1

Restaurants I Industry Spotlight

Q3 2018

Restaurants I Q3 2018

Investment Banking I Industry Spotlight

2

Introduction to Fifth Third Investment Banking

SENIOR BANKERS

RECENT M&A ADVISORY TRANSACTIONS

DIVERSIFIED INDUSTRIALS

TECH-ENABLED BUSINESS SERVICES

CONSUMER & RETAIL

HEALTHCARE COKER CAPITAL

Business Services

Staffing

has been recapitalized by

Healthcare

Senior Living

has been recapitalized by

SUN CITY IMAGING

Healthcare

Radiology

has been acquired by

a portfolio company of

a division of

Industrials

Distribution

has been acquired by

a portfolio company of

Consumer & Retail

Consumer Products

has been recapitalized by

Industrials

Automation

has been acquired by

a portfolio company of

Healthcare

Behavioral Health

has been acquired by has been acquired by

Healthcare

Behavioral Health

FULL SERVICE INVESTMENT BANKING PLATFORM

Fifth Third Investment Banking provides Merger & Acquisition (M&A), capital raising and

other strategic and financial advisory services to Fifth Third’s corporate and financial

sponsor clients

SERVICES PROVIDED

Sell-Side M&A Advisory

Buy-Side M&A Advisory

Acquisition Strategy

Capital Raising

Corporate Finance Advisory

Strategic Alternatives Review

TYPICAL M&A CLIENT

EBITDA of $3 - $50+ million

Private or Financial Sponsor-Owned

Within Fifth Third Bank Footprint

Within Core Industry Verticals

CHARLIE HURT

Consumer & Retail

DAN DAVIDSON

Healthcare

ALAN MCCLURE

Business Services

JOHN SHOFFNER

Consumer & Retail

JAMIE HEIDBREDER

Healthcare

JIM PARRINO

Buy-Side Advisory

JOE CARSON

Diversified Industrials

BO HINTON

Healthcare

MICHAEL HO

Buy-Side Advisory

JEREMY EBERLEIN

Diversified Industrials

JOHN REIBOLDT

Healthcare

ROB TYNDALL

Corporate Finance

ROB BOHN

Diversified Industrials

MCNEILL WESTER

Healthcare

MELINA AUDINELLE

M&A Execution

3

Restaurants I Industry Spotlight

Q3 2018

85%

90%

95%

100%

105%

110%

115%

120%

125%

130%

Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18

Consumer & Retail Sector Dashboard

Returns by Sector (LTM)

Consumer Sentiment

Relative Performance (LTM)

Retail Gas Prices ($/gallon) Case Schiller Index % Δ Disposable Income (YoY)

Source: Bloomberg

LTM YTD

S&P 18.9% 10.7%

Cons. Staples 3.9% (2.5%)

Cons. Discretionary 30.3% 17.6%

43.1%

38.6%

37.9%

21.8%

19.5%

12.9%

5.6%

3.1%

(1.7%)

Apparel

Retail - Multiline

Retail - Specialty

Personal Products

Retail - Food

Restaurants

Beverage

Food

Household Products

60

65

70

75

80

85

90

95

100

105

Au

g-1

3

Feb

-14

Au

g-1

4

Feb

-15

Au

g-1

5

Feb

-16

Au

g-1

6

Feb

-17

Au

g-1

7

Feb

-18

Au

g-1

8

1.50

2.00

2.50

3.00

3.50

4.00

Au

g-1

3

Feb

-14

Au

g-1

4

Feb

-15

Au

g-1

5

Feb

-16

Au

g-1

6

Feb

-17

Au

g-1

7

Feb

-18

Au

g-1

8

120

130

140

150

160

170

180

190

200

210

May

-12

No

v-1

2

May

-13

No

v-1

3

May

-14

No

v-1

4

May

-15

No

v-1

5

May

-16

No

v-1

6

May

-17

No

v-1

7

May

-18

(6%)

(4%)

(2%)

0%

2%

4%

6%

8%

Jun

-12

Dec

-12

Jun

-13

Dec

-13

Jun

-14

Dec

-14

Jun

-15

Dec

-15

Jun

-16

Dec

-16

Jun

-17

Dec

-17

Jun

-18

4

Restaurants I Industry Spotlight

Q3 2018

Same Store Sales (SSS) Growth

Consumer Spending as a % of Real GDP

Personal Expenditure – Primary Consumer Segments

Restaurant Sector Insights

Source: S&P Capital IQ, Company Filings, Technomic, TDn2K

Same Store Sales (SSS) Growth Continued to Grow in Q2

Restaurants have now experienced three consecutive quarters with positive SSS growth

August was a strong month for restaurant same-store sales, which had the highest growth rate recorded since September 2015

Continued momentum in improving household income after two years of lag has led to a positive consumer outlook

Restaurant operators are still challenged by declining guest counts year-over-year, which have been offset by increasing guest checks

Keeping Restaurants Fully Staffed is Still a Key Challenge Faced by Operators Today

The US unemployment rate averaged at 3.9% over the last four months, which has led operators to scramble for hourly workers

– In addition, staffing is even more challenged in certain parts of the country as 20 states reported unemployment of 3.6% or less

In light of the problem, turnover rates for both managers and hourly employees dropped slightly during the summer period

Looking ahead, top performing brands will continue to implement best-in-class people practices and training programs to increase employee retention and guest satisfaction

“Ghost Restaurants” Set to Disrupt Traditional Eatery Industry

Increasing wages and falling foot traffic has created innovated eateries that skip the storefront and bring food straight to consumers by delivery

“Ghost restaurants” offer little to no direct contact between the customer and kitchen, rather food is ordered via a third-party food-delivery company

The model allows brands to be more agile and adapt easily to new dining trends and shifting consumer preferences

64%

65%

66%

67%

68%

69%

70%

71%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

95%100%105%110%115%120%125%130%135%140%

Au

g-1

3

Dec

-13

Ap

r-14

Au

g-1

4

Dec

-14

Ap

r-15

Au

g-1

5

Dec

-15

Ap

r-16

Au

g-1

6

Dec

-16

Ap

r-17

Au

g-1

7

Dec

-17

Ap

r-18

Au

g-1

8

Apparel Food & Beverage

Personal Care Food Services

Jewelry & Watches

(4.0%)

(2.0%)

0.0%

2.0%

4.0%

6.0%

8.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2015 2016 2017 2018

Full Service Restaurants Limited Service Restaurants

5

Restaurants I Industry Spotlight

Q3 2018

10.0x

15.0x

20.0x

25.0x

30.0x

Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18

Full Service Restaurants Limited Service Restaurants S&P 500

(10.0%)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18

Full Service Restaurants Limited Service Restaurants S&P 500

Public Equity Market Valuation Trends

5-Year Forward P/E Performance [1] 5-Year Share Price Performance

Sub-Sector Indices’ Share Price Performance [1]

Source: S&P Capital IQ as of September 28th, 2018 * Each index is comprised of the companies noted on page 12 [1] Forward P/E multiples in charts do not match the table, as 5-year performance chart is market capitalization weighted

+72.5%

+46.9%

+51.7%

17.0x

19.0x

23.7x

Median

Number of Enterprise Value Median EV Multiple Median Multiple

Sector/Sub-Sector Companies $ in Millions Revenue EBITDA LTM P/E Revenue EBITDA Forward P/E

Full Service Restaurants 21 $1,494 1.1x 10.4x 21.1x 1.1x 10.1x 20.2x

Casual Dining 14 2,778 1.4x 11.5x 21.8x 1.3x 10.5x 20.6x

Fine Dining & Polished Casual 7 210 0.9x 9.3x 20.4x 0.9x 9.7x 19.7x

Limited Service Restaurants 25 1,709 2.7x 14.7x 17.8x 2.8x 14.2x 23.5x

Coffee & Specialty 3 8,796 4.2x 16.1x 17.8x 5.0x 16.7x 25.3x

Fast Casual 6 674 1.2x 16.5x NM 1.2x 15.3x 37.7x

Quick Service 12 2,744 4.8x 13.4x 20.0x 4.3x 13.1x 21.7x

Franchisees 4 494 0.7x 9.3x 14.3x 0.6x 7.4x 15.1x

S&P 500 500 NM 2.6x 13.1x 27.5x 2.4x 11.2x 17.0x

Median TEV/LTM Multiples Median TEV/Forward Multiples

6

Restaurants I Industry Spotlight

Q3 2018

13.3%

20.0%

13.6%

11.8%

13.4%

19.7%

28.1%

8.1%

27.5%

12.8%

9.6%

7.9%

1.9%

(0.2%)

1.7%

(0.0%)

(0.5%)

4.1%

25.3x

37.7x

21.7x

20.6x

19.7x

15.1x

16.7x

15.3x

13.1x

10.5x

9.7x

7.4x

Public Equity Market Valuation Trends (Cont’d)

Source: S&P Capital IQ as of September 28th, 2018 * Each index is comprised of the companies noted on page 12

EV / 2018P EBITDA 5-Year Est. EPS Growth LTM EBITDA Margin P / 2018 EPS

Fast Casual

Coffee & Specialty

Quick Service

Casual Dining

Franchisees

Fine Dining & Polished

Casual

3-Year Avg. SSS Growth

Median: 11.8x Median: 21.1x Median: 0.9% Median: 11.2% Median: 13.5%

(0.5%)

(0.0%)

(0.2%)

7

Restaurants I Industry Spotlight

Q3 2018

$0

$200

$400

$600

$800

$1,000

$1,200

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17'18(1)

Venture Capital Buyout Growth Other Private Equity*

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

Positive Conditions in the Broader M&A Market

We are in the 9th year of the post-Great Recession recovery

Typical expansion lasts 7 years

M&A deal flow and transaction volume have declined for 3 straight years, though still above pre-recession levels

We expect 1 – 2 more years of strong M&A market conditions

Tax reform and the de-regulatory environment provide a boost after several years of ~2% growth

The labor market is tight, but job-seekers may be tempted to return after low participation

Interest rates are stabilizing, but are expected to continue rising

Financial leverage is at cyclical highs, representing a risk

It is still a seller’s market given:

Record levels of un-invested private equity capital

Healthy corporate profits and strategic buyer balance sheets

U.S. Middle Market M&A Activity

Market Conditions Today Make the Environment a “Sellers’ Market”

M&A Market Commentary

(1) As of June 30, 2018

* = “Other Private Equity” includes balanced, co-Investment, co-Investment multi-manager, direct secondaries, and turnaround funds Source: Pitchbook, Prequin, and S&P Capital IQ

Private Equity Dry Powder by Fund Type Strategic Buyer (Corporate) Cash

Private equity firms continue to sit on a built up level of dry powder, driving a need to deploy it for acquisitions

U.S. corporate cash balances remain at record levels and are driving activity in strategic buyer M&A

Historically, M&A cycles have not extended past seven years; 2017 was the 8th year of the current cycle

2017 demonstrated signs that the buyout cycle is slowing, however, numerous positive drivers remain

– 2018 tax policy changes and cash repatriation expected to support continued M&A activity

Over $1.6 trillion ($ in billions) ($ in billions)

Over $1.0 trillion

$264

$168 $156 $166 $197

$225

$266 $270

$208

$140

$227

$283 $294 $295 $328

$304 $263

$245

$180 $191

0

1,000

2,000

3,000

4,000

5,000

6,000

$0

$50

$100

$150

$200

$250

$300

$350

$400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD9/17

YTD9/18

Implied Enterprise Value ($ in billions) Number of Transactions

8

Restaurants I Industry Spotlight

Q3 2018

Q3 M&A Dynamics Drag

Overall 3Q18 Consumer & Retail deal value and volume decreased compared to 3Q17

Companies are still feeling the effects of the tax overhaul with increased cash on hand

– Active consolidators are increasingly seeking transformational acquisitions to deploy dry powder

Investors Remain Active in Franchisee Consolidation

Spurred by franchisor’s increasing reimage demands and sales of company-operated units

Acquisitions led by large multi-concept consolidators benefit from economies of scale

– Consolidators typically have an established infrastructure that allows them to deliver a level of professional management and leverage fixed overhead costs that smaller franchisees can’t match

Franchisor Activity Driven by Large Sponsors

Apollo Global Management, JAB Holding and Roark Capital have catalyzed the franchise M&A market

Brand acquisitions lead to increasing consolidation in franchise systems

Restaurant Sector M&A Trends

U.S. Consumer & Retail M&A Announced Deal Value ($ in billions) [1,2]

U.S. Consumer & Retail M&A Announced Deal Volume

U.S. Consumer & Retail M&A Closed Deal Average EV / EBITDA Multiple [1,2]

Source: Fifth Third Securities, S&P Capital IQ [1] Middle Market transactions defined by transactions with an enterprise value below $1 billion [2] U.S. Consumer & Retail transactions include Consumer Discretionary and Consumer Staples transactions, and exclude outlier multiples

Median Middle Market: $14.2 Median > $1 Billion: $27.1

Median Middle Market: 10.2x Median > $1 Billion: 11.1x

$0

$100

$200

$300

3Q

201

0

4Q

201

0

1Q

201

1

2Q

201

1

3Q

201

1

4Q

201

1

1Q

201

2

2Q

201

2

3Q

201

2

4Q

201

2

1Q

201

3

2Q

201

3

3Q

201

3

4Q

201

3

1Q20

14

2Q20

14

3Q

201

4

4Q

201

4

1Q

201

5

2Q

201

5

3Q

201

5

4Q

201

5

1Q

201

6

2Q

201

6

3Q

201

6

4Q

201

6

1Q

201

7

2Q

201

7

3Q

201

7

4Q

201

7

1Q

201

8

2Q

201

8

3Q

201

8

Middle Market > $1 Billion

0

200

400

600

800

1,000

1,200

3Q

201

0

4Q

201

0

1Q

201

1

2Q

201

1

3Q

201

1

4Q

201

1

1Q

201

2

2Q

201

2

3Q

201

2

4Q

201

2

1Q

201

3

2Q

201

3

3Q

201

3

4Q

201

3

1Q

201

4

2Q

201

4

3Q

201

4

4Q

201

4

1Q

201

5

2Q

201

5

3Q

201

5

4Q

201

5

1Q

201

6

2Q

201

6

3Q

201

6

4Q

201

6

1Q

201

7

2Q

201

7

3Q

201

7

4Q

201

7

1Q

201

8

2Q

201

8

3Q

201

8

10.0x 10.2x9.5x

10.9x 11.1x9.8x 9.3x

10.2x11.4x

11.0x9.5x

8.2x9.8x

10.6x 11.7x 11.1x12.3x

11.2x10.0x

11.3x

0.0x

5.0x

10.0x

15.0x

2010 2011 2012 2013 2014 2015 2016 2017 3Q2017 3Q2018

Middle Market > $1 Billion

9

Restaurants I Industry Spotlight

Q3 2018 Precedent M&A Transactions: Restaurants

$ in millions

Source: Fifth Third Securities, S&P Capital IQ

Announced Enterprise LTM Financials EV/LTM Include in Comps?

Date Target Acquirer Target Sub-Sector Value (EV) Revenue EBITDA Revenue EBITDA

Sep-18 Sonic Corp. (SONC) Inspire Brands (Roark Capital Group) QSR $2,270 $434 $146 5.2x * 15.6x

Aug-18 Zoe's Kitchen (ZOES) Cava Group & Consortium of Investors Fast Casual 300 333 18 0.9x 16.7x

Aug-18 Jamba Juice (JMBA) FOCUS Brands (Roark Capital Group) Coffee & Specialty 205 78 4 2.6x 56.9x *

May-18 Pret A Manger JAB Holding Fast Casual 2,000 1,188 133 1.7x 15.0x

May-18 Barteca Restaurant Group Del Frisco's Restaurant Group (DFRG) Fine Dining 325 128 32 2.5x 10.3x

Mar-18 Bravo Brio Restaurant Group (BBRG) Spice Private Equity Casual Dining 101 505 27 0.2x * 3.7x *

Feb-18 Fogo de Chao (FOGO) Rhone Capital Casual Dining 560 311 53 1.8x 10.6x

Feb-18 Huddle House Elysium Management Casual Dining - - - - -

Dec-17 Qdoba Restaurant Corporation Apollo Global Management (APO) Fast Casual 305 457 38 0.7x 8.0x

Nov-17 Buffalo Wild Wings (BWLD) Inspire Brands (Roark Capital Group) Casual Dining 2,885 2,061 255 1.4x 11.3x

Nov-17 Au Bon Pain Corporation Panera Bread Co. (JAB Holding) Fast Casual - - - - -

Oct-17 Ruby Tuesday (RT) NRD Capital Management Casual Dining 314 1,046 37 0.3x 8.5x

Aug-17 Bruegger's Enterprises Caribou Coffee Company Coffee & Specialty - - - - -

Jun-17 Ignite Restaurant Group (IRG) Landry's Casual Dining 55 550 17 0.1x * 3.3x *

Apr-17 Back Yard Burgers Axum Capital Partners Fast Casual - - - - -

Apr-17 Panera Bread Co. (PNRA) JAB Holding Fast Casual 7,500 2,885 424 2.6x 17.7x

Mar-17 Cheddar's Scratch Kitchen Darden Restaurants (DR) Casual Dining 780 - 75 - 10.4x

Mar-17 Checkers Drive-In Restaurants Oak Hill Capital Partners QSR 525 - - - -

Feb-17 Popeyes Louisiana Kitchen (PLKI) Restaurant Brands International (QSR) QSR 1,815 267 89 6.8x * 20.5x *

Jan-17 Bob Evans Farms (BOBE) Golden Gate Capital Casual Dining 565 - - - -

Oct-16 Pacific Island Restaurants Restaurant Brands New Zealand Franchisee 105 120 19 0.9x 5.5x

Oct-16 Red Lobster Master Holdings Thai Union Group Public Company Casual Dining 1,265 2,479 144 0.5x 8.8x

Sep-16 Jimmy John's Franchise Roark Capital Group Fast Casual - - - - -

Sep-16 Wetzel's Pretzels CenterOak Partners Coffee & Specialty - - - - -

May-16 Kalaha Corp. MTY Food Group (TSX:MTY) Casual Dining 302 729 - 0.4x -

May-16 Krispy Kreme Doughnuts (KKD) JAB Holding Coffee & Specialty 1,298 519 73 2.5x 17.8x

Dec-15 Taco Bueno TPG Growth Fast Casual 185 188 33 1.0x 5.7x

Oct-15 Smashburger Jollibee Worldwide Fast Casual 99 - 7 - 13.3x

Jul-15 Cote Restaurants BC Partners Casual Dining 391 172 38 2.3x 10.4x

May-15 Frisch's Restaurants (FRS) NRD Capital Casual Dining 173 216 24 0.8x 7.3x

Mar-15 Del Taco Holdings Levy Acquistion Group (n/k/a TACO) Fast Casual 500 385 59 1.3x 8.5x

Median 0.9x 9.0x

Average 1.2x 9.9x

10

Restaurants I Industry Spotlight

Q3 2018 Middle Market Private Equity Activity

U.S. Private Equity Deal Flow ($ in billions)

U.S. Consumer & Retail Private Equity Deal Flow ($ in billions)

U.S. Consumer & Retail Private Equity Exits ($ in millions)

Source: Fifth Third Securities, PitchBook ND – No Transaction Values Disclosed *3Q18 preliminary PitchBook data

U.S. Private Equity deal flow was up on a value basis and down on a volume basis during the third quarter of 2018

A handful of large buyouts drove total deal value, including Keurig Green Mountain’s completed buyout of Dr. Pepper Snapple Group

Median deal sizes are expected to continue to increase, with larger fund sizes pushing fund managers to pursue larger deals, along with lofty purchase multiples

Deal flow is expected to be continually strong throughout 2018 driven by current dry powder levels and easy access to debt financing

Inspire Brands Continues to Consolidate the Restaurant Industry

Inspire Brands will acquire Sonic Corp. (a quick-service drive-in restaurant) for $2.3 billion

With the addition of Sonic to Inspire Brand’s portfolio of companies, the Company will operate more than 8,000 restaurants and have combined system sales in excess of $12 billion

Zoe’s Kitchen Goes Private through Cava Group’s Acquisition

Calculated move to leverage scale and a larger footprint to expand investments in people, culinary, and tech innovation

0

500

1,000

1,500

$0

$50

$100

$150

$200

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18*

Deal Value ($) # of Deals Closed

$67.4 $100.0 $85.0 $70.0 $123.6

$71.0 $92.5 $101.0 $72.0

$345.9 556 671755 704 817 941 862 858

232 177

2010 2011 2012 2013 2014 2015 2016 2017 3Q2017 3Q2018

Median Deal Size ($) # of Exits

$46.5 $54.4 $58.1$72.4

$62.9

$131.9

$64.3 $70.1$29.9

$49.6

556 671 755 704 817941 862 858

232177

2010 2011 2012 2013 2014 2015 2016 2017 3Q2017 3Q2018

Capital Invested ($) # of Deals Closed

11

Restaurants I Industry Spotlight

Q3 2018 U.S. Middle Market Loan Market Trends

Loan Volume: Level of Supply Regains Momentum in 2Q 2018 After Relative Stability in 1Q, B-rated Yields Widen in 2Q 2018[1]

Middle Market Covenant-Lite Volume Remains Flat in 2Q 2018 Middle Market LBO Leverage Levels Stay Consistent Around 6.0x

($ in billions)

($ in billions)

Note: This data represents the entire U.S. middle market (all industries) Note: The middle market is defined as deal size < $100 million and borrower sales < $500 million [1] Includes both non-sponsored and sponsored transactions; sufficient data not available for MM NR loans in 1Q15, 1Q17, and 1Q18 Source: Bloomberg, S&P Capital IQ LCD, and Thomson Reuters LPC

$-

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

Non-Sponsored Volume Sponsored Volume

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

MM B-rated MM NR

6.72%

6.37%

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

$10.0

MM Covenant-Lite Volume

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

1st Lien Debt to EBITDA Junior Debt to EBITDA

12

Restaurants I Industry Spotlight

Q3 2018 Appendix: Key Disclosures

Casual Dining

BH – Biglari Holdings Inc.

BJRI – BJ’s Restaurants, Inc.

BLMN – Bloomin’ Brands, Inc.

CBRL – Cracker Barrel Old Country Store, Inc.

CHUY – Chuy’s Holdings, Inc.

DAVE – Famous Dave’s of America Inc.

DENN - Denny’s Corp.

DIN – DineEquity, Inc.

DRI – Darden Restaurants, Inc.

EAT – Brinker International, Inc.

GTIM - Good Times Restaurants, Inc.

PLAY – Dave and Buster’s Entertainment, Inc.

RRGB – Red Robin Gourmet Burgers, Inc.

TXRH – Texas Roadhouse, Inc.

Fine Dining & Polished Casual

ARKR – Ark Restaurants Corp.

CAKE – The Cheesecake Factory Incorporated

DFRG – Del Frisco’s Restaurant Group, Inc.

JAX - J. Alexander’s Holdings, Inc.

KONA – Kona Grill Inc.

RUTH – Ruth’s Hospitality Group Inc.

STKS – One Group Hospitality, Inc.

Limited Service Restaurants Full Service Restaurants

Fast Casual

CMG – Chipotle Mexican Grill, Inc.

FRGI – Fiesta Restaurant Group, Inc.

HABT – The Habit Restaurants, Inc.

NDLS – Noodles & Company

PBPB – Potbelly Corporation

SHAK – Shake Shack Inc.

Quick Service Restaurants (QSR)

BOJA – Bojangles’, Inc.

DPZ – Domino’s Pizza, Inc.

FRSH – Papa Murphy’s Holdings, Inc.

JACK – Jack in the Box Inc.

LOCO – El Pollo Loco Holdings

MCD – McDonald’s Corp.

PZZA – Papa John’s International

QSR – Restaurant Brands International Inc.

SONC – Sonic Corp.

WEN – The Wendy’s Company

YUM – Yum! Brands, Inc.

WING – Wingstop Inc.

Coffee & Specialty

DNKN – Dunkin’ Brands Group, Inc.

NATH – Nathan’s Famous, Inc.

SBUX – Starbucks Corporation

Franchisees

ARCO - Arcos Dorados Holdings, Inc.

OTCPK:MHGU – Meritage Hospitality Group, Inc.

SAUC - Diversified Restaurant Holdings, Inc.

TAST – Carrols Restaurant Group, Inc.

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Restaurants I Industry Spotlight

Q3 2018 Notes & Definitions

S&P 500 Index- A broad index that includes American Companies. EBITDA- A company's earnings before interest, taxes, depreciation, and amortization, is an accounting measure calculated using a company's net earnings, before interest expenses, taxes, depreciation and amortization are subtracted, as a proxy for a company's current operating profitability. Dry Powder- Refers to cash reserves kept on hand to cover future obligations or to purchase assets. GDP- Gross domestic product is the market value of the goods and services produced by labor and property located in the United States Consumer Sentiment Index- The University of Michigan Consumer Sentiment Index is a consumer confidence index published monthly by the University of Michigan. The index is normalized to have a value of 100 in December 1964 National Unemployment Rate- the percentage of the total labor force that is unemployed but actively seeking employment and willing to work. Non-Farm Payroll- Nonfarm payroll employment is a compiled name for goods, construction and manufacturing companies in the US. It does not include farm workers, private household employees, non-profit organization employees, or government employees . It is an economic indicator released monthly by the United States Department of Labor as part of a comprehensive report on the state of the labor market. Housing Starts- are the number of new residential construction projects that have begun during any particular month. The Economist- offers authoritative insight and opinion on international news, politics, business, finance, science, technology and the connections between them LBO -- leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. Industrial Production Index (IPI)- is an economic indicator published by the Federal Reserve Board of the United States that measures the real production output of manufacturing, mining, and utilities Capital Goods Orders. Covenant-lite loans- means that debt is being issued, both personally and commercially, to borrowers with less restrictions on collateral, payment terms, and level of income. IRR-Internal Rate of Return.

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About Fifth Third Capital Markets

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