Carrols Restaurant Group, Inc. 2017 Annual Report April 27, 2018 Dear Fellow Stockholders: 2017 was a year of continued progress at Carrols Restaurant Group, Inc. and we were pleased with our accomplishments, which included crossing the $1 billion mark in restaurant sales and increasing our unit count to more than 800 restaurants. We are proud to reach these milestones and intend to build upon them as we further position the Company for continued groowth. Total revenues in 2017 were $1.09 billion, an increase of 15.4% over the prior year, including $210.3 million in restaurant sales from the 175 restaurants acquired from 2015 to 2017. Comparable restaurant sales growth in 2017 of 5.2% yielded a strong 7.5% two-yyear trend, which outpaced most of our quick- service restaurant peers. Despite higher beef costs and wwage inflation, we also increased Adjusted EBITDA in 2017 to $91.4 million from $89.5 million in the prior year. BURGER KING®’s marketing strategy continues to effectively balance premium, value, and limited time product offerings to drive sales, average check, and customer traffic in a highly competitive environment. Premium offerings during the year included a number of products built around our new King™ sandwich platform and our new Crispy Chicken Sandwich. Notable value oofferings included the 2 for $6 WHOPPER® promotion, 2 cheeseburgers with small fries and a drink for $3.49, and 2 for $4 Mix and Match breakfast sandwiches, among others. In 2017, we acquired 64 BURGER KING restaurants in three separate transactions, consisting of 43 in Ohio (Cincinnati market), 17 in Maryland (Baltimore - Washington, DC market), and four in Maine. The integration of these restaurants is progressing well following the implementation of our systems and as we apply our operating and financial disciplines to improve booth sales and operating margins. Acquisitions continue to be important to our longer-termm growth strategy to build shareholder value, supported by our control of Burger King’s right of first refusal in 20 states, and our significant presence in these markets. Our wide geographic footprint also provides opportunities to fill-in markets through selective new restaurant development. We opened 11 new restaurants in 2017, the most we have opened in several years, and also remodeled 34 locations. At year-end over 75% of our restaurants featured the 20/20 design image. In 2018, we anticipate constructing 10 to 15 nnew restaurants and remodeling another 30 to 35 locations. Let me thank the entire Carrols team for their tireless efforts as well as our stockholders for their ongoing support. Our achievements would not be possible without your confidence. We believe that the Company is well positioned for continued success as we move into 20118 and beyond. Sincerely, Daniel T. Accordino Chief Executive Officer and President UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K/A (Amendment No. 1) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2017 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-33174 CARROLS RESTAURANT GROUP, INC. (Exact name of Registrant as specified in its charter) Delaware 16-1287774 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 968 James Street, Syracuse, New York 13203 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (315) 424-0513 Securities registered pursuant to Section 12(b) of the Act: Title of each class: Name of each exchange on which registered: Common Stock, par value $.01 per share 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 15(d) of the Exchange 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No As of March 5, 2018 Carrols Restaurant Group, Inc. had 36,538,903 shares of its common stock, $.01 par value, outstanding. The aggregate market value of the common stock held by non-affiliates as of July 2, 2017 of Carrols Restaurant Group, Inc. was $419,573,219. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's definitive Proxy Statement for Carrols Restaurant Group, Inc's 2018 Annual Meeting of Stockholders, which is expected to be filed pursuant to Regulation 14A no later than 120 days after the conclusion of Carrols Restaurant Group, Inc.'s fiscal year ended December 31, 2017 are incorporated by reference into Part III of this annual report. EXPLANATORY NOTE Carrols Restaurant Group, Inc. (the “Company”) is filing this Amendment No. 1 (this "Form 10-K/A") to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the Securities and Exchange Commission (the “SEC”) on March 12, 2018 (the “Original Filing”), solely for correcting the form of the Reports of Independent Registered Public Accounting Firm regarding its opinions on the financial statements and internal control over financial reporting which were included in the report on the date of the Original Filing. The change to the filed copy of the Deloitte Financial Statements Opinion does not affect Deloitte’s unqualified opinion on the Company's consolidated financial statements included in the Original Filing and this Form 10-K/A, or Deloitte’s unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2017. In addition, pursuant to the rules of the SEC, the exhibit list included in Item 15 of Part IV of the Original Filing has been amended to contain currently-dated certifications from the Company's Chief Executive Officer and Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications of the Company's Chief Executive Officer and Chief Financial Officer are attached as exhibits to this Form 10-K/A. For ease of reference, this Form 10-K/A amends and restates the Original Filing in its entirety, making only the amendments described above. No other amendments have been made to the Original Filing and the Company is not amending its consolidated financial statements or any other part of, or otherwise updating any other disclosures made in, the Original Filing. This Form 10-K/A speaks as of the original filing date of the Original Filing and does not reflect any events that may have occurred subsequent to the original filing date. Accordingly, this Form 10-K/A should be read in conjunction with our other filings made with the SEC subsequent to the filing of the Original Filing, including any amendments to those filings. CARROLS RESTAURANT GROUP, INC. FORM 10-K/A YEAR ENDED DECEMBER 31, 2017 Page PART I Item 1 Business 3 Item 1A Risk Factors 14 Item 1B Unresolved Staff Comments 26 Item 2 Properties 26 Item 3 Legal Proceedings 26 Item 4 Mine Safety Disclosures 27 PART II Item 5 Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6 Selected Financial Data 29 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A Quantitative and Qualitative Disclosures about Market Risk 49 Item 8 Financial Statements and Supplementary Data 49 Item 9 Changes In and Disagreements with Accountants on Accounting and Financial Disclosure 49 Item 9A Controls and Procedures 49 Item 9B Other Information 52 PART III Item 10 Directors, Executive Officers and Corporate Governance 53 Item 11 Executive Compensation 53 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 53 Item 13 Certain Relationships and Related Transactions, and Director Independence 53 Item 14 Principal Accountant Fees and Services 53 PART IV Item 15 Exhibits and Financial Statement Schedule 54 Item 16 Form 10-K Summary 57 1 PART I—FINANCIAL INFORMATION PART I Throughout this Annual Report on Form 10-K/A, we refer to Carrols Restaurant Group, Inc.