MTY FOOD GROUP INC. 8150 Trans-Canada Highway, Suite 200 St-Laurent, Québec H4S 1M5

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MTY FOOD GROUP INC. 8150 Trans-Canada Highway, Suite 200 St-Laurent, Québec H4S 1M5 MTY FOOD GROUP INC. 8150 Trans-Canada Highway, suite 200 St-Laurent, Québec H4S 1M5 Annual Information Form For the year ended November 30, 2015 February 15, 2016 TABLE OF CONTENTS PRELIMINARY NOTES AND CAUTIONARY STATEMENT .......................................... 5 CORPORATE STRUCTURE .......................................................................................... 7 Name, Address and Incorporation of the Company ...................................................................... 7 Intercorporate Relationships ............................................................................................................. 8 GENERAL DEVELOPMENT OF THE BUSINESS ....................................................... 10 3 Year History .................................................................................................................................. 10 DESCRIPTION OF THE BUSINESS OF THE COMPANY ........................................... 13 Overview ........................................................................................................................................... 13 Brief Description of the Company’s Concepts: ..................................................................... 13 Restaurant Industry ....................................................................................................................... 17 Development of the Business ..................................................................................................... 19 System Sales ................................................................................................................................... 24 Same store sales ............................................................................................................................ 25 Seasonality of System Sales ....................................................................................................... 25 Supplies and Distribution ............................................................................................................ 25 Franchise Operation ...................................................................................................................... 26 Sources of Revenue ...................................................................................................................... 27 Management .................................................................................................................................... 29 Employees ....................................................................................................................................... 29 Intellectual Properties ................................................................................................................... 29 Marketing .......................................................................................................................................... 30 Target Market .................................................................................................................................. 30 Competition ..................................................................................................................................... 31 Competitive Strengths .................................................................................................................. 31 Strategy ............................................................................................................................................ 31 Government Regulation ............................................................................................................... 32 RISK FACTORS ........................................................................................................... 34 The Restaurant Industry and its Competitive Nature ........................................................... 34 Economic Environment ................................................................................................................ 35 - 2 - Sustainability and growth of the Business of the Company .............................................. 35 Food Borne Illnesses .................................................................................................................... 36 Intellectual Property ...................................................................................................................... 36 Government Regulation ............................................................................................................... 36 Laws Concerning Employees ..................................................................................................... 37 Potential Litigation, Class Actions and Other Complaints ................................................. 37 The Impact of change in Sales Tax ........................................................................................... 37 The Company’s Dependence on Key Personnel ................................................................... 37 The Company’s Dependence on the Franchisors of TCBY®, Yogen Früz®, Taco ....... 38 Time® and Au Vieux Duluth® Concepts .................................................................................. 38 Leases and Lease Renewals ....................................................................................................... 38 Price and Supply Fluctuation...................................................................................................... 38 Seasonality of the Business........................................................................................................ 39 Maintain adequate levels of collection from Franchisees ................................................... 39 Commodity Costs, Labour Shortages and Costs and Other Risks .................................. 39 Ability to Locate and Secure Acceptable Location Sites .................................................... 40 Uninsured and Underinsured Losses ....................................................................................... 40 International Locations ................................................................................................................. 40 Currency Exchange Rates ........................................................................................................... 40 Interest Rates .................................................................................................................................. 40 Information Technology ............................................................................................................... 41 Corporate Governance ................................................................................................................. 41 Dividends ......................................................................................................................................... 41 DIVIDEND POLICY ....................................................................................................... 41 DESCRIPTION OF CAPITAL STRUCTURE ................................................................ 42 CREDIT FACILITIES .................................................................................................... 42 MARKET FOR SECURITIES – TRADING PRICE AND VOLUME ............................... 43 Trading Price and Volume ........................................................................................................... 43 DIRECTORS AND OFFICERS ..................................................................................... 43 Name and Occupation ..................................................................................................................... 43 Independence of the directors ........................................................................................................ 44 - 3 - Nomination, orientation and continuing education ...................................................................... 44 Security Holdings of the Directors and Officers ........................................................................... 45 Corporate Cease Trade Orders, Bankruptcies, Penalties or Sanctions .......................... 45 Conflicts of Interest ....................................................................................................................... 47 PROMOTER ................................................................................................................. 47 LEGAL PROCEEDINGS AND REGULATORY ACTIONS ........................................... 47 TRANSFER AGENT AND REGISTRAR ...................................................................... 47 MATERIAL CONTRACTS ............................................................................................. 48 INTEREST OF EXPERTS ............................................................................................. 49 AUDIT COMMITTEE INFORMATION ........................................................................... 49 Audit Committee Charter ............................................................................................................. 49 Composition of the Audit Committee ....................................................................................... 52 Relevant Education and Experience ......................................................................................... 52 Audit Committee Oversight ........................................................................................................
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