or all, restaurants. In addition, instances of food-borne illnesses or food tampering, even those
occurring solely at the restaurants of competitors, could, by resulting in negative publicity about the restaurant industry,
adversely affect system sales on a local, regional or system-wide basis. A decrease in customer traffic as a result of these
health concerns or negative publicity, or as a result of a temporary closure of any of our Company-owned restaurants or our
franchisees’ restaurants, could materially harm our business, results of operations and financial condition.

Additionally, we may be subject to liability if the consumption of any of our products causes injury, illness, or death.
A significant product liability judgment or a widespread product recall may negatively impact our sales and profitability for
a period of time depending on product availability, competitive reaction, and consumer attitudes. Even if a product liability
claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness
or injury could adversely affect our reputation with existing and potential customers and our corporate and brand image.
Injury to our brand’s reputation would likely reduce revenue and profits.

Negative publicity, including complaints on social media platforms and other internet-based communications,
could damage our reputation and harm our guest traffic, and in turn, negatively impact our business, financial condition,
results of operations and prospects.

There has been an increase in the use of social media platforms and other forms of internet-based communications,
including video sharing and instant messaging platforms, that allow individuals to access a broad audience of consumers and
other interested persons. The availability of information on these social media platforms and internet-based communications
is virtually immediate, as is its impact. The opportunity for dissemination of information, including inaccurate information,
organizing collective actions such as boycotts and other brand-damaging behaviors is seemingly limitless and readily
available. Information concerning our business and products may be posted on such platforms at any time. Information posted
may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business. The
harm may be immediate without affording us an opportunity for redress or correction. Such platforms could also be used for
dissemination of trade secret information, compromising valuable Company assets. The dissemination of information online,
regardless of its accuracy, could harm our business, results of operations and financial condition.

The use of social media has become a larger element of our advertising and promotional efforts. These marketing
initiatives may not be successful, resulting in expenses incurred without a corresponding increase in sales, increased customer
awareness or engagement or brand awareness. The laws and regulations governing the use of social media are evolving and
changing. If the Company, our employees, our franchisees or business partners do not adhere to the laws and regulations
regarding the use of social media, it may adversely affect our business, results of operations, and financial condition and may
subject the Company to litigation, fines or penalties.

Changing health or dietary preferences may cause consumers to avoid products offered by us in favor of
alternative foods.

The foodservice industry is affected by consumer preferences and perceptions, including calories, sodium,
carbohydrates or fat. If prevailing health or dietary preferences, perceptions and governmental regulation cause consumers to
avoid the products we offer in favor of alternative or healthier foods, demand for our products may be reduced and could
materially adversely affect our business, results of operations and financial condition.

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We may not be able to adequately protect our intellectual property, which could decrease the value of our business
or the value of our brands and products.

The success of our business depends on the continued ability to use existing trademarks, domain names, service
marks and other components of each of our brands in order to increase brand awareness and further develop branded products.
We may not be able to adequately protect our trademarks, and the use of these trademarks may result in liability for trademark
infringement, trademark dilution or unfair competition. All of the steps we have taken to protect our intellectual property may
not be adequate.

We have registered or applied to register many of our trademarks and service marks both in the United States and in
foreign countries. Due to the differences in foreign trademark laws, our trademark rights may not receive the same degree of
protection in foreign countries as they would in the United States. We also cannot assure you that our trademark and service
mark applications will be approved. In addition, third parties may oppose our trademark and service mark applications, or
otherwise challenge our use of the trademarks or service marks. In the event that our trademarks or service marks are
successfully challenged, we could be forced to rebrand our products and services, which could result in loss of brand
recognition, and could require us to devote resources towards advertising and marketing new brands. Further, we cannot
assure you that competitors will not infringe upon our marks, or that we will have adequate resources to enforce our
trademarks or service marks. We cannot ensure that all of the steps that we have taken to protect our intellectual property in
the United States and foreign countries will be adequate.

We also license third party franchisees and other licensees to use our trademarks and service marks. We enter into
franchise agreements with our franchisees and license agreements with our licensees which govern the use of our trademarks
and service marks. Although we make efforts to monitor the use of our trademarks and service marks by our franchisees and
licensees, we cannot assure you that these efforts will be sufficient to ensure that our franchisees and licensees abide by the
terms of the trademark licenses. In the event that our franchisees and licensees fail to do so, our trademark and service mark
rights could be diluted.

Our earnings and business growth strategy depend in large part on the success of our restaurant franchisees and
on new restaurant openings. Our corporate reputation or brand reputation may be harmed by actions taken by restaurant
franchisees that are otherwise outside of our control.

A portion of our earnings comes from royalties, fees and other amounts paid by our restaurant franchisees. These
earnings are dependent upon the operational and financial success of our franchise operators. The opening and success of
franchised restaurants depends on various factors, including the demand for our franchises and the selection of appropriate
franchisee candidates, the availability of suitable restaurant sites, the negotiation of acceptable lease or purchase terms for
new locations, permitting and regulatory compliance, the ability to secure restaurant equipment, the ability to meet
construction schedules, the availability of financing and the financial and other capabilities of our franchisees and area
developers. We cannot assure you that area developers planning the opening of franchised restaurants will have the business
abilities or sufficient access to financial resources necessary to open the restaurants required by their agreements. We cannot
assure you that franchisees will successfully participate in our strategic initiatives or operate their restaurants in a manner
consistent with our concept and standards. Our franchisees are independent contractors, and their employees are not our
employees. Our franchisees are solely responsible for making their own hiring, firing and disciplinary decisions, scheduling
hours, establishing wages and managing their day-to-day operations at their individual locations in accordance with local and
state laws. We provide training and support to, and monitor the operations of, our franchisees, but the quality of their
restaurant operations may be diminished by any number of factors beyond our control. Consequently, the franchisees may
not successfully operate their restaurants in a manner consistent with our high standards and requirements, and franchisees
may not hire and train qualified managers and other restaurant personnel. Any operational shortcoming of a franchised
restaurant is likely to be attributed by consumers to an entire brand or our system, thus damaging our corporate or brand
reputation, potentially adversely affecting our business, results of operations and financial condition.

26
Growth in our restaurant revenue and earnings is significantly dependent on new restaurant openings. Numerous
factors beyond our control may affect restaurant openings. These factors include but are not limited to: our ability to attract
new franchisees; the availability of site locations for new restaurants; the ability of potential restaurant owners to obtain
financing, which may become more difficult due to current market conditions and rising interest rates; the ability of restaurant
owners to hire, train and retain qualified operating personnel; construction and development costs of new restaurants,
particularly in highly-competitive markets; the ability of restaurant owners to secure required governmental approvals and
permits in a timely manner, or at all; and adverse weather conditions.

We cannot assure you that franchisees will renew their franchise agreements or that franchised restaurants will
remain open. Closings of franchised restaurants are expected in the ordinary course and may cause our royalty revenues and
financial performance to decline. Our principal competitors may have greater influence over their respective restaurant
systems than we do because of their significantly higher percentage of company restaurants and/or ownership of franchisee
real estate and, as a result, may have a greater ability to implement operational initiatives and business strategies, including
their marketing and advertising programs.

As our franchisees are independent operators, we have limited influence over their ability to invest in other
businesses or incur excessive indebtedness. Some of our franchisees have invested in other businesses, including other
restaurant concepts. Such franchisees may use the cash generated by their Nathan’s restaurants to expand their other
businesses or to subsidize losses incurred by such businesses. Additionally, as independent operators, franchisees do not
require our consent to incur indebtedness. Consequently, our franchisees have in the past, and may in the future, experience
financial distress as a result of over-leveraging. To the extent that our franchisees use the cash from their Nathan’s restaurants
to subsidize their other businesses or experience financial distress, due to over-leveraging, delayed or reduced payments of
royalties, advertising fund contributions and rents for properties we lease to them, or otherwise, it could have a material
adverse effect on our business, results of operations and financial condition. In addition, lenders to our franchisees may be
less likely to provide current or prospective franchisees necessary financing on favorable terms, or at all, due to market
conditions and operating results.

We rely on the performance of major retailers, wholesalers, specialty distributors and mass merchants for the
success of our business, and should they perform poorly or give higher priority to other brands or products, our business
could be adversely affected.

We sell our products to retail outlets and wholesale distributors including, traditional supermarkets, mass
merchandisers, warehouse clubs, wholesalers, food service distributors and convenience stores. The replacement by or poor
performance of our major wholesalers, retailers or chains or our inability to collect accounts receivable from our customers
could materially and adversely affect our business, results of operations and financial condition. In addition, our customers
offer branded and private label products that compete directly with our products for retail shelf space and consumer purchases.
Accordingly, there is a risk that our customers may give higher priority to their own products or to the products of our
competitors. In the future, our customers may not continue to purchase our products or provide our products with adequate
levels of promotional support. A significant decline in the purchase of our products would have a material adverse effect on
our business, results of operations and financial condition.

The sophistication and buying power of our customers could have a negative impact on profits.

Our customers, such as supermarkets, warehouse clubs, and food distributors, have continued to consolidate,
resulting in fewer customers with which to do business. These consolidations and the growth of supercenters have produced
large, sophisticated customers with increased buying power and negotiating strength who are more capable of resisting price
increases and can demand lower pricing, increased promotional programs, or specialty tailored products. In addition, larger
retailers have the scale to develop supply chains that permit them to operate with reduced inventories or to develop and market
their own retailer brands. If the larger size of these customers results in additional negotiating strength and/or increased
private label or store brand competition, our profitability could decline.

Consolidation also increases the risk that adverse changes in our customers’ business operations or financial
performance will have a corresponding material adverse effect on us. For example, if our customers cannot access sufficient
funds or financing, then they may delay, decrease, or cancel purchases of our products, or delay or fail to pay us for previous
purchases.

27
Our annual and quarterly financial results may fluctuate depending on various factors, many of which are
beyond our control, and, if we fail to meet the expectations of investors, our share price may decline.

Our sales and operating results can vary from quarter to quarter and year to year depending on various factors, many
of which are beyond our control. Certain events and factors may directly and immediately decrease demand for our products.
These events and factors include:

●
changes in customer demand;

●
sales promotions by Nathan’s and its competitors;

●
variations in the timing and volume of Nathan’s sales and franchisees’ sales;

●
changes in the terms of our existing license/supply agreements and/or the replacement of existing licenses
or suppliers;

●
changes in average same-store sales and customer visits;

●
variations in the price, availability and shipping costs of supplies;

●
tax expense, asset impairment charges and other non-operating costs;

●
seasonal effects on demand for Nathan’s products;

●
unexpected slowdowns in new store development efforts;

●
changes in competitive and macroeconomic conditions in the United States and in other regions of the
world, including the Russia-Ukraine conflict and the Israel-Hamas war;

●
changes in the cost or availability of commodities, including beef and beef trimmings or labor and our
inability to offset these higher costs with price increases;

●
weather and acts of God; and

●
changes in the number of franchises sold and franchise agreement renewals.

Our operations are influenced by adverse weather conditions.

Weather, which is unpredictable, can impact our sales. Harsh weather conditions that keep customers from dining
out result in lost opportunities for our Company-owned and our franchisees’ restaurants. A heavy snowstorm or a tropical
storm or hurricane in the Northeast can shut down an entire metropolitan area, resulting in a reduction in sales in that area at
Company-owned and franchised restaurants. Our fourth quarter includes winter months and historically has a lower level of
sales at Company-owned and franchised restaurants. Additionally, our Company-owned restaurants at Coney Island are
heavily dependent on favorable weather conditions during the summer season. Rain during the weekends and/or unseasonably
cold temperatures will negatively impact the number of patrons visiting the Coney Island beach locations. Because a
significant portion of our restaurant operating costs is fixed or semi-fixed in nature, the loss of sales during these periods
adversely impacts our operating margins and can result in restaurant operating losses. For these reasons, a quarter-to-quarter
comparison may not be a good indication of our performance or how it may perform in the future.

Climate change could adversely affect our results of operation and financial condition.

We and our supply chain are subject to risks and costs arising from the effects of climate change, global warming
and diminishing energy and water resources. Climate change may have a negative effect on agricultural productivity which
may result in decreased availability or less favorable pricing for certain commodities used in our products, such as beef,
chicken, produce and dairy. Climate change may also increase the frequency or severity of natural disasters and other extreme
weather conditions, which could disrupt the business of our suppliers, cause temporary restaurant closures and negatively
impact guest traffic at our restaurants. Concern over climate change and other environmental and social sustainable business
practices may result in new or increased legal and regulatory requirements, which could significantly increase costs.
Furthermore, any perception of a failure to act responsibly with respect to the environment or to effectively respond to
regulatory requirements concerning climate change or other sustainable business practices could lead to adverse publicity
and have a material adverse effect on our business, results of operations and financial conditions.

Due to the concentration of our restaurants in particular geographic regions, our business results could be
impacted by the adverse economic conditions prevailing in those regions regardless of the state of the national economy
as a whole.

As of March 31, 2024, we and our franchisees (including locations operated pursuant to our Branded Menu Program)
operated Nathan’s restaurants in 17 states and 13 foreign countries. As of March 31, 2024, the highest concentration of
operating units was in the Northeast, principally in New York and New Jersey. This geographic concentration in the Northeast
can cause economic conditions in this area of the country to have a disproportionate impact on our overall results of
operations. It is possible that adverse economic conditions in states or regions that contain a high concentration of Nathan’s
restaurants could have a material adverse impact on our business, results of operations and financial condition.

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We rely extensively on computer systems, our point-of-sales system and information technology to manage our
business. Any disruption in our computer systems, our point-of-sales system or information technology may adversely
affect our ability to run our business.

We are significantly dependent upon our computer systems, our point-of-sales system and information technology
to properly conduct our business. A failure or interruption of computer systems, our point-of-sales system or information
technology could result in the loss of data, business interruptions or delays in business operations. Many of these systems are
provided and managed by third parties, and we are reliant on these third-party providers to implement protective measures
that ensure the security, availability and integrity of their systems. Despite our considerable efforts to secure our computer
systems and these third-party systems, security breaches, such as unauthorized access and computer viruses, phishing attacks,
introduction of malware or ransomware may occur resulting in system disruptions, shutdowns or unauthorized disclosure of
confidential information. Any security breach of our computer systems, and/or these third-party systems may result in adverse
publicity, loss of sales and profits, penalties or loss resulting from misappropriation of information.

If any of our critical information technology systems were to become unreliable, unavailable, compromised or
otherwise fail, and we were unable to recover in a timely manner, we could experience an interruption that could have a
material adverse effect on our business, results of operations and financial condition.

Cyberattacks and breaches could cause operational disruptions, fraud or theft of sensitive information.

Aspects of our operations are reliant upon internet-based activities, such as ordering supplies and back-office
functions such as accounting and transaction processing, making payments and accepting credit card payments in our
restaurants, as well as at third party online ordering and delivery businesses, processing payroll and other administrative
functions, etc. For instance, if we fail to comply with applicable rules or requirements for the payment methods we accept,
or if payment-related data is compromised due to a breach or misuse of data, we may be liable for costs incurred by payment
card issuing banks and other third parties or subject to fines and higher transaction fees, or our ability to accept or facilitate
certain types of payments may be impaired. In addition, our customers could lose confidence in certain payment types, which
may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs.

We also use third-party vendors. While we select third-party vendors carefully, we do not control their actions. Any
problems caused by these third parties, including those resulting from breakdowns or other disruptions in communication
services provided by a vendor, failure of a vendor to handle current or higher volumes, cyberattacks and security breaches at
a vendor could adversely affect our ability to deliver products and services to conduct our business.

Although we have taken measures to protect our technology systems and infrastructure, including investing in our
existing information technology systems and providing employee training around phishing, malware and other cyber risks,
there can be no assurance that we will be successful and fully protected against cyber risks and security breaches. The
techniques and sophistication used to conduct a cyberattack change frequently and the measures that we have taken do not
guarantee that a cyberattack or security breach could not occur. A cyberattack or security breach could result in operational
disruptions, theft or fraud, or exposure of sensitive information to unauthorized parties. Such events could result in additional
costs related to operational inefficiencies, damages, claims or fines and may adversely affect our business, results of
operations and financial condition.

Catastrophic events may disrupt our business.

Unforeseen events, or the prospect of such events, including war, terrorism and other international conflicts,
including the Russia-Ukraine conflict, the Israel-Hamas war, public health issues such as epidemics or pandemics (including,
without limitation, as a result of the COVID-19 pandemic), labor unrest and natural disasters such as earthquakes, hurricanes
or other extreme adverse weather and climate conditions, whether occurring in the United States or abroad, could disrupt our
operations, disrupt the operations of franchisees, suppliers or customers, or result in political or economic instability. These
events could negatively impact consumer discretionary spending, thereby reducing demand for our products, or the ability to
receive products from suppliers. We do not have insurance policies that insure against certain of these risks. To the extent
that we do maintain insurance with respect to some of these risks, our receipt of the proceeds of such policies may be delayed
or the proceeds may be insufficient to fully offset our losses.

29
Our international operations are subject to various factors of uncertainty.

Our business outside of the United States is subject to a number of additional factors, including international
economic and political conditions, differing cultures and consumer preferences, currency regulations and fluctuations, diverse
government regulations and tax systems, uncertain or differing interpretations of rights (including intellectual property rights)
and obligations in connection with international franchise agreements and the collection of royalties from international
franchisees, the availability and cost of land and construction costs, and the availability of appropriate franchisees. In
developing markets, we may face risks associated with new and untested laws and judicial systems. Although we believe we
have developed the support structure required for international growth, there is no assurance that such growth will occur or
that international operations will be profitable.

Our business operations and future development could be significantly disrupted if we lose key personnel.

The success of our business continues to depend to a significant degree upon the continued contributions of our
senior officers and key employees, both individually and as a group. Our future performance will be substantially dependent,
in particular, on our ability to retain and motivate our executive officers, for certain of whom we currently have employment
agreements in place. The loss of the services of any of our executive officers could have a material adverse effect on our
business, financial condition, results of operations and prospects, as we may not be able to find suitable individuals to replace
such personnel on a timely basis or without incurring increased costs, or at all.

Additionally, our Company-owned and franchised restaurants are highly service-oriented, and our success depends
in part upon the ability to attract, retain and motivate a sufficient number of qualified employees, including franchisee
management, restaurant managers and other crew members. The market for qualified employees in the retail food industry is
very competitive. We are experiencing and may continue to experience a shortage of labor for positions in our Company-
owned and franchised restaurants, due to the current competitive labor market.

We face risks of litigation and pressure tactics, such as strikes, boycotts and negative publicity from customers,
franchisees, suppliers, employees and others, which could divert our financial, and management resources and which
may negatively impact our financial condition and results of operations.

Class action lawsuits have been filed, and may continue to be filed, against various quick-service restaurants
alleging, among other things, that quick-service restaurants have failed to disclose the health risks associated with high-fat
foods and that quick-service restaurant marketing practices have targeted children and encouraged obesity. In addition, we
face the risk of lawsuits and negative publicity resulting from injuries, including injuries to infants and children, allegedly
caused by our products, toys and other promotional items available in our restaurants.

In addition, activist groups, including animal rights activists and groups acting on behalf of franchisees, the workers
who work for suppliers and others, have in the past, and may in the future, use pressure tactics to generate adverse publicity
by alleging, for example, inhumane treatment of animals by our suppliers, poor working conditions or unfair purchasing
policies. These groups may be able to coordinate their actions with other groups, threaten strikes or boycotts or enlist the
support of well-known persons or organizations in order to increase the pressure on us to achieve their stated aims. In the
future, these actions or the threat of these actions may force us to change our business practices or pricing policies, which
may have a material adverse effect on our business, results of operations and financial condition.

Further, we may be subject to employee, franchisee and other claims in the future based on, among other things,
mismanagement of the system, unfair or unequal treatment, discrimination, harassment, wrongful termination and wage, rest
break and meal break issues, including those relating to overtime compensation. We have been subject to these types of
claims in the past, and if one or more of these claims were to be successful or if there is a significant increase in the number
of these claims, our business, results of operations and financial condition could be harmed.

30
Risks Related to Regulatory Matters

Changes to minimum wage rates have increased our labor costs.

We must comply with the Fair Labor Standards Act and various federal and state laws governing minimum
wages. Increases in the minimum wage and labor regulations have increased our labor costs. On January 1, 2024, the
minimum hourly wage in New York City, Long Island and Westchester increased from $15.00 to $16.00 which will be
followed by $0.50 annual increases in 2025 and 2026. Further, beginning in 2027, the minimum wage across New York State
will increase annually according to the Consumer Price Index. Additionally, the federal government and a number of other
states are evaluating various proposals to increase their respective minimum wage. As minimum wage rates increase, we may
need to increase not only the wages of our minimum wage employees but also the wages paid to employees at wage rates that
are above minimum wage. As a result, we anticipate that our labor costs will continue to increase. If we are unable to pass
on these higher costs through price increases, our margins and profitability as well as the profitability and margins of our
franchisees will be adversely impacted which could have a material adverse effect on our business, results of operations or
financial condition. Our business could be further negatively impacted if the decrease in margins for our franchisees results
in the potential loss of new franchisees or the closing of a significant number of existing franchised restaurants.

Changes in franchise regulations and laws could impact our ability to obtain or retain licenses or approvals and
adversely affect our business, financial condition, results of operations and prospects.

We are subject to federal statutes and regulations, including the rules promulgated by the U.S. Federal Trade
Commission, as well as certain state laws governing the offer and sale of franchises. Many state franchise laws impose
substantive requirements on franchise agreements, including limitations on non-competition provisions and on provisions
concerning the termination or non-renewal of a franchise. Some states require that certain materials be filed for a franchisor
to be registered and approved (or exempt from the applicable state franchise law) before a franchisor can offer or sell
franchises in that state. The failure to obtain or retain licenses or approvals to sell franchises could have a material adverse
effect on our business, financial condition, results of operations and prospects.

We are subject to health, employment, environmental and other government regulations, and failure to comply
with existing or future government regulations could expose us to litigation, damage our corporate reputation or the
reputation of our brands and lower profits.

We and our franchisees are subject to various federal, state and local laws, rules or regulations affecting our
businesses. To the extent that the standards imposed by local, state and federal authorities are inconsistent, they can adversely
affect popular perceptions of our business and increase our exposure to litigation or governmental investigations or
proceedings. We may be unable to manage effectively the impact of new, potential or changing regulations that affect or
restrict elements of our business. The successful development and operation of restaurants depends to a significant extent on
the selection and acquisition of suitable sites, which are subject to zoning, land use (including the placement of drive-thru
windows), environmental (including litter), traffic and other regulations. There can be no assurance that we and our
franchisees will not experience material difficulties or failures in obtaining the necessary licenses or approvals for new
restaurants which could delay the opening of such restaurants in the future. Restaurant operations are also subject to licensing
and regulation by state and local departments relating to health, food preparation, sanitation and safety standards, federal and
state labor laws (including applicable minimum wage requirements, overtime, working and safety conditions and citizenship
requirements), federal and state laws prohibiting discrimination and other laws regulating the design and operation of
facilities. If we fail to comply with any of these laws, we may be subject to governmental action or litigation, and accordingly
our reputation could be harmed.

Injury to us or our brand’s reputation would, in turn, likely reduce revenue and profits. In addition, difficulties or
failures in obtaining any required licenses or approvals could delay or prevent the development or opening of a new restaurant
or renovations to existing restaurants, which would adversely affect our revenue.

31
Failure by third-party manufacturers or suppliers of raw materials to comply with food safety, environmental or
other regulations may disrupt our supply of certain products and adversely affect our business.

We rely on third-party manufacturers to produce our products and on other suppliers to supply raw materials. Such
manufacturers and other suppliers, whether in the United States or outside the United States, are subject to a number of
regulations, including food safety and environmental regulations. Failure by any of our manufacturers or other suppliers to
comply with regulations, or allegations of compliance failure, may disrupt their operations. Disruption of the operations of a
manufacturer or other suppliers could disrupt our supply of product or raw materials, which could have an adverse effect on
our business, results of operations, and financial condition. Additionally, actions we may take to mitigate the impact of any
such disruption or potential disruption, including increasing inventory in anticipation of a potential production or supply
interruption, may adversely affect our business, results of operations, and financial condition.

Supply chain risk could increase our costs and limit the availability of ingredients and supplies that are critical to
our operations. The markets for some of our ingredients, such as beef and beef trimmings are particularly volatile due to
factors beyond our control such as limited sources, seasonal shifts, climate conditions and industry demand, including as a
result of animal disease outbreaks, food safety concerns, product recalls and government regulation. In addition, we have a
limited number of suppliers and distributors. We remain in regular contact with our major suppliers and to date we have not
experienced significant disruptions in our supply chain; however, during fiscal 2023 and fiscal 2024 costs for certain supplies
and ingredients, such as packaging, beef and beef trimmings, and freight, increased materially and rapidly, which combined
with inflationary pressures could continue. Such factors may have a material adverse effect on our business, results of
operations and financial condition.

We are subject to many federal, state and local laws, as well as statutory and regulatory requirements. Failure to
comply with, or changes in these laws or requirements, could have an adverse impact on our business.

In 2023, the National Labor Relations Board (“NLRB”) issued amendments to its previous regulation on joint
employment; under that amended regulation, some franchisors might have been deemed the “joint employer” of its
franchisees’ staff under certain fact patterns. However, in March 2024, a federal court struck down the 2023 amended
regulation, leaving the NLRB’s previous 2020 regulation on joint employment in effect. It is not yet known whether the
NLRB will appeal from the March 2024 court decision. There is also the possibility of administrative action from other
agencies, state governments, and in private lawsuits that may allege that a franchisor and its franchisee “jointly employ” the
franchisee’s staff, that the franchisor is responsible for the franchisees’ staff (under theories of apparent agency, ostensible
agency, or actual agency), or otherwise. If the U.S. Department of Labor and agencies such as the Occupational Safety and
Health Administration and NLRB take a more aggressive position on defining and enforcing joint employer status, or if
Congress passes the proposed “PRO Act” and it is signed into law, that might change the status quo and expose Nathan’s to
the possibility of being deemed a “joint employer” of our franchisees’ staff (together with our franchisees) and also to the
possibility that some franchisees might be reclassified as Nathan's “employees.”

Among other things, a determination that Nathan's and its franchisees are joint employers of one or more franchisees’
staff may make it easier to organize our franchisees’ staff into unions, provide the staff and their union representatives with
bargaining power to request that we have our franchisees raise wages, and make it more expensive and less profitable to
operate a Nathan’s franchised restaurant. A decrease in profitability or the closing of a significant number of franchised
restaurants could significantly impact our business (as well as our franchisees’ businesses), and we may also be impacted if
the NLRB or a private party, successfully brought an action alleging that we are a “joint employer” of our franchisees’ staff,
all of which might impact our results of operations and financial condition.

California also adopted legislation to address data privacy. The California Consumer Privacy Act (“CCPA”) took
effect at the beginning of 2020, and imposes stringent data security standards, which might apply more broadly than only
within the borders of that state (for example, if a California resident buys products or has them shipped into the state and pays
with a credit or debit card). In total, 14 states have adopted laws that apply (or that will apply as of the effective date) to data
and other biometric technology, which may be broadly interpreted. It remains uncertain whether the CCPA and the data
privacy laws adopted in other states will have a material impact on our operations or that of our franchisees.

Additionally, state and local laws such as the recently passed California Fast Food Accountability and Standards
Recovery Act (the “FAST Act”) may require wage increases and working hours and working condition standards that may
increase our costs without corresponding benefits. Although the FAST Act is stayed pending a referendum in November
2024, it is possible that it will pass, and that other jurisdictions may pass similar laws.

32
Our business is subject to an increasing focus on Environmental, Social, and Governance (ESG) matters.

In recent years, there has been an increasing focus by investors, activists, the media, governmental and non-
governmental organizations and stakeholders – including employees, franchisees, customers and suppliers on ESG matters.
A failure, whether real or perceived, to address ESG could adversely affect our business, including by heightening other risks
disclosed in this Item 1A, “Risk Factors.” In the restaurant industry, concerns have been expressed regarding energy
management, water management, food and packaging waste management, supply chain management and labor practices.

We may also face increased pressure to provide expanded disclosure and establish additional commitments, targets
or goals, and take actions to meet them, which could expose us to additional market, operational, execution and reputational
costs and risks.

Changes in tax laws and unfavorable resolution of tax contingencies could adversely affect our tax expense.

Our future effective tax rates could be adversely affected by changes in tax laws, both domestically and
internationally. From time to time, the United States Congress and foreign, state and local governments consider legislation
that could increase our effective tax rates. If changes to applicable tax laws are enacted, our results of operations could be
negatively impacted. Our tax returns and positions (including positions regarding jurisdictional authority of foreign
governments to impose tax) are subject to review and audit by federal, state, local and international taxing authorities. An
unfavorable outcome to a tax audit could result in higher tax expense, thereby negatively impacting our results of operations.

Risks Related to Our Common Stock and Organizational Structure

The market price of our common stock may be highly volatile or may decline regardless of our operating
performance.

The trading price of our common stock may fluctuate substantially. The price of our common stock that will prevail
in the market may be higher or lower than the price when you acquired our stock, depending on many factors, some of which
are beyond our control. Broad market and industry factors may adversely affect the market price of our common stock,
regardless of our actual operating performance. The fluctuations could cause a loss of all or part of an investment in our
common stock.

Factors that could cause fluctuation in the trading price of our common stock may include, but are not limited to the
following: price and volume fluctuations in the overall stock market from time to time; significant volatility in the market
price and trading volume of companies generally or restaurant companies specifically; actual or anticipated variations in the
earnings or operating results of our company or our competitors; actual or anticipated changes in financial estimates by us or
by any securities analysts who might cover our stock or the stock of other companies in our industry; market conditions or
trends in our industry and the economy as a whole; announcements by us or our competitors of significant acquisitions,
strategic partnerships or divestitures and our ability to complete any such transaction; announcements of investigations or
regulatory scrutiny of our operations or lawsuits filed against us; capital commitments; changes in accounting principles;
additions or departures of key personnel; sales of our common stock, including sales of large blocks of our common stock or
sales by our directors and officers; and events that affect any of our significant suppliers discussed above.

In addition, if the market for restaurant company stocks or the stock market in general experiences loss of investor
confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of operations
or financial condition. The trading price of our common stock might also decline in reaction to events that affect other
companies in our industry or related industries even if these events do not directly affect us.

In the past, following periods of volatility in the market price of a company's securities, class action securities
litigation has often been brought against that company. Due to the potential volatility of our stock price, we may be the target
of securities litigation in the future. Securities litigation could result in substantial costs and divert management's attention
and resources from our business and could also require us to make substantial payments to satisfy judgments or to settle
litigation.

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Our certificate of incorporation and by-laws and other corporate documents include anti-takeover provisions
which may deter or prevent a takeover attempt.

Some provisions of our certificate of incorporation, by-laws, other corporate documents, including the terms and
condition of our Notes, and provisions of Delaware law may discourage takeover attempts and hinder a merger, tender offer
or proxy contest targeting us, including transactions in which stockholders might receive a premium for their shares. This
may limit the ability of stockholders to approve a transaction that they may think is in their best interest.

The corporate documents include:

●
Employment Contracts. The employment agreements between us and each of Howard M. Lorber and Eric
Gatoff provide that in the event there is a change in control of Nathan’s, the employee has the option, exercisable
within one year for each of Messrs. Lorber and Gatoff, of his becoming aware of the change in control, to
terminate his employment agreement. Upon such termination, Mr. Gatoff has the right to receive a lump sum
payment equal to his salary and annual bonus for a one-year period, and Mr. Lorber has the right to receive a
lump sum payment equal to the greater of (i) his salary and annual bonuses for the remainder of the employment
term or (ii) 2.99 times his salary and annual bonus plus the difference between the exercise price of any
exercisable options having an exercise price of less than the then current market price of our common stock and
such current market price. Mr. Lorber will also receive a tax gross up payment to cover any excise tax.

While we have approved a quarterly dividend policy, there can be no assurance as to the declaration of future
dividends or the amount of such dividends.

Our declaration and payment of future cash dividends are subject to the final determination by our Board of
Directors that (i) the dividend will be made in compliance with laws applicable to the declaration and payment of cash
dividends, including Section 170 of the Delaware General Business Corporation Law, (ii) the dividend complies with the
terms of the Indenture, and (iii) the payment of dividends remains in our best interests, which determination will be based on
a number of factors, including the impact of changing laws and regulations, economic conditions, our results of operations
and/or financial condition, capital resources, the ability to satisfy financial covenants and other factors considered relevant
by the Board of Directors. There can be no assurance our Board of Directors will approve the payment of cash dividends in
the future or the amount of a cash dividend. Any discontinuance of the payment of a dividend or changes to the amount of a
dividend compared to prior dividends could cause our stock price to decline.

Risks Related to the Notes

Our substantial indebtedness makes us more sensitive to adverse economic conditions, may limit our ability to plan
for or respond to significant changes in our business, and requires a significant amount of cash to service our debt payment
obligations that we may be unable to generate or obtain.

As of March 31, 2024, we had total outstanding indebtedness of $60,000,000 of Notes which are due November 1,
2025. Subject to the terms of any future agreements, we and our subsidiaries may be able to incur additional indebtedness in
the future, which would increase the risks related to our high level of indebtedness. If new debt is added to our existing debt
levels, the related risks that we face would intensify and we may not be able to meet all our debt obligations, including the
repayment of the Notes.

Specifically, our high level of indebtedness could have important potential consequences, including, but not limited
to:

●
increasing our vulnerability to, and reducing our flexibility to plan for and respond to, adverse economic and
industry conditions and changes in our business and the competitive environment;

●
make it more difficult for us to satisfy our other financial obligations, including our obligations relating to the
Notes;

●
requiring the dedication of a substantial portion of our cash flow from operations to the payment of principal
of, and interest on, indebtedness, thereby reducing the availability of such cash flow to fund working capital,
capital expenditures, acquisitions, dividends, share repurchases or other corporate purposes;

●
make it more difficult for us to satisfy our obligations to the holders of the Notes, resulting in possible defaults
on and acceleration of such indebtedness;

●
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

●
place us at a competitive disadvantage compared to our competitors that have less debt;

●
increasing our vulnerability to a downgrade of our credit rating, which could adversely affect our cost of funds,
liquidity, value and trading of the Notes and access to capital markets;

●
restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

●
limit our ability to borrow additional funds or increase our cost of borrowing;

●
placing us at a disadvantage compared to other less leveraged competitors or competitors with comparable debt
at more favorable interest rates;

●
increasing our exposure to the risk of increased interest rates insofar as current and future borrowings are subject
to variable rates of interest;

●
making it more difficult for us to repay, refinance or satisfy our obligations relating to the Notes;

●
limiting our ability to borrow additional funds in the future and increasing the cost of any such borrowing;

●
imposing restrictive covenants on our operations as the result of the terms of our indebtedness, which, if not
complied with, could result in an event of default, which in turn, if not cured or waived, could result in the
acceleration of our debts, including the Notes.

There is no assurance that we will generate cash flow from operations or that future debt or equity financings will
be available to us to enable us to pay our indebtedness or to fund other liquidity needs. If our business does not generate
sufficient cash flow from operations or if future borrowings are not available to us in amounts sufficient to pay our
indebtedness or to fund other liquidity needs, our financial condition and results of operations may be adversely affected. As
a result, we may need to refinance all or a portion of our indebtedness on or before maturity. There is no assurance that we
will be able to refinance any of our indebtedness on favorable terms, or at all. Any inability to generate sufficient cash flow
or refinance our indebtedness on favorable terms could have a material adverse effect on our business and financial condition.

35
Item 1B.
Unresolved Staff Comments.

None.

Item 1C.
Cybersecurity.

Risk management and strategy

The Company is committed to securing our information technology systems, including accounting software, point-
of-sale software, and back-of-house software, against cybersecurity threats and protecting the privacy of the data of our
customers’, employees’, franchisees’, licensees’ and other business partners. However, as described in “Item 1A. Risk Factors
–Cyberattacks and breaches could cause operational disruptions, fraud or theft of sensitive information” of this Form 10-K,
we recognize that cybersecurity threats are an ongoing concern in today’s digital world and that, despite devoting resources
to secure our information technology systems, cybersecurity incidents can occur and, if so, could negatively impact our brand,
business, results of operations and financial condition. Cybersecurity threats include any potential unauthorized occurrence
on or conducted through our information technology systems or information technology systems of a third party that we
utilize in our business that may result in adverse effects on the confidentiality, integrity or access to our information
technology systems.

We maintain technology and cybersecurity programs and follow the guidelines of the National Institute of Standards
and Technology Cybersecurity Framework to help manage information security risk within the Company. The objectives of
our programs are to protect the confidentiality, integrity, use and availability of the Company’s data; to protect against
unauthorized access to the Company’s data, the Company’s network and information technology applications; and to maintain
recovery plans regarding the Company’s informational technology. Our programs fall under the oversight of our Information
Technology manager.

To supplement our internal controls and processes and to meet these objectives, the Company engages third-party
consultants who work closely with the Company’s Information Technology manager to collectively manage our
cybersecurity, information technology and data privacy programs, as well as perform application security reviews and
penetration tests. The Company’s senior management team, including its Chief Executive Officer and its Chief Financial
Officer, reviews the assessments performed by its third-party consultants and determines the plans to be executed in
collaboration with the Information Technology manager.

Our information technology infrastructure includes firewalls, and intrusion detection tools, as well as multi-factor
authentication to provide a multi-layered approach to protecting our information technology systems from unauthorized
access, use, disclosure, disruption, or destruction.

We obtain System and Organizational Controls (“SOC”) 1 or SOC 2 reports on an annual basis from vendors that
host our significant financial applications to aid in our assessment of information security risk amongst our relationships with
the host vendors. We also perform quarterly access reviews for these systems that are subject to SOX oversight.

The Company has been certified as compliant with the Payment Card Industry Security Standard intended to ensure
that the processing, storing and transmission of credit card information in the Company’s point-of-sale software in our
Company-owned restaurants is maintained in a secure manner.

Over 98% of our restaurants are operated by franchisees who themselves are at risk of potential cybersecurity threats.
There is no connectivity between the Company’s network and the networks on which our franchisees and licensees operate.
Furthermore, there is no interface between the Company-owned restaurants point-of-sale system and the Company’s network
and no interface between the Company’s primary manufacturer, Smithfield Foods, Inc. and the Company’s network.

36
The Company routinely leads training exercises, at least annually, for its employees to reinforce the risk from
common tactics and scams like email phishing campaigns to defend against potential business email and network
compromise.

We have developed an incident response plan outlining immediate response actions, including internal and external
communication protocols. The incident response plan is reviewed regularly by our third-party consultants in collaboration
with our Information Technology manager evaluating our capabilities and our readiness. Under the plan, we have identified
a management group comprised of our Chief Executive Officer, Chief Financial Officer, Corporate Controller and
Information Technology manager. The plan provides that any cybersecurity incident will be reviewed by this group to
determine whether any such incident is material for securities laws purposes and whether public disclosure is required,
following consultation with outside counsel, the Audit Committee and/or Board of Directors.

We maintain cyber risk insurance coverage that is intended to mitigate the financial impact of cybersecurity and data
privacy incidents experienced by the Company. There can be no assurance that our cyber insurance policies will be sufficient
in scope or amount to cover the costs and expenses related to any future cybersecurity incidents.

Governance

The full Board of Directors has overall responsibility for risk oversight, including cybersecurity matters. It is
supported by the Audit Committee, which reports to the full Board of Directors. The Audit Committee receives updates from
management on the cybersecurity landscape and cybersecurity risks impacting the Company. At least annually, the Board of
Directors receives a cybersecurity update as part of our Company’s risk management program. Such updates are designed to
ensure that the Company’s senior management team remain informed about and can monitor the prevention, detection,
mitigation, and remediation of potential cybersecurity incidents.

At a management level, our cybersecurity program is led by our Information Technology manager, who reports to
the Chief Financial Officer. Our Information Technology manager is supported by our third-party consultants. With over 25
years of Company experience, our Information Technology manager along with the support of our third-party consultants, is
equipped to help navigate the landscape of cybersecurity risks and challenges.

While cybersecurity threats have not materially affected our business strategy, results of operations or financial
condition, future incidents may interrupt our operations and could materially adversely affect our business, results of
operations and financial condition.

37
Item 2.
Properties.

We currently lease approximately 9,300 square feet of space for our executive offices in Jericho, New York for
approximately $396,000 per year, under a lease agreement which expires on March 31, 2029.

At March 31, 2024, other Company-owned restaurants that were operating were located in leased space with terms
expiring as shown in the following table:

Nathan’s Restaurants
Location

Current Lease
Expiration Date

Approximate
Square Footage
Coney Island .......................... Brooklyn, NY
December 2027

10,000
Coney Island Boardwalk (a) .. Brooklyn, NY
November 2028

3,800
Long Beach Road ................... Oceanside, NY
April 2030

4,100
Central Park Avenue .............. Yonkers, NY
December 2028

3,500

(a) Seasonal satellite location.

At March 31, 2024, in addition to the leases listed above, we were the sub-lessor of one property to a franchisee
located within the metropolitan New York area.

Aggregate rental expense, net of sublease income, under all current leases amounted to $1,686,000 in fiscal 2024.

Item 3.
Legal Proceedings.

We and our subsidiaries are from time to time involved in ordinary and routine litigation. Management presently
believes that the ultimate outcome of these proceedings, individually or in the aggregate, will not have a material adverse
effect on our financial position, cash flows or results of operations. Nevertheless, litigation is subject to inherent uncertainties
and unfavorable rulings could occur. An unfavorable ruling could include monetary damages and, in such event, could result
in a material adverse impact on our results of operations for the period in which the ruling occurs.

Item 4.
Mine Safety Disclosures.

Not applicable.

38
PART II

Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.

Market Information and Dividend Policy

Our common stock is quoted on the NASDAQ Global Market (“Nasdaq”) under the symbol “NATH.” As of June
6, 2024 we had approximately 311 shareholders of record, excluding shareholders whose shares were held by brokerage
firms, depositories and other institutional firms in “street name” for their customers.

During fiscal 2023, the Company declared and paid three quarterly dividends of $0.45 per share and one quarterly
dividend of $0.50 per share. During fiscal 2024, the Company declared and paid four quarterly dividends of $0.50 per share.
Effective June 12, 2024, the Board declared its first quarterly cash dividend of $0.50 per share for fiscal year 2025 which is
payable on July 2, 2024 to stockholders of record as of the close of business on June 24, 2024.

Our ability to pay future dividends is limited by the terms of an Indenture, dated November 1, 2017, between the
Company, certain of its wholly-owned subsidiaries, as guarantors and U.S. Bank Trust Company, National Association
(formerly known as U.S. Bank National Association), as Trustee and Collateral Trustee (the “Indenture”).

In addition to the terms of the Indenture, the payment of any cash dividends in the future will be dependent upon
our earnings and financial requirements and the terms of any other indebtedness that we may incur in the future and there can
be no assurance that we will declare and pay any dividends subsequent to the July 2, 2024 dividend.

Issuer Purchases of Equity Securities

The Company did not repurchase any of its common stock during the quarter ended March 31, 2024.

Item 6.
Reserved.

39
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Introduction

Recent Events Affecting Our Results of Operations

Inflationary pressures impacted our results of operations during fiscal 2024, including (i) rising labor costs and (ii)
higher commodity prices, including beef and beef trimmings. In general, we are already paying a higher wage rate than the
statutory minimum wage rate. We attempt to offset cost increases resulting from inflation by increasing prices and adjusting
product mix. We continue to monitor these inflationary pressures and will continue to implement mitigation measures as
needed. Inherent volatility in commodity markets, including beef and beef trimmings, could have a significant impact on our
results of operations. Delays in implementing price increases, competitive pressures, a decline in consumer spending levels
and other factors may limit our ability to implement further price increases in the future.

Business Overview

We are engaged primarily in the marketing of the “Nathan’s Famous” brand and the sale of products bearing the
“Nathan’s Famous” trademarks through several different channels of distribution. Historically, our business has been the
operation and franchising of quick-service restaurants featuring Nathan’s World Famous Beef Hot Dogs, crinkle-cut French
fries, and a variety of other menu offerings. Our Company-owned and franchised restaurants operate under the name
“Nathan’s Famous,” the name first used at our original Coney Island restaurant opened in 1916. Nathan’s product licensing
program sells packaged hot dogs, frozen crinkle-cut French fries and additional products to retail customers through
supermarkets, grocery channels and club stores for off-site consumption. Our Branded Product Program enables foodservice
retailers and others to sell some of Nathan’s proprietary products outside of the realm of a traditional franchise relationship.
In conjunction with this program, purchasers of Nathan’s products are granted a limited use of the Nathan’s Famous trademark
with respect to the sale of the purchased products, including Nathan’s World Famous Beef Hot Dogs, certain other proprietary
food items and paper goods. Our Branded Menu Program is a limited franchise program, under which foodservice operators
may sell a greater variety of Nathan’s Famous menu items than under the Branded Product Program.

Our revenues are generated primarily from selling products under Nathan’s Branded Product Program, operating
Company-owned restaurants, licensing agreements for the sale of Nathan’s products within supermarkets, grocery stores and
club stores, the sale of Nathan’s products directly to other foodservice operators, the manufacture of certain proprietary spices
by third parties and the royalties, fees and other sums we can earn from franchising the Nathan’s restaurant concept (including
the Branded Menu Program and virtual kitchens).

The following summary reflects the openings and closings of the Nathan’s franchise system (including the Branded
Menu Program) for the fiscal years ended March 31, 2024 and March 26, 2023.

March 31,
2024

March 26,
2023

Beginning balance ....................................................................................................
232
239
Opened .....................................................................................................................
17
11
Closed .......................................................................................................................
(19 )
(18)
Ending balance (a) ....................................................................................................
230
232

(a) Units operating pursuant to our Branded Product Program and our virtual kitchens are excluded.

At March 31, 2024, our franchise system consisted of 230 Nathan’s franchised locations, including 116 Branded
Menu locations located in 17 states, and 13 foreign countries. We also operate four Company-owned restaurants (including
one seasonal unit), within the New York metropolitan area.

40
Our primary focus is to expand the market penetration of the Nathan’s Famous brand by increasing the number of
distribution points for our products across all of our business platforms, including our Licensing Program for distribution of
Nathan’s Famous branded consumer packaged goods, our Branded Products Program for distribution of Nathan’s Famous
branded bulk products to the foodservice industry, and our namesake restaurant system comprised of both Company-owned
and franchised restaurants, including virtual kitchens. The primary drivers of our growth have been our Licensing and
Branded Product Programs, which are the largest contributors to the Company’s revenues and profits.

While we do not expect to significantly increase the number of Company-owned restaurants, we may
opportunistically and strategically invest in a small number of new units as showcase locations for prospective franchisees
and master developers as we seek to grow our franchise system. We continue to seek opportunities to drive sales in a variety
of ways as we adapt to the ever-changing consumer and business climate.

As described in Item 1A. “Risk Factors” and other sections in this Annual Report on Form 10-K for the year ended
March 31, 2024, our future results could be impacted by many developments including the impact of the inflationary pressures
on our business, as well as our dependence on Smithfield Foods, Inc. as our principal supplier, and the dependence of our
licensing revenue and overall profitability on our agreement with Smithfield Foods, Inc. Our future operating results could
be impacted by supply constraints on beef or by increased costs of beef, beef trimmings and other commodities due to
inflationary pressures compared to earlier periods.

On November 1, 2017, the Company issued $150,000,000 of 6.625% Senior Secured Notes due 2025 (the "2025
Notes") in a private offering in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities
Act”). The 2025 Notes were issued pursuant to an indenture, dated November 1, 2017, (the “Indenture”) by and among the
Company, certain of its wholly-owned subsidiaries, as guarantors, and U.S. Bank Trust Company, National Association
(formerly U.S. Bank National Association), as trustee and collateral trustee. The Company used the net proceeds of the 2025
Notes offering to redeem the 2020 Notes, paid a portion of a special $5.00 cash dividend and used the remaining proceeds
for general corporate purposes, including working capital.

Over the past three years, we have significantly reduced the outstanding balance of our 2025 Notes from
$150,000,000 at March 28, 2021 to $60,000,000 at March 31, 2024 using free cash flow. We believe that our multi-channel
asset light business model will continue to generate consistent free cash flow to manage our current debt service levels and
may enable us to further reduce our debt service levels in the future.

The 2025 Notes bear interest at 6.625% per annum, payable semi-annually on May 1st and November 1st of each
year. During the fiscal year ended March 31, 2024, the Company made its required semi-annual interest payments on May 1,
2023 and November 1, 2023. On May 1, 2024, the Company paid its first semi-annual interest payment of fiscal 2025.

The 2025 Notes have no scheduled principal amortization payments prior to its final maturity on November 1, 2025.

Our future results may be impacted by our interest obligations under the 2025 Notes. As a result of the 2025 Notes,
the Company expects to incur annual interest expense of $3,975,000 per annum and annual amortization of debt issuance
costs of approximately $277,000.

Critical Accounting Estimates

Our consolidated financial statements and the notes to our consolidated financial statements contain information that
is pertinent to management’s discussion and analysis. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities. These estimates and assumptions
are inherently uncertain and require additional management judgment. Results can materially differ when varying
assumptions are applied. We consider the following estimates to be the most critical in understanding the assumptions used
by management in preparing the consolidated financial statements due to the subjectivity and sensitivity of the methods used
in determining the related estimates. The following discussion should be read in conjunction with the consolidated financial
statements included in Part IV, Item 15 of this Form 10-K.

41
Impairment of Long-Lived Assets

Long-lived assets include property, equipment and right-of-use assets for operating leases with finite useful lives.
Impairment losses are recorded on long-lived assets whenever impairment factors are determined to be present. The Company
considers a history of restaurant operating losses to be its primary indicator of potential impairment for individual restaurant
locations. The Company tests the recoverability of its long-lived assets with finite useful lives whenever events or changes
in circumstances indicate that the carrying value of the asset may not be recoverable. The Company tests for recoverability
based on the projected undiscounted cash flows to be derived from such assets. If the projected undiscounted future cash
flows are less than the carrying value of the assets, the Company will record an impairment loss, if any, based on the difference
between the estimated fair value and the carrying value of the assets. The Company generally measures fair value by
considering discounted estimated future cash flows from such assets. Key inputs to determine estimated future cash flows
include forecasted Company-owned restaurant sales and a discount rate. We use a weighted average cost of capital discount
rate to calculate future cash flows. No long-lived assets were deemed impaired during the fiscal years ended March 31, 2024
and March 26, 2023. Cash flow projections and fair value estimates require significant estimates and assumptions by
management. Should the estimates and assumptions prove to be incorrect, the Company may be required to record impairment
charges in future periods and such impairments could be material.

Impairment Intangible Asset

The Company’s intangible asset consists of the trademarks, and the trade name and other intellectual property in
connection with the Arthur Treacher’s Fish & Chips brand.

The Company determined its intangible asset to have a finite useful life based on the expected future use of this
intangible asset. Based upon the review of its Arthur Treacher’s Fish & Chips co-branding agreements, the Company
determined that the remaining useful lives of these agreements is four years concluding in fiscal 2028 and the intangible asset
is subject to annual amortization. The Company’s definite-lived intangible asset is tested for impairment at least annually, or
more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company tested for
recoverability of its definite-lived intangible asset based on the projected undiscounted cash flows to be derived from such
co-branding agreements. Assumptions used to determine projected undiscounted cash flows include future trends and
projected sales. Based on the quantitative test performed, the Company determined that the definite-lived intangible asset
was recoverable and no impairment charge was recorded for the fiscal years ended March 31, 2024 and March 26, 2023. Cash
flow and sales projections require significant estimates and assumptions by management. Should the estimates and
assumptions prove to be incorrect, the Company may be required to record an impairment charge in future periods and such
impairment could be material.

Current Expected Credit Losses (“CECL”)

The CECL reserve methodology requires companies to measure expected credit losses on financial instruments
based on the total estimated amount to be collected over the lifetime of the instrument. Under CECL, reserves may be
established against financial asset balances even if the risk of loss is remote.

The Company calculates an allowance for credit losses by pooling financial assets based on similar risk
characteristics and delinquency status under an aging method at the measurement date. The risk characteristics the Company
generally reviews when analyzing its trade accounts receivable pools include the type of receivable (for example, franchise
receivable, license receivable, Branded Product Program receivable), payment terms, the Company’s previous loss history,
current and future economic conditions and the length of time accounts receivables are past due. For those trade accounts
receivable that no longer share similar risk characteristics with its pool and potential loss is evident, a specific reserve is
recorded.

Reserves can be subject to a degree of judgment and can be subject to macroeconomic factors, including inflation
and forecasts of future economic conditions. A change in these factors could have a material impact on the allowance for
credit losses.

42
Income Taxes

The Company’s current provision for income taxes is based upon its estimated taxable income in each of the
jurisdictions in which it operates, after considering the impact on taxable income of temporary differences resulting from
different treatment of items for tax and financial reporting purposes. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and any operating loss or tax credit carryforwards. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences
are expected to be recovered or settled. The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income in those periods in which temporary differences become deductible. Should management determine
that it is more likely than not that some portion of the deferred tax assets will not be realized, a valuation allowance against
the deferred tax assets would be established in the period such determination was made. We believe that the judgments and
estimates made are reasonable. However, if actual results differ from estimated amounts recorded, such differences will
impact the income tax provision in the period in which the determination is made.

Uncertain Tax Positions

The Company has recorded liabilities for underpayment of income taxes and related interest and penalties for
uncertain tax positions based on the determination of whether tax benefits claimed or expected to be claimed on a tax return
should be recorded in the consolidated financial statements. The Company may recognize the tax benefit from an uncertain
tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities
based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such
position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon
ultimate settlement. Nathan’s recognizes accrued interest and penalties associated with unrecognized tax benefits as part of
the income tax provision.

New Accounting Standards Not Yet Adopted

See Note B item 23 to the consolidated financial statements included in Part IV, Item 15 of this Form 10-K for a
summary of new accounting standards applicable to us.

Results of Operations

Fiscal year ended March 31, 2024 compared to fiscal year ended March 26, 2023

Revenues

Total revenues increased by approximately 6% to $138,610,000 for the fifty-three weeks ended March 31, 2024
(“fiscal 2024”) as compared to $130,785,000 for the fifty-two weeks ended March 26, 2023 (“fiscal 2023”).

Foodservice sales from the Branded Product Program were $86,489,000 for the fiscal 2024 period as compared to
$78,884,000 for the fiscal 2023 period. We estimate that the additional week of operations during fiscal 2024 represented
approximately $1,202,000 of additional Branded Product Program sales. During the fiscal 2024 period, the total volume of
hot dogs sold in the Branded Product Program increased by approximately 2% as compared to the fiscal 2023 period. Our
average selling prices increased by approximately 7% as compared to the fiscal 2023 period.

Total Company-owned restaurant sales decreased by approximately $58,000 to $12,103,000 during the fiscal 2024
period as compared to $12,161,000 during the fiscal 2023 period. Restaurant sales were impacted by reduced traffic due
primarily to unfavorable summer weather conditions.

43
License royalties increased by approximately $126,000 to $33,581,000 in the fiscal 2024 period as compared to
$33,455,000 in the fiscal 2023 period. We do not believe that the additional week of operations had a significant impact on
license royalties as our licensees continued to report based upon their fiscal reporting periods. Total royalties earned on sales
of hot dogs from our license agreement with Smithfield Foods, Inc. at retail and foodservice, increased to $30,068,000 for
the fiscal 2024 period as compared to $29,998,000 for the fiscal 2023 period. The increase is due to a 3% increase in average
net selling price which was offset, in part, by a 3% decrease in retail volume. The foodservice business earned higher royalties
of $301,000 as compared to the fiscal 2023 period. Royalties earned from all other licensing agreements for the manufacture
and sale of Nathan’s products increased by $56,000 during the fiscal 2024 period as compared to the fiscal 2023 period
primarily due to higher royalties earned on sales of French fries, onion rings, and proprietary spices offset, in part, by lower
royalties on the sales of franks-in-a-blanket, mozzarella sticks and other hors d’oeuvres.

Franchise fees and royalties increased by $64,000 to $4,356,000 in the fiscal 2024 period as compared to $4,292,000
in the fiscal 2023 period. Total royalties were $3,886,000 in the fiscal 2024 period as compared to $3,636,000 in the fiscal
2023 period. Royalties earned under the Branded Menu Program were $744,000 in the fiscal 2024 period as compared to
$630,000 in the fiscal 2023 period. Royalties earned under the Branded Menu Program are not based upon a percentage of
restaurant sales but are based upon product purchases. Virtual kitchen royalties were $81,000 in the fiscal 2024 period as
compared to $149,000 in the fiscal 2023 period. Traditional franchise royalties were $3,061,000 in the fiscal 2024 period as
compared to $2,857,000 in the fiscal 2023 period. Franchise restaurant sales increased to $68,417,000 in the fiscal 2024
period as compared to $63,739,000 in the fiscal 2023 period primarily due to higher sales at airport locations, movie theaters
and shopping malls. We estimate that the additional week of operations during fiscal 2024 resulted in $1,215,000 of additional
franchise restaurant sales or royalties of approximately $60,000. Comparable domestic franchise sales (consisting of 59
Nathan’s locations, excluding sales under the Branded Menu Program and excluding the impact of the additional week of
operations) were $54,031,000 during the fiscal 2024 period as compared to $51,607,000 during the fiscal 2023 period.

At March 31, 2024, 230 franchised locations, including domestic, international and Branded Menu Program units
were operating as compared to 232 franchised locations, including domestic, international and Branded Menu Program units
at March 26, 2023. Total franchise fee income was $470,000 in the fiscal 2024 period as compared to $656,000 in the fiscal
2023 period. Domestic franchise fee income was $106,000 in the fiscal 2024 period as compared to $110,000 in the fiscal
2023 period. International franchise fee income was $241,000 in the fiscal 2024 period as compared to $280,000 in the fiscal
2023 period. We recognized $123,000 and $266,000 of forfeited fees in the fiscal 2024 and fiscal 2023 periods, respectively.
During the fiscal 2024 period, 17 franchised locations opened and 19 franchised locations closed. During the fiscal 2023
period, 11 franchise locations opened and 18 franchised locations closed.

Advertising fund revenue, after eliminating Company contributions, was $2,081,000 in the fiscal 2024 period and
$1,993,000 during the fiscal 2023 period.

Costs and Expenses

Overall, our cost of sales increased by approximately 11% to $83,182,000 in the fiscal 2024 period as compared to
$75,172,000 in the fiscal 2023 period. Our gross profit (calculated as total Branded Product sales plus total Company-owned
restaurants sales less cost of sales) was $15,410,000 during the fiscal 2024 period as compared to $15,873,000 during the
fiscal 2023 period.

44
Cost of sales in the Branded Product Program increased by approximately 12% to $75,966,000 during the fiscal
2024 period as compared to $67,646,000 in the fiscal 2023 period, primarily due to the 2% increase in the volume of hot dogs
sold as discussed above, as well as a 10% increase in the average cost per pound of our hot dogs. A shrinking supply of cattle,
combined with drought conditions and inflationary pressures have resulted in higher commodity prices, including beef and
beef trimmings, driving the increase in the average cost per pound of our hot dogs. We did not make any purchase
commitments for beef during the fiscal 2024 period or the fiscal 2023 period. If the cost of beef and beef trimmings increases
and we are unable to pass on these higher costs through price increases or otherwise reduce any increase in our costs through
the use of purchase commitments, our margins will be adversely impacted. With respect to Company-owned restaurants, our
cost of sales during the fiscal 2024 period was $7,216,000 or 60% of restaurant sales, as compared to $7,526,000 or 62% of
restaurant sales in the fiscal 2023 period. Food and paper costs as a percentage of Company-owned restaurant sales were
28%, down from 29% in the comparable period of the prior year. Labor and related expenses as a percentage of Company-
owned restaurant sales were 32%, down from 33% in the comparable period in the prior year due to tighter management and
staffing stabilization.

Restaurant operating expenses increased by $193,000 to $4,177,000 in the fiscal 2024 period as compared to
$3,984,000 in the fiscal 2023 period. The increase is due primarily to higher occupancy expenses of $85,000, higher insurance
costs of $35,000, and higher credit card bank fees of $73,000.

Depreciation and amortization, which primarily consists of the depreciation of fixed assets, including leasehold
improvements and equipment, was $1,135,000 in the fiscal 2024 period and the fiscal 2023 period.

General and administrative expenses increased by $1,551,000 to $15,612,000 in the fiscal 2024 period as compared
to $14,061,000 in the fiscal 2023 period. The increase in general and administrative expenses was primarily attributable to a
discretionary bonus payment of $500,000 to our current Chairman of the Board, an incentive compensation accrual of
$500,000, higher share-based compensation expense of $475,000, higher professional fees of $251,000, and higher travel
expenses of $48,000 which were offset, in part, by lower bad debt expense of $300,000.

Advertising fund expense, after eliminating Company contributions, was $1,998,000 in the fiscal 2024 period as
compared to $1,988,000 in the fiscal 2023 period.

Other Items

Interest expense of $5,355,000 in the fiscal 2024 period represented interest expense of $5,010,000 on the 2025
Notes and amortization of debt issuance costs of $345,000.

Interest expense of $7,742,000 in the fiscal 2023 period represented interest expense of $7,234,000 on the 2025
Notes and amortization of debt issuance costs of $508,000.

The reduction in interest expense of $2,387,000 is due to the reduction in the outstanding principal amount of the
Company’s 2025 Notes as a result of the partial redemptions of $30,000,000 principal amount of its 2025 Notes completed
in March 2023 and $20,000,000 principal amount of its 2025 Notes completed in December 2023. In connection with the
partial redemptions, the Company recorded a loss on early extinguishment of debt of $169,000 and $357,000 in the fiscal
2024 period and the fiscal 2023 period, respectively, that reflected the write-off of a portion of previously recorded debt
issuance costs.

Interest income of $383,000 for the fiscal 2024 period represented amounts earned by the Company on its certificates
of deposit, as well as interest bearing bank and money market accounts, as compared to $440,000 in the fiscal 2023 period.

Other income, net was $86,000 in the fiscal 2024 period, which primarily relates to sublease income from a
franchised restaurant. Other income, net was $18,000 in the fiscal 2023 period, which primarily relates to sublease income
from a franchised restaurant, offset by a net loss on disposal of assets for capitalized software no longer in use of $87,000.

45
Provision for Income Taxes

The effective income tax rate for the fiscal 2024 period was 28.5% compared to 26.8% for the fiscal 2023 period.
The effective income tax rate for the fiscal 2024 period reflected income tax expense of $7,835,000 recorded on $27,451,000
of pre-tax income. The effective income tax rate for the fiscal 2023 period reflected income tax expense of $7,181,000
recorded on $26,804,000 of pre-tax income. The effective tax rates are higher than the statutory rates primarily due to state
and local taxes, as well as non-deductible executive compensation under the Internal Revenue Code Section 162(m).

The amount of unrecognized tax benefits at March 31, 2024 was $465,000 all of which would impact Nathan’s
effective tax rate, if recognized. As of March 31, 2024, Nathan’s had $345,000 of accrued interest and penalties in connection
with unrecognized tax benefits.

Nathan’s estimates that its unrecognized tax benefit excluding accrued interest and penalties could be further reduced
by up to $46,000 during the fiscal year ending March 30, 2025, due primarily to the lapse of statutes of limitations which
would favorably impact the Company’s effective tax rate, although no assurances can be given in this regard.

Reconciliation of GAAP and Non-GAAP Measures

In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles
in the United States of America ("US GAAP"), the Company has provided EBITDA, a non-GAAP financial measure, which
is defined as net income excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization
expense. The Company has also provided Adjusted EBITDA, a non-GAAP financial measure, which is defined as EBITDA,
excluding (i) the loss on disposal of property and equipment; (ii) loss on debt extinguishment; and (iii) share-based
compensation that the Company believes will impact the comparability of its results of operations.

The Company believes that EBITDA and Adjusted EBITDA, which are non-GAAP financial measures, are useful
to investors to assist in assessing and understanding the Company's operating performance and underlying trends in the
Company's business because EBITDA and Adjusted EBITDA are (i) among the measures used by management in evaluating
performance and (ii) are frequently used by securities analysts, investors and other interested parties as a common
performance measure.

EBITDA and Adjusted EBITDA are not recognized terms under US GAAP and should not be viewed as alternatives
to net income or other measures of financial performance or liquidity in conformity with US GAAP. Additionally, our
definitions of EBITDA and Adjusted EBITDA may differ from other companies. Analysis of results and outlook on a non-
US GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with US GAAP.

Fiscal Year

(In thousands)

2024

2023

Net income .............................................................................................................. $
19,616 $
19,623
Interest expense .......................................................................................................
5,355
7,742
Provision for income taxes ......................................................................................
7,835
7,181
Depreciation and amortization ................................................................................
1,135
1,135
EBITDA ....................................................................................................
33,941
35,681

Loss on disposal of property and equipment ...........................................................
-
87
Loss on debt extinguishment ...................................................................................
169
357
Share-based compensation ......................................................................................
733
258
ADJUSTED EBITDA ............................................................................... $
34,843 $
36,383

46
Liquidity and Capital Resources

Sources and uses of cash

Cash at March 31, 2024 aggregated $21,027,000, a $8,834,000 decrease during the fiscal 2024 period as compared
to cash of $29,861,000 at March 26, 2023. Net working capital decreased to $23,203,000 from $30,652,000 at March 26,
2023 due primarily to the partial redemption of $20,000,000 of the Company’s 2025 Notes.

Our primary sources of liquidity are cash flows from operations. Our primary cash requirements are to fund our
quarterly dividends, to satisfy the debt service on the 2025 Notes, capital expenditures, working capital and general corporate
needs.

During the fiscal 2024 period, the Company made its required semi-annual interest payments on the 2025 Notes of
$2,650,000 on May 1, 2023 and November 1, 2023, as well as its required interest payment of $177,000 on December 18,
2023 in connection with the partial redemption of its 2025 Notes. On May 1, 2024, we made the first semi-annual interest
payment of $1,987,500 for fiscal 2025.

On December 19, 2023, the Company completed the partial redemption, in the principal amount of $20,000,000 of
the 2025 Notes. The redemption price of the redeemed notes was 100% of the principal amount, plus accrued and unpaid
interest from, and including November 1, 2023 to, but excluding the redemption date of December 19, 2023. The Company
completed the partial redemption by paying cash of $20,177,000, inclusive of accrued interest of $177,000, and recognized
a loss on early extinguishment of $169,000 that reflected the write-off of a portion of previously recorded debt issuance costs.
Please refer to Note J – Long Term Debt in the accompanying consolidated financial statements for a further discussion
regarding the Company’s indebtedness.

Summary of Cash Flows

The following table presents a summary of our cash flows from operating, investing and financing activities:

(In thousands)

Fiscal year

2024

2023

Net cash provided by operating activities .................................................................... $
20,002 $
19,837
Net cash used in investing activities ............................................................................
(313)
(584)
Net cash used in financing activities ...........................................................................
(28,523)
(39,455)
Net decrease in cash .................................................................................................... $
( 8,834) $
(20,202)

Operating activities

Cash provided by operations is primarily attributable to net income of $19,616,000 in addition to other non-cash
operating items of $2,558,000, offset by changes in other operating assets and liabilities of $2,172,000. Non-cash operating
expenses consist principally of a loss on debt extinguishment of $169,000, depreciation and amortization of $1,135,000,
amortization of debt issuance costs of $345,000, share-based compensation expense of $733,000 and bad debt expense of
$157,000. In the fiscal 2024 period, accounts and other receivables decreased by $74,000 due primarily to lower Branded
Product and other receivables of $734,000 which were offset, in part, by higher Franchise and license royalty receivables of
$322,000. Prepaid expenses and other current assets increased by $281,000 due primarily to an increase in prepaid income
taxes of $712,000 which were offset, in part, by a reduction in prepaid marketing and other expenses of $325,000. Accounts
payable, accrued expenses and other current liabilities decreased by $1,232,000 due principally to a decrease in accrued
interest expense of $467,000 due to the partial redemption of our 2025 Notes and a decrease in accounts payable of $717,000
due to the timing of product purchases for our Branded Products Program. Offsetting these decreases was an increase in
accrued payroll and other benefits of $112,000 due primarily to higher incentive compensation accruals.

47
Investing activities

Cash used in investing activities of $313,000 is primarily comprised of capital expenditures incurred for our Branded
Product Program and our Coney Island restaurants.

Financing activities

Cash used in financing activities of $28,523,000 relates to the payment of $20,000,000 in connection with the partial
redemption of our 2025 Notes and the payments of the Company’s quarterly $0.50 per share dividends totaling $8,161,000.
The Company also paid $362,000 for withholding taxes on the net share vesting of 10,000 restricted stock units.

At March 31, 2024 and March 26, 2023, Nathan’s did not have any open purchase commitments to purchase hot
dogs. Nathan’s may enter into purchase commitments in the future as favorable market conditions become available.

In 2016, the Board authorized increases to the sixth stock repurchase plan for the repurchase of up to 1,200,000
shares of its common stock on behalf of the Company. As of March 31, 2024, Nathan’s has repurchased 1,101,884 shares at
a cost of approximately $39,000,000 under the sixth stock repurchase plan. At March 31, 2024, there were 98,116 shares
remaining to be repurchased pursuant to the sixth stock repurchase plan. The plan does not have a set expiration date.
Purchases under the Company’s stock repurchase program may be made from time to time, depending on market conditions,
in open market or privately negotiated transactions, at prices deemed appropriate by management. There is no set time limit
on the repurchases. There were no stock repurchases during the fiscal 2024 period.

As discussed above, we had cash at March 31, 2024 aggregating $21,027,000. Our Board routinely monitors and
assesses its cash position and our current and potential capital requirements. During the fiscal 2024 period, the Company
declared and paid four quarterly dividends of $0.50 per share aggregating $8,161,000.

Effective June 12, 2024, the Board declared its first quarterly cash dividend of $0.50 per share for fiscal 2025 which
is payable on July 2, 2024 to stockholders of record as of the close of business on June 24, 2024.

If the Company pays regular quarterly cash dividends for the remainder of fiscal 2025 at the same rate as declared
in the first quarter of fiscal 2025, the Company’s total cash requirement for dividends for all of fiscal 2025 would be
approximately $8,169,000 based on the number of shares of common stock outstanding at June 6, 2024. The Company intends
to declare and pay quarterly cash dividends; however, there can be no assurance that any additional quarterly dividends will
be declared or paid or of the amount or timing of such dividends, if any.

Our ability to pay future dividends is limited by the terms of the Indenture for the 2025 Notes. In addition, the
payment of any cash dividends in the future are subject to final determination of the Board and will be dependent upon our
earnings and financial requirements and the terms of any other indebtedness that we may incur in the future. We may also
return capital to our stockholders through stock repurchases, subject to any restrictions in the Indenture, although there is no
assurance that the Company will make any repurchases under its existing stock repurchase plan.

We may from time to time seek to redeem additional portions of our 2025 Notes, through open market purchases,
privately negotiated transactions or otherwise. Such repurchases, if any, will depend on market conditions, our liquidity
requirements, and other factors.

48
We expect that in the future we will make investments in certain existing restaurants, support the growth of the
Branded Product and Branded Menu Programs, service the outstanding debt, fund our dividend program and may continue
our stock repurchase programs, funding those investments from our operating cash flow. We may also incur capital and other
expenditures or engage in investing activities in connection with opportunistic situations that may arise on a case-by-case
basis. During the fiscal year ending March 30, 2025, we expect to make interest payments of $3,975,000. On May 1, 2024,
we made the first semi-annual interest payment of $1,987,500 for fiscal 2025.

Management believes that available cash and cash generated from operations should provide sufficient capital to
finance our operations, satisfy our debt service requirements, fund dividend distributions and stock repurchases for at least
the next 12 months.

At March 31, 2024, we sublet one property to a franchisee that we lease from a third party. We remain contingently
liable for all costs associated with this property including: rent, property taxes and insurance. We may incur future cash
payments with respect to such property, consisting primarily of future lease payments, including costs and expenses
associated with terminating such lease.

Our contractual obligations primarily consist of the 2025 Notes and the related interest payments, operating leases,
and employment agreements with certain executive officers. These contractual obligations impact our short-term and long-
term liquidity and capital resource needs. There have been no material changes in our contractual obligations since March
26, 2023 except for the partial redemption of the 2025 Notes on December 19, 2023 as discussed above.

Inflationary Pressures

Inflationary pressures on labor and rising commodity prices, most notably for beef and beef trimmings, have
impacted our consolidated results of operations during the fiscal 2024 period, and this trend may continue into fiscal 2025.
From April 2023 through September 2023, we experienced significant increases in the cost of beef and beef trimmings. From
October 2023 through December 2023, we began to experience slight declines. However, beef prices began escalating again
during our fourth quarter fiscal 2024 and into our first quarter fiscal 2025.

Our average cost of hot dogs during the fiscal 2024 period was approximately 10% higher than during the fiscal
2023 period. Inherent volatility experienced in certain commodity markets, such as those for beef and beef trimmings due to
seasonal shifts, climate conditions, industry demand, inflationary pressures and other macroeconomic factors could have an
adverse effect on our results of operations. This impact will depend on our ability to manage such volatility through price
increases and product mix. We are unable to predict the future cost of our hot dogs and expect to experience price volatility
for our beef products during the remainder of fiscal 2025. To the extent that beef prices increase as compared to earlier
periods, it could impact our results of operations. In the past, we entered into purchase commitments for a portion of our hot
dogs to reduce the impact of increasing market prices. We may attempt to enter into similar purchase arrangements for hot
dogs and other products in the future.

We have experienced competitive pressure on labor rates as a result of the increase in the minimum hourly wage for
fast food workers where our Company-owned restaurants are located. On January 1, 2024, the minimum wage increased to
$16.00 in New York City, Long Island and Westchester which will be followed by $0.50 annual increases in 2025 and 2026.
Further, beginning in 2027, the minimum wage across New York State will increase annually according to the Consumer
Price Index. There has also been an increased demand for labor at all levels which has resulted in greater challenges retaining
adequate staffing levels at our Company-owned restaurants; our franchised restaurants and Branded Menu Program locations;
as well as for certain vendors in our supply chain that we depend on for our commodities. We remain in contact with our
major suppliers and to date we have not experienced significant disruptions in our supply chain.

We believe that these increases in the minimum wage and other changes in employment laws have had a significant
financial impact on our financial results and the results of our franchisees that operate in New York State. Our business could
be negatively impacted if the decrease in margins for our franchisees results in the potential loss of new franchisees or the
closing of a significant number of franchised restaurants.

49
We expect to continue experiencing volatility in oil and gas prices on our distribution costs for our food products
and utility costs in the Company-owned restaurants and volatile insurance costs resulting from the uncertainty of the insurance
markets.

Continued increases in labor costs, commodity prices and other operating expenses, including health care, could
adversely affect our operations. We attempt to manage inflationary pressure, and rising commodity costs, at least in part,
through raising prices. Delays in implementing price increases, competitive pressures, a decline in consumer discretionary
spending levels and other factors may limit our ability to offset these rising costs. Volatility in commodity prices, including
beef and beef trimmings could have a significant adverse effect on our results of operations.

The Company’s business, financial condition, operating results and cash flows can be impacted by a number of
factors, including but not limited to those set forth above in “Management’s Discussion and Analysis of Financial Condition
and Results of Operations,” any one of which could cause our actual results to vary materially from recent results or from our
anticipated future results. For a discussion identifying additional risk factors and important factors that could cause actual
results to differ materially from those anticipated, also see the discussions in “Forward-Looking Statements”, “Risk Factors”,
and “Notes to Consolidated Financial Statements” in this Form 10-K.

50
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.

Cash and Cash Equivalents

We have historically invested our cash in money market funds or short-term, fixed rate, highly rated and highly
liquid instruments which are generally reinvested when they mature. Although these existing investments are not considered
at risk with respect to changes in interest rates or markets for these instruments, our rate of return on short-term investments
could be affected at the time of reinvestment as a result of intervening events. As of March 31, 2024, Nathan’s cash balance
aggregated $21,027,000. Earnings on this cash would increase or decrease by approximately $53,000 per annum for each
0.25% change in interest rates.

Borrowings

At March 31, 2024, we had $60,000,000 principal amount of 6.625% 2025 Notes outstanding which are due in
November 2025. Interest expense on these borrowings would increase or decrease by approximately $150,000 per annum for
each 0.25% change in interest rates. We currently do not anticipate entering into interest rate swaps or other financial
instruments to hedge our borrowings.

Commodity Costs

Inflationary pressures on labor and rising commodity prices have directly impacted our consolidated results of
operation during fiscal 2024, most notably within our restaurant operations and Branded Product Program segments. We
expect this trend to continue into fiscal 2025. Our average cost of hot dogs during fiscal 2024 was approximately 10% higher
than during fiscal 2023.

We are unable to predict the future cost of our hot dogs and expect to experience price volatility for our beef products
during fiscal 2025. Factors that affect beef prices are outside of our control and include foreign and domestic supply and
demand, inflation, weather and seasonality. To the extent that beef prices increase as compared to earlier periods, it could
impact our results of operations. In the past, we have entered into purchase commitments for a portion of our hot dogs to
reduce the impact of increasing market prices. We may attempt to enter into purchase arrangements for hot dogs and other
products in the future. Additionally, we expect to continue experiencing volatility in oil and gas prices on our distribution
costs for our food products and utility costs in the Company-owned restaurants and volatile insurance costs resulting from
rising rates.

With the exception of purchase commitments, we have not attempted to hedge against fluctuations in the prices of
the commodities we purchase using future, forward, option or other instruments. As a result, we expect that the majority of
our future commodity purchases will be subject to market changes in the prices of such commodities. We have attempted to
enter sales agreements with our customers that are correlated to our cost of beef, thus reducing our market volatility, or have
passed through permanent increases in our commodity prices to our customers that are not on formula pricing, thereby
reducing the impact of long-term increases on our financial results. A short-term increase or decrease of 10% in the cost of
our food and paper products for the year ended March 31, 2024 would have increased or decreased our cost of sales by
approximately $7,734,000.

Foreign Currencies

Foreign franchisees generally conduct business with us and make payments in United States dollars, reducing the
risks inherent with changes in the values of foreign currencies. As a result, we have not purchased future contracts, options
or other instruments to hedge against changes in values of foreign currencies and we do not believe fluctuations in the value
of foreign currencies would have a material impact on our financial results.

51
Item 8.
Financial Statements and Supplementary Data.

The consolidated financial statements are submitted as a separate section of this report beginning on Page F-1.

Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A.
Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an
evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined by Exchange
Act Rule 13a-15(e) and Exchange Act Rule 15d-15(e). Based on that evaluation, the Chief Executive Officer, and Chief
Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and
procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s
rules and forms and that such information is accumulated and communicated to our management, including our principal
executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining an adequate system of internal control over
financial reporting, as defined by Exchange Act Rule 13a-15(f) and Exchange Act Rule 15d-15(f). Our internal control over
financial reporting includes those policies and procedures that:

●
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of our assets;

●
provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial
statements in accordance with generally accepted accounting principles in the United States, and that our
receipts and expenditures are being made only in accordance with authorizations of our management and
directors; and

●
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material effect on the financial statements.

Management has assessed the effectiveness of our system of internal control over financial reporting as of March
31, 2024. In making this assessment, management used the framework in Internal Control — Integrated Framework issued
in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our assessment
and the criteria set forth by COSO in 2013, management believes that Nathan’s maintained effective internal control over
financial reporting as of March 31, 2024. The effectiveness of our internal control over financial reporting as of March 31,
2024, has been audited by Marcum LLP, an independent registered public accounting firm which has also audited our
consolidated financial statements, as stated in its attestation report which is included herein.

Changes in Internal Controls

There were no changes in our internal controls over financial reporting that occurred during the quarter ended March
31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.

52
Limitations on the Effectiveness of Controls

We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that
the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are
designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Chief Financial
Officer have concluded that such controls and procedures are effective at the reasonable assurance level.

Item 9B. Other Information.

As disclosed in this Annual Report on Form 10-K, the Company’s Board of Directors has declared a $0.50 per share
dividend payable on July 2, 2024 to shareholders of record at the close of business on June 24, 2024.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

53
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL
OVER FINANCIAL REPORTING

To the Stockholders and Board of Directors of
Nathan’s Famous, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Nathan’s Famous, Inc. and Subsidiaries’ (the “Company”) internal control over financial reporting as of
March 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in 2013. In our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of March 31, 2024, based on criteria established in
COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated balance sheets as of March 31, 2024 and March 26, 2023 and the related consolidated
statements of earnings, changes in stockholders’ deficit, and cash flows and the related notes for each of the fifty-three week
period ended March 31, 2024 and the fifty-two week period ended March 26, 2023 of the Company, and our report dated
June 12, 2024 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting, and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management
Annual Report on Internal Control over Financial Reporting”. Our responsibility is to express an opinion on the Company's
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in
all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate.

/s/ Marcum LLP

Marcum LLP
New York, NY
June 12, 2024

54
PART III

Item 10.
Directors, Executive Officers and Corporate Governance.

The information required in response to this Item is incorporated herein by reference from the discussions under the
captions Proposal 1 – Election of Directors, Corporate Governance Management and Security Ownership in our proxy
statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after
the end of the fiscal year covered by this Report.

Our Board of Directors has adopted a Financial Officer Code of Ethics applicable to the Company’s Chief Executive
Officer, Chief Financial Officer and all other members of the Company’s Finance Department. This Code of Ethics is posted
on the Company’s website within a broader Code of Business Conduct and Ethics at www.nathansfamous.com in the Investor
Relations section. We intend to satisfy the disclosure requirement under Item 10 of Form 8-K regarding an amendment to, or
a waiver from, the provision of our Code of Ethics that applies to our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions and that relates to any element of such
provision of our Code of Ethics by posting such information on our website within four business days of the date of such
amendment or waiver. In the case of a waiver, the nature of the waiver, the name of the person to whom the waiver was
granted and the date of the waiver will also be disclosed.

Item 11.
Executive Compensation.

The information required in response to this Item is incorporated herein by reference from the discussion under the
caption Executive Compensation, including the Summary Compensation and other tables, Non-Qualified Deferred
Compensation, Risk Consideration in our Compensation Programs and 2024 Director Compensation in our proxy statement
to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the end
of the fiscal year covered by this Report.

Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required in response to this Item is incorporated herein by reference from the discussion under the
caption Equity Plan Information and Security Ownership in our proxy statement to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A, not later than 120 days after the end of the fiscal year covered by this Report.

Item 13.
Certain Relationships and Related Transactions, and Director Independence.

The information required in response to this Item is incorporated herein by reference from the discussion under the
caption Corporate Governance – Director Independence and Corporate Governance – Certain Relationships and Related
Persons transactions in our proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation
14A, not later than 120 days after the end of the fiscal year covered by this Report.

55
Item 14.
Principal Accountant Fees and Services.

Audit Fees

We were billed by Marcum LLP the aggregate amount of approximately $381,000 in the fiscal 2024 period and
$311,000 in the fiscal 2023 period, for fees for professional services rendered for the audit of our annual financial statements
and the effectiveness of our internal control over financial reporting, as well as the review of our financial statements included
in our Form 10-Q.

Audit-Related Fees

Marcum LLP did not render any audit-related services for fiscal 2024 and 2023, respectively and, accordingly, did
not bill for any such services.

Tax Fees

Marcum LLP did not render any tax compliance, tax advice or tax planning services for fiscal 2024 and 2023,
respectively and, accordingly, did not bill for any such services.

All Other Fees

Marcum LLP did not render any other services for fiscal 2024 and 2023, respectively, and accordingly, did not bill
for any such services.

Pre-Approval Policies

Our Audit Committee has not adopted any pre-approval policies. Instead, the Audit Committee will specifically pre-
approve the provision by Marcum LLP of all audit and non-audit services.

Our Audit Committee approved all of the audit services provided by Marcum LLP during fiscal 2024 and 2023,
respectively.

56
PART IV

Item 15.
Exhibits and Financial Statement Schedules.

(a) (1) Consolidated Financial Statements

The consolidated financial statements listed in the accompanying index to the consolidated financial statements on
Page F-1 are filed as part of this Report.

(2)
Financial Statement Schedule

None.

(3)
Exhibits

Certain of the following exhibits were previously filed as exhibits to other reports or registration statements filed by
the Registrant under the Securities Act of 1933 or under the Securities Exchange Act of 1934 and are therefrom incorporated
by reference.

Exhibit
No.
Exhibit
3.1
Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-1 No.
33- 56976.)
3.2
Amendment to the Certificate of Incorporation, filed December 15, 1992. (Incorporated by reference to Exhibit 3.2
to Registration Statement on Form S-1 No. 33-56976.)
3.3
By-Laws, as amended. (Incorporated by reference to Exhibit 3.1 to Form 8-K dated November 1, 2006.)
3.4
(1) First Amendment to By-Laws.
4.1
Specimen Stock Certificate. (Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-1 No.
33-56976.)
4.2
Indenture, dated as of November 1, 2017, by and among Nathan’s Famous, Inc., certain of its wholly owned
subsidiaries, as guarantors, and U.S. Bank Trust Company, National Association (formerly U.S. Bank National
Association), as trustee and collateral trustee (including the form of Note (Incorporated by reference to Exhibit 4.1
to the Company’s Current Report filed on Form 8-K dated November 1, 2017.)
4.3
Description of Common Stock (incorporated by reference to Exhibit 4.5 to Form 10-K for the year ended March
29, 2020.)
10.1
Leases for premises at Coney Island, New York, as follows: (Incorporated by reference to Exhibit 10.3 to
Registration Statement on Form S-1 No. 33-56976.)

a) Lease, dated November 22, 1967, between Nathan’s Realty Associates and the Company.

b) Lease, dated November 22, 1967, between Ida’s Realty Associates and the Company.
10.2
Form of Standard Franchise Agreement. (Incorporated by reference to Exhibit 10.12 to Registration Statement on
Form S-1 No. 33-56976.)
10.3
***Employment Agreement with Howard M. Lorber, dated as of December 15, 2006. (Incorporated by reference
to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 15, 2006.)
10.4
***Employment Agreement with Eric Gatoff, dated as of December 15, 2006. (Incorporated by reference to
Exhibit 10.2 to the Company’s Current Report on Form 8-K dated December 15, 2006.)
10.5
***Amendment to Employment Agreement with Eric Gatoff dated August 3, 2010. (Incorporated by reference to
Exhibit 10.1 to Form 10-Q for the quarter ended June 27, 2010.)
10.6
Agreement of Lease between One-Two Jericho Plaza Owner LLC and Nathan’s Famous Services, Inc. dated
September 11, 2009, (Incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended September 27,
2009.)
10.7
Guaranty by Nathan’s Famous, Inc. of Agreement of Lease with One-Two Jericho Plaza Owner LLC dated
September 11, 2009, (Incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended September 27,
2009).

57
10.8
***2010 Stock Incentive Plan (Incorporated by reference to Exhibit A to Proxy Statement on Schedule 14A dated
July 23, 2010).
10.9
***Amendment to 2010 Stock Incentive Plan (Incorporated by reference to Exhibit A to Proxy Statement on
Schedule 14A dated July 23, 2012).
10.10 ***Amendment to Employment Agreement with Howard M. Lorber, dated November 1, 2012. (Incorporated by
reference to Exhibit 10.1 to Form 10-Q for the quarter ended September 23, 2012).
10.11 ***Amendment Number 2, dated December 7, 2017 to Employment Agreement with Howard M. Lorber
(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 6,
2017).
10.12 **Letter agreement dated December 5, 2012 between Nathan’s Famous Systems, Inc. and John Morrell & Co.
(Incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended December 23, 2012).
10.13 First Amendment to Licensing and Supply Agreement, dated September 22, 2016 between Nathan’s Famous
Systems, Inc. and John Morrell & Co. (Incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter
ended September 24, 2017).
10.14 Second Amendment to Licensing and Supply Agreement, dated June 29, 2017 between Nathan’s Famous Systems,
Inc. and John Morrell & Co. (Incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended
September 24, 2017).
10.15 ***Restricted Stock Agreement with Eric Gatoff, dated June 4, 2013. (Incorporated by reference to Exhibit 10.27
to Form 10-K for the year ended March 31, 2013.)
10.16 Parity Lien Security Agreement dated as of November 1, 2017, by and among Nathan’s Famous, Inc. and Other
Assignors Identified therein and U.S. Bank Trust Company, National Association (formerly U.S. Bank National
Association), as Collateral Trustee. (Incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended
December 24, 2017.)
10.17 ***2019 Management Incentive Plan for the Fiscal Year ending March 29, 2020 (Incorporated by reference to
Exhibit 10.1 to Form 10-Q for the quarter ended June 24, 2018).
10.18 ***Nathan’s Famous, Inc. Code Section 162(m) Bonus Plan (Incorporated by reference to Appendix B to the Proxy
Statement on Schedule 14A filed on July 28, 2016).
10.19 Agreement of Sale between Nathan’s Famous Operating Corp. and 660 86 LLC dated September 8, 2017.
(Incorporated by reference to Exhibit 10.20 to Form 10-K for the year ended March 25, 2018.)
10.20 Amendment to Agreement of Sale between Nathan’s Famous Operating Corp. and 660 86 LLC dated March 6,
2018. (Incorporated by reference to Exhibit 10.21 to Form 10-K for the year ended March 25, 2018.)
10.21 Amendment to Agreement of Sale between Nathan’s Famous Operating Corp. and 660 86 LLC dated July 15,
2018. (Incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended June 24, 2018.)
10.22 First Amendment to Lease, dated April 1, 2019 by and between Jericho Plaza, LLC and Nathan’s Famous Services,
Inc. (Incorporated by reference to Exhibit 10.22 to Form 10-K for the year ended March 31, 2019.)
10.23 ***2019 Stock Incentive Plan. (Incorporated by reference to Annex A to Proxy Statement on Schedule 14A dated
July 26, 2019.)
10.24 ***Amendment No. 3 to Employment Agreement dated as of December 8, 2022 between Nathan’s Famous, Inc.
and Howard M. Lorber (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
dated December 9, 2022.)
16.1
Letter of Grant Thornton LLP, dated July 6, 2018. (Incorporated by reference to Exhibit 16.1 to the Company’s
Current Report on Form 8-K dated July 6, 2018.)
19.1
Policy on Insider Trading. (Incorporated by reference to Exhibit 19.1 to Form 10-K for the year ended March 26,
2023)
19.2
Policy on Trading Procedures for Covered Individuals. (Incorporated by reference to Exhibit 19.2 to Form 10-K
for the year ended March 26, 2023)
21
(1) List of Subsidiaries of the Registrant.
23.1
(1) Consent of Marcum LLP dated June 12, 2024.
31.1
(1) Certification by Eric Gatoff, Chief Executive Officer, pursuant to Rule 13a - 14(a).
31.2
(1) Certification by Robert Steinberg, Chief Financial Officer, pursuant to Rule 13a - 14(a).
32.1
(1) Certification by Eric Gatoff, Chief Executive Officer of Nathan’s Famous, Inc., pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
(1) Certification by Robert Steinberg, Chief Financial Officer of Nathan’s Famous, Inc., pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

58
97.1
(1) Nathan’s Famous, Inc. Clawback Policy
101.INS Inline XBRL Instance Document.
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Date File (embedded within the Inline XBRL and contained in Exhibit 101)

(1) Filed herewith.

**Filed with confidential portions omitted pursuant to request for confidential treatment. The omitted portions have been
separately filed with the SEC.

*** Indicates a management plan or arrangement.

Item 16.
Form 10-K Summary.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the 12th day of June, 2024.

Nathan’s Famous, Inc.

/s/ ERIC GATOFF

Eric Gatoff

Chief Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities indicated on the 12th day of June, 2024.

/s/ ERIC GATOFF

Eric Gatoff

Chief Executive Officer

(Principal Executive Officer)

/s/ HOWARD LORBER

Howard Lorber

Executive Chairman

/s/ ROBERT STEINBERG

Robert Steinberg

Vice President - Finance and Chief Financial Officer

(Principal Financial and Accounting Officer)

/s/ WAYNE NORBITZ

Wayne Norbitz, Director

/s/ ROBERT J. EIDE

Robert J. Eide, Director

/s/ BARRY LEISTNER

Barry Leistner, Director

/s/ BRIAN GENSON

Brian Genson, Director

/s/ ATTILIO F. PETROCELLI

Attilio F. Petrocelli, Director

/s/ CHARLES RAICH

Charles Raich, Director

/s/ ANDREW LEVINE

Andrew Levine, Director

/s/ JOANNE PODELL

Joanne Podell, Director

F-1
Nathan’s Famous, Inc. and Subsidiaries

TABLE OF CONTENTS

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 688) ..................................................... F-2

Consolidated Balance Sheets .................................................................................................................................. F-3

Consolidated Statements of Earnings ..................................................................................................................... F-4

Consolidated Statements of Changes in Stockholders’ Deficit .............................................................................. F-5 – F-6

Consolidated Statements of Cash Flows ................................................................................................................ F-7

Notes to Consolidated Financial Statements .......................................................................................................... F-8

F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of
Nathan’s Famous, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Nathan’s Famous, Inc. and Subsidiaries (the “Company”)
as of March 31, 2024 and March 26, 2023, the related consolidated statements of earnings, changes in stockholders’ deficit
and cash flows for the fifty-three week period ended March 31, 2024 and the fifty-two week period ended March 26, 2023,
and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of March 31, 2024 and March 26, 2023, and the
results of its operations and its cash flows for the fifty-three week period ended March 31, 2024 and the fifty-two week period
ended March 26, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
("PCAOB"), the Company's internal control over financial reporting as of March 31, 2024, based on the criteria established
in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in 2013 and our report dated June 12, 2024, expressed an unqualified opinion on the effectiveness of
the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether
due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or
required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the
financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there
are no critical audit matters.

/s/ Marcum LLP

Marcum LLP

We have served as the Company’s auditor since 2018.

New York, NY
June 12, 2024

F-3
Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)

March 31, 2024 March 26, 2023
ASSETS

CURRENT ASSETS

Cash .......................................................................................................................... $
21,027 $
29,861
Accounts and other receivables, net (Note D) ..........................................................
14,731
15,066
Inventories ................................................................................................................
842
539
Prepaid expenses and other current assets (Note E)..................................................
2,176
1,895
Total current assets ..............................................................................
38,776
47,361

Property and equipment, net of accumulated depreciation of $11,687 and $10,871,
respectively (Note F) .............................................................................................
2,673
3,321
Operating lease assets (Note K) ................................................................................
6,203
6,421
Goodwill ...................................................................................................................
95
95
Intangible asset, net ..................................................................................................
695
869
Deferred income taxes, net (Note H) ........................................................................
275
375
Other assets ...............................................................................................................
141
168

Total assets .......................................................................................... $
48,858 $
58,610

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES

Accounts payable ...................................................................................................... $
5,744 $
6,461
Accrued expenses and other current liabilities (Note G) ..........................................
7,615
8,130
Current portion of operating lease liabilities (Note K) .............................................
1,887
1,782
Deferred franchise fees .............................................................................................
327
336
Total current liabilities ........................................................................
15,573
16,709

Long-term debt, net of unamortized debt issuance costs of $438 and $952,
respectively (Note J) .............................................................................................
59,562
79,048
Operating lease liabilities (Note K) ..........................................................................
4,937
5,406
Other liabilities .........................................................................................................
810
737
Deferred franchise fees .............................................................................................
899
1,272

Total liabilities.....................................................................................
81,781
103,172

COMMITMENTS AND CONTINGENCIES (Note M)

STOCKHOLDERS’ DEFICIT

Common stock, $.01 par value; 30,000,000 shares authorized; 9,374,130 and
9,369,235 shares issued; and 4,084,615 and 4,079,720 shares outstanding at
March 31, 2024 and March 26, 2023, respectively ...............................................
94
94
Additional paid-in capital .........................................................................................
62,936
62,565
Accumulated deficit ..................................................................................................
(9,291)
(20,559)
Stockholders’ equity before treasury stock .........................................
53,739
42,100

Treasury stock, at cost, 5,289,515 shares at March 31, 2024 and March 26, 2023 ...
(86,662)
(86,662)
Total stockholders’ deficit ...................................................................
(32,923)
(44,562)

Total liabilities and stockholders’ deficit ............................................ $
48,858 $
58,610

The accompanying notes are an integral part of these consolidated financial statements.

F-4
Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except share and per share amounts)

Fifty-Three
Fifty-Two

weeks ended
weeks ended

March 31, 2024 March 26, 2023
REVENUES

Branded Products ...................................................................................................... $
86,489 $
78,884
Company-owned restaurants .....................................................................................
12,103
12,161
License royalties .......................................................................................................
33,581
33,455
Franchise fees and royalties ......................................................................................
4,356
4,292
Advertising fund revenue ..........................................................................................
2,081
1,993
Total revenues .........................................................................................
138,610
130,785

COSTS AND EXPENSES

Cost of sales ..............................................................................................................
83,182
75,172
Restaurant operating expenses ..................................................................................
4,177
3,984
Depreciation and amortization ..................................................................................
1,135
1,135
General and administrative expenses ........................................................................
15,612
14,061
Advertising fund expense .........................................................................................
1,998
1,988
Total costs and expenses .........................................................................
106,104
96,340

Income from operations ..........................................................................
32,506
34,445

Interest expense ........................................................................................................
(5,355)
(7,742)
Loss on debt extinguishment (NOTE J) ....................................................................
(169)
(357)
Interest income..........................................................................................................
383
440
Other income, net ......................................................................................................
86
18

Income before provision for income taxes ...................................................................
27,451
26,804
Provision for income taxes ...........................................................................................
7,835
7,181
Net income .............................................................................................. $
19,616 $
19,623

PER SHARE INFORMATION

Weighted average shares used in computing net income per share:

Basic ......................................................................................................................
4,081,000
4,089,000
Diluted ...................................................................................................................
4,087,000
4,090,000

Net income per share:

Basic ...................................................................................................................... $
4.81 $
4.80
Diluted ................................................................................................................... $
4.80 $
4.80

The accompanying notes are an integral part of these consolidated financial statements.

F-5
Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
Fifty-three weeks ended March 31, 2024 and the Fifty-two weeks ended March 26, 2023

(in thousands, except share and per share amounts)

Additional

Treasury Stock,

Total

Common Common Paid-in Accumulated
at Cost
Stockholders’

Shares Stock Capital
Deficit

Shares Amount
Deficit

Balance, March 27, 2022 ................. 9,369,235 $
94 $ 62,307 $
(32,619) 5,254,081 $ (84,770) $
(54,988)

Repurchase of common stock ..........
-
-
-
-
35,434 (1,892)
(1,892)

Dividends on common stock
($1.85 per share) ..........................
-
-
-
(7,563)
-
-
(7,563)

Share-based compensation ..............
-
-
258
-
-
-
258

Net income ......................................
-
-
-
19,623
-
-
19,623
Balance, March 26, 2023 ................. 9,369,235 $
94 $ 62,565 $
(20,559) 5,289,515 $ (86,662) $
(44,562)

The accompanying notes are an integral part of these consolidated financial statements.

F-6
Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
Fifty-three weeks ended March 31, 2024 and the Fifty-two weeks ended March 26, 2023

(in thousands, except share and per share amounts)

Additional

Treasury Stock,

Total

Common Common Paid-in Accumulated
at Cost
Stockholders’

Shares Stock Capital
Deficit

Shares Amount
Deficit

Balance, March 26, 2023 ............... 9,369,235 $
94 $ 62,565 $
(20,559 ) 5,289,515 $(86,662) $
(44,562)

Cumulative effect of adoption of
ASU 2016-13 (Note B) ................
-
-

(187 )
-
-
(187)

Shares issued in connection with
share-based compensation
plans ............................................
4,895
-
-
-
-
-
-

Withholding tax on net share
settlement of share-based
compensation plans ....................
-
-
(362)
-
-
-
(362)

Dividends on common stock
($2.00 per share) .........................
-
-
-
(8,161 )
-
-
(8,161)

Share-based compensation ...........
-
-
733
-
-
-
733

Net income .....................................
-
-
-
19,616
-
-
19,616
Balance, March 31, 2024 ............... 9,374,130 $
94 $ 62,936 $
(9,291 ) 5,289,515 $(86,662) $
(32,923)

The accompanying notes are an integral part of these consolidated financial statements.

F-7
Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Fifty-Three
Fifty-Two

weeks ended
weeks ended

March 31, 2024 March 26, 2023
Cash flows from operating activities:

Net income ................................................................................................................ $
19,616 $
19,623
Adjustments to reconcile net income to net cash provided by operating activities

Loss on debt extinguishment .............................................................................
169
357
Loss on disposal of property and equipment .....................................................
-
87
Depreciation and amortization ...........................................................................
1,135
1,135
Amortization of debt issuance costs ..................................................................
345
508
Share-based compensation expense ...................................................................
733
258
Provision for uncollectible accounts ..................................................................
157
457
Deferred income taxes .......................................................................................
165
207
Other non-cash items .........................................................................................
(146)
(153)
Changes in operating assets and liabilities:

Accounts and other receivables, net ..................................................................
(74)
(2,149)
Inventories .........................................................................................................
(303)
(17)
Prepaid expenses and other current assets .........................................................
(281)
(454)
Other assets ........................................................................................................
27
27
Accounts payable, accrued expenses and other current liabilities .....................
(1,232)
377
Deferred franchise fees ......................................................................................
(382)
(489)
Other liabilities ..................................................................................................
73
63

Net cash provided by operating activities ...............................................
20,002
19,837

Cash flows from investing activities:

Insurance proceeds for property and equipment .......................................................
-
42
Purchase of property and equipment, net ..................................................................
(313)
(626)

Net cash used in investing activities .......................................................
(313)
(584)

Cash flows from financing activities:

Cash payments for extinguishment of debt ...............................................................
(20,000)
(30,000)
Dividends paid to stockholders .................................................................................
(8,161)
(7,563)
Repurchase of treasury stock ....................................................................................
-
(1,892)
Payments of withholding tax on net share settlement of share-based compensation
plans ......................................................................................................................
(362)
-

Net cash used in financing activities .......................................................
(28,523)
(39,455)

Net decrease in cash .....................................................................................................
(8,834)
(20,202)

Cash, beginning of year ................................................................................................
29,861
50,063

Cash, end of year .......................................................................................................... $
21,027 $
29,861

Cash paid during the year for:

Interest ...................................................................................................................... $
5,477 $
8,061
Income taxes ............................................................................................................. $
8,309 $
7,160

The accompanying notes are an integral part of these consolidated financial statements.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-8
NOTE A - DESCRIPTION AND ORGANIZATION OF BUSINESS

Nathan’s Famous, Inc. and subsidiaries (collectively the “Company” or “Nathan’s”) has historically operated or
franchised a chain of retail fast food restaurants featuring the “Nathan’s World Famous Beef Hot Dog”, crinkle-cut
French-fried potatoes and a variety of other menu offerings. Nathan’s has also established a Branded Product Program,
which enables foodservice retailers to sell select Nathan’s proprietary products outside of the realm of a traditional
franchise relationship. Nathan’s also licenses the manufacture and sale of “Nathan’s Famous” packaged hot dogs, crinkle-
cut French fries and a number of other products to a variety of third parties for sale to supermarkets, club stores and
grocery stores. The Company is also the owner of the Arthur Treacher’s Fish & Chips brand. Arthur Treacher’s main
product is its "Original Fish & Chips" product consisting of fish fillets coated with a special batter prepared under a
proprietary formula, deep-fried golden brown, and served with English-style chips and corn meal "hush puppies." The
Company considers itself to be a brand marketer of its products to the foodservice and retail industries, pursuant to its
various business structures. Nathan’s has also pursued co-branding and co-hosting initiatives.

At March 31, 2024, the Company’s restaurant system included four Company-owned restaurants (including one seasonal
unit) in the New York City metropolitan area and 230 franchised units, located in 17 states and 13 foreign countries.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies have been applied in the preparation of the consolidated financial
statements:

1. Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and all of its
wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in
consolidation.

2. Fiscal Year

The Company’s fiscal year ends on the last Sunday in March, which results in a 52 or 53 week reporting period. The
fiscal year ended March 31, 2024 was on the basis of a 53 week reporting period and the fiscal year ended March 26,
2023 was on the basis of a 52 week reporting period. All references to years and quarters relate to fiscal periods rather
than calendar periods.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-9
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3. Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Significant estimates made by management in preparing the consolidated financial statements include the valuation of
long lived assets, the valuation of an intangible asset, the allowance for credit losses, and the accounting for income
taxes. On an ongoing basis, the Company evaluates its estimates based on historical experience, current conditions and
other assumptions under the circumstances. Actual results could differ from those estimates.

4. Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be
cash equivalents. The Company did not have any cash equivalents at March 31, 2024 or March 26, 2023. The Company’s
cash balances principally consist of cash in bank and money market accounts.

At March 31, 2024 and March 26, 2023, substantially all of the Company’s cash balances are in excess of Federal
government insurance limits. The Company has not experienced any losses in such accounts.

5. Inventories

Inventories, which are stated at the lower of cost or net realizable value, consist primarily of food, beverages, and paper
supplies. Cost is determined using the first-in, first-out method.

6. Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Major improvements are
capitalized, and minor replacements, maintenance and repairs are charged to expense as incurred. Depreciation and
amortization are calculated on the straight-line basis over the estimated useful lives of the assets. Leasehold
improvements are amortized over the shorter of the estimated useful life or the remaining lease term of the related asset.
The estimated useful lives are as follows:

Building and improvements (years) .................................................................................................................. 5 – 25
Machinery, equipment, furniture and fixtures (years) ....................................................................................... 3 – 15
Leasehold improvements (years) ...................................................................................................................... 5 – 20

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-10
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

7. Goodwill and Intangible Asset

Goodwill and intangible assets consist of (i) goodwill of $95 resulting from the acquisition of Nathan’s in 1987; and (ii)
trademarks, and the trade name and other intellectual property of $695 in connection with the Arthur Treacher’s brand.

Goodwill is not amortized, but is tested for impairment annually during the fourth quarter, or more frequently if events
or changes in circumstances indicate that the carrying amount may be impaired. As of March 31, 2024, and March 26,
2023 the Company performed its annual quantitative impairment test of goodwill and has determined no impairment is
deemed to exist.

Based upon the review of the current Arthur Treacher’s co-branding agreements, the Company determined that the
remaining useful lives of these agreements is four years concluding in fiscal year 2028, and the intangible asset is subject
to annual amortization. The Company has recorded amortization expense of $174 for each of the fiscal years ending
March 31, 2024 and March 26, 2023 and estimates that our annual amortization expense will continue to be $174 for
each of the next four fiscal years.

The Company’s definite-lived intangible asset is tested for impairment at least annually, or more frequently if events or
changes in circumstances indicate that the asset may be impaired. The Company tested for recoverability of its definite-
lived intangible asset based on the projected undiscounted cash flows to be derived from such co-branding agreements.
Based on the quantitative test performed, the Company determined that the definite-lived intangible asset was recoverable
and no impairment charge was recorded for the fiscal years ended March 31, 2024 and March 26, 2023. Cash flow
projections require significant estimates and assumptions by management. Should the estimates and assumptions prove
to be incorrect, the Company may be required to record an impairment charge in future periods and such impairment
could be material.

8. Long-lived Assets

Long-lived assets on Company-owned restaurants are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying value may not be recoverable.

Long-lived assets include property, equipment and right-of-use assets for operating leases with finite useful lives. Assets
are grouped at the individual restaurant level, which represents the lowest level for which cash flows can be identified
largely independent of the cash flows of other assets and liabilities. The Company generally considers a history of
restaurant operating losses to be its primary indicator of potential impairment for individual restaurant locations.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-11
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company tests for recoverability based on the projected undiscounted cash flows to be derived from such assets. If
the projected undiscounted future cash flows are less than the carrying value of the assets, the Company will record on
a restaurant-by-restaurant basis, an impairment loss, if any, based on the difference between the estimated fair value and
the carrying value of the assets. The Company generally measures fair value by considering discounted estimated future
cash flows from such assets. Cash flow projections and fair value estimates require significant estimates and assumptions
by management. Should the estimates and assumptions prove to be incorrect, the Company may be required to record
impairment charges in future periods and such impairments could be material. No long-lived assets were deemed
impaired during the fiscal years ended March 31, 2024 and March 26, 2023.

9. Leases

Determination of Whether a Contract Contains a Lease

We determine if an arrangement is a lease at inception or modification of a contract and classify each lease as either an
operating or finance lease at commencement. The Company only reassesses lease classifications subsequent to
commencement upon a change to the expected lease term or the contract being modified. Operating leases represent the
Company’s right to use an underlying asset as lessee for the lease term, and lease obligations represent the Company’s
obligation to make lease payments arising from the lease.

ROU Model and Determination of Lease Term

The Company uses the right-of-use (“ROU”) model to account for leases where the Company is the lessee, which requires
an entity to recognize a lease liability and ROU asset on the lease commencement date. A lease liability is measured
equal to the present value of the remaining lease payments over the lease term and is discounted using the incremental
borrowing rate, as the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate
is the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an
amount equal to the lease payments in a similar economic environment. Lease payments include payments made before
the commencement date and any residual value guarantees, if applicable. The initial ROU asset consists of the initial
measurement of the lease liability, adjusted for any payments made before the commencement date, initial direct costs
and lease incentives earned. When determining the lease term, as both lessee and lessor, the Company includes option
periods when it is reasonably certain that those options will be exercised.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-12
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Significant Assumptions and Judgement

Management makes certain estimates and assumptions regarding each new lease and sublease agreement, renewal and
amendment, including, but not limited to, property values, market rents, property lives, discount rates and probable term,
all of which can impact (1) the classification and accounting for a lease or sublease as operating or finance, (2) the Rent
Holiday and escalations in payment that are taken into consideration when calculating Straight-Line Rent, (3) the term
over which leasehold improvements for each restaurant are amortized and (4) the values and lives of adjustments to the
initial ROU asset where the Company is the lessee, or favorable and unfavorable leases where the Company is the lessor.
The amount of depreciation and amortization, interest and rent expense and income would vary if different estimates and
assumptions were used.

Operating Leases

For operating leases, minimum lease payments or receipts, including minimum scheduled rent increases, are recognized
as rent expense where the Company is a lessee, or income where the Company is a lessor, as applicable, on a straight-
line basis (“Straight-Line Rent”) over the applicable lease terms. There is a period under certain lease agreements referred
to as a rent holiday (“Rent Holiday”) that generally begins on the possession date and ends on the rent commencement
date. During a Rent Holiday, no cash rent payments are typically due under the terms of the lease; however, rent expense
is recorded for that period on a straight-line basis. The excess of the Straight-Line Rent over the minimum rents paid is
included in the ROU asset where the Company is a lessee. The excess of the Straight-Line Rent over the minimum rents
received is recorded as a deferred lease asset and is included in “Other Assets” where the Company is a lessor. The
Company recorded $22 and $29 in Other Assets at March 31, 2024 and March 26, 2023, respectively. Certain leases
contain provisions, referred to as contingent rent (“Contingent Rent”), that require additional rental payments based upon
restaurant sales volume. Certain leases may include rent escalations based on inflation indexes. Subsequent escalations
subject to such an index and contingent rental payments are recognized as variable lease expense in the period incurred.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-13
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Lease cost for operating leases is recognized on a straight-line basis and includes the amortization of the ROU asset and
interest expense relating to the operating lease liability. Variable lease cost for operating leases include Contingent Rent
and payments for executory costs such as real estate taxes, insurance and common area maintenance, which are excluded
from the measurement of the lease liability. Short-term lease cost for operating leases includes rental expense for leases
with a term of less than 12 months. Leases with an initial expected term of 12 months or less are not recorded in the
Consolidated Balance Sheets and the related lease expense is recognized on a straight-line basis over the lease term.
Lease costs are recorded in the Consolidated Statements of Earnings based on the nature of the underlying leases as
follows: (1) rental expense related to leases for Company-owned restaurants is recorded to “Restaurant operating
expenses,” (2) rental expense for leased properties that are subsequently subleased to franchisees is recorded to “Other
income, net” and (3) rental expense related to leases for corporate offices and equipment is recorded to “General and
administrative expenses.”

Rental income for operating leases on properties subleased to franchisees is recorded net of associated lease costs to
“Other income, net.” At March 31, 2024, the Company leases one site which it in turn subleases to a franchisee, which
expires in April 2027 exclusive of renewal options. The Company remains liable for all lease costs when property is
subleased to a franchisee.

10. Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date (an exit price).

The fair value hierarchy, as outlined in the applicable accounting guidance, is based on inputs to valuation techniques
that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions
market participants would use in pricing an asset or liability based on market data obtained from independent sources
while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions.

The fair value hierarchy consists of the following three levels:

●
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an
active market

●
Level 2 - inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market
or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset
or liability

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-14
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

●
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement of the
asset or liability and reflect the Company’s own assumptions

The use of observable market inputs (quoted market prices) when measuring fair value and, specifically, the use of Level
1 quoted prices to measure fair value are required whenever possible. The determination of where an asset or liability
falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures quarterly and based
on various factors, it is possible that an asset or liability may be classified differently from year to year.

At March 31, 2024 and March 26, 2023, we did not have any assets or liabilities that were recorded at fair value.

The Company’s long-term debt had a face value of $60,000 as of March 31, 2024 and a fair value of $59,903 as of March
31, 2024. The Company estimates the fair value of its long-term debt based upon review of observable pricing in
secondary markets as of the last trading day of the fiscal period. Accordingly, the Company classifies its long-term debt
as Level 2.

The carrying amounts of cash, accounts receivable and accounts payable approximate fair value due to the short-term
nature of those items.

The majority of the Company’s non-financial assets and liabilities are not required to be carried at fair value on a
recurring basis. However, the Company is required on a non-recurring basis to use fair value measurements when
analyzing asset impairment as it relates to goodwill and its other definite-lived asset and long-lived assets. The Company
utilized the income approach (Level 3 inputs) which utilized projected undiscounted cash flows in performing its annual
impairment testing of the Company’s intangible asset and long-lived assets.

11. Start-up Costs

Pre-opening and similar restaurant costs are expensed as incurred and are included in “Restaurant operating expenses”
in the accompanying Consolidated Statement of Earnings.

12. Revenue Recognition - Branded Product Program

The Company recognizes sales from the Branded Product Program and certain products sold from the Branded Menu
Program upon delivery to Nathan’s customers via third party common carrier. Rebates provided to customers are
classified as a reduction to sales.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-15
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

13. Revenue Recognition - Company-owned Restaurants

Sales by Company-owned restaurants, which are typically paid in cash or with credit card by the customer, are recognized
at the point of sale when food and beverage items are sold. Sales are presented net of sales tax collected from customers
and remitted to governmental taxing authorities.

14. Revenue Recognition - License Royalties

The Company earns revenue from royalties on the licensing of the use of its intellectual property in connection with
certain products produced and sold by outside vendors. The use of the Company’s intellectual property must be approved
by the Company prior to each specific application to ensure proper quality and a consistent image. Revenue from license
royalties is generally based on a percentage of sales, subject to certain annual minimum royalties, and is recognized on
a monthly basis when it is earned and deemed collectible.

15. Revenue Recognition - Franchising Operations

In connection with its franchising operations, the Company receives initial franchise fees, international development
fees, royalties, and in certain cases, revenue from sub-leasing restaurant properties to franchisees.

The following services are typically provided by the Company prior to the opening of a franchised restaurant:

●
Approval of all site selections to be developed.

●
Provision of architectural plans suitable for restaurants to be developed.

●
Assistance in establishing building design specifications, reviewing construction compliance and equipping the
restaurant.

●
Provision of appropriate menus to coordinate with the restaurant design and locations to be developed.

●
Provision of management training for the new franchisee and selected staff.

●
Assistance with the initial operations of restaurants being developed.

The services provided in exchange for these upfront restaurant franchise fees do not contain separate and distinct
performance obligations from the franchising right and these initial franchise fees, renewal fees and transfer fees are
deferred and recognized over the term of each respective agreement, or upon termination of the franchise agreement.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-16
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The services provided in exchange for these international development fees do not contain separate and distinct
performance obligations from the franchising right and these international development fees are deferred and recognized
over the term of each respective agreement, or upon termination of the franchise agreement. Certain other costs, such as
legal expenses, are expensed as incurred.

The Company recognizes franchise royalties on a monthly basis, which are generally based upon a percentage of sales
made by the Company’s franchisees, including virtual kitchens, when they are earned and deemed collectible.

The Company recognizes royalty revenue from its Branded Menu Program directly from the sale of Nathan’s products
by its distributors or directly from the manufacturers.

Franchise fees and royalties that are subsequently deemed to be not collectible are recorded as bad debts until paid by
the franchisee or until collectability is deemed to be reasonably assured.

The following is a summary of franchise openings and closings (excluding virtual kitchens) for the Nathan’s franchise
restaurant system for the fiscal years ended March 31, 2024 and March 26, 2023:

March 31,

March 26,

2024

2023

Franchised restaurants operating at the beginning of the period ..........................
232
239

New franchised restaurants opened during the period ..........................................
17
11

Franchised restaurants closed during the period ..................................................
(19)
(18 )

Franchised restaurants operating at the end of the period ....................................
230
232

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-17
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Contract balances

The following table provides information about contract liabilities from contracts with customers:

March 31,

March 26,

2024

2023

Deferred franchise fees (a) ................................................................................... $
1,226 $
1,608
Deferred revenues, which are included in “Accrued expenses and other current
liabilities” (b) .................................................................................................... $
1,375 $
1,406

(a) Deferred franchise fees of $327 and $899 as of March 31, 2024 and $336 and $1,272 as of March 26, 2023 are
included in Deferred franchise fees – current and long term, respectively.

(b) Includes $875 of deferred license royalties and $500 of deferred advertising fund revenue as of March 31, 2024 and
$906 of deferred license royalties and $500 of deferred advertising fund revenue as of March 26, 2023.

Significant changes in deferred franchise fees for the fiscal years ended March 31, 2024 and March 26, 2023 are as
follows:

March 31,

March 26,

2024

2023

Deferred franchise fees at beginning of period ................................................... $
1,608 $
2,097
New deferrals due to cash received and other .....................................................
88
167
Revenue recognized during the period ................................................................
(470 )
(656 )
Deferred franchise fees at end of period ............................................................. $
1,226 $
1,608

Significant changes in deferred revenues for the fiscal years ended March 31, 2024 and March 26, 2023 are as follows:

March 31,

March 26,

2024

2023

Deferred revenues at beginning of period ........................................................... $
1,406 $
876
New deferrals due to cash received and other .....................................................
2,340
1,828
Revenue recognized during the period ................................................................
(2,371 )
(1,298 )
Deferred revenues at end of period ..................................................................... $
1,375 $
1,406

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-18
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Anticipated future recognition of deferred franchise fees

The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations
that are unsatisfied at the end of the period:

Estimate for fiscal year
2025 ........................................................................................................................................ $
327
2026 ........................................................................................................................................
296
2027 ........................................................................................................................................
183
2028 ........................................................................................................................................
92
2029 ........................................................................................................................................
61
Thereafter ...............................................................................................................................
267
Total ....................................................................................................................................... $
1,226

We have applied the optional exemption, as provided for under ASC Topic 606, “Revenues from Contracts with
Customers,” which allows us not to disclose the transaction price allocated to unsatisfied performance obligations when
the transaction price is a sales-based royalty.

16. Revenue Recognition – National Advertising Fund

The Company maintains a national advertising fund (the “Advertising Fund”) established to collect and administer funds
contributed for use in advertising and promotional programs for Company-owned and franchised restaurants.

The revenue, expenses and cash flows of the Advertising Fund are fully consolidated into the Company’s Consolidated
Statements of Earnings and Statements of Cash Flows.

While this treatment impacts the gross amount of reported advertising fund revenue and related expenses, the impact is
expected to approximately offset the increase to both revenue and expense, with minimal impact to income from
operations or net income because the Company attempts to manage the Advertising Fund to breakeven over the course
of the fiscal year. However, any surplus or deficit in the Advertising Fund will impact income from operations and net
income.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-19
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

17. Business Concentrations and Geographical Information

The Company’s accounts receivable consists principally of receivables from franchisees, including virtual kitchens, for
royalties and advertising contributions, from sales under the Branded Product Program, and from royalties from retail
licensees. At March 31, 2024, three Branded Product customers represented 21%, 15% and 13%, of accounts receivable.
At March 26, 2023, three Branded Product customers represented 23%, 13% and 12%, of accounts receivable. One
Branded Product customer accounted for 18% of total revenue for each of the fiscal years ended March 31, 2024 and
March 26, 2023. One retail licensee accounted for 23% and 24% of the total revenue for the fiscal years ended March
31, 2024 and March 26, 2023, respectively.

The Company’s primary supplier of hot dogs represented 95% of product purchases for each of the fiscal years ended
March 31, 2024 and March 26, 2023. The Company’s primary distributor of products to its Company-owned restaurants
represented 3% of product purchases for each of the fiscal years ended March 31, 2024 and March 26, 2023. If a
disruption of service from a primary supplier or distributor was to occur, we could experience short-term increases in
our costs while supply or distribution channels were adjusted.

The Company’s revenues for the fiscal years ended March 31, 2024 and March 26, 2023 were derived from the following
geographic areas:

March 31,
2024

March 26,
2023

United States .................................................................................................. $
133,205 $
124,887
International ...................................................................................................
5,405
5,898
Total revenues ......................................................................................... $
138,610 $
130,785

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-20
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company’s revenues for the fiscal years ended March 31, 2024 and March 26, 2023 were derived from the following:

March 31,
2024

March 26,
2023

Branded Products ......................................................................................... $
86,489 $
78,884
Company-owned restaurants ........................................................................
12,103
12,161
License royalties...........................................................................................
33,581
33,455
Franchise royalties .......................................................................................
3,886
3,636
Franchise fees ...............................................................................................
470
656
Advertising fund revenue .............................................................................
2,081
1,993
Total revenues ....................................................................................... $
138,610 $
130,785

18. Advertising

The Company administers an Advertising Fund on behalf of its restaurant system to coordinate the marketing efforts of
the Company. Under this arrangement, the Company collects and disburses fees paid by manufacturers, franchisees and
Company-owned restaurants for national and regional advertising, promotional and public relations programs.
Contributions to the Advertising Fund are based on specified percentages of net sales, generally ranging up to 2%.
Company-owned restaurant advertising expense, which is expensed as incurred, was $117 and $126, for the fiscal years
ended March 31, 2024 and March 26, 2023, respectively, and have been included in “Restaurant operating expenses” in
the accompanying Consolidated Statements of Earnings.

19. Share-Based Compensation

At March 31, 2024, the Company had one share-based compensation plan in effect which is more fully described in Note
L.2.

The cost of all share-based payments, including grants of restricted stock units and stock options, is recognized in the
consolidated financial statements based on their fair values measured at the grant date, or the date of any later
modification, over the requisite service period. The Company recognizes compensation cost for unvested stock awards
on a straight-line basis over the requisite vesting period.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-21
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

20. Classification of Operating Expenses

Cost of sales consists of the following:

●
The cost of food and other products sold by Company-owned restaurants, through the

●
Branded Product Program and through other distribution channels.

●
The cost of labor and associated costs of Company-owned restaurants.

●
The cost of paper products used in Company-owned restaurants.

●
Other direct costs such as fulfillment, commissions, freight and samples.

Restaurant operating expenses consist of the following:

●
Occupancy costs of Company-owned restaurants.

●
Utility costs of Company-owned restaurants.

●
Repair and maintenance and other incidental expenses of Company-owned restaurants.

●
Marketing and advertising expenses done locally and contributions to advertising funds for Company-owned
restaurants.

●
Insurance costs directly related to Company-owned restaurants.

21. Income Taxes

The Company’s current provision for income taxes is based upon its estimated taxable income in each of the jurisdictions
in which it operates, after considering the impact on taxable income of temporary differences resulting from different
treatment of items for tax and financial reporting purposes. Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and any operating loss or tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary
differences are expected to be recovered or settled. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income in those periods in which temporary differences become deductible. Should
management determine that it is more likely than not that some portion of the deferred tax assets will not be realized, a
valuation allowance against the deferred tax assets would be established in the period such determination was made.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-22
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Uncertain Tax Positions

The Company has recorded liabilities for underpayment of income taxes and related interest and penalties for uncertain
tax positions based on the determination of whether tax benefits claimed or expected to be claimed on a tax return should
be recorded in the consolidated financial statements. The Company may recognize the tax benefit from an uncertain tax
position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities
based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from
such position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being
realized upon ultimate settlement. Nathan’s recognizes accrued interest and penalties associated with unrecognized tax
benefits as part of the income tax provision.

See Note H for a further discussion of our income taxes.

22. Adoption of New Accounting Standard

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, “Financial Instruments –
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“CECL”) which requires
measurement and recognition of expected versus incurred losses for financial assets held. The Company adopted ASU
2016-13 as of March 27, 2023 (the first day of fiscal 2024) under the modified retrospective method. Accordingly, the
consolidated financial statements have not been adjusted prior to the date of adoption.

Upon adoption, the Company recorded an increase to the allowance for credit losses of $252 and a cumulative effect
adjustment to retained earnings of $187, net of $65 of income taxes.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-23
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

23. New Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures” which provides guidance to improve reportable segment disclosure requirements, primarily
through enhanced disclosures about significant segment expenses. In addition, the guidance enhances interim disclosure
requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss,
provides new segment disclosure requirements for entities with a single reportable segment and contains other disclosure
requirements. The purpose of the guidance is to enable investors to better understand an entity’s overall performance and
assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and
interim periods within fiscal years beginning after December 15, 2024. For the Company, annual reporting requirements
will be effective for our fiscal year 2025 beginning on April 1, 2024 and interim reporting requirements will be effective
beginning with our fourth quarter of fiscal year 2025. Early adoption is permitted. Entities are required to adopt the
guidance on a retrospective basis. We are currently evaluating the impact that the new guidance will have on our
consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax
Disclosures” which updates income tax disclosure requirements primarily by requiring specific categories and greater
disaggregation within the rate reconciliation table and disaggregation of income taxes paid, net of refunds, by jurisdiction.
All entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The guidance is
effective for fiscal years beginning after December 15, 2024, which for us is our fiscal year 2026 beginning on March
31, 2025. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our
consolidated financial statements.

The Company does not believe that any other recently issued, but not yet effective accounting standards, when adopted,
will have a material effect on the accompanying consolidated financial statements.

NOTE C – NET INCOME PER SHARE

Basic net income per common share is calculated by dividing net income by the weighted average number of common
shares outstanding and excludes any dilutive effect of share-based awards. Diluted net income per common share gives
effect to all potentially dilutive common shares that were outstanding during the period. Dilutive common shares used
in the computation of diluted income per common share result from the assumed exercise of stock options as determined
using the treasury stock method.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-24
NOTE C – NET INCOME PER SHARE (continued)

The following chart provides a reconciliation of information used in calculating the per-share amounts for the fiscal years
ended March 31, 2024 and March 26, 2023, respectively:

March 31,

March 26,

2024

2023

Net income ....................................................................................................... $
19,616 $
19,623

Common Stock:

Weighted average basic shares outstanding ..................................................
4,081
4,089
Effect of dilutive share-based awards ...........................................................
6
1
Weighted average diluted shares outstanding ...............................................
4,087
4,090

Net income per share:

Basic ............................................................................................................. $
4.81 $
4.80
Diluted .......................................................................................................... $
4.80 $
4.80

Anti-dilutive share-based awards .....................................................................
10
10

NOTE D - ACCOUNTS AND OTHER RECEIVABLES, NET

Accounts and other receivables, net, consist of the following:

March 31,

March 26,

2024

2023

Branded product sales ..................................................................................... $
10,833 $
11,106
Franchise and license royalties .......................................................................
4,139
3,817
Other ...............................................................................................................
162
623

15,134
15,546

Less: allowance for credit losses .....................................................................
(403 )
(480 )

Accounts and other receivables, net ................................................................ $
14,731 $
15,066

The Company is exposed to credit losses through its trade accounts receivable. Trade accounts receivable are generally
due within 30 days and are stated at amounts due from franchisees, including virtual kitchens, retail licensees and
Branded Product Program customers, net of an allowance for credit losses. Accounts that are outstanding longer than the
contractual payment terms are generally considered past due.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-25
NOTE D - ACCOUNTS AND OTHER RECEIVABLES, NET (continued)

An allowance for credit losses is determined by pooling financial assets based on similar risk characteristics and
delinquency status under an aging method at the measurement date. The risk characteristics the Company generally
reviews when analyzing its trade accounts receivable pool include the type of receivable (for example, franchise
receivable, license receivable, Branded Product Program receivable), payment terms, the Company’s previous loss
history, current and future economic conditions and the length of time accounts receivables are past due. For those trade
accounts receivable that no longer share similar risk characteristics with its pool and potential loss is evident, a specific
reserve is recorded.

For pooled trade account receivables, the Company develops its allowance for credit losses by applying a historical loss
rate to each pool based on historical account write-off trends. The Company believes that the past five years provide a
reasonable representation of the Company’s operations and performance through various business cycles, both favorable
and unfavorable. The allowance for credit losses is then adjusted for current macroeconomic factors, including the effects
of inflation and reasonable and supportable forecasts of future economic conditions. The Company provides for expected
credit losses through a charge to earnings. After the Company has used reasonable collection efforts, it writes off accounts
receivable through a charge to the allowance for credit losses.

Changes in the Company’s allowance for credit losses for the fiscal years ended March 31, 2024 and March 26, 2023 are
as follows:

March 31,
2024

March 26,
2023

Beginning balance ............................................................................................ $
480 $
258
Cumulative effect of adoption of ASU 2016-13 ...........................................
252
-
Bad debt expense ..........................................................................................
157
457
Write offs and other ......................................................................................
(486 )
(235 )

Ending balance ................................................................................................. $
403 $
480

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-26
NOTE E - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

March 31,

March 26,

2024

2023

Income taxes .................................................................................................... $
858 $
146
Real estate taxes ...............................................................................................
93
78
Insurance ..........................................................................................................
268
389
Marketing .........................................................................................................
562
814
Other ................................................................................................................
395
468

Total prepaid expenses and other current assets ............................................... $
2,176 $
1,895

NOTE F - PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following:

March 31,

March 26,

2024

2023

Land ................................................................................................................. $
123 $
123
Building and improvements .............................................................................
1,414
1,414
Machinery, equipment, furniture and fixtures ..................................................
5,405
5,200
Leasehold improvements..................................................................................
7,418
7,392
Construction-in-progress ..................................................................................
-
63
Total property and equipment ..........................................................................
14,360
14,192
Less: accumulated depreciation and amortization ............................................
(11,687)
(10,871)

Property and equipment, net ............................................................................. $
2,673 $
3,321

Depreciation and amortization expense related to property and equipment was $961 for each of the fiscal years ended
March 31, 2024 and March 26, 2023.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-27
NOTE G – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

March 31,

March 26,

2024

2023

Payroll and other benefits ................................................................................. $
3,522 $
3,410
Accrued rebates ................................................................................................
693
698
Rent and occupancy costs ................................................................................
78
70
Deferred revenue ..............................................................................................
1,375
1,406
Interest ..............................................................................................................
1,676
2,143
Professional fees...............................................................................................
56
99
Sales, use and other taxes .................................................................................
41
76
Other ................................................................................................................
174
228
Total accrued expenses and other current liabilities ......................................... $
7,615 $
8,130

NOTE H – INCOME TAXES

The income tax provision consists of the following for the fiscal years ended March 31, 2024 and March 26,
2023:

March 31,

March 26,

2024

2023

Federal

Current .......................................................................................................... $
5,767 $
5,293
Deferred ........................................................................................................
118
137
Total Federal income tax ..............................................................................
5,885
5,430
State and local

Current ..........................................................................................................
1,903
1,681
Deferred ........................................................................................................
47
70
Total State and local income tax ...................................................................
1,950
1,751
Total provision for income taxes .................................................................. $
7,835 $
7,181

The income tax provisions for the fiscal years ended March 31, 2024 and March 26, 2023 reflect effective tax rates of
28.5% and 26.8%, respectively.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-28
NOTE H – INCOME TAXES (continued)

The total income tax provision for the fiscal years ended March 31, 2024 and March 26, 2023 differs from the amounts
computed by applying the United States Federal income tax rate of 21% to income before income taxes as a result of the
following:

March 31,

March 26,

2024

2023

Income tax provision at the U.S. Federal statutory rate ................................... $
5,765 $
5,629
State and local income taxes, net of U.S. Federal income tax benefit ..............
1,485
1,339
Change in uncertain tax positions, net ..............................................................
73
63
Nondeductible meals and entertainment and other...........................................
(24)
(45)
Nondeductible executive compensation ...........................................................
536
195
Total provision for income taxes .................................................................. $
7,835 $
7,181

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax
liabilities are presented below:

March 31,

March 26,

2024

2023

Deferred tax assets

Accrued expenses ......................................................................................... $
303 $
348
Allowance for credit losses ...........................................................................
101
120
Deferred revenue ..........................................................................................
305
402
Deferred stock compensation .......................................................................
28
78
Operating lease liability ................................................................................
1,505
1,550
Other .............................................................................................................
151
135
Total deferred tax assets ................................................................. $
2,393 $
2,633

Deferred tax liabilities

Deductible prepaid expense .......................................................................... $
150 $
147
Operating lease right-of-use asset .................................................................
1,373
1,390
Depreciation expense ....................................................................................
465
549
Amortization .................................................................................................
130
172
Total deferred tax liabilities ...........................................................
2,118
2,258
Net deferred tax asset ..................................................................... $
275 $
375

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-29
NOTE H – INCOME TAXES (continued)

A valuation allowance is provided when it is more likely than not that some portion, or all, of the deferred tax assets will
not be realized. We consider the level of historical taxable income, scheduled reversal of temporary differences, tax
planning strategies and projected future taxable income in determining whether a valuation allowance is warranted. Based
upon these considerations, management believes that it is more likely than not that the Company will realize the benefit
of its deferred tax asset.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits, excluding interest and
penalties, for the fiscal years ended March 31, 2024 and March 26, 2023:

March 31,
2024

March 26,
2023

Unrecognized tax benefits, beginning of year .................................................. $
432 $
403
Decreases of tax positions taken in prior years ................................................
(19 )
(16 )
Increases based on tax positions taken in current year .....................................
52
45
Unrecognized tax benefits, end of year ............................................................ $
465 $
432

The amount of unrecognized tax benefits included in Other liabilities at March 31, 2024 and March 26, 2023 were $465
and $432, respectively, all of which would impact Nathan’s effective tax rate, if recognized. As of March 31, 2024 and
March 26, 2023, the Company had $345 and $305, respectively, accrued for the payment of interest and penalties. For
the fiscal years ended March 31, 2024 and March 26, 2023 Nathan’s recognized interest and penalties in the amounts of
$41 and $33, respectively.

During the fiscal year ending March 30, 2025, we believe it is reasonably possible the amount of unrecognized tax
benefits, excluding the related accrued interest and penalties, could be reduced by up to $46, due primarily to the lapse
of statutes of limitations which would favorably impact Nathan’s effective tax rate, although no assurances can be given
in this regard.

On August 16, 2022 the United States enacted the Inflation Reduction Act. Among other provisions, this law imposes a
1% excise tax on stock buybacks made after December 31, 2022, with certain exceptions including stock repurchases of
less than $1,000 within a tax year. We do not expect this law to have a material impact on our consolidated financial
statements.

The earliest tax years that are subject to examination by taxing authorities by major jurisdictions are as follows:

Jurisdiction
Fiscal Year
Federal .......................................................
2021
New York State .........................................
2021
New York City ...........................................
2021
New Jersey .................................................
2020
California ...................................................
2020

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-30
NOTE I – SEGMENT INFORMATION

Nathan’s considers itself to be a brand marketer of the Nathan’s Famous signature products to the foodservice industry
pursuant to its various business structures. Nathan’s sells its products directly to consumers through its restaurant
operations segment consisting of Company-owned and franchised restaurants, including virtual kitchens, to distributors
that resell our products to the foodservice industry through the Branded Product Program and by third party
manufacturers pursuant to license agreements that sell our products to supermarkets, club stores and grocery stores
nationwide. The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker
(“CODM”) who regularly reviews operating results, evaluates performance and allocates resources for the Branded
Product Program, Product Licensing and Restaurant Operations segments based upon a number of factors, the primary
profit measure being income from operations. Certain administrative expenses are not allocated to the segments and are
reported within the Corporate segment.

Branded Product Program – This segment derives revenue principally from the sale of hot dog products either directly
to foodservice operators or to various foodservice distributors who resell the products to foodservice operators.

Product licensing – This segment derives revenue, primarily in the form of royalties, from licensing a broad variety of
Nathan’s Famous branded products, including our hot dogs, sausages, frozen crinkle-cut French fries and additional
products through retail supermarkets, grocery channels and club stores throughout the United States.

Restaurant operations – This segment derives revenue from the sale of our products at Company-owned restaurants and
earns fees and royalties from its franchised restaurants, including its virtual kitchens.

Revenues from operating segments are from transactions with unaffiliated third parties and do not include any
intersegment revenues.

Income from operations attributable to Corporate consists principally of administrative expenses not allocated to the
operating segments such as executive management, finance, information technology, legal, insurance, corporate office
costs, corporate incentive compensation and compliance costs and expenses of the Advertising Fund.

Interest expense, loss on debt extinguishment, interest income and other income, net, are managed centrally at the
corporate level, and, accordingly, such items are not presented by segment since they are excluded from the measure of
profitability reviewed by the CODM.

Corporate assets consist primarily of cash and long-lived assets.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-31
NOTE I – SEGMENT INFORMATION (continued)

Operating segment information for the fiscal years ended March 31, 2024 and March 26, 2023 is as follows:

March 31,
2024

March 26,
2023

Revenues

Branded Product Program .................................................................................. $
86,489 $
78,884
Product licensing ................................................................................................
33,581
33,455
Restaurant operations .........................................................................................
16,459
16,453
Corporate (1) ......................................................................................................
2,081
1,993
Total revenues ...................................................................................... $
138,610 $
130,785

Income from operations

Branded Product Program .................................................................................. $
8,284 $
8,976
Product licensing ................................................................................................
33,399
33,273
Restaurant operations .........................................................................................
1,661
1,684
Corporate ............................................................................................................
(10,838)
(9,488 )
Income from operations ....................................................................... $
32,506 $
34,445

Interest expense .................................................................................................. $
(5,355) $
(7,742 )
Loss on debt extinguishment ..............................................................................
(169)
(357 )
Interest income ...................................................................................................
383
440
Other income, net ...............................................................................................
86
18
Income before provision for income taxes ........................................... $
27,451 $
26,804

Total assets

Branded Product Program .................................................................................. $
11,777 $
12,033
Product licensing ................................................................................................
3,602
3,376
Restaurant operations .........................................................................................
8,303
9,296
Corporate ............................................................................................................
25,176
33,905
Total assets ........................................................................................... $
48,858 $
58,610

Depreciation & amortization expense

Branded Product Program .................................................................................. $
144 $
132
Restaurant operations .........................................................................................
700
716
Corporate ............................................................................................................
291
287
Total depreciation & amortization expense ......................................... $
1,135 $
1,135

(1) Represents advertising fund revenue.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-32
NOTE J – LONG-TERM DEBT

Long-term debt consists of the following:

March 31,

March 26,

2024

2023

6.625% Senior Secured Notes due 2025 .......................................................... $
60,000 $
80,000
Less: unamortized debt issuance costs .............................................................
(438)
(952)
Long-term debt, net ...................................................................................... $
59,562 $
79,048

On November 1, 2017, the Company issued $150,000 of 6.625% Senior Secured Notes due 2025 (the "2025 Notes") in
a private offering in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).
The 2025 Notes were issued pursuant to an indenture dated as of November 1, 2017 by and among the Company, certain
of its wholly-owned subsidiaries and U.S. Bank Trust Company, National Association (formerly U.S. Bank National
Association) (the “Indenture”). The Company used the net proceeds of the 2025 Notes offering to satisfy and discharge
the Indenture relating to the $135,000 of 10.000% Senior Secured Notes due 2020 and redeemed such Notes (the
"Redemption"), paid a portion of a special $5.00 per share cash dividend to Nathan's stockholders of record, and used
the remaining net proceeds for general corporate purposes, including working capital. The Company also funded the
majority of the special dividend of $5.00 per share through its existing cash. The Redemption occurred on November 16,
2017.

The 2025 Notes bear interest at 6.625% per annum, payable semi-annually on May 1st and November 1st of each year.
The Company made its required semi-annual interest payments of $2,650 on May 1, 2023 and November 1, 2023. On
May 1, 2024, the Company paid its first semi-annual interest payment of $1,987 for fiscal 2025.

The 2025 Notes have no scheduled principal amortization payments prior to its final maturity on November 1, 2025.

Redemptions

On November 14, 2023, the Company announced its intent to complete the partial redemption, in the principal amount
of $20,000, of the 2025 Notes in accordance with the terms and conditions of the Indenture. The redemption price of the
redeemed notes was 100% of the principal amount, plus accrued and unpaid interest from, and including November 1,
2023 to, but excluding the redemption date of December 19, 2023. On December 19, 2023, the Company completed the
partial redemption by paying cash of $20,177, inclusive of accrued interest of $177, and recognized a loss on early
extinguishment of $169 that reflected the write-off of a portion of previously recorded debt issuance costs.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-33
NOTE J – LONG-TERM DEBT (continued)

On February 14, 2023, the Company announced its intent to complete the partial redemption, in the principal amount of
$30,000, of the 2025 Notes in accordance with the terms and conditions of the Indenture. The redemption price of the
redeemed notes was 100% of the principal amount, plus accrued and unpaid interest from, and including November 1,
2022 to, but excluding the redemption date of March 21, 2023. On March 21, 2023, the Company completed the partial
redemption by paying cash of $30,773, inclusive of accrued interest of $773, and recognized a loss on early
extinguishment of $357 that reflected the write-off of a portion of previously recorded debt issuance costs.

Covenants and restrictions

The terms and conditions of the 2025 Notes are as follows (terms not defined shall have the meanings set forth in the
Indenture):

There are no ongoing financial maintenance covenants associated with the 2025 Notes. As of March 31, 2024, Nathan’s
was in compliance with all covenants associated with the 2025 Notes.

The Indenture contains certain covenants and restrictions limiting the Company’s ability and the ability of its restricted
subsidiaries (as defined in the Indenture) to, subject to certain exceptions and qualifications: (i) incur additional
indebtedness; (ii) pay dividends or make other distributions on, redeem or repurchase, capital stock; (iii) make
investments or other restricted payments; (iv) create or incur certain liens; (v) incur restrictions on the payment of
dividends or other distributions from its restricted subsidiaries; (vi) enter into certain transactions with affiliates; (vii)
sell assets; or (viii) effect a consolidation or merger. Certain Restricted Payments which may be made or indebtedness
incurred by Nathan’s or its Restricted Subsidiaries may require compliance with the following financial ratios:

Fixed Charge Coverage Ratio: the ratio of the Consolidated Cash Flow to the Fixed Charges for the relevant period,
currently set at 2.0 to 1.0 in the Indenture. The Fixed Charge Coverage Ratio applies to determining whether
additional Restricted Payments may be made, certain additional debt may be incurred and acquisitions may be made.

Priority Secured Leverage Ratio : the ratio of (a) Consolidated Net Debt outstanding as of such date that is secured by a
Priority Lien to (b) Consolidated Cash Flow of Nathan’s for the Test Period then most recently ended, in each case
with such pro forma adjustments as are appropriate; currently set at 0.40 to 1.00 in the Indenture.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-34
NOTE J – LONG-TERM DEBT (continued)

Secured Leverage Ratio: the ratio of (a) Consolidated Net Debt outstanding as of such date that is secured by a Lien on
any property of Nathan’s or any Guarantor to (b) Consolidated Cash Flow of Nathan’s for the Test Period then most
recently ended, in each case with such pro forma adjustments as are appropriate. The Secured Leverage Ratio under
the Indenture is 3.75 to 1.00 and applies if Nathan’s wants to incur additional debt on the same terms as the 2025
Notes.

The Indenture also contains customary events of default, including, among other things, failure to pay interest, failure to
comply with agreements related to the Indenture, failure to pay at maturity or acceleration of other indebtedness, failure
to pay certain judgments, and certain events of insolvency or bankruptcy. Generally, if any event of default occurs, the
Trustee or the holders of at least 25% in principal amount of the 2025 Notes may declare the 2025 Notes due and payable
by providing notice to the Company. In case of default arising from certain events of bankruptcy or insolvency, the 2025
Notes will become immediately due and payable.

Guarantees

The 2025 Notes are general senior secured obligations, are fully and unconditionally guaranteed by substantially all of
the Company’s wholly-owned subsidiaries and rank pari passu in right of payment with all of the Company’s existing
and future indebtedness that is not subordinated, are senior in right of payment to any of the Company’s existing and
future subordinated indebtedness, are structurally subordinated to any existing and future indebtedness and other
liabilities of the Company’s subsidiaries that do not guarantee the 2025 Notes, and are effectively junior to all existing
and future indebtedness that is secured by assets other than the collateral securing the 2025 Notes.

Pursuant to the terms of a collateral trust agreement, the liens securing the 2025 Notes and the guarantees will be
contractually subordinated to the liens securing any future credit facility.

Change of Control

In certain circumstances involving a change of control, the Company will be required to make an offer to repurchase all
or, at the holder’s option, any part, of each holder’s 2025 Notes pursuant to the offer described below (the “Change of
Control Offer”). In the Change of Control Offer, the Company will be required to offer payment in cash equal to 101%
of the aggregate principal amount of 2025 Notes repurchased plus accrued and unpaid interest, to the date of purchase.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-35
NOTE J – LONG-TERM DEBT (continued)

Asset Sale Offer

If the Company sells certain collateralized assets and does not use the net proceeds as required, the Company will be
required to use such net proceeds to repurchase the 2025 Notes at 100% of the principal amount thereof, plus accrued
and unpaid interest and additional interest penalty, if any, to the date of repurchase.

The 2025 Notes may be traded between qualified institutional buyers pursuant to Rule 144A of the Securities Act. The
2025 Notes are recorded at cost.

NOTE K – LEASES

The Company is party as lessee to various leases for its Company-owned restaurants and lessee/sublessor to one
franchised location property, including land and buildings, as well as leases for its corporate office and certain office
equipment.

Company as lessee

The components of the net lease cost for the fiscal years ended March 31, 2024 and March 26, 2023 were as follows:

March 31,

March 26,

2024

2023

Operating lease cost ..................................................................................... $
1,580 $
1,548
Variable lease cost ........................................................................................
1,751
1,614
Less: Sublease income, net ...........................................................................
(87 )
(85)

Total net lease cost ....................................................................................... $
3,244 $
3,077

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-36
NOTE K – LEASES (continued)

The components of the net lease cost on the Consolidated Statement of Earnings for the fiscal years ended March 31,
2024 and March 26, 2023 were as follows:

March 31,

March 26,

2024

2023

Restaurant operating expenses ..................................................................... $
2,535 $
2,416
General and administrative expenses ...........................................................
796
746
Less: Other income, net ................................................................................
(87 )
(85)

Total net lease cost ....................................................................................... $
3,244 $
3,077

Cash paid for amounts included in the measurement of lease liabilities for the fiscal years ended March 31, 2024 and
March 26, 2023 were as follows:

March 31,

March 26,

2024

2023

Operating cash flows from operating leases ................................................. $
1,259 $
1,171

The weighted average remaining lease term and weighted average discount rate for operating leases for the fiscal years
ended March 31, 2024 and March 26, 2023 were as follows:

March 31,

March 26,

2024

2023

Weighted average remaining lease term (years): .........................................
4.4
5.3

Weighted average discount rate: ..................................................................
8.480%
8.859%

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-37
NOTE K – LEASES (continued)

Future lease commitments to be paid and received by the Company as of March 31, 2024 were as follows:

Payments

Receipts

Operating Leases
Subleases

Net Leases

Fiscal year:

2025 .............................................................. $
1,887 $
274 $
1,613
2026 ..............................................................
1,923
278
1,645
2027 ..............................................................
1,931
281
1,650
2028 ..............................................................
1,781
129
1,652
2029 ..............................................................
434
118
316
Thereafter .....................................................
171
376
(205 )
Total lease commitments ........................................ $
8,127 $
1,456 $
6,671
Less: Amount representing interest .........................
(1,303 )

Present value of lease liabilities (a) ......................... $
6,824

(a) The present value of minimum operating lease payments of $1,887 and $4,937 are included in “Current portion of
operating lease liabilities” and “Long-term operating lease liabilities,” respectively, on the Consolidated Balance
Sheet.

Company as lessor

The components of lease income for the fiscal years ended March 31, 2024 and March 26, 2023 were as follows:

March 31,

March 26,

2024

2023

Operating lease income, net ......................................................................... $
87 $
85

NOTE L – STOCKHOLDERS’ EQUITY, STOCK PLANS AND OTHER EMPLOYEE BENEFIT PLANS

1.
Dividends

During fiscal year 2024 and fiscal year 2023, the Company paid dividends per share of $2.00 and $1.85, respectively.

Effective June 12, 2024, the Board declared its first quarterly cash dividend of $0.50 per share for fiscal year 2025,
which is payable on July 2, 2024 to stockholders of record as of the close of business on June 24, 2024.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-38
NOTE L – STOCKHOLDERS’ EQUITY, STOCK PLANS AND OTHER EMPLOYEE BENEFIT PLANS
(continued)

Our ability to pay future dividends is limited by the terms of the Indenture with U.S. Bank Trust Company, National
Association (formerly U.S. Bank National Association), as trustee and collateral trustee. In addition to the terms of
the Indenture, the declaration and payment of any cash dividends in the future are subject to final determination of
the Board and will be dependent upon our earnings and financial requirements.

2.
Stock Incentive Plan

On September 18, 2019, the Company’s shareholders approved the Nathan’s Famous, Inc. 2019 Stock Incentive
Plan (the “2019 Plan”). The 2019 Plan became effective as of July 1, 2020 (the "Effective Date"). Following the
Effective Date, (i) no additional stock awards were granted under the 2010 Plan and (ii) all outstanding stock awards
previously granted under the 2010 Plan remained subject to the terms of the 2010 Plan. All awards granted on or
after the Effective Date are subject to the terms of the 2019 Plan.

As of the Effective Date, we were able to issue up to: (a) 369,584 shares of common stock under the 2019 Plan
which includes: (i) shares that have been authorized but not issued pursuant to the 2010 Plan as of the Effective Date
up to a maximum of an additional 208,584 shares and (ii) any shares subject to any outstanding options or restricted
stock grants under any plan of the Company that were outstanding as of the Effective Date and that subsequently
expire unexercised, or were otherwise forfeited, up to a maximum of an additional 11,000 shares. As of March 31,
2024, there were up to 134,808 shares available to be issued for future option grants or up to 148,584 shares of
restricted stock to be granted under the 2019 Plan.

In general, options granted under the Company’s stock incentive plans have terms of five or ten years and vest over
periods of between three and five years. The Company has historically issued new shares of common stock for
options that have been exercised and used the Black-Scholes option valuation model to determine the fair value of
options granted at the grant date.

Share-based compensation:

The Company recognizes compensation cost for unvested share-based awards on a straight-line basis over the
requisite service period. Compensation expense under all share-based awards for the fiscal years ended March 31,
2024 and March 26, 2023 is as follows:

March 31,

March 26,

2024

2023

Stock options ......................................................................................... $
58 $
33
Restricted stock units ............................................................................
675
225

$
733 $
258

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-39
NOTE L – STOCKHOLDERS’ EQUITY, STOCK PLANS AND OTHER EMPLOYEE BENEFIT PLANS
(continued)

As of March 31, 2024, there was $2,660 of unamortized compensation expense related to share-based awards. The
Company expects to recognize this expense over approximately 39 months, which represents the weighted average
remaining requisite service periods for such awards.

Stock options:

During the fiscal year ended March 31, 2024, the Company granted options to purchase 10,000 shares at an exercise
price of $78.00 per share, all of which expire five years from the date of grant. All such options vest ratably over a
four year period commencing August 11, 2023.

The weighted average option fair values, as determined using the Black-Scholes option valuation model, and the
assumptions used to estimate these values for stock options granted during the fiscal year ended March 31, 2024
were as follows:

Weighted-average option fair values ...................................................................................... $
16.23
Expected life (years) ..............................................................................................................
4.4
Interest rate .............................................................................................................................
4.31%
Volatility ................................................................................................................................
24.29%
Dividend yield ........................................................................................................................
2.56%

The expected dividend yield is based on historical and projected dividend yields. The Company estimates volatility
based primarily on historical monthly price changes of the Company’s stock equal to the expected life of the option.
The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant. The expected option term
is the number of years the Company estimates the options will be outstanding prior to exercise based on expected
historical exercise patterns and employment termination behavior.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-40
NOTE L – STOCKHOLDERS’ EQUITY, STOCK PLANS AND OTHER EMPLOYEE BENEFIT PLANS
(continued)

A summary of the status of the Company’s stock options at March 31, 2024 and March 26, 2023 and changes during
the fiscal years then ended is presented in the tables below:

March 31, 2024

Weighted

Weighted
Average

Average
Remaining
Aggregate

Exercise
Contractual
Intrinsic

Price

Life

Value

Options outstanding – beginning of year .......
20,000 $
79.20
1.92 $
40

Granted .......................................................
10,000 $
78.00
4.37
-

Expired .......................................................
(10,000) $
89.90
-
-

Options outstanding - end of year ..................
20,000 $
73.25
3.36 $
23

Options exercisable - end of year ...................
5,000 $
68.50
2.36 $
12

March 26, 2023

Weighted

Average

Average
Remaining
Aggregate

Exercise
Contractual
Intrinsic

Price

Life

Value

Options outstanding – beginning of year .......
20,000 $
79.20
2.92

Granted .......................................................
-
-

Expired .......................................................
-
-

Exercised ....................................................
-
-

Options outstanding - end of year ..................
20,000 $
79.20
1.92 $
40

Options exercisable - end of year ...................
12,500 $
85.62
1.05 $
10

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-41
NOTE L – STOCKHOLDERS’ EQUITY, STOCK PLANS AND OTHER EMPLOYEE BENEFIT PLANS
(continued)

Restricted stock units:

During the fiscal year ended March 26, 2023, the Company granted 50,000 restricted stock units at a fair value of
$67.59 per unit representing the closing price on the date of grant, which will be fully vested five years from the
date of grant. The restricted stock units vest ratably over a five year period as follows: 10,000 restricted stock units
on December 8, 2023; 10,000 restricted units on December 8, 2024; 10,000 restricted stock units on December 8,
2025; 10,000 restricted stock units on December 8, 2026; and 10,000 restricted stock units on December 8, 2027.

A summary of the status of the Company’s restricted stock units at March 31, 2024 and March 26, 2023 and changes
during the fiscal years then ended are presented in the tables below:

March 31, 2024

Weighted

Average

Grant-date

Fair value

Per share

Unvested restricted stock units – beginning of year ................................
50,000 $
67.59

Granted .................................................................................................
-
-

Vested ..................................................................................................
(10,000 ) $
67.59

Unvested restricted stock units – end of year ..........................................
40,000 $
67.59

The aggregate fair value of restricted stock units vested during the fiscal year ended March 31, 2024 was $710.

March 26, 2023

Weighted

Average

Grant-date

Fair value

Per share

Unvested restricted stock units – beginning of year ................................
- $
-

Granted .................................................................................................
50,000 $
67.59

Vested ..................................................................................................
- $
-

Unvested restricted stock units – end of year ..........................................
50,000 $
67.59

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-42
NOTE L – STOCKHOLDERS’ EQUITY, STOCK PLANS AND OTHER EMPLOYEE BENEFIT PLANS
(continued)

3. Stock Repurchase Programs

On June 14, 2022, the Board approved a 10b5-1 Plan (the “10b5-1 Plan”) which expired on September 13, 2022.
During the fiscal year ended March 26, 2023, the Company repurchased in open market transactions 35,434 shares
of the Company’s common stock at an average share price of $53.39 for a total cost of $1,892 under the 10b5-1
Plan.

In 2016, the Board authorized increases to the sixth stock repurchase plan for the purchase of up to 1,200,000 shares
of its common stock on behalf of the Company. As of March 31, 2024, Nathan’s had repurchased 1,101,884 shares
at a cost of $39,000 under the sixth stock repurchase plan. At March 31, 2024, there were 98,116 shares remaining
to be repurchased pursuant to the sixth stock repurchase plan. The plan does not have a set expiration date. Purchases
under the Company’s stock repurchase program may be made from time to time, depending on market conditions,
in open market or privately negotiated transactions, at prices deemed appropriate by management. There is no set
time limit on the repurchases.

4.
Employment Agreements

Effective January 1, 2007, Howard M. Lorber, previously Chairman of the Board and Chief Executive Officer,
assumed the position of Executive Chairman of the Board of Nathan’s and Eric Gatoff, previously Vice President
and Corporate Counsel, became Chief Executive Officer of Nathan’s. In connection with the foregoing, the
Company entered into an employment agreement with each of Messrs. Lorber (as amended, the “Lorber
Employment Agreement”) and Gatoff (as amended, the “Gatoff Employment Agreement”).

Mr. Lorber receives a base salary of $1,000. On December 8, 2022, the Company entered into Amendment No. 3 to
the Lorber Employment Agreement. Under the amendment, the term of the employment agreement was extended
from December 31, 2022 to December 31, 2027. In addition, Mr. Lorber received a grant of 50,000 restricted stock
units under the Company’s 2019 Stock Incentive Plan which vest in equal installments over five years. The Lorber
Employment Agreement provides for a three-year consulting period after the termination of employment during
which Mr. Lorber will receive a consulting fee of $200 per year in exchange for his agreement to provide no less
than 15 days of consulting services per year, provided, Mr. Lorber is not required to provide more than 50 days of
consulting services per year.

The Lorber Employment Agreement provides Mr. Lorber with the right to participate in employment benefits offered
to other Nathan’s executives. During and after the contract term, Mr. Lorber is subject to certain confidentiality,
non-solicitation and non-competition provisions in favor of the Company.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-43
NOTE L – STOCKHOLDERS’ EQUITY, STOCK PLANS AND OTHER EMPLOYEE BENEFIT PLANS
(continued)

In the event that Mr. Lorber’s employment is terminated without cause, he is entitled to receive his salary and bonus
for the remainder of the contract term. The Lorber Employment Agreement further provides that in the event there
is a change in control, as defined in the agreement, Mr. Lorber has the option, exercisable within one year after such
event, to terminate the agreement. Upon such termination, he has the right to receive a lump sum cash payment equal
to the greater of (A) his salary and annual bonuses for the remainder of the employment term (including a prorated
bonus for any partial fiscal year), which bonus shall be equal to the average of the annual bonuses awarded to him
during the three fiscal years preceding the fiscal year of termination; or (B) 2.99 times his salary and annual bonus
for the fiscal year immediately preceding the fiscal year of termination, in each case together with a lump sum cash
payment equal to the difference between the exercise price of any exercisable options having an exercise price of
less than the then current market price of the Company’s common stock and such then current market price. In
addition, Nathan’s will provide Mr. Lorber with a tax gross-up payment to cover any excise tax due.

In the event of termination due to Mr. Lorber’s death or disability, he is entitled to receive an amount equal to his
salary and annual bonuses for a three-year period, which bonus shall be equal to the average of the annual bonuses
awarded to him during the three fiscal years preceding the fiscal year of termination.

Under the terms of the Gatoff Employment Agreement, Mr. Gatoff initially served as Chief Executive Officer from
January 1, 2007 until December 31, 2008, which period automatically extends for additional one-year periods unless
either party delivers notice of non-renewal no less than 180 days prior to the end of the term then in effect.
Consequently, the Gatoff Employment Agreement is expected to be extended through December 31, 2025, based on
the original terms, and no non-renewal notice has been given.

Pursuant to the agreement, Mr. Gatoff receives a base salary, currently $625 and an annual bonus based on his
performance measured against the Company’s financial, strategic and operating objectives as determined by the
Compensation Committee. The Gatoff Employment Agreement provides for an automobile allowance and the right
of Mr. Gatoff to participate in employment benefits offered to other Nathan’s executives. The employment
agreement automatically extends for successive one-year periods unless notice of non-renewal is provided in
accordance with the agreement. During and after the contract term, Mr. Gatoff is subject to certain confidentiality,
non-solicitation and non-competition provisions in favor of the Company.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-44
NOTE L – STOCKHOLDERS’ EQUITY, STOCK PLANS AND OTHER EMPLOYEE BENEFIT PLANS
(continued)

Each employment agreement terminates upon death or voluntary termination by the respective employee or may be
terminated by the Company on up to 30-days’ prior written notice by the Company in the event of disability or
“cause,” as defined in each agreement.

5.
Defined Contribution and Union Pension Plans

The Company has a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code
covering all nonunion employees over age 21, who have been employed by the Company for at least one year.
Employees may contribute to the plan, on a tax-deferred basis, up to 20% of their total annual salary. Historically,
the Company has matched contributions at a rate of $.25 per dollar contributed by the employee on up to a maximum
of 3% of the employee’s total annual salary. Employer contributions for the fiscal years ended March 31, 2024 and
March 26, 2023 were $38 and $35 and are included in general and administrative expenses on the Consolidated
Statements of Earnings.

The Company participates in a noncontributory, multi-employer, defined benefit pension plan (the “Union Plan”)
covering substantially all of the Company’s union-represented employees. The risks of participating in the Union
Plan are different from a single-employer plan in the following aspects: (a) assets contributed to the Union Plan by
one employer may be used to provide benefits to employees of other participating employers; (b) if a participating
employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining
participating employers; and (c) if the Company chooses to stop participating in the Union Plan, the Company may
be required to pay the Union Plan an amount based on the underfunded status of the Union Plan, referred to as a
withdrawal liability. The most recent estimate of our potential withdrawal liability is $378 as of December 31, 2023.
The Company has no plans or intentions to stop participating in the plan as of March 31, 2024 and does not believe
that there is a reasonable possibility that a withdrawal liability will be incurred. Any adjustment for withdrawal
liability will be recorded only when it is probable that a liability exists and can be reasonably estimated, in
accordance with GAAP. Contributions to the Union Plan were $8 and $9 for the fiscal years ended March 31, 2024
and March 26, 2023, respectively.

6.
Other Benefits

The Company provides, on a contributory basis, medical benefits to active employees. The Company does not
provide medical benefits to retirees.

Nathan’s Famous, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

March 31, 2024 and March 26, 2023

F-45
NOTE M – CONTINGENCIES

Legal Proceedings

The Company and its subsidiaries are from time to time involved in ordinary and routine litigation. Management
presently believes that the ultimate outcome of these proceedings, individually or in the aggregate, will not have a
material adverse effect on the Company’s financial position, cash flows or results of operations. Nevertheless,
litigation is subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling could
include money damages and, in such event, could result in a material adverse impact on the Company’s results of
operations for the period in which the ruling occurs.

NOTE N - RELATED PARTY TRANSACTIONS

A firm to which the Company’s Executive Chairman of the Board is as an investor, and the firm’s affiliates, received
ordinary and customary insurance commissions aggregating approximately $11 and $18 for the fiscal years ended
March 31, 2024 and March 26, 2023, respectively.

NOTE O - SUBSEQUENT EVENTS

The Company evaluated subsequent events through the date the consolidated financial statements were issued and
filed with the U.S. Securities and Exchange Commission. There were no subsequent events that required recognition
or disclosure.

Nathan’s Famous, Inc. and Subsidiaries
2024 FORWARD-LOOKING STATEMENTS DISCLAIMER
Except for historical information contained herein, 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 Nathan’s Famous,
Inc.’s (“we,” “us,” “our” or the “Company”) management, as well as assumptions made by and information currently avail-
able to the Company’s management. Among the factors that could cause actual results to differ materially include but are
not limited to: the impact of disease epidemics such as the COVID-19 pandemic; increases in the cost of food and paper
products; the impact of price increases on customer visits; the status of our licensing and supply agreements, including our
licensing revenue and overall profitability being substantially dependent on our agreement with Smithfield Foods, Inc.; the
impact of our debt service and repayment obligations under our debt instruments, including the effect on our ability to fund
working capital, operations and make new investments; economic (including inflationary pressures like those currently
being experienced); weather (including the impact on sales at our restaurants particularly during the summer months), and
changes in the price of beef trimmings; our ability to pass on the cost of any price increases in beef and beef trimmings;
legislative and business conditions; the collectability of receivables; changes in consumer tastes; the continued viability
of Coney Island as a destination location for visitors; the ability to attract franchisees; the impact of the minimum wage
legislation on labor costs in New York State or other changes in labor laws, including regulations which could render a
franchisor as a “joint employee” or the impact of our union contracts; our ability to attract competent restaurant and
managerial personnel; the enforceability of international franchising agreements; the future effects of any food borne
illness, such as bovine spongiform encephalopathy, BSE and e coli; and the risk factors reported from time to time in the
Company’s SEC reports. The Company does not undertake any obligation to update such forward-looking statements.

Nathan’s Famous, Inc. & Subsidiaries
Corporate Directory
LIST OF DIRECTORS
Howard M. Lorber
Executive Chairman of the Board,
Nathan’s Famous, Inc.
Eric Gatoff
Chief Executive Officer,
Nathan’s Famous, Inc.
Wayne Norbitz
Former President, and
Chief Operating Officer,
Nathan’s Famous, Inc.
Robert J. Eide
Chairman & Chief Executive Officer,
AEGIS Capital Corp.
Barry Leistner
President & Chief Executive Officer,
Koenig Iron Works, Inc.
Brian S. Genson
President, F1Collectors.com
A.F. Petrocelli
Owner—Retired,
United Capital Corp.
Joanne Podell
Executive Vice Chairman,
Retail Services—
Cushman & Wakefield
Charles Raich
Retired Founding Partner,
Raich, Ende, Malter & Co. LLP
Andrew M. Levine
Director of Real Estate,
Fingerboard Family Office
FORM 10-K
The Company’s annual report
on Form 10-K as filed with the
Securities and Exchange
Commission, is available without
charge upon written request:
Secretary, Nathan’s Famous, Inc.
One Jericho Plaza
Second Floor—Wing A
Jericho, New York 11753
CORPORATE
HEADQUARTERS
One Jericho Plaza
Second Floor—Wing A
Jericho, New York 11753
Telephone 516-338-8500
COMPANY WEBSITE
www.nathansfamous.com
ANNUAL
SHAREHOLDERS’
MEETING
The Annual Meeting of
Shareholders of the Company
will be held at 10:00 a.m., EST
on Tuesday, September 10, 2024,
in the Corporate Headquarters
of Nathan’s Famous, Inc.
One Jericho Plaza
Second Floor—Wing A
Jericho, New York 11753
LIST OF OFFICERS
Howard M. Lorber
Executive Chairman of the Board
Eric Gatoff
Chief Executive Officer
Robert Steinberg
Vice President—Finance,
Chief Financial Officer, Treasurer
and Secretary
Leigh Platte
Senior Vice President—Food Service
INDEPENDENT
REGISTERED PUBLIC
ACCOUNTING FIRM
Marcum LLP
730 3rd Avenue
New York, New York 10017
CORPORATE COUNSEL
Akerman LLP
1251 Avenue of the Americas
37th Floor
New York, New York 10020
TRANSFER AGENT
Equiniti Trust Company, LLC
48 Wall Street, Floor 23
New York, NY 10005

One Jericho Plaza, Second Floor – Wing A, Jericho, New York 11753
www.nathansfamous.com