Restaurant Monthly March 2015

Restaurant Industry Commentary

The restaurant industry posted comparable sales growth of 2.1% in February—its eighth consecutive month of positive comparable figures—despite a decline in comparable traffic of 1.0%, according to Blackbox Intelligence. Operators are optimistic towards 2015, as consumer sentiment remains strong and performance continues to hold in the face of erratic weather patterns nationwide over the first two months of the year. M&A activity continued to ramp throughout February and the first half of March.Redrock Partners has announced its acquisition of Romano’s Macaroni Grill for $8 million, a paltry sum relative to the $55 million that Ignite Restaurant Group paid for the concept in April of 2013. Not surprisingly, Redrock Partners views the expansion of Fast Casual concept Romano’s Kitchen Counter as central to the new company’s growth thesis. Also hitting the press in March, Boyne Capital Partners sold 227 unit YUM! franchisee KBP Foods. Fast Casual concepts continue to top public market valuations, with leading concepts and Zoe’s Kitchen commanding outsized valuations due to lofty growth expectations.

Current Restaurant Valuations by Price Point (TEV / EBITDA) 19.9x 20.0x 16.6x 15.7x 16.3x 13.8x 13.4x 15.0x 12.1x 11.8x 10.6x 9.6x 10.0x

5.0x 15.0x 13.3x15.0x 13.8x 13.3x 13.3x 13.8x 13.3x 12.3x 12.3x — 8.5x QSR 8.5x 8.9x 9.1x 8.9x 9.1x Family Dining 10.0x 10.0x 8.0x 8.0xFast Casual 7.8x 7.4x 7.8x 7.4x Casual Dining Premium Dining Median TEV / LTM EBITDA Median TEV / 2015E EBITDA 5.0x 5.0x

— — Public Market Performance (Latest Twelve Months) 140 126 130 123 120 113 110 107 100 105

Segment Index 90 105 80 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 S&P 500 QSR Fast Casual Family Dining Casual Dining Premium Dining Recent Restaurant M&A Activity

($ in millions) Closed / Enterprise Industry Announced Target Acquiror Value EBITDA / Value Multiple Segment 03/18/2015 BGR Holdings Chanticleer Holdings (NasdaqCM:HOTR) NA NA / NA Fast Casual 03/17/2015A KBP Foods Undisclosed NA NA / NA QSR 03/17/2015A Catalina Restaurant Group Food Management Partners NA NA / NA Casual 03/15/2015 Mary's Phoenix Investors NA NA / NA Casual 03/12/2015A Holdings Levy Acquisition Corp. $500.0 NA / NA Casual 03/12/2015A 26 Denny's Restaurants RJC, LLC NA NA / NA Family 03/12/2015 23 Stores Jamba, Inc. (NasdaqGM:JMBA) NA NA / NA QSR 03/10/2015A Macaroni Grill RedRock Partners $8.0 NA / NA Casual 03/06/2015 T-Bird Restaurant Group H.I.G. Capital NA NA / NA Casual 02/13/2015 Cotton Patch Cafe Altamont Capital Partners NA NA / NA Fast Casual 02/06/2015 5 Wendy's Restaurants in New Jersey The Briad Group NA NA / NA QSR 02/02/2015A 45 Domino's Restaurants in Indiana RPM Pizza NA NA / NA QSR

Indices consist of all publicly-available information for restaurant operators in their respective price points. For full listing, please contact the TM Capital Restaurant Practice. Quarterly Gainers & Losers Same Store Sales by Price Point by Price Point Decliners / Gainers 10.0%

Q4 '14 7.5% Q3 '14 Q2 '14 Q1 '14 5.0% Q4 '13 Q3 '13 Q2 '13 Q1 '13 2.5% Q4 '12 Q3 '12 Q2 '12 ― Q1 '12 Q4 '11 Q3 '11 Q2 '11 (2.5%) Q1 '11 Q4 '10 Q3 '10 (5.0%) Q2 '10 Q1 '10 Q4 '09 Quick Service Q3 '09 (7.5%) Q2 '09 Q1 '09 Q4 '08 Same Store Sales Growth (10.0%)

Q3 '08 Same Store Sales Growth Q2 '08 Q1 '08 (12.5%) (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Q4 '14 2009 2011 2012 2013 Q3 '14 2008 2010 2014 Q2 '14 Q1 '14 Q4 '13 Q3 '13 QSR Fast Casual Family Dining Casual Dining Premium Dining Q2 '13 Q1 '13 Q4 '12 Q3 '12 Q2 '12 Q1 '12 Recent TM Capital Restaurant Experience Q4 '11 Q3 '11 Q2 '11 Q1 '11 Q4 '10 Q3 '10 Q2 '10 Q1 '10 Fast Casual Q4 '09 Q3 '09 Q2 '09 Q1 '09 Q4 '08 Q3 '08 Q2 '08 Q1 '08 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%

Q4 '14 Q3 '14 Q2 '14 Q1 '14 Q4 '13 Q3 '13 Q2 '13 Q1 '13 Q4 '12 Q3 '12 Q2 '12 Q1 '12 Q4 '11 Q3 '11 Q2 '11 Q1 '11 Q4 '10 Q3 '10 Q2 '10 Q1 '10 Q4 '09 Family Dining Q3 '09 Q2 '09 Q1 '09 Q4 '08 Q3 '08 Q2 '08 Q1 '08 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%

Q4 '14 Q3 '14 Q2 '14 Q1 '14 Q4 '13 Q3 '13 Q2 '13 Q1 '13 Q4 '12 Q3 '12 Q2 '12 Q1 '12 Q4 '11 Q3 '11 Q2 '11 Q1 '11 Q4 '10 Q3 '10 Q2 '10 Q1 '10 Q4 '09 TM Capital’s Restaurant Practice

Casual Dining Q3 '09 Q2 '09 Q1 '09 Q4 '08 Q3 '08 Q2 '08 Q1 '08 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%

Q4 '14 Q3 '14 Q2 '14 Q1 '14 Q4 '13 Q3 '13 Q2 '13 Q1 '13 Q4 '12 Q3 '12 Q2 '12 Q1 '12 Q4 '11 Q3 '11 Q2 '11 Q1 '11 Q4 '10 Q3 '10 Q2 '10 Q1 '10 Q4 '09 James S. Grien Philip S. Krieger Swin M. Moore Q3 '09 Q2 '09 Premium Dining Q1 '09 Q4 '08 President and CEO Vice President Analyst Q3 '08 Q2 '08 [email protected] [email protected] [email protected] Q1 '08 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100% 404-995-6235 404-995-6242 404-995-6241 About TM Capital TM Capital Corp. is a partner-owned investment banking firm based in New York, Boston and Atlanta, which has completed over 250 transactions with a combined value in excess of $16 billion. Since 1989, we have advised clients navigating a full range of critical transactions, including complex mergers, acquisitions, debt and equity financings, minority and majority recapitalizations, restructurings, and advisory services including takeover defense, fairness and solvency opinions, valuations, as well as litigation support. We have built deep industry expertise in key sectors and our team regularly publishes research highlighting current and emerging trends in targeted industries and markets. TM Capital is a member firm of M&A International Inc., the world’s leading alliance of mid-market investment banks with over 600 M&A professionals in 42 countries. For more information, visit www.tmcapital.com.

New York Boston Atlanta 641 Lexington Avenue 201 Washington Street 3575 Piedmont Road NE 30th Floor 32nd Floor Suite 1010 New York, NY 10022 Boston, MA 02108 Atlanta, GA 30305 Tel: 212.809.1360 Tel: 617.259.2200 Tel: 404.995.6230 www.tmcapital.com