Restaurant Monthly October 2015

Restaurant Industry Commentary Same store sales grew for the fifth consecutive quarter—again, owing entirely to increases in average check size and despite declines in traffic. Reflecting investors’ skepticism that diners will be forever willing to pay more, each of the restaurant segments, except family dining,has underperformed the S&P since June 2015. Despite less than stellar performance in the public markets, M&A activity remains strong—led by YUM! Brands, Inc. (NYSE: YUM) announcement that the company plans to spin off its China business into a new standalone entity. Peet’s Coffee & Tea, Inc. led a flurry of activity in the coffee segment—acquiring both Seattle-based Stumptown Coffee Roasters and Chicago-based Intelligentsia Coffee. Additionally, TM Capital advised Corp. (NasdaqGS:SBUX) in selling the rights to operate its Puerto Rican restaurant portfolio to Baristas Del Caribe, LLC—an affiliate of Empresas Fonalledas Inc. In the world of burgers, Foods Corp. (PSE:JFC) acquired a 40% stake in Master LLC for $99 million. There was also significant activity in the and Applebee’s systems, including an acquisition by Restaurants Group, Inc. (NasdaqGS:TAST) and divestitures of two portfolios of restaurants by Apple Sauce, Inc.

Current Restaurant Valuations by Price Point (TEV / EBITDA)

20.0x

15.0x 13.2x 12.9x 13.0x 12.6x 11.3x 10.9x 10.3x 9.4x 10.0x 8.1x 8.7x

5.0x

— QSR Fast Casual Family Dining Casual Dining Premium Dining Median TEV / LTM EBITDA Median TEV / 2015E EBITDA

Public Market Performance (Latest Twelve Months)

140 116 130 112 120 106 110 99 100 99

Segment Index Segment 90 99 80 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 S&P 500 QSR Fast Casual Family Dining Casual Dining Premium Dining

Recent Restaurant M&A Activity

($ in millions) Closed / Enterprise EBITDA / Value Industry Announced Target Acquiror Value Multiple Segment 10/30/2015A Intelligentsia Coffee & Tea, Inc. Peet's Coffee & Tea, Inc. NA NA / NA QSR 10/29/2015 Nobu Hospitality LLC Crown Resorts Limited (ASX:CWN) NA NA / NA Premium 10/20/2015A Yum! Brands, Inc. China Operations Yum! China NA NA / NA QSR 10/14/2015 Yum! Brands, Inc. Restaurants in Chicago KBP Foods, LLC $20.0 NA / NA QSR 10/12/2015 Smashburger Master LLC Jollibee Foods Corp. (PSE:JFC) $247.5 NA / NA Fast Casual 10/06/2015 Stumptown Coffee Roasters, Inc. Peet's Coffee & Tea, Inc. NA NA / NA QSR 10/02/2015 5 Burger King Restaurants Carrols Restaurant Group, Inc. (NasdaqGS:TAST) NA NA / NA QSR Starbucks Corp. (NasdaqGS:SBUX), Puerto 09/27/2015 Baristas Del Caribe, LLC; Empresas Fonalledas Inc. NA NA / NA QSR Rican Rights 09/09/2015 Apple Sauce, Inc., 10 Applebee's Restaurants Doherty Enterprises, Inc. NA NA / NA Casual 08/31/2015A Fries Ltd. Cara Operations Limited (TSX:CAO) NA NA / NA Fast Casual 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%

Q2 '15 7.5% Q1 '15 Q4 '14 Q3 '14 5.0% Q2 '14 Q1 '14 Q4 '13 2.5% Q3 '13 Q2 '13 Q1 '13 ― Q4 '12 Q3 '12 Q2 '12 Q1 '12 (2.5%) Q4 '11 Q3 '11 Q2 '11 (5.0%) Q1 '11 Q4 '10 Service Q3 '10 (7.5%) Q2 '10

Q1 '10 Same Store SalesGrowth Q4 '09 (10.0%) Q3 '09 Q2 '09 Q1 '09 Same Store Sales Growth (12.5%) Q4 '08 Q3 '08 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 Q1 Q2 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100% 2008 2009 2010 2011 2012 2013 2014 2015

Q2 '15 Q1 '15 Q4 '14 QSR Fast Casual Family Dining Casual Dining Premium Dining Q3 '14 Q2 '14 Q1 '14 Q4 '13 Q3 '13 Q2 '13 Selected TM Capital Restaurant Experience Q1 '13 Q4 '12 Q3 '12 Q2 '12 Q1 '12 Q4 '11 Q3 '11 Q2 '11 Q1 '11 Fast Casual Q4 '10 Q3 '10 Q2 '10 Q1 '10 Q4 '09 Q3 '09 Q2 '09 Q1 '09 Q4 '08 Q3 '08 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%

Q2 '15 Q1 '15 Q4 '14 Q3 '14 Q2 '14 Q1 '14 Q4 '13 Q3 '13 Q2 '13 Q1 '13 Q4 '12 Q3 '12 Q2 '12 Family Dining Q1 '12 Q4 '11 Q3 '11 Q2 '11 Q1 '11 Q4 '10 Q3 '10 Q2 '10 Q1 '10 Q4 '09 Q3 '09 Q2 '09 Q1 '09 Q4 '08 Q3 '08 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%

Q2 '15 Q1 '15 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 Casual Dining Q4 '10 Q3 '10 Q2 '10 Q1 '10 Q4 '09 Q3 '09 TM Capital’s Restaurant Contacts Q2 '09 Q1 '09 Q4 '08 Q3 '08 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%

Q2 '15 Q1 '15 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

Premium Dining Q3 '10 Q2 '10 James S. Grien Craig M. Gibson Philip S. Krieger Q1 '10 Q4 '09 Q3 '09 Managing Director Managing Director Vice President Q2 '09 Q1 '09 Q4 '08 [email protected] [email protected] [email protected] Q3 '08 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100% 404-995-6235 617-259-2204 404-995-6242

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