1. HEDGEYE 1 SPEAKER SERIES: WALL STREET MEETS MAIN STREET May 6, 2016 2016 RESTAURANT REMODEL ANALYSIS

2. HEDGEYE 2 DISCLAIMER Hedgeye Risk Management is a registered investment advisor, registered with the State of Connecticut. Hedgeye Risk Management is not a broker dealer and does not provide investment advice for individuals. This research does not constitute an offer to sell, or a solicitation of an offer to buy any security. This research is presented without regard to individual investment preferences or risk parameters; it is general information and does not constitute specific investment advice. This presentation is based on information from sources believed to be reliable. Hedgeye Risk Management is not responsible for errors, inaccuracies or omissions of information. For more information about Hedgeye Risk Management, including Terms of Use of our information, please go to www.hedgeye.com. The presentation is the work of Restaurant Research and Philip Hofmann of BDO and is protected intellectual property. Views and opinions expressed herein do not necessarily reflect the opinions of Hedgeye Risk Management. This presentation is for information purposes and is not intended as investment recommendations. TERMS OF USE This report is intended solely for the use of its recipient. Re-distribution or republication of this report and its contents are prohibited. For more details please refer to the appropriate sections of the Hedgeye Services Agreement and the Terms of Use at www.hedgeye.com DISCLAIMER

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4. 2016 REMODEL ANALYSIS www.ChainRestaurantData.com Distribution by RR Permission Only CONFERENCE CALL SERIES BROUGHT TO YOU BY BDO USA, LLP

5. HEDGEYE 5 AGING $1B+ CHAIN FACILITIES ARE GETTING OLDER… DATA SOURCE: CHAINRESTAURANTDATA.COM, RR REMODEL REPORT, DISTRIBUTION BY RR PERMISSION ONLY.

6. HEDGEYE 6 OLD SYSTEMS REQUIRE REGULAR UPKEEP DATA SOURCE: CHAINRESTAURANTDATA.COM, RR REMODEL REPORT, DISTRIBUTION BY RR PERMISSION ONLY.

7. HEDGEYE 7 REMODELS KEEP THINGS CURRENT, SORT OF… DATA SOURCE: CHAINRESTAURANTDATA.COM, RR REMODEL REPORT, DISTRIBUTION BY RR PERMISSION ONLY.

8. HEDGEYE 8 REMODEL PROGRAMS ARE EXPENSIVE… DATA SOURCE: CHAINRESTAURANTDATA.COM, RR REMODEL REPORT, DISTRIBUTION BY RR PERMISSION ONLY.

9. HEDGEYE 9 …WHICH IS WHY THEY DRAG ON DATA SOURCE: CHAINRESTAURANTDATA.COM, RR REMODEL REPORT, DISTRIBUTION BY RR PERMISSION ONLY.

10. HEDGEYE 10 INCREASING FRANCHISEE LEVERAGE CONSTRAINS CAPACITY TO REMODEL DATA SOURCE: CHAINRESTAURANTDATA.COM, RR REMODEL REPORT, DISTRIBUTION BY RR PERMISSION ONLY.

11. HEDGEYE 11 FORTUNATELY REMODELS DRIVE SALES… DATA SOURCE: CHAINRESTAURANTDATA.COM, RR REMODEL REPORT, DISTRIBUTION BY RR PERMISSION ONLY.

12. HEDGEYE 12 …REMODEL ROI IS MORE COMPLICATED DATA SOURCE: CHAINRESTAURANTDATA.COM, RR REMODEL REPORT, DISTRIBUTION BY RR PERMISSION ONLY.

13. HEDGEYE 13 Phil Hofmann, BDO – remodeling tax implications for franchisees Douglas McKenzie, CIT – underwriting remodel loans Lloyd Droller, Pacific Premiere – underwriting future remodel/capex needs Alan Gallup, National Franchise Sales – remodel adjustment on unit valuations Howard Penney, HEDGEYE – remodel impact analysis on public stock INSIDE COLOR ON REMODELING

14. HEDGEYE 14 Overview Revenue Procedure 2015-56 issued in November 2015 Download BDO’s Federal Tax Alert Historically “remodeling” is a contentious exam area with IRS Safe harbor method of accounting for retailers and restaurants Must have Applicable Financial Statements Must have qualified projects, buildings, costs Certain exclusions apply Effective for years beginning on or after Jan. 1, 2014 No partial disposition deduction allowed - Must use GAA TAX IMPLICATIONS

15. HEDGEYE 15 Benefits Audit protection Minimizes need to perform detailed factual analysis under repair regulations Eliminates need to apply rules separately to each building structure and building system Automatic change in accounting method TAX IMPLICATIONS Material discussed is meant to provide general information and should not be acted on without professional advice tailored to your firm’s individual needs. © 2016 BDO USA, LLP. All rights reserved. 75 % Deduction of Qualified Expenses CONTACT Phil Hofmann, CPA - Tax Senior Director phofmann@bdo.com | 513-766-3014 phofmann@bdo.com

16. Phil Mangieri, Partner pmangieri@ChainRestaurantData.com 203-938-4703 16 www.ChainRestaurantData.com Distribution by RR Permission Only Wally Butkus, Partner wbutkus@ChainRestaurantData.com 203-405-1901

17. RR Research Coverage 17 www.ChainRestaurantData.com Distribution by RR Permission Only

18. DISCLAIMERS 18 Copyright: This Restaurant Research LLC document is copyrighted material. Copyright 2016 Restaurant Research® LLC. All rights reserved. Disclosure: Restaurant Research LLC often sells report subscriptions to concepts under our coverage. Disclaimer of Liability: Although the information in this report has been obtained from sources Restaurant Research® LLC believes to be reliable, RR does not guarantee its accuracy. The views expressed herein are subject to change without notice and in no case can be considered as an offer or solicitation with regard to the purchase or sales of any securities. Restaurant Research’s analyses and opinions are not a guarantee of the future performance of any company or individual franchisee. RR disclaims all liability for any misstatements or omissions that occur in the publication of this report. In making this report available, no client, advisory, fiduciary or professional relationship is implied or established. This report is intended to provide an overview of the restaurant industry, but cannot be used as a substitute for independent investigations and sound business judgment. REPORT NOT LICENSED FOR DISTRIBUTION www.ChainRestaurantData.com Distribution by RR Permission Only

19. HEDGEYE 19 FOR MORE INFORMATION CONTACT: SALES@HEDGEYE.COM 203.562.6500