Monthly February 2019

Restaurant Industry Commentary

All of TM Capital’s restaurant indices, except for Fast Casual, underperformed the S&P 500 over the last 30 days, while same-store sales increased by 2.0% and same-store traffic decreased by 0.7%. On the M&A front, financial investors remained acquisitive in the QSR space. Grand Mere Restaurant Group, a New York-based, restaurant focused private equity firm, bought a chain of 82Pizza Hut franchise locations from High Plains . In addition, City Capital Ventures and Saxonworld Capital announced a buyout of Redberry Group, a franchisee operating more than 100 Burger King and locations in Canada.

Current Restaurant Valuations by Price Point (TEV / EBITDA)

20.0x 14.5x 14.1x 15.0x 13.8x 13.5x 9.5x 8.8x 9.7x 9.1x 9.6x 10.0x 20.0x 8.1x 20.0x

5.0x 15.0x 13.5x 15.0x12.9x 13.5x 12.9x 11.8x 11.8x 11.8x 11.8x 10.2x 10.2x 10.5x 10.5x 9.0x 9.1x 9.0x 9.1x — 10.0x 10.0x 8.0x 7.7x 8.0x 7.7x QSR Fast Casual Family Dining Casual Dining Premium Dining 5.0x Median5.0x TEV / LTM EBITDA Median TEV / 2019E EBITDA

— — PublicQSR Market PerformanceQSRFast (LatestCasual Twelve FastMonths) CasualFamily Dining Family CasualDining Dining CasualPremium Dining Dining Premium Dining

160 150 123 140 109 130 108 120 110 103 Segment Index 100 101 90 91 80 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19

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

02/07/2019 Redberry Group City Capital Ventures; Saxonworld Capital NA NA / NA QSR 01/30/2019 82 Pizza Hut Grand Mere Restaurant Group NA NA / NA QSR 01/28/2019 Group of Restaurants in Garden Grove, CA Valore Ventures $13.1 NA / NA Casual 01/15/2019 Les Rôtisseries Au Coq Ltée Foodtastic Inc. NA NA / NA QSR 01/08/2019 Firebirds International, LLC J.H. Whitney Capital Partners, LLC NA NA / NA Casual 01/03/2019 Vapiano International LLC Plutos Sama, LLC $15.0 NA / NA Casual 12/14/2018 SJBF LLC Bee Good, Inc. $67.0 NA / NA QSR 12/13/2018 69 Restaurants in NC and SC Applebee’s Neighbourhood Grill + Bar NA NA / NA QSR 12/12/2018A BiteSquad.com, LLC Waitr Holdings Inc. (NasdaqGS:WTRH) $321.4 NA / NA Delivery 12/05/2018 368 Arby's Restaurant Locations RB American Group LLC 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 & Decliners Same Store Sales by Price Point by Price Point

Decliners / Gainers 10.0% 8.0% Q3 '18 Q2 '18 Q1 '18 6.0% Q4 '17 Q3 '17 Q2 '17 4.0% Q1 '17 Q4 '16 Q3 '16 2.0% Q2 '16 Q1 '16 Q4 '15 ― Q3 '15 Q2 '15 (2.0%) Q1 '15 Q4 '14 Q3 '14 (4.0%) Q2 '14 Q1 '14 Same Store Sales Growth

Quick Service Q4 '13 (6.0%) Q3 '13 Q2 '13 Same Store Sales Growth Q1 '13 (8.0%) Q4 '12 Q3 '12 Q2 '12 (10.0%) Q1 '12 Q4 '11 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 Q3 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100% 2011 2012 2013 2014 2015 2016 2017 2018

Q3 '18 Q2 '18 Q1 '18 QSR Fast Casual Family Dining Casual Dining Premium Dining Q4 '17 Q3 '17 Q2 '17 Q1 '17 Q4 '16 Q3 '16 Q2 '16 Q1 '16 Selected TM Capital Restaurant Experience Q4 '15 Q3 '15 Q2 '15 Q1 '15 Q4 '14 Q3 '14 Q2 '14

Fast Casual Q1 '14 Q4 '13 Q3 '13 Q2 '13 Q1 '13 Q4 '12 Q3 '12 Q2 '12 Q1 '12 Q4 '11 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%

Q3 '18 Q2 '18 Q1 '18 Q4 '17 Q3 '17 Q2 '17 Q1 '17 Q4 '16 Q3 '16 Q2 '16 Q1 '16 Q4 '15 Q3 '15 Q2 '15 Q1 '15 Q4 '14 Q3 '14 Q2 '14 Q1 '14

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

Q3 '18 Q2 '18 Q1 '18 Q4 '17 Q3 '17 Q2 '17 Q1 '17 Q4 '16 Q3 '16 Q2 '16 Q1 '16 Q4 '15 Q3 '15 Q2 '15 Q1 '15 Q4 '14 Q3 '14 Q2 '14 Q1 '14 Q4 '13

Casual Dining Q3 '13 Q2 '13 Q1 '13 Q4 '12 Q3 '12 TM Capital’s Restaurant Contacts Q2 '12 Q1 '12 Q4 '11 (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%

Q3 '18 Q2 '18 Q1 '18 Q4 '17 Q3 '17 Q2 '17 Q1 '17 Q4 '16 Q3 '16 Q2 '16 Q1 '16 Q4 '15 Q3 '15 Q2 '15 Q1 '15 Q4 '14 Q3 '14 Q2 '14 Q1 '14 Q4 '13 Q3 '13 Craig M. Gibson Philip S. Krieger John A. Dean Premium Dining Q2 '13 James S. Grien Q1 '13 Q4 '12 Managing Director Managing Director Vice President Q3 '12 Managing Director Q2 '12 Q1 '12 Q4 '11 [email protected] [email protected] [email protected] [email protected] (100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100% (404) 995-6235 (617) 259-2204 (404) 995-6242 (404) 995-6234

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