<Page>
Presentation to
Quizno's Board of Directors
April 11, 2001
Confidential
[TUCKER ANTHONY SUTRO LOGO]
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Table of Contents
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I. Situation Analysis
II. Scope of Work and Limitations
III. Transaction Overview Summary
IV. Valuation Data
<Page>
Situation Analysis
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[TUCKER ANTHONY SUTRO LOGO] 1
<Page>
Why are we here?
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o Tucker Anthony Sutro Capital Markets ("Tucker Anthony") has been asked to
present its thoughts on a potential "take private" transaction of The
Quizno's Corporation ("Quizno's" or "the Company") and the value of the
Company
o Tucker Anthony is recommending the Company repurchase all or substantially
all remaining shares not held by the Schadens and Levine Leichtman
("Non-Affiliated Shareholders")
-- Acquiring the remaining shares provides shareholders liquidity in an
illiquid stock --> The Company does not have a business plan that
would allow it to expand its market cap and float to the point where
Quizno's can take full advantage of being public
-- The Schadens have indicated they have no interest in selling their
shares to a third party anytime in the foreseeable future --> The
Schadens and Levine Leichtman together own approximately 72% of the
shares (plus equivalents) outstanding
-- We believe the fair value of the equity is between $7.25 and $8.25 per
share --> At $8.00 per share ("Offer Price"), shareholders would
receive a premium to recent prices and to the average trading price
prior to the self tender transaction completed in December of 2000
("December Tender")
o Tucker Anthony believes the purchase price would be fair to shareholders
and that Quiz has sufficient resources to complete a transaction without
any financing contingency
[TUCKER ANTHONY SUTRO LOGO] 2
Tender Offer Recap and Current Situation Synopsis
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o In December 2000, shareholders were provided the opportunity to tender
their common and common stock equivalents ("Stock") in exchange for $8.00
per share in cash (the "Tender Price") --> The $8.00/share offer
represented a 23%-28% premium over recent trading prices just prior to the
tender
o The Tender Offer was subject to at least 50% of the "non-Schaden" or
"public" shares (approximately 1.3 million shares) being tendered -->
Approximately 51% of the "public" common shares were tendered (just under
670,000) along with nearly 1.1 million shares related to options, preferred
stock and the RRGC warrants for a total of 1.75 million common shares and
equivalents
o At the time of the tender, shareholders were advised that the Company may
pursue a take private transaction and that they may end up with a less
liquid, unlisted stock if they failed to tender --> Average daily trading
volume has fallen to approximately 1,000 shares per day
o Cash on the balance sheet reflects a fully drawn Levine Leichtman
("Levine") facility --> Company has the option to repay the facility down
to $7.0 million without penalty but cannot draw on its Merrill Lynch
facility due to constraints imposed by AMRESCO
o A disagreement about the calculation of a fixed charge coverage ratio
resulted in AMRESCO releasing certain collateral in exchange for a
prepayment of $1.7 million and Quizno's placing $1.0 million in escrow
until the fixed charge coverage (under a revised definition) equals 1.50x
--> Management expects this will occur between July and September of 2001
[TUCKER ANTHONY SUTRO LOGO] 3
<Page>
Current Situation Synopsis (continued)
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o The Company's relatively stable stock price reflects December's tender
offer and market expectations for a "take private" transaction near $8.00
per share --> Following the tender offer, Quizno's stock price has remained
fairly stable around $7.50 per share
o Quizno's stock is trading at 6.2x LTM (12/31) EBITDA and 9.2x LTM EBIT,
representing significant premiums to the small cap peer group despite
recent increases in small cap restaurant multiples
o Since the December Tender, the Company has performed in line with
budget --> Operating characteristics remain "at or above" most peers
o At current price levels, Small Cap companies are generally viewed as having
market caps of approximately $1.0 to $2.5 billion --> Quizno's market cap
of less than $20 million remains substantially below this
o Small cap stocks continue to trade at material discounts relative to larger
capitalization stocks
o It appears all shareholders could benefit from a "take private" transaction
-- The Non-Affiliated shareholders (general public) would gain liquidity
at a premium to recent trading prices, opportunity to participate in
more attractive investment options and eliminate the current "cap" on
the stock
-- The Company and the three remaining significant shareholders (the
Schadens and Levine) would benefit from the elimination of public
company costs and additional operating flexibility beyond the market's
quarterly focus
[TUCKER ANTHONY SUTRO LOGO] 4
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Stock Price Chart
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Quizno's Corp.
Daily Price Volume
April 4, 2000-April 4, 2001
[GRAPHIC OMITTED]
o Between March 27, 2000 and the date the tender offer was announced,
Quizno's stock generally traded between $6.00 and $7.00
o Average daily trading volume before the tender = 7,000 shares vs. after of
only 1,000 shares
[TUCKER ANTHONY SUTRO LOGO] 5
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Stock Performance vs. Selected Peer Group Since Tender Offer
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Quizno's Corp.
Daily Indexed Price Performance
November 14, 2000-April 4, 2001
[GRAPHIC OMITTED]
o Quizno's has underperformed the small and large cap peer group, but has
outperformed the Russell 2000
[TUCKER ANTHONY SUTRO LOGO] 6
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Russell 2000 Breakdown
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Russell 2000 Median Market Capitalization by Quartile vs.
Quizno's Market Capitalization
[GRAPHIC OMITTED]
o Quizno's current market capitalization is substantially below the median
market capitalization of the smallest quartile of stocks in the Russell
2000
o Quizno's low market cap is exacerbated by its low float --> Nearly 72% of
the Company's stock is held by three shareholders
[TUCKER ANTHONY SUTRO LOGO] 7
Fund Manager Matrix - Small Cap Companies Are Penalized
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As of December, 1999 VALUE EQUITY GENERAL EQUITY GROWTH Total Funds
U.S. Diversified Equity Fund Style Breakpoints
less than greater than less than greater than
Large-Cap Price/Earnings Ratio 37.52 37.52 42.01 42.01
75% >= 9.0 Price/Book Ratio 10.05 10.05 12.57 12.57
($) Billion 3yr Earnings-Per-Share Growth Rate 17.86 17.86 22.87 22.87
Price/Sales 6.44 6.40 8.87 8.87
3-yr Sales-Per-Share Growth Rate 12.85 12.85 17.05 17.05
Number of Funds 320 412 407 1,139
Multi-Cap Price/Earnings Ratio 31.81 31.81 38.18 38.18
No Price/Book Ratio 7.65 7.65 11.31 11.31
Capitalization 3yr Earnings-Per-Share Growth Rate 15.91 15.91 24.15 24.15
Restrictions Price/Sales 5.25 5.25 9.32 9.32
3-yr Sales-Per-Share Growth Rate 11.70 11.70 18.67 18.67
Number of Funds 524 490 376 1,390
Mid-Cap Price/Earnings Ratio 32.42 32.42 39.47 39.47
75% < 8.9 Price/Book Ratio 8.31 8.31 12.62 12.62
($) Billion 3yr Earnings-Per-Share Growth Rate 22.83 22.83 33.98 33.98
Price/Sales 7.85 7.85 13.35 13.35
3-yr Sales-Per-Share Growth Rate 19.66 19.66 28.30 28.30
Number of Funds 205 172 251 628
Small-Cap Price/Earnings Ratio 26.10 26.10 33.14 33.14
75% <=2.2 Price/Book Ratio 5.48 5.48 9.15 9.15
($) Billion 3yr Earnings-Per-Share Growth Rate 20.30 20.30 30.74 30.74
Price/Sales 4.74 4.74 9.21 9.21
3-yr Sales-Per-Share Growth Rate 16.74 16.74 24.17 24.17
Number of Funds 340 222 340 902
Source: Lipper Associates
o Size matters --> Capitalization and P/E ratios are inversely related to
earnings growth
[TUCKER ANTHONY SUTRO LOGO] 8
Lipper Classifications
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Ceiling Floor Index Ceiling
------- ----- ----- -------
Large Cap n/a $9.1 Billion
Flex Cap - - - -
Mid Cap $9.1 Billion - $2.1 Billion S&P 400 90% weighted mcap
Small Cap $2.1 Billion - $400 Million S&P 600 90% weighted mcap
Micro Cap(1) $400 Million n/a S&P 600 15% weighted mcap
Source: Lipper Associates
(1) Lipper no longer separately tracks micro caps; number represents use of
previous methodology to differentiate small vs. micro caps
o Morningstar has similar classifications
o Caps and floors will move up or down with the market
o 75% of fund assets must match classification
[TUCKER ANTHONY SUTRO LOGO] 9
Scope of Work and Limitations
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[TUCKER ANTHONY SUTRO LOGO] 10
Scope of Tucker Anthony's Work
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o Tucker Anthony obtained and reviewed publicly-available and certain
non-public financial and business information relating to Quizno's,
including:
- Quizno's Form 10-QSB for the four quarterly periods ended December 31,
1999, March 31, 2000, June 30, 2000 and December 31, 2000
- Quizno's Form 10-KSB for the fiscal year ended September 30, 2000
and for the previous five fiscal years
- Annual and quarterly forecast ("Management Forecast") for Quizno's for
the period March 31, 2001 through December 31, 2005 prepared by
Richard E. Schaden (Rick Schaden), President and Chief Executive
Officer, and John L. Gallivan, Chief Financial Officer
- Various press releases, presentations and third party documents
- The Securities Purchase Agreement and ancillary documents related to
the subordinated debt plus warrants investment of Levine Leichtman
Capital Partners, Inc. ("Levine")
o Tucker Anthony reviewed with Rick Schaden, John Gallivan and Pat Meyers
(Vice President & General Counsel) the business, prospects and historical
and projected financial performance of Quizno's on numerous occasions
o Tucker Anthony reviewed such other information, financial studies and
analyses, and financial, economic and market conditions and data as were
deemed relevant and appropriate
[TUCKER ANTHONY SUTRO LOGO] 11
Scope of Tucker Anthony's Work (cont.)
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o Tucker Anthony completed the following analyses in arriving at its opinion:
- Compared market trading multiples for comparable publicly traded
companies to the multiples for Quizno's derived from the proposed
purchase price of Quizno's
- Compared acquisition multiples for comparable industry transactions to
the multiples for Quizno's derived from the proposed purchase price of
Quizno's
- Compared the market premiums paid for other take private transactions
to the premium being offered to Quizno's shareholders
- Compared the estimated discounted future trading prices for Quizno's
common stock based upon current trading multiples to the proposed
purchase price of Quizno's
- Considered the values derived from unleveraged after-tax discounted
cash flow analysis ("DCF") utilizing the Management Forecast
o Tucker Anthony has formed an opinion regarding the fairness, from a
financial point of view, of the $8.00 Price offered to all Unaffiliated
Shareholders
[TUCKER ANTHONY SUTRO LOGO] 12
Limitations of Tucker Anthony Analysis
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o Tucker Anthony:
- Relied on information available from recognized public sources and
information provided by Quizno's without independent verification
- Assumed that all information provided by Quizno's was complete and
accurate in all material respects and reflected the best currently
available estimates and judgments of Quizno's management as to the
future financial performance of Quizno's
- Assumed that all material assets and liabilities of Quizno's are as
set forth in the consolidated financial statements provided by
Quizno's
[TUCKER ANTHONY SUTRO LOGO] 13
Limitations of Tucker Anthony's Analysis (cont.)
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o Tucker Anthony's Fairness Opinion does not address:
- The underlying business decision to proceed with the merger
- The liquidation value of Quizno's
- The relative merits of any other transaction that maybe available as
an alternative, and we did not solicit third parties relative to such
a transaction --> Richard E. and Richard F. Schaden have indicated
they do not have an interest in selling their shares to a third party
in the foreseeable future
o Tucker Anthony's Fairness Opinion is based upon the economic, monetary and
market conditions as of today and the transaction structure as described
(See Transaction Summary)
o Preparation of a fairness opinion involves various determinations as to the
most appropriate and relevant quantitative methods of financial analyses
--> The applications of those methods of financial analyses to the
particular circumstances are complex and, therefore, such an opinion is not
readily susceptible to partial analysis or summary description
[TUCKER ANTHONY SUTRO LOGO] 14
Limitations of Tucker Anthony's Analysis (cont.)
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o The Fairness Opinion assumes that Quizno's will have adequate financing at
closing to consummate the proposed transaction
o The Fairness Opinion does not address the fairness of the terms of any
financing required to complete the Tender Offer
o The Fairness Opinion:
- Addresses, from a financial point of view, the purchase price being
offered to all Unaffiliated Shareholders
- Is subject to Tucker Anthony's review of the final documents
[TUCKER ANTHONY SUTRO LOGO] 15
Limitations of Tucker Anthony's Analysis (cont.)
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o In the past, Tucker Anthony has not had any material relationship with
Quizno's other than acting as advisor to the Company for the December
Tender
o Quizno's did not place any restrictions or limitations upon Tucker Anthony
with respect to the procedures followed or factors considered in rendering
its Fairness Opinion
o Tucker Anthony's compensation for delivering this Fairness Opinion is not
contingent upon the content of the Fairness Opinion
o Quizno's has agreed to reimburse Tucker Anthony for its reasonable and
properly documented expenses and to indemnify it against certain
liabilities that may arise out of the rendering of the Fairness Opinion,
including liabilities arising under the federal securities laws
[TUCKER ANTHONY SUTRO LOGO] 16
Summary Conclusion
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o Based upon and subject to all the foregoing, it is the opinion of Tucker
Anthony that, as of the date hereof, the Offer Price being offered to all
Unaffiliated Shareholders is fair, from a financial point of view, to such
shareholders
[TUCKER ANTHONY SUTRO LOGO] 17
Transaction Overview Summary
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[TUCKER ANTHONY SUTRO LOGO] 18
Summary of Proposed Transaction Terms
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o Using a long form merger structure, ("Merger") Unaffiliated Shareholders
will receive $8.00 per share in cash ("Offer Price") for each share of
common or common stock equivalent ("Stock") (the "Offer")
o The $8.00/share offer represents a premium of approximately 20% - 28% over
trading prices just prior to the December Tender and 10% over recent
trading prices
o Non-Affiliated shareholders will have appraisal rights
o All terms and conditions are subject to final documentation, including
information to be provided in the Merger documents
[TUCKER ANTHONY SUTRO LOGO] 19
Preliminary Calendar
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--------------------------------- -----------------------------------
Apr-01 May-01
--------------------------------- -----------------------------------
S M T W T F S S M T W T F S
--------------------------------- -----------------------------------
1 2 3 4 5 6 7 1 2 3 4 5
8 9 10 11 12 13 14 6 7 8 9 10 11 12
15 16 17 18 19 20 21 13 14 15 16 17 18 19
22 23 24 25 26 27 28 20 21 22 23 24 25 26
29 30 27 28 29 30 31
--------------------------------- -----------------------------------
o Board meeting April o Finalize prospectus May 1st to
11th May 10th
o Drafting Proxy and Prospectus o Submit Prospectus to SEC
April 12th to April 30th May 11th
o SEC review May 12th through
June 12th
--------------------------------- -----------------------------------
Jun-01 Jul-01
--------------------------------- -----------------------------------
S M T W T F S S M T W T F S
--------------------------------- -----------------------------------
1 2 1 2 3 4 5 6 7
3 4 5 6 7 8 9 8 9 10 11 12 13 14
10 11 12 13 14 15 16 15 16 17 18 19 20 21
17 18 19 20 21 22 23 22 23 24 25 26 27 28
24 25 26 27 28 29 30 29 30 31
--------------------------------- -----------------------------------
o SEC comments June 13th o Shareholders meeting/Close
to June 20th July 10th
o Print and Mail Proxy and
Prospectus to Shareholders
June 28th
[TUCKER ANTHONY SUTRO LOGO] 20
Preliminary Sources and Uses
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Sources and Uses
(Amounts in thousands)
Use of Funds Source of Funds
Stock Price $ 8.00 Cash & Equivalents $6,788
Term Debt $0 Bank Revolver $ -
Common Stock $6,943 Term Debt $ -
Transaction Costs $500 Preferred Stock with Warrants $ -
Other (Options & Warrants) $ 655
------------------------------------ --------------------------------------------------
Total Uses $7,443 Total Sources $7,443
------------------------------------ --------------------------------------------------
o Assumes all shares (including all common stock equivalents) are acquired
for $8.00/share, except Class D and Class E preferred shares; that is,
approximately 865,000 shares are acquired
o The Class D is assumed redeemed for a total of $25,000
o Class E preferred of approximately $512,000 is assumed left outstanding
--> Redeemable only after April 1, 2003 at $8.62 per share
o Excess cash balances from the fully drawn Levine facility provide the
financing required to complete the transaction --> At closing, excess cash
balances will be between $3.0 million and $3.7 million
o The current loan to Rick Schaden of approximately $2.0 million will be
refinanced using the new credit facility secured the Company plane
[TUCKER ANTHONY SUTRO LOGO] 21
Estimated Closing Balance Sheets
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Estimated June 30, 2001 Opening and Pro Forma Balance Sheets (1)
(amounts in thousands) Estimated Pro Forma Pro Forma
Pre-Transaction Scenario A Scenario B
933,934 Shares Acq'd 864,771 Shares Acq'd
Cash $10,500 $ 3,158 $ 3,712
A/R 3,000 3,000 3,000
Other Current 3,600 3,600 3,600
------- ------- -------
Total Current Assets $17,100 $ 9,758 $10,312
Net PP&E 11,100 11,100 11,100
Other Assets 20,600 21,100 21,100
------- ------- -------
Total Assets $48,800 $41,958 $42,512
======= ======= =======
Current Liabilities $ 6,700 6,700 6,700
(excl. current mat.)
Capitalized Leases/Other 725 725 725
Long Term Sr. Debt 13,963 13,963 13,963
Levine Debt 13,862 13,862 13,862
Deferred Franchise Fees 19,050 19,050 19,050
Stockholders' Equity (5,500) (12,342) (11,788)
------- ------- -------
Total Liabs + Equity $48,800 $41,958 $42,512
======= ======= =======
(1) All scenarios assume a purchase price of $8.00 per share
-----------------------------------------------------------------------------------------
Scenario A All shares and equivalents, except the Preferred D, are
acquired; Preferred D redeemed for $25,000
Scenario B All shares and equivalents, except the Preferred D and
E, are acquired; Preferred D redeemed for $25,000 and
Preferred E remains O/S
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[TUCKER ANTHONY SUTRO LOGO] 22
Pro-Forma Capitalization for Proposed Transaction
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Pro Forma Capital Structure
(Amounts in thousands) Equity
Pro Forma Balances (1) Participation
Cash $ 3,712 0.00%
Revolver $0 0.00%
Senior Term Debt 14,688 0.00%
Levine Debt 13,862 14.00%
Preferred Stock 0 0.00%
Common Stock 14,479 86.00%
------- ------
Total $46,741 100.00%
(1) Uses estimated June 30, 2001 as "opening" balance sheet; also see pro forma
closing balance sheet
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Management has indicated a need for at least $2.0 million in cash balances for
working capital needs
This scenario assumes the Class E preferred stock remains in place and the Class
D preferred stock is redeemed for $25,000
[TUCKER ANTHONY SUTRO LOGO] 23
Quizno's Ownership Table as of March 15, 2001
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THE QUIZNO'S CORPORATION - OWNERSHIP SCHEDULE
as of March 15, 2001
Preferred Stock Common Options
Name Class A Class B Class C Class D Class E Stock Employee Board
---- ------- ------- ------- ------- ------- ----- -------- -----
Schadens;
Richard F Schaden 73,000 34,000 34,803 773,667 4,000
Richard E Schaden 73,000 778,006 35,378 4,000
Tim Schaden 4,000
Fred Schaden 2,000 26,000
Board Members;
Brad Griffin 5,000 5,000
Mark Bromberg 14,000
Eric Lawrence 16,000
Lewis Rudnick 26,000
Bruce Golbus 15,000 5,801 26,000
Lyle Stewart 16,000
John Todd 1,000
Total Other 75,000 - 17,403 106,827 - 22,000
Total Employees 75,000 1,473 40,583 232,615 14,000
Other/"Public" 36,000 1,304,838 180,235
Not Issued 65,000
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Total Pre-Tender 146,000 167,000 75,000 59,480 3,007,921 513,228 174,000
401(k) cert not issued - - - - (2,360) - -
Amount Tendered - (110,000) - - (668,355) (477,850) (54,000)
Shs Issued Scott Adams - - - - 933 - -
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Total Post-Tender 146,000 57,000 75,000 59,480 2,338,139 35,378 120,000
LLCP % Allocation 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0%
Total LLCP Allocation 23,767 9,279 12,209 9,683 380,627 5,759 19,535
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Net After LLCP 169,767 66,279 87,209 69,163 2,718,766 41,137 139,535
=====================================================================================
Warrants Total Share
Name RRGC Phoenix Equivalents
---- ---- ------- -----------
Schadens;
Richard F Schaden 919,470*
Richard E Schaden 890,384*
Tim Schaden 4,000
Fred Schaden 28,000
Board Members; -
Brad Griffin 10,000
Mark Bromberg 14,000
Eric Lawrence 16,000
Lewis Rudnick 26,000
Bruce Golbus 46,801
Lyle Stewart 16,000
John Todd 1,000
Total Other 415,056 - 636,286
Total Employees
Other/"Public" 25,000 1,546,073
Not Issued 65,000
--------------------------------
Total Pre-Tender 415,056 25,000 4,582,685
401(k) cert not issued - - (2,360)
Amount Tendered (415,056) (25,000) (1,750,261)
Shs Issued Scott Adams - - 933
--------------------------------
Total Post-Tender - - 2,830,997
LLCP % Allocation 14.0% 14.0% 14.0%
Total LLCP Allocation - - 460,860*
--------------------------------
Net After LLCP - - 3,291,857
================================
Class D Shares Cancelled/Redeemed 87,209
Class E Remains Outstanding 69,163
-------------------------------------------------
* Indicates shares not tendering Shares Available for Purchase 864,771
-------------------------------------------------
-------------------------------------------------
** Based upon overall average strike price "Fully Diluted" Shares Outstanding** 3,073,025
of $5.83 and conversion of all preferred stock -------------------------------------------------
--------------------------------------------------------------------------------
[TUCKER ANTHONY SUTRO LOGO] 24
Quiz Ownership Post-Transaction
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Ownership: Post-Transaction
Percentage Implied
Ownership Shares
Richard F. Schaden 43.7% 919,470
Richard E. Schaden 42.3% 890,384
Levine Leichtman 14.0% 294,627
----- ---------
Total 100.0% 2,104,481
===== =========
--------------------------------------------------------------------------------
o Regardless of the number of shares that are acquired or rolled, Levine's
ownership interest will remain constant at 14.0%
[TUCKER ANTHONY SUTRO LOGO] 25
Covenant Descriptions
--------------------------------------------------------------------------------
o AMRESCO's only material financial covenant, a fixed charge coverage
ratio ("FCCR"), is calculated monthly and reflects pro forma
adjustments for debt amortization, interest expense and rents versus
historical EBITDA
o Calculations of "Total Cash Flow" and "Total Fixed Charges" for
AMRESCO are shown on the following page --> Dividends are not
included in the calculation of FCCR
o Levine's financial covenants include:
- Minimum EBITDA set equal to approximately 80%, 75% and 65% of
Management's projections (at the time of the December Tender)
for calendar 2001, 2002 and 2003 through 2005, respectively
- Minimum Fixed Charge Coverage Ratio ("FCCR") of not less than
1.35x; defined as EBITDA divided by cash interest expense,
scheduled principal payments, cash dividends paid and cash
taxes paid
- Maximum Net Debt (net of cash)/EBITDA on a reducing scale,
falling from 3.75x at December 31, 2001 to 2.50x by December
31, 2004
- Maximum Capital Expenditures of $3.5 million in fiscal 2001
and up to 25% of EBITDA in each subsequent fiscal year
o Under the Levine facility, Quizno's is provided a 180 day grace
period before acceleration, unless the Company's performance falls
below the "Aceleration levels for EBITDA, FCCR and Net Debt/EBITDA
o If Levine's debt is accelerated, the prepayment penalty is reduced
by 50%
[TUCKER ANTHONY SUTRO LOGO] 26
Pro-Forma Covenant Compliance -- AMRESCO
----------------------------------------------------------------------------------------------------------------------
Calculation of Fixed Charge Coverage for AMRESCO
Last Twelve Months
Dec. 31, '00 Mar 31, '01 June 30, '01 Sept. 30, '01 Dec. 31, '01
Net Income before Taxes ($1,827,431) ($1,387,151) ($831,899) ($446,077) $3,769,996
Interest $2,051,977 $2,466,026 $2,879,183 $3,244,101 $3,419,471
Depreciation and Amortization $2,141,058 $2,301,400 $2,385,913 $2,441,152 $2,549,438
----------- ----------- ---------- ---------- ----------
Unadjusted EBITDA $2,365,604 $3,380,275 $4,433,197 $5,239,176 $9,738,905
Adjustments
Impairment $1,796,878 $1,796,878 $1,796,878 $1,217,632 $0
Financing Costs $2,343,277 $2,343,277 $2,343,277 $2,343,277 $0
AFD start up costs $289,878 $289,878 $289,878 $289,878 $0
Owner Bonuses $490,000 $340,000 $210,070 $136,583 $0
Rents $2,041,692 $2,120,005 $2,158,803 $2,158,804 $2,110,000
Pro forma Rent Adjustment $68,308 $0 $0 $0 $0
---------------------------------------------------------------------------------------------------------------------
Adjusted Total Cash Flow $9,395,637 $10,270,313 $11,232,103 $11,385,350 $11,848,905
=====================================================================================================================
Principal plus Interest (1) $3,184,443 $3,641,449 $4,197,681 $4,606,187 $4,892,698
Pro forma Debt Service Adjustment $2,681,903 $1,862,393 $1,222,075 $570,042 $69,169
Rents $2,041,692 $2,120,005 $2,158,803 $2,158,804 $2,110,000
Pro forma Rent Adjustment $68,308 $0 $0 $0 $0
---------------------------------------------------------------------------------------------------------------------
Total Fixed Charges $7,908,038 $7,623,847 $7,578,559 $7,335,033 $7,071,867
=====================================================================================================================
FCCR 1.19 1.35 1.48 1.55 1.68
---------------------------------------------------------------------------------------------------------------------
FCCR after 933,934 Shares Acq'd 1.19 1.35 1.48 1.54 1.64
----------------------------------------------------------------------------------------------------------------------
(1) Excludes the $1.72 million prepayment made to AMRESCO in February 2001
o This analysis assumes the maximum number of shares is acquired (933,934) at
$8.00/share
o Based upon Management's projections, it appears Quizno's will meet or
exceed a 1.50x fixed charge coverage ratio (minimum debt incurrence
covenant) between July and September of this year --> Company would receive
$1.1 million currently held in escrow
[TUCKER ANTHONY SUTRO LOGO] 27
Pro-Forma Covenant Compliance -- Levine Leichtman
------------------------------------------------------------------------------------------------------------------
Calculations for Levine Leichtman Covenants
Six Months
Ending LTM LTM LTM
Projected Amounts 6/30/01 12/31/01 3/31/02 6/30/02
EBITDA (adj. for lost interest income of $75k/qtr) $4,755,978 $9,474,010 $10,061,491 $10,631,999
Cash Interest $915,983 $1,832,826 $2,052,540 $2,479,892
Principal Payments (1) $709,142 $1,409,929 $1,516,993 $1,711,402
Cash Taxes Paid (2) $481,075 $1,706,476 $2,026,986 $2,255,309
Dividends Paid $54,666 $109,332 $54,683 $27,358
Total Fixed Charges $2,160,866 $5,058,562 $5,651,202 $6,473,961
Total Debt $28,550,000 $27,934,000 $27,496,000 $27,058,000
Cash $3,158,278 $2,524,531 $3,113,552 $3,702,573
Total Net Debt $25,391,722 $25,409,469 $24,382,448 $23,355,427
Covenants
Minimum EBITDA - Penalty/Standstill (3) $3,389,000 $7,628,000 $8,203,000 $8,731,000
Minimum EBITDA - Acceleration $2,542,000 $5,686,000 $6,080,000 $6,438,000
Projected $4,755,978 $9,474,010 $10,061,491 $10,631,999
Minimum FCCR - Penalty/Standstill (3) 1.35x 1.35x 1.35x 1.35x
Minimum FCCR - Acceleration 1.00x 1.00x 1.00x 1.00x
Projected 2.20x 1.87x 1.78x 1.64x
Maximum Net Debt/EBITDA - Penalty/Standstill (3) 8.60x 3.75x 3.70x 3.60x
Maximum Net Debt/EBITDA - Acceleration 10.00x 5.00x 5.00x 5.00x
Projected 5.34x 2.68x 2.42x 2.20x
Capital Expenditures (4) n.a. $3,500,000 $3,500,000 $3,500,000
Projected n.a. $2,500,000 $2,500,000 $2,500,000
(1) Assumes the $1.72 million prepayment made to AMRESCO in February 2001 is
not included in this calculation
(2) Tax benefit of approx. $1.1 million booked in the quarter ended December
31, 2000 reduces cash taxes paid in CY '01; book taxes are estimated at
$1.4 million
(3) Performance below the "Penalty" level at June 30 results in the interest
rate increasing 1% for 60 days +1% for each 30 days thereafter until cured;
performance below the "Penalty" level after June 30 results in a default
that is subject to a 180 day standstill
(4) Capital Expenditure covenant covers fiscal years ending September 30
o This analysis also assumes the maximum number of shares is acquired
(933,934) at $8.00/share --> Based upon information provided by management,
it appears the Company will meet its covenants with Levine
[TUCKER ANTHONY SUTRO LOGO] 28
Valuation Data
--------------------------------------------------------------------------------
[TUCKER ANTHONY SUTRO LOGO] 29
Summary Annual Income Statements
--------------------------------------------------------------------------------
(Amounts in thousands)
December 31, Pro Forma December 31,
OPERATING SUMMARY 1998 1999 2000 2000 2001 2002 2003 2004 2005
---- ---- ---- ---- ---- ---- ---- ---- ----
Revenues 19,455 27,908 45,414 45,414 54,651 58,973 66,439 73,091 79,832
Cost of Goods Sold (4,366) (6,207) (8,342) (8,342) (8,586) (11,827) (13,467) (14,849) (16,300)
------------------------------------------------------------------------------------------------------------------------------
Gross Profit 15,089 21,702 37,072 37,072 46,065 47,146 52,973 58,242 63,531
Selling, General &
Administrative (13,222) (17,774) (29,890) (29,890) (35,755) (32,596) (34,950) (37,427) (39,822)
Depreciation & Amortization (782) (1,383) (2,085) (2,085) (2,549) (2,835) (3,085) (3,335) (3,578)
Other Income/(Expense) 0 903 (871) (871) (571) (1,715) (1,919) (2,102) (2,269)
Canada Investment (net) 0 0 0 0 0 500 500 800 1,100
------------------------------------------------------------------------------------------------------------------------------
EBIT $ 1,085 $ 3,447 $ 4,227 $ 4,227 $ 7,189 $ 10,500 $ 13,518 $ 16,177 $ 18,963
------------------------------------------------------------------------------------------------------------------------------
Amortization $ 258 $ 456 $ 500 $ 500 $ 583 $ 583 $ 583 $ 583 $ 583
------------------------------------------------------------------------------------------------------------------------------
EBITA $ 1,343 $ 3,904 $ 4,727 $ 4,727 $ 7,773 $ 11,083 $ 14,101 $ 16,761 $ 19,546
------------------------------------------------------------------------------------------------------------------------------
Depreciation 524 927 1,585 1,585 1,966 2,252 2,502 2,752 2,995
------------------------------------------------------------------------------------------------------------------------------
EBITDA $ 1,867 $ 4,830 $ 6,311 $ 6,311 $ 9,739 $ 13,335 $ 16,603 $ 19,512 $ 22,541
------------------------------------------------------------------------------------------------------------------------------
Interest Expense
Interest Expense, Net (341) (708) (2,052) (3,419) (3,419) (3,237) (3,121) (2,848) (2,497)
Other Income/(Expense) 0 0 (4,002) (4,002) 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------
Income before Income Taxes 744 2,739 (1,827) (3,195) 3,770 7,263 10,397 13,330 16,466
Provision for Income Taxes 369 (948) 672 1,478 (1,741) (3,408) (4,662) (5,835) (7,090)
Net Income $ 1,113 $ 1,791 ($ 1,155) ($ 1,717) $ 2,029 $ 3,854 $ 5,735 $ 7,495 $ 9,376
==============================================================================================================================
Net Income Per Share
(Fully Diluted) $ 0.32 $ 0.48 ($ 0.40) ($ 0.60) $ 0.71 $ 1.34 $ 2.00 $ 2.61 $ 3.27
Preferred Dividends $ 221 $ 164 $ 196 $ 196 $ 55 $ 0 $ 0 $ 0 $ 0
o Based upon Management's quarterly projections
[TUCKER ANTHONY SUTRO LOGO] 30
Preliminary Summary Valuation
--------------------------------------------------------------------------------
Per Share
Method Value Range
------ ------------------------
Comparable Public Company Analysis $6.50 - $8.25
Comparable Transaction Analysis $7.00 - $8.50
Theoretical Future Trading Prices $7.50 - $9.00
Discounted Cash Flow Analysis $10.00 - $13.00
Financial Buyer Analysis $6.75 - $8.25
--------------------------------------------------------------------------------
Tucker Anthony Sutro Capital Markets Estimate $7.25 - $8.25
--------------------------------------------------------------------------------
</Table>
[TUCKER ANTHONY SUTRO LOGO] 31
Multiples Analysis - Stock Price Matrix
--------------------------------------------------------------------------------
($000, except price per share)
Stock Price
-----------------------------------------------------------------
Share price $7.25 $7.50 $7.75 $8.00 $8.25
"Fully-Diluted" Shares outstanding at 3/15/01 3,073 3,073 3,073 3,073 3,073
------- ------- ------- ------- -------
Market Value of Equity $22,279 $23,048 $23,816 $24,584 $25,352
Net Debt as of 12/31/00 21,502 21,502 21,502 21,502 21,502
------- ------- ------- ------- -------
Enterprise Value $43,781 $44,550 $45,318 $46,086 $46,854
Quizno's Results - LTM as of
-------------------------------------
Revenues - 12/31/00 $45,414 0.96x 0.98x 1.00x 1.01x 1.03x
Revenues - 6/30/01 $50,292 0.87x 0.89x 0.90x 0.92x 0.93x
Revenue - 12/31/01 $54,651 0.80x 0.82x 0.83x 0.84x 0.86x
EBITDA - 12/31/00 $6,311 6.9x 7.1x 7.2x 7.3x 7.4x
EBITDA - 6/30/01 $8,435 5.2x 5.3x 5.4x 5.5x 5.6x
EBIT - 12/31/00 $4,227 10.4x 10.5x 10.7x 10.9x 11.1x
EBIT - 6/30/01 $6,049 7.2x 7.4x 7.5x 7.6x 7.7x
Net Income - 12/31/01 (2) $2,262 9.8x 10.2x 10.5x 10.9x 11.2x
(1) Fully diluted shares outstanding is based upon treasury method and assumes
all preferred stock (except D) is converted
(2) Pre-tax income taxed at a normalized 40%
[TUCKER ANTHONY SUTRO LOGO] 32
Trading Multiples Analysis - October 31, 2000 vs. April 4, 2001
--------------------------------------------------------------------------------
($ in thousands) October 31, 2000 April 4, 2001
--------------------------------------------- -----------------------------------------------
QUIZ Median QUIZ Median
Multiple Multiple Adjusted Range(1) Multiple Multiple Adjusted Range (1)
----------- ---------- ------------------- ----------- ------------- -------------------
Small Cap Peer Group
----------------------
LTM Sales 0.81x 0.36x 0.17x - 0.47x 0.90x 0.48x 0.21x - 0.53x
LTM EBIT 7.4x 6.9x 4.1x - 9.8x 9.6x 7.9x 7.0x - 8.8x
LTM EBITDA 5.1x 3.6x 2.9x - 4.3x 6.5x 4.8x 4.8x - 4.9x
LTM Net Income 16.1x 12.0x 12.0x - 12.0x 18.6x 10.8x 10.1x - 11.4x
Calendar 2001 Sales 0.65x 1.03x NA - NA 0.75x 1.02x NA - NA
Calendar 2001 Net Income 8.7x 3.9x NA - NA 7.3x NA NA - NA
Large Cap Peer Group
------------------------
LTM Sales 1.19x 0.55x - 2.23x 1.18x 0.70x - 1.96x
LTM EBIT 8.4x 6.2x - 8.9x 8.5x 7.1x - 12.8x
LTM EBITDA 6.4x 4.1x - 9.4x 6.1x 5.1x - 9.9x
LTM Net Income 13.3x 7.8x - 31.0x 13.7x 11.1x - 16.3x
Calendar 2001 Sales 1.06x 0.95x - 1.13x 1.10x 0.68x - 1.33x
Calendar 2001 Net Income 11.2x 9.3x - 14.4x 12.0x 10.9x - 17.9x
(1) Excludes highest two and lowest two values
o While all of the median trading multiples for the small cap peer group
have increased since October 31, 2000 (reflecting takeover speculation),
the change in median multiples for the large cap peer group is more mixed
o Quizno's continues to trade at premiums to the trading multiples for the
small cap group despite the expansion in multiples
[TUCKER ANTHONY SUTRO LOGO] 33
Comparable Publicly Traded Company Analysis
--------------------------------------------------------------------------------
(Amounts in 000's)
Quizno's Results - LTM as of Valuation Multiple Range Enterprise Value Net Debt(1) Equity Value Price per Share (2)
------------------------------------------------------------------------------------------------------------------------------
Revenues - 12/31/00 $45,414 0.50x - 1.00x $22,707 - $45,414 $21,502 n.m. - $23,912 n.m. - $7.78
Revenues - 6/30/01 $50,292 0.55x - 0.90x $27,661 - $45,263 $21,502 $ 6,159 - $23,761 $2.00 - $7.73
Revenue - 12/31/01 $54,651 0.50x - 0.80x $27,326 - $43,721 $21,502 $ 5,824 - $22,219 $1.90 - $7.23
EBITDA - 12/31/00 $ 6,311 5.0x - 6.8x $31,556 - $42,600 $21,502 $10,054 - $21,098 $3.27 - $6.87
EBITDA - 6/30/01 $ 8,435 4.5x - 5.7x $37,958 - $48,081 $21,502 $16,456 - $26,579 $5.36 - $8.65
EBIT - 12/31/00 $ 4,227 7.0x - 9.5x $29,586 - $40,152 $21,502 $ 8,084 - $18,650 $2.63 - $6.07
EBIT - 6/30/01 $ 6,049 6.1x - 8.0x $36,901 - $48,394 $21,502 $15,399 - $26,892 $5.01 - $8.75
Net Income - 12/31/01(3) $ 2,262 9.0x - 12.0x $41,860 - $48,646 $21,502 $20,358 - $27,144 $6.62 - $8.83
Tucker Anthony Sutro Capital Markets Estimate $6.50 $8.25
(1) Net debt as of December 31, 2000 plus liquidation value of preferred stock
(2) Based upon fully diluted shares outstanding of 3.1 million as of March 15,
2001
(3) Pre-tax income taxed at a normalized 40%
[TUCKER ANTHONY SUTRO LOGO] 34
Trading Multiples for Selected Comparable Companies
--------------------------------------------------------------------------------
($ in millions, except per share amounts)
Enterprise Value Multiples
4/4/01 Market -----------------------------------
Stock Common Value of Enterprise Calendar LTM LTM LTM
Company Ticker Price Shares(1)Equity(2) Value(3) 2001 Sales Sales EBITDA EBIT
Comparable Companies Market Cap < $100 million
Blimpie International, Inc BLM $1.45 9.2 $13.4 $5.5 NA 0.18x 2.8x 6.0x
Checkers Drive-In Rest. CHKR $5.25 9.4 $49.5 $96.7 NA 0.53x 4.9x 8.8x
Jerry's Famous Deli, Inc. DELI $4.25 4.7 $19.9 $33.6 NA 0.48x 4.8x 10.1x
Pizza Inn, Inc. PZZI $1.78 10.6 $18.9 $31.3 NA 0.48x 5.0x 6.4x
Schlotzsky's, Inc. BUNZ $3.91 7.4 $29.1 $60.8 1.0x 1.03x NM NM
Sizzler International SZ $1.26 27.6 $34.8 $50.2 NA 0.21x 3.1x 7.0x
Uno Restaurant Corp. UNO $9.48 11.0 $104.2 $160.1 NA 0.67x 5.2x 9.2x
Wall Street Deli Inc. WSDI $0.50 2.9 $1.5 $4.7 NA 0.10x NM NM
--------------------------------------------------------------------------
Mean: $33.9 $55.4 1.0x 0.46x 4.3x 7.9x
Median: $24.5 $41.9 1.0x 0.48x 4.8x 7.9x
--------------------------------------------------------------------------
Comparable Companies Market Cap > $100 million
Applebee's Int'l, Inc. APPB $37.94 24.4 $925.0 $1,004.3 1.33x 1.46x 6.9x 9.3x
Brinker International, Inc. EAT $26.87 99.1 $2,663.3 $2,772.8 1.03x 1.21x 8.9x 12.8x
BUCA, Inc. BUCA $19.00 14.2 $269.5 $260.9 1.44x 2.01x 15.1x 23.5x
Cheesecake Factory CAKE $33.75 31.6 $1,065.8 $1,014.7 1.87x 2.32x NM NM
IHOP Corp. IHP $19.25 20.0 $385.4 $594.7 NA 1.96x 6.4x 7.5x
Landry's Seafood Restaur. LNY $11.05 21.5 $237.6 $366.5 0.52x 0.70x 5.7x 11.7x
Lone Star Steakhouse STAR $8.88 20.0 $177.7 $148.7 0.25x 0.26x 2.7x 5.8x
Outback Steakhouse, Inc. OSI $24.45 76.7 $1,875.6 $1,781.5 0.82x 0.93x 5.8x 7.2x
P.F. Chang's China Bistro PFCB $32.25 11.7 $377.4 $388.8 1.27x 1.66x 13.9x NM
-------------------------------------------------------------------------------------------------------------------------
Papa Johns International PZZA $23.50 24.2 $568.8 $703.5 0.68x 0.74x 6.0x 8.5x
-------------------------------------------------------------------------------------------------------------------------
Ruby Tuesday, Inc. RI $18.55 63.2 $1,171.8 $1,201.3 1.42x 1.48x 9.9x 14.9x
Ryan's Family Steak House RYAN $10.69 32.5 $347.2 $537.1 NA 0.76x 5.1x 7.1x
TRICON Global Restaurants YUM $37.80 146.3 $5,528.9 $7,854.9 1.11x 1.11x 5.6x 7.4x
VICORP Restaurants, Inc. VRES $24.91 6.8 $135.7 $140.3 NA 0.37x 3.5x 5.8x
Wendy's International WEN $22.39 114.3 $2,560.1 $2,642.7 1.09x 1.18x 6.2x 8.5x
---------------------------------------------------------------------------
Mean: $1,219.3 $1,427.5 1.1x 1.21x 7.3x 10.0x
Median: $568.8 $703.5 1.1x 1.18x 6.1x 8.5x
---------------------------------------------------------------------------
Subject Company
Quizno's - 12/31/00 (7) $7.50 2.3 $17.5 $40.7 0.75x 0.90x 6.5x 9.6x
Equity Value Multiples
--------------------------------------------
Calendar P/E Book 3-5 Yr.
LTM 2001 2002 Value Growth(4) Type(6)
Comparable Companies Market Cap < $100 million
Blimpie International,Inc 17.7x NEG 29.0x 0.7x NA F
Checkers Drive-In Rest 9.6x NA NA 1.0x NA B
Jerry's Famous Deli, Inc. 13.7x NA NA 0.7x NA O
Pizza Inn, Inc. 7.7x NA NA NM NA F
Schlotzsky's, Inc. NEG NA NA 0.4x 12.0% B
Sizzler International 10.1x NA NA 0.7x NA B
Uno Restaurant Corp. 11.4x NA NA 1.2x 22.0% B
Wall Street Deli Inc. NEG NA NA 0.3x NA O
--------------------------------------------------------
11.7x - 29.0x 0.7x 17.0%
10.8x - 29.0x 0.7x 17.0%
--------------------------------------------------------
Comparable Companies Market Cap > $100 million
Applebee's Int'l, Inc. 15.6x 13.8x 12.0x 3.3x 15.1% B
Brinker International, Inc. 14.2x 17.9x NA 3.3x NA B
BUCA, Inc. 35.2x 25.3x 19.4x 2.7x 34.4% O
Cheesecake Factory NM NM 23.3x 4.4x 25.5% O
IHOP Corp. 11.1x 9.8x 8.8x 1.5x NA B
Landry's Seafood Restaur. 16.3x 10.9x 9.3x 0.7x 21.5% O
Lone Star Steakhouse 12.3x NA NA 0.4x 13.3% O
Outback Steakhouse, Inc. 13.7x 11.9x 10.3x 2.4x 18.5% B
P.F. Chang's China Bistro NM NM 21.4x 4.9x 36.4% O
---------------------------------------------------------------------------------------
Papa Johns International 12.4x 12.0x 11.0x 3.4x NA B
---------------------------------------------------------------------------------------
Ruby Tuesday, Inc. 25.0x 18.9x NA 4.5x 19.0% O
Ryan's Family Steak House 8.4x 7.9x NA 1.2x NA B
TRICON Global Restaurants 10.5x 12.0x 10.9x NEG 15.0% B
VICORP Restaurants, Inc. 11.5x NA NA 1.0x NA B
Wendy's International 15.1x 13.1x 11.7x 2.3x 14.9% B
--------------------------------------------------------
15.5x 14.0x 13.8x 2.6x 21.3%
13.7x 12.0x 11.4x 2.5x 18.7%
--------------------------------------------------------
Subject Company
Quizno's - 12/31/00 (7) 18.6x 7.3x 4.0x NEG 22.7% B
-------------------------------------------------------------------------------
Notes:
(1) Latest reported common shares outstanding, in millions
(2) Market Value of Equity calculated by multiplying current market price by
number of common shares outstanding
(3) Enterprise Value equals net debt plus market value of equity plus book
value of preferred stock and minority interests
(4) First Call consensus estimated annual increase in operating earnings over
the next (3-5 years)
(5) 2000 P/E ratio as a percentage of 3-5 year growth rate
(6) Refers to type of business; F= Franchisor, O= Operator, B= Both
(7) Shares as of 12/31/00 10Q
* "LTM" or "Latest Twelve Months" represents last four quarters reported
[TUCKER ANTHONY SUTRO LOGO] 35
Margin Analysis for Selected Comparable Companies
--------------------------------------------------------------------------------
LTM Margins
----------------------------------------------
Gross SG&A Net
Company Ticker Profit Expense EBITDA EBIT Income
Comparable Companies Market Cap < $100 million
Blimpie International,Inc BLM 47.7% 44.8% 6.3% 2.9% 2.3%
Checkers Drive-In Rest. CHKR 21.6% 15.5% 11.0% 6.1% 3.1%
Jerry's Famous Deli, Inc. DELI 60.4% 55.6% 10.1% 4.8% 2.1%
Pizza Inn, Inc. PZZI 14.0% 6.6% 9.6% 7.5% 4.0%
Schlotzsky's, Inc. BUNZ 53.8% 56.7% 3.4% NEG NEG
Sizzler International SZ 34.9% 31.9% 6.6% 3.0% 1.5%
Uno Restaurant Corp. UNO 44.0% 36.8% 12.9% 7.3% 4.1%
Wall Street Deli Inc. WSDI 4.9% 11.4% NEG NEG NEG
--------------------------------------------------------
Mean: 35.2% 32.4% 8.6% 5.3% 2.8%
Median: 39.5% 34.3% 9.6% 5.4% 2.7%
--------------------------------------------------------
Comparable Companies Market Cap > $100 million
Applebee's Int'l, Inc. APPB 48.2% 32.5% 21.1% 15.7% 9.3%
Brinker International, Inc. EAT 69.3% 59.9% 13.6% 9.4% 5.8%
BUCA, Inc. BUCA 37.3% 28.8% 13.3% 8.5% 5.6%
Cheesecake Factory CAKE 39.7% 29.1% 13.6% 10.5% 7.3%
IHOP Corp. IHP 61.1% 35.1% 30.8% 26.3% 11.7%
Landry's Seafood Restaur. LNY 35.2% 29.2% 12.4% 6.0% 3.1%
Lone Star Steakhouse STAR 59.9% 55.5% 9.4% 4.4% 3.3%
Outback Steakhouse, Inc. OSI 35.8% 22.8% 16.1% 13.0% 7.4%
P.F. Chang's China Bistro PFCB 39.4% 30.9% 11.9% 8.5% 4.1%
--------------------------------------------------------------------------------------
Papa Johns International PZZA 35.9% 27.2% 12.4% 8.7% 5.0%
--------------------------------------------------------------------------------------
Ruby Tuesday, Inc. RI 41.7% 31.7% 15.0% 10.0% 5.9%
Ryan's Family Steak House RYAN 28.5% 17.7% 15.0% 10.8% 6.0%
TRICON Global Restaurants YUM 48.0% 35.9% 19.6% 15.0% 7.6%
VICORP Restaurants, Inc. VRES 38.1% 31.7% 10.7% 6.4% 3.9%
Wendy's International WEN 44.2% 30.3% 18.9% 13.9% 8.1%
--------------------------------------------------------
Mean: 44.2% 33.2% 15.6% 11.2% 6.3%
Median: 39.7% 30.9% 13.6% 10.0% 5.9%
--------------------------------------------------------
Subject Company
Quizno's - 12/31/00 81.6% 65.8% 13.9% 9.3% 2.5%
LTM Leverage Ratios
-------------------------------------------------
Total Net Net LTM LTM
Debt/ Debt/ Debt/ EBITDA/ Op. Inc./ Return on Return on
Company Total Cap(1) EBITDA Op. Inc. Int. Exp. Int. Exp. Equity (2) Capital (3)
Comparable Companies Market Cap < $100 million
Blimpie International,Inc 0.0% NM NM NM NM 3.8% 6.6%
Checkers Drive-In Rest 49.0% 2.3x 4.2x 3.4x 1.9x 11.7% 5.8%
Jerry's Famous Deli, Inc. 33.1% 1.8x 3.9x 6.3x 3.0x 5.4% 3.5%
Pizza Inn, Inc. 100.1% 2.0x 2.6x 6.6x 5.2x 121.9% 19.9%
Schlotzsky's, Inc. 31.6% 15.6x NM NM NM NEG NEG
Sizzler International 49.1% 1.0x 2.1x 8.9x 4.0x 7.2% 5.5%
Uno Restaurant Corp. 40.6% 1.8x 3.2x 8.4x 4.7x 11.8% 7.0%
Wall Street Deli Inc. 43.0% NM NM NEG NEG NEG NEG
-----------------------------------------------------------------------------
Mean: 43.3% 4.1x 3.2x 6.7x 3.8x 27.0% 8.1%
Median: 41.8% 1.9x 3.2x 6.6x 4.0x 9.5% 6.2%
-----------------------------------------------------------------------------
Comparable Companies Market Cap > $100 million
Applebee's Int'l, Inc. 25.3% 0.5x 0.7x 18.6x 13.9x 23.9% 17.7%
Brinker International, Inc. 15.7% 0.4x 0.5x 35.0x 24.3x 18.0% 14.3%
BUCA, Inc. 2.0% NM NM NM NM 9.2% 7.9%
Cheesecake Factory 0.0% NM NM NM NM 15.1% 16.9%
IHOP Corp. 46.1% 2.2x 2.6x 4.3x 3.7x 14.5% 7.5%
Landry's Seafood Restaur. 31.4% 2.0x 4.1x NM NM 4.3% 3.2%
Lone Star Steakhouse 0.0% NM NM NM NM 4.1% 4.7%
Outback Steakhouse, Inc. 1.7% NM NM NM NM 21.2% 20.5%
P.F. Chang's China Bistro 18.8% 0.4x 0.5x 716.6x 514.7x 13.7% 11.0%
---------------------------------------------------------------------------------------------------
Papa Johns International 48.7% 1.2x 1.6x 20.1x 14.2x 20.6% 15.7%
---------------------------------------------------------------------------------------------------
Ruby Tuesday, Inc. 13.5% 0.2x 0.4x 1736.1x 1153.1x 19.8% 16.5%
Ryan's Family Steak House 40.6% 1.8x 2.5x 7.6x 5.5x 14.8% 8.9%
TRICON Global Restaurants 133.2% 1.7x 2.2x 7.9x 6.0x NEG 28.6%
VICORP Restaurants, Inc. 7.1% 0.1x 0.2x 53.5x 31.9x 10.9% 10.9%
Wendy's International 20.9% 0.2x 0.3x 28.1x 20.6x 16.5% 15.0%
-----------------------------------------------------------------------------
Mean: 27.0% 1.0x 1.4x 262.8x 178.8x 14.8% 13.3%
Median: 18.8% 0.5x 0.7x 24.1x 17.4x 14.9% 14.3%
-----------------------------------------------------------------------------
Subject Company
Quizno's - 12/31/00 204.0% 3.4x 5.1x 3.1x 2.1x NEG 7.5%
--------------------------------------------------------------------------------
Notes:
(1) Total Capital represents net debt plus total shareholders' equity plus
minority interest
(2) LTM Return on Equity equals LTM net income before non-recurring items
divided by common shareholders' equity
(3) LTM Return on Invested Capital equals LTM operating income before
non-recurring items divided by total capital
[TUCKER ANTHONY SUTRO LOGO] 36
Financial Performance for Selected Comparable Companies
-------------------------------------------------------------------------------
($ in millions, except per
share amounts)
Fiscal LTM
Year Data Total Cash & Net
Company Ticker End as of Debt Equivalents Debt
------- ------ ---- ----- ---- ----------- ----
Comparable Companies Market Cap < $100 million
Blimpie International,Inc BLM 6/00 12/00 $0.0 $7.9 ($7.9)
Checkers Drive-In Rest. CHKR 12/00 12/00 $46.9 $0.3 $46.7
Jerry's Famous Deli, Inc. DELI 12/00 12/00 $13.4 $0.5 $12.9
Pizza Inn, Inc. PZZI 6/00 12/00 $12.9 $0.4 $12.5
Schlotzsky's, Inc. BUNZ 12/00 12/00 $32.9 $1.2 $31.8
Sizzler International SZ 4/00 1/01 $33.5 $18.1 $15.4
Uno Restaurant Corp. UNO 9/00 12/00 $56.6 $0.8 $55.9
Wall Street Deli Inc. WSDI 6/00 12/00 $3.8 $0.6 $3.2
Comparable Companies Market Cap > $100 million
Applebee's Int'l, Inc. APPB 12/00 12/00 $91.4 $12.1 $79.3
Brinker International, Inc. EAT 6/00 12/00 $145.2 $35.7 $109.5
BUCA, Inc. BUCA 12/00 12/00 $1.8 $10.5 ($8.6)
Cheesecake Factory CAKE 12/00 12/00 $0.0 $51.1 ($51.1)
IHOP Corp. IHP 12/00 12/00 $216.5 $7.2 $209.3
Landry's Seafood Restaur. LNY 12/00 12/00 $155.0 $26.1 $128.9
Lone Star Steakhouse STAR 12/00 12/00 $0.0 $29.0 ($29.0)
Outback Steakhouse, Inc. OSI 12/00 12/00 $11.6 $88.3 ($76.8)
P.F. Chang's China Bistro PFCB 12/00 12/00 $16.7 $6.4 $10.3
-----------------------------------------------------------------------------
Papa Johns International PZZA 12/00 12/00 $146.6 $11.9 $134.7
-----------------------------------------------------------------------------
Ruby Tuesday, Inc. RI 5/00 11/00 $38.8 $9.3 $29.4
Ryan's Family Steak House RYAN 12/00 12/00 $192.0 $2.1 $189.9
TRICON Global Restaurants YUM 12/00 12/00 $2,502 $176.0 $2,326.0
VICORP Restaurants, Inc. VRES 10/00 1/01 $9.6 $12.1 $4.6
Wendy's International WEN 12/00 12/00 $252.3 $169.7 $82.6
Subject Company
Quizno's - 12/31/00 (3) QUIZ 9/00 12/00 $31.4 $9.9 $21.5
LTM Financial Data Calendar
--------------------------------------------- EPS(2) Common
Net ------------ Book
Company Sales EBITDA EBIT Income EPS(1) 2001 2002 Value
------- ----- ------ ---- ------ ----- ---- ---- -----
Comparable Companies Market Cap < $100 million
Blimpie International,Inc $31.1 $2.0 $0.9 $0.7 $0.08 ($0.15) $0.05 $18.5
Checkers Drive-In Rest. $181.2 $19.9 $11.0 (8) $5.6 $0.55 NA NA $48.6
Jerry's Famous Deli, Inc. $69.6 $7.0 $3.3 (9) $1.4 $0.31 NA NA $26.8
Pizza Inn, Inc. $64.8 $6.2 $4.9 (10) $2.6 $0.23 NA NA $0.4
Schlotzsky's, Inc. $59.2 $2.0 ($1.7) ($2.3) ($0.31) NA NA $72.5
Sizzler International $241.5 $15.9 $7.2 $3.7 $0.12 NA NA $52.8
Uno Restaurant Corp. $238.3 $30.8 $17.4 $9.7 $0.83 NA NA $83.7
Wall Street Deli Inc. $46.7 ($0.7) ($3.0)(4) ($3.2) ($1.10) NA NA $5.7
Comparable Companies Market Cap > $100 million
Applebee's Int'l, Inc. $690.2 $145.3 $108.5 (5) $64.0 $2.43 $2.74 $3.17 $281.7
Brinker International, Inc. $2,300.5 $311.7 $216.3 $132.7 $1.89 $1.50 NA $816.8
BUCA, Inc. $129.8 $17.3 $11.1 (11) $7.3 $0.54 $0.75 $0.98 $100.7
Cheesecake Factory $438.3 $59.8 $46.1 $32.1 $0.96 $1.17 $1.45 $240.8
IHOP Corp. $303.2 $93.3 $79.8 $35.3 $1.74 $1.96 $2.20 $260.0
Landry's Seafood Restaur. $521.0 $64.8 $31.5 (12) $16.0 $0.68 $1.01 $1.19 $364.6
Lone Star Steakhouse $575.9 $54.1 $25.5 $19.1 $0.72 NA NA $437.8
Outback Steakhouse, Inc. $1,906.0 $306.0 $247.9 (13) $141.1 $1.78 $2.06 $2.37 $782.2
P.F. Chang's China Bistro $234.9 $27.9 $20.1 $9.7 $0.86 $1.18 $1.51 $77.3
---------------------------------------------------------------------------------------------------
Papa Johns International $944.7 $116.7 $82.5 (14) $47.3 $1.90 $1.96 $2.13 $166.3
---------------------------------------------------------------------------------------------------
Ruby Tuesday, Inc. $810.1 $121.5 $80.7 (6) $47.5 $0.74 $0.98 NA $258.2
Ryan's Family Steak House $704.6 $105.5 $76.1 (15) $42.0 $1.27 $1.35 NA $282.4
TRICON Global Restaurants $7,093.0 $1,390.7 $1,064.0 (16) $536.2 $3.60 $3.16 $3.48 ($448.0)
VICORP Restaurants, Inc. $375.3 $40.3 $24.1 $14.8 $2.17 NA NA $130.7
Wendy's International $2,236.9 $423.9 $310.4 (7) $181.1 $1.48 $1.71 $1.91 $1,126.1
Subject Company
Quizno's - 12/31/00 (3) $45.4 $6.3 $4.2 $1.2 $0.40 $0.83 $1.51 ($6.1)
---------------------------------------------------------------------------------------------------
Notes:
(1) Diluted earnings per share.
(2) Estimates are First Call consensus estimates.
(3) LTM and 1999 Calendar Net income and EPS numbers exclude $2.77 million
adjustment for change in accounting methods
(4) Excludes charge for impairment of long-lived assets of $376,417 and gain
from sale of assets $31,438.
(5) Excludes loss on disposition of restaurants and equipment $1,265,000.
(6) Excludes loss on sale of American Cafe and Tria's Tex-Mex Restaurants.
(7) Excludes $18,370,000 in International charges.
(8) Income statement information taken from press release dated 3/9/01 and
balance sheet information taken from 9/30/00 10Q.
(9) Income statement information taken from press release dated 3/6/01 excludes
$1,733,000 in non-cash compensation and $1,255,000 in impairment of
long-lived assets, balance sheet information taken from 9/11/00 10Q.
(10) Income statement and balance sheet information taken from press release
dated 3/13/01 depreciation and amortization number extrapolated from
9/30/00 10Q.
(11) Income statement information taken from press release dated 2/6/01 and
balance sheet information taken from 9/24/00 10Q.
(12) Income statement and balance sheet information taken from press release
dated 3/1/01 excludes special charges of $2,000,000.
(13) Income statement information taken from press release dated 2/14/01 and
balance sheet information taken from 9/30/00 10Q.
(14) Income statement and balance sheet information taken from press release
dated 2/27/01 excludes special charges of $24,105,000 and advertising
litigation expense of $1,017,000.
(15) Income statement and balance sheet information taken from press release
dated 1/31/01.
(16) Income statement information taken from press release dated 2/14/01
excludes $204,000,000 of unusual item expenses and balance sheet
information and depreciation and amortization extrapolated from 9/2/00 10Q.
[TUCKER ANTHONY SUTRO LOGO] 37
Comparable Company Transaction Analysis
--------------------------------------------------------------------------------
<Caption>
(Amounts in 000's)
Quizno's Results - Valuation
LTM as of Multiple Range Enterprise Value Net Debt(1) Equity Value Price per Share(2)
------------------- -------------- ---------------- ----------- ------------ ------------------
Revenues - 12/31/00 $45,414 0.50x - 0.90x $22,707 - $40,872 $21,502 n.m. - $19,370 n.m. - $6.30
Revenues - 6/30/01 $50,292 0.45x - 0.80x $22,631 - $40,234 $21,502 n.m. - $18,732 n.m. - $6.10
EBITDA - 12/31/00 $6,311 5.4x - 7.0x $34,080 - $44,178 $21,502 $12,578 - $22,676 $4.09 - $7.38
EBITDA - 6/30/01 $8,435 5.2x - 6.3x $43,863 - $52,720 $21,502 $22,361 - $31,218 $7.28 - $10.16
EBIT - 12/31/00 $4,227 7.5x - 8.5x $31,699 - $35,926 $21,502 $10,197 - $14,424 $3.32 - $4.69
EBIT - 6/30/01 $6,049 7.2x - 8.2x $43,555 - $49,604 $21,502 $22,053 - $28,102 $7.18 - $9.14
----------------------------------------------------------------------------------------------------------------------------
Tucker Anthony Sutro Capital Markets Estimate $7.00 $8.50
----------------------------------------------------------------------------------------------------------------------------
(1) Net debt as of December 31, 2000
(2) Based upon fully diluted shares outstanding of 3.1 million as of March 15,
2001
[TUCKER ANTHONY SUTRO LOGO] 38
Selected Restaurant M & A Transactions
--------------------------------------------------------------------------------
Date Target Name / Acquiror Name /
Effective Business Description Business Description
Pending Vicorp Restaurants Inc. Investor Group
Operates and franchises family style Financial Buyer
restaurants
Pending NPC international Investor Group
Owns and operates Pizza Hut franchises Financial Buyer
12/12/00 Quizno's Corp. Investor Group
Owns and franchises Italian Sub restaurants Financial Buyer
Pending Il Fornaio Corp. Bruckman Rosser Sherrill & Co. LLC
Owns and operates full service Italian Financial Buyer
Restaurants
Pending Taco Cabana, Inc. Carrols Corporation
Operates and franchises Mexican patio cafes Operator of quick service
primarily in the restaurants including
western US Burger Kings
2/28/01 Uno's Restaurant Corp. (Remaining 38% Investor Group
interest) Management group led by Aaron
Operates and franchises casual dining Spencer
restaurants
12/1/00 Rainforest Cafe Landry's Seafood Restaurants Inc.
Owns and operates combination restaurant & Owns and operates casual dining
retail facilities seafood restaurants
10/2/00 Buffets, Inc. Caxton-Iseman Capital
Operates Buffet Style Restaurants Financial Buyer
1/13/00 Boston Chicken Inc. McDonald's Corporation
Operates and franchises restaurants Owns, operates and franchises fastfood
specializing in complete restaurants
meals featuring rotisserie roasted chicken
Enterprise Target's Enterprise Value
Date Value Sales EBITDA EBIT as a Multiple of:
Effective ($mil) ($mil) Margin Margin Sales EBITDA EBIT Assets
Pending $178.6 $375.3 11.2% 6.5% 0.48x 4.2x 7.3x 0.9x
Pending $439.0 $481.0 15.6% 9.7% 0.91x 5.8x 9.4x 1.0x
12/12/00 $34.2 $41.7 9.6% 5.0% 0.82x 8.6x 16.3x 0.8x
Pending $76.5 $118.8 9.3% 4.5% 0.64x 7.0x 14.2x 1.1x
Pending $150.7 $165.9 15.2% 9.8% 0.91x 6.0x 9.3x 1.4x
2/28/01 $107.9 $231.2 13.2% 7.5% 0.47x 3.5x 6.2x 0.6x
12/1/00 $61.8 $265.2 9.7% 2.1% 0.23x 2.4x 11.2x 0.4x
10/2/00 $499.7 $936.9 12.1% 7.5% 0.53x 4.4x 7.1x 1.0x
1/13/00 $173.5 NA NA NA NA NA NA NA
[TUCKER ANTHONY SUTRO LOGO] 39
Selected Restaurant M & A Transactions (cont'd)
-------------------------------------------------------------------------------
Date Target Name / Acquiror Name /
Effective Business Description Business Description
1/4/99 Logan's Roadhouse Inc. CBRL Group Inc.
Owns and franchises roadhouse style Owns and operates Cracker Barrel
restaurants Restaurants
10/1/99 Miami Subs Corp. (Remaining 70% interest) Nathan's Famous Inc.
Owns operates and franchises quick service Own's and operates Nathan's Famous
restaurants Foods Units
------------------------------------------------------------------------------------------------
9/29/99 Sbarro, Inc. (Remaining 65%) Investors (Sbarro Family)
Owns operates and franchises a chain of Financial & Strategic Buyer
Italian eateries
------------------------------------------------------------------------------------------------
9/2/99 Host Marriott Services Corp. Autogrill SpA
Operates restaurants, gift shops and related Operates restaurants, gift shops
facilities at airports, travel plazas, and related facilities at airports,
and shopping malls travel plazas, and shopping
malls throughout Europe
------------------------------------------------------------------------------------------------
8/16/99 Rock Bottom Restaurants Inc. RB Capital Inc.
Owner and Operator of sit down restaurants Financial Buyer
and breweries
------------------------------------------------------------------------------------------------
8/10/99 Rally's Hamburgers Inc. (74% interest) Checker's Drive-in Restaurants Inc.
Operates and franchises drive thru quick Operates and franchises drive thru
service hamburger restaurants quick service hamburger restaurants
7/6/99 Coffee People Inc. Diedrich Coffee Inc.
Sells coffee beverages and various related Sells coffee beverages and various
items related items
------------------------------------------------------------------------------------------------
4/5/99 Back Bay Restaurant Group SRC Holdings Inc.
Owns and operates full service restaurants Restaurant Holding Company
in New England
------------------------------------------------------------------------------------------------
1/25/99 Spaghetti Warehouse Inc. Cracken Harkey & Co. LLC
Holding company for subsidiaries who operate Financial Buyer
restaurants
Enterprise Target's Enterprise Value
Date Value Sales EBITDA EBIT as a Multiple of:
Effective ($mil) ($mil) Margin Margin Sales EBITDA EBIT Assets
1/4/99 $179.0 $90.3 18.4% 13.3% 1.98x 10.8x 14.9x 2.0x
10/1/99 $18.9 $23.5 13.2% 7.1% 0.80x 6.1x 11.3x 0.6x
---------------------------------------------------------------------------------
9/29/99 $395.4 $357.9 16.1% 15.5% 1.10x 6.9x 7.1x NA
---------------------------------------------------------------------------------
9/2/99 $989.1 $1,377.6 8.6% 4.3% 0.72x 8.3x 16.6x 1.7x
---------------------------------------------------------------------------------
8/16/99 $106.4 $160.1 11.8% 5.5% 0.66x 5.6x 12.2x 1.0x
---------------------------------------------------------------------------------
8/10/99 $229.0 $147.8 10.5% 3.2% 1.55x 14.7x 48.1x 1.9x
7/6/99 $33.5 $44.3 7.5% 3.4% 0.75x 10.1x 22.0x 0.6x
---------------------------------------------------------------------------------
4/5/99 $38.5 $95.9 9.0% 4.5% 0.40x 4.5x 8.9x 0.9x
---------------------------------------------------------------------------------
1/25/99 $60.0 $66.0 9.2% 3.4% 0.91x 9.9x 26.6x 1.0x
[TUCKER ANTHONY SUTRO LOGO] 40
Selected Restaurant M & A Transactions (cont'd)
--------------------------------------------------------------------------------
Date Target Name / Acquiror Name /
Effective Business Description Business Description
12/15/98 Lyon's Restaurants Inc. ICH Corporation
Owns and operates restaurants Restaurant Holding Company
11/30/98 Miami Subs Corp. (30% interest) Nathan's Famous Inc.
Owns operates and franchises quick Own's and operates Nathan's
service restaurants Famous Foods
Units
11/25/98 Manhatten Bagel Co. New World Coffee & Bagels Inc.
Owns and operates bagel stores and Owns and operates coffee and
bakeries bagel shops and
bakeries
7/21/98 Bertucci's Inc. NE Restaurant Company
Operates Italian restaurants Restaurant Holding Company
7/9/98 Pollo Tropical Inc. Carrols Corporation
Owns and operates quick service Operator of quick service
restaurants in a tropical restaurants including
setting Burger Kings
7/798 Houlihan's Restaurants Group Inc. Scroggin Ventures Inc.
Holding company which owns and operates Financial Buyer
casual dining
restaurants
4/27/98 The Epicure Market Jerry's Famous Deli Inc.
Operates a bread and sandwich deli Operates New York style deli
restaurants
Enterprise Target's Enterprise Value
Date Value Sales EBITDA EBIT as a Multiple of:
Effective ($mil) ($mil) Margin Margin Sales EBITDA EBIT Assets
12/15/98 $22.6 $124.2 6.4% 0.8% 0.18x 2.9x 21.6x NA
11/30/98 $10.5 $23.4 12.6% 6.5% 0.45x 3.6x 7.0x 0.3x
11/25/98 $20.0 $36.9 NEG NEG 0.54x NEG NEG 0.7x
7/21/98 $104.9 $136.7 11.1% 4.8% 0.77x 6.9x 16.1x 1.0x
7/9/98 $89.4 $67.7 18.0% 14.5% 1.32x 7.3x 9.1x 2.2x
7/798 $127.0 $149.5 NA NA 0.85x NA NA NA
4/27/98 $9.1 $13.6 NA NA 0.67x NA NA NA
----------------------------------------------------------------------------------------
Mean - Highlighted $175.6 $271.1 12.2% 7.1% 0.66x 5.4x 10.1x 0.9x
Median - Highlighted $107.1 $198.5 12.0% 6.8% 0.65x 5.7x 9.4x 0.9x
----------------------------------------------------------------------------------------
Mean - Since 1/1/99 $209.5 $292.9 11.8% 6.6% 0.82x 7.0x 14.6x 1.1x
Median - Since 1/1/99 $129.3 $160.1 11.2% 5.5% 0.75x 6.1x 11.3x 1.0x
----------------------------------------------------------------------------------------
Mean - All $166.2 $230.5 11.8% 6.6% 0.74x 6.2x 10.8x 1.1x
Median - All $104.9 $130.5 11.2% 5.5% 0.72x 6.0x 9.4x 1.0x
Notes:
1) Bolded items excluded from means and medians
2) The Rainforest Cafe deal was announced on 9/26/00 and is a 2nd attempt at the
merger
[TUCKER ANTHONY SUTRO LOGO]
41
Take Private Premiums vs. 52 Week Highs and Lows
--------------------------------------------------------------------------------
52 Week 52 Week
Date Date Tender 52 Week High 52 Week Low
Announced Effective Target Name Acquiror Name Price High Premium Low Premium
--------- --------- ----------- ------------- ----- ---- ------- ------ -------
3/26/01 Pending CSFBDirect Credit Suisse First Boston $4.00 $15.06 (73.4%) $2.50 60.0%
3/13/01 Pending Roy F. Weston Investor Group $5.02 $4.69 7.0% $2.03 147.3%
02/15/01 Pending VICORP Restaurants Investor Group $25.65 $24.50 4.7% $16.31 57.2%
01/26/00 Pending Perry County Financial Jefferson County Bancshares $23.50 $22.75 3.3% $15.00 56.7%
Corp.
12/27/00 Pending Venturian Corp. Investor Group $3.00 $7.90 (62.0%) $4.00 (25.0%)
12/26/00 Pending Netcreations Inc. Seat Pagine Gialle SPA $7.00 $62.00 (88.7%) $9.20 (23.9%)
12/22/00 Pending Michael Foods Inc. Investor Group $30.10 $26.60 13.2% $19.60 53.6%
12/16/00 Pending Crown Central Petroleum Rosemore Inc. $10.50 $9.80 7.1% $4.80 118.8%
Corp.
12/11/00 Pending PBOC Holdings Inc. FBOP Corp. $10.00 $9.90 1.0% $7.60 31.6%
11/16/00 Pending Il Fornaio Corp. Bruckmann, Rousser, Sherrill & Co. $14.00 $10.00 40.00% $6.00 133.3%
10/28/00 02/28/01 Uno Restaurant Corp. Investor Group $9.75 $12.56 (22.4%) $6.06 60.8%
10/06/00 Pending Taco Cabana, Inc. Carrols Corp. $9.04 $9.63 (6.1%) $4.13 118.9%
09/19/00 Pending Stratosphere Corp American Real Estate Partners $44.32 $47.00 (5.7%) $21.00 111.0%
09/19/00 Pending US Franchise Systems Inc Pritzker Group $5.00 $17.31 (71.1%) $4.13 21.2%
09/18/00 Pending Langer Biomechanics OrthoStrategies Inc $1.75 $2.13 (17.6%) $1.25 40.0%
Group Inc
08/04/00 09/22/00 EndoSonics Corp Jomed NV $11.00 $9.00 22.2% $3.19 245.1%
08/04/00 Pending PDK Labs Inc PDK Acquisition Corp $5.00 $5.19 (3.6%) $3.00 66.7%
08/02/00 Pending MascoTech Inc Heartland Industrial Partners $16.90 $17.50 (3.4%) $10.50 60.95%
06/22/00 Pending Johns Manville Corp Hicks, Muse, Tate & Furst $13.63 $14.81 (8.0%) $7.50 81.67%
06/20/00 08/02/00 Justin Industries Inc Berkshire Hathaway Inc $22.00 $21.88 0.6% $13.00 69.23%
06/16/00 08/31/00 Pacific Gateway Mission Orchard Statutory $12.60 $11.94 5.5% $7.31 72.31%
Properties
06/06/00 Pending PSC Inc Welch Allyn Inc $8.45 $10.13 (16.5%) $3.50 141.43%
06/05/00 09/28/00 Buffets Inc Investor Group $13.85 $12.88 7.6% $8.06 71.78%
05/29/00 09/29/00 Mark IV Industries Inc Investor Group $23.00 $23.63 (2.6%) $16.56 38.87%
05/26/00 Pending Acme Electric Corp Key Components LLC (Kelso & Co) $9.00 $7.44 21.0% $4.63 94.59%
05/26/00 07/20/00 KLLM Transport Services High Road Acquisition Corp $8.05 $8.75 (8.0%) $4.00 101.25%
Inc
05/25/00 08/11/00 Protocol Systems Inc Welch Allyn Inc $16.00 $15.69 2.0% $6.00 166.67%
05/17/00 Pending Petco Animal Supplies Investor Group $22.00 $18.38 19.7% $9.38 134.67%
Inc
05/11/00 10/01/00 Old Guard Group Inc Ohio Farmers Insurance Co $12.00 $14.25 (15.8%) $9.50 26.32%
05/10/00 06/26/00 WMF Group Ltd Prudential Mortgage Capital $8.90 $8.72 2.1% $2.44 265.13%
04/24/00 07/17/00 Cherry Corp Investor Group $18.75 $24.00 (21.9%) $10.00 87.50%
03/24/00 05/26/00 Tubby's Inc R Corp $1.10 $1.13 (2.2%) $0.41 170.77%
03/23/00 Pending US Can Corp Investor Group $20.00 $25.63 (22.0%) $12.50 60.00%
03/07/00 06/01/00 Duff & Phelps Credit Fitch IBCA (FIMALAC SA) $100.00 $97.01 3.1% $51.50 94.17%
Rating Co
03/06/00 Pending Data Transmission VS&A Commun Partners III LP $29.00 $28.94 0.2% $16.50 75.76%
Network Corp
02/04/00 07/26/00 BNC Mortgage, Inc. Investors $10.00 $8.97 11.5% $4.44 125.35%
01/31/00 08/04/00 Jason, Inc Saw Mill Capital Fund LLP/ $11.25 $10.38 8.4% $5.88 91.49%
Investor Group
01/26/00 Pending Omega Worldwide Inc. Investors (Todd Robinson) $5.34 $6.00 (11.0%) $3.44 55.35%
01/19/00 Pending Dayton Superior Odyssey Investment Partners/ $27.00 $24.00 12.5% $11.94 126.18%
Corporation Investors
---------------------------------------------
Mean: (8.6%) 86.9%
Median: 0.22% 72.31%
---------------------------------------------
(2) Global Motorsport was ultimately acquired by Stonington Partners and
Management.
Source: Securities Data Corp.
[TUCKER ANTHONY SUTRO LOGO] 42
Going Private Transactions - Stock Price Premium Analysis
--------------------------------------------------------------------------------
[GRAPHIC]
[GRAPHIC]
o More than 60% of going private transactions between 1998 and YTD 2000
received premiums of between 0% and 40%
o Going private activity appears to be increasing in 2000
[TUCKER ANTHONY SUTRO LOGO] 43
Future Trading Price Analysis
--------------------------------------------------------------------------------
(amounts in 000's) June 30, 2001 December 31, 2001 December 31, 2002
------------------ ------------- ----------------- -----------------
Sales $50,292 $54,651 $58,973
Multiple 0.90x 0.90x 0.90x
Implied Value $45,263 $49,186 $53,076
Net Debt $18,050 $19,255 $15,902
Equity Value $27,213 $29,931 $37,174
Present Value @ 37.5% $25,130 $23,572 $21,292
Fully Diluted Shares Outstanding 3,073 3,073 3,073
------------------------------------------------------------------------------------------------------------
Value per Share $8.18 $7.67 $6.93
------------------------------------------------------------------------------------------------------------
EBIT $6,049 $7,273 $10,583
Multiple 8.00x 8.00x 8.00x
Implied Value $48,394 $58,182 $84,667
Net Debt $18,050 $19,255 $15,902
Equity Value $30,344 $38,927 $68,765
Present Value @ 37.5% $28,022 $30,657 $39,386
Fully Diluted Shares Outstanding 3,073 3,099 3,117
------------------------------------------------------------------------------------------------------------
Value per Share $9.12 $9.89 $12.64
------------------------------------------------------------------------------------------------------------
Net Income(1) n.m. $2,277 $4,782
Multiple 10.5 10.5 10.5
Equity Value n.m. $23,904 $50,212
Present Value @ 37.5% n.m. $18,826 $28,759
Fully Diluted Shares Outstanding 3,073 3,073 3,088
------------------------------------------------------------------------------------------------------------
Value per Share n.m. $6.13 $9.31
------------------------------------------------------------------------------------------------------------
(1) Pre-transaction, reported net income
o Multiples based on comparable company analysis and Quizno's trading
multiples
[TUCKER ANTHONY SUTRO LOGO] 44
Discounted Cash Flow Analysis
--------------------------------------------------------------------------------
Terminal Value (X 2005 EBITDA)
-----------------------------------------------------------------------
(Amounts in 000) 4.50 X 5.00 X 5.50 X 6.00 X 6.50 X
---------------- ------ ------ ------ ------ ------
Valuation Matrix Discounted Value of Cash Flows (Enterprise Value) (1)
24.0% $55,991 $59,835 $63,680 $67,524 $71,369
-----------------------------------
25.5% $53,223 $56,843 $60,463 $64,083 $67,703
Discount Rate 27.0% $50,634 $54,046 $57,457 $60,868 $64,280
28.5% $48,212 $51,429 $54,645 $57,862 $61,079
-----------------------------------
30.0% $45,943 $48,978 $52,013 $55,049 $58,084
Debt Adjusted DCF (Equity Value) (2) (3) (4)
24.0% $35,143 $38,988 $42,832 $46,677 $50,521
-----------------------------------
25.5% $32,375 $35,995 $39,615 $43,235 $46,856
Discount Rate 27.0% $29,787 $33,198 $36,609 $40,021 $43,432
28.5% $27,364 $30,581 $33,798 $37,015 $40,231
-----------------------------------
30.0% $25,095 $28,130 $31,166 $34,201 $37,237
Per Share Debt Adjusted DCF (Equity Value Per Share) (2) (3) (4)
24.0% $11.44 $12.69 $13.94 $15.19 $16.44
-----------------------------------
25.5% $10.54 $11.71 $12.89 $14.07 $15.25
Discount Rate 27.0% $9.69 $10.80 $11.91 $13.02 $14.13
28.5% $8.90 $9.95 $11.00 $12.04 $13.09
-----------------------------------
30.0% $8.17 $9.15 $10.14 $11.13 $12.12
Notes:
(1) Enterprise Value excludes opening cash balance.
(2) Equity Value equals Enterprise Value less Net Debt (debt outstanding less
cash balance).
(3) Equity Value Per Share equals Equity Value divided by diluted shares
outstanding as of March 15, 2001; approx. 3,073,025
(4) Includes proceeds from options and warrants in cash balance
o The estimated cost of the Levine subordinated debt with warrants is
approximately 30%-33% based upon estimated five-year IRR --> Implies a cost
of equity of 37% to 40%+
o Assuming an after tax cost of debt of 6.4% and a target capital structure
of 40% debt, 60% equity, the implied weighted average cost of capital of
25% to 27%
[TUCKER ANTHONY SUTRO LOGO] 45