Wingstop

• Wingstop is the only $1B+ national chain with an exclusive specialization in the hot chicken wing category.
• A system high AUV translates into a near all-time high EBITDAR in absolute dollars.
• Bone-in wing price volatility represents perhaps the chain’s most significant risk.

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2Q:21 Same Store Sales

• 2Q:21 comps increased +37.9% y/y for the $1B+ Chains and +12.8% on a 2 yr. stacked basis as all segments of the industry have fully recovered.
• 3Q:21 comp trends are moderating, reflecting flat disposable income (less government assistance) coupled with significantly higher menu and gas prices.

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1H:21 Valuation & Restaurant Finance Update

• Franchisee EBITDA valuation multiples continue to recover and are now only -2.9% below their 2H:16 peak.
• Premiums for deals with $1M+ in aggregate EBITDA continue to rebound off the 1H:20 low.
• Full year 2021 restaurant originations are expected to increase +19.1% compared to initial expectations in January.

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Burger King

• 3rd largest burger chain with a well-established brand equity around flame grilling.
• Burger platforms include the signature Whopper configurations and various “King” varieties.
• New Ch’King Sandwich helps BK enter into the chicken sandwich war.
• BK’s challenge is to find ways to expand its market reach towards new, more affluent consumers who are willing to pay for the brand’s strong core equities and quality upgrades.

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Taco Bell

Taco Bell is extremely well positioned as the only $1B+ national QSR Mexican player (category of 1) with core equity around abundant value and craveable food with a bold flavor profile. A positive long-term sales outlook reflects: strong value equation; innovative marketing calendar; strong positioning with Millennials; ability to address multiple dayparts including breakfast, Happier Hour/snack & late night; access to expanded DSP marketplaces; and new store formats which increase capacity for off-premise digital.

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Unit Economics

• RR’s Unit Economic Report provides: (1) FYE 2020 unit level AUV along with COGs, labor, royalty, advertising, other operating and EBITDAR margin estimates for 44 chains; (2) a 5-year history of unit economic performance; (3) an analysis of food and labor cost drivers; and (4) aggregate G&A margins, rent margins and leverage ratios based on RR’s annual lender survey.

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RR Insights Journal

• The following data is based on RR’s Annual Lender Unit Economic Survey representing more than 15,400 franchised units (14,800 QSR and 600 FSR across 29 chains) for FYE 2020.

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Dashboard: July 2021

• Possible Pause from Astounding 2Q Sales Results
• Drive-Thrus Back in Favor
• FSR Feels Need to Discount More So Than QSR
• Food Inflation & Labor Shortages are a Thing

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Popeyes

• The iconic “Love that Chicken from Popeyes” tagline emphasizes the emotional bond of loyal customers with a unique brand positioning around a flavorful Louisiana heritage.
• Sales strength over the last couple of years reflects resounding social media marketing success around its chicken sandwich.
• While Popeyes’ eye-popping success with its chicken sandwich has helped the brand to drive its store-level profitability to an all-time high, intense competition around all things chicken poses a current challenge to the leader of the pack.

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