Family Steak Houses of Florida, Inc.

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International Guild of Hospitality & Restaurant Managers

Family Steak Houses of Florida, Inc., formed in 1985, is the sole franchisee of Ryan's Family Steak House restaurants in the State of Florida . The Company's first Ryan's restaurant was opened in Jacksonville , Florida , in May 1982. The Company operated 23 Ryan's restaurants as of February 15, 2002. A Ryan's restaurant is a family-oriented restaurant serving reasonably priced food in a casual atmosphere with server-assisted service. The restaurants feature self-service scatter bars with a variety of over 100 fruit, vegetable and meat entree items, a bakery and dessert bar, and table service and drink refills. Several restaurants feature a display cooking area, where guests can have grilled-to-order steaks, chicken, pork chops and other items cooked to order for them, all of which is included in the price of the buffet.

As of February 15, 2002 , 21 of the Company's Ryan's restaurants were located in free-standing buildings that vary in size from 7,500 to 12,000 square feet. Two of the Company's Ryan's restaurants are located in shopping malls. Each restaurant is constructed of brick or stucco walls, interior and exterior, with exposed woodwork. The interior of each Ryan's restaurant contains a dining room, a customer ordering area and a kitchen. The dining rooms seat between 270 and 500 persons and highlight centrally located, illuminated scatter bars and a fresh bakery and dessert bar. Six restaurants include a display cooking area with a charcoal grill and a flat grill for grilled-to-order steaks, pork chops and chicken items, a rotisserie chicken broiler, a pizza oven and a wok for preparation of Chinese food items. Each Ryan's restaurant has parking for approximately 100 to 175 cars on lots of overall size of approximately 50,000 to 70,000 square feet.

The Ryan's restaurants operate seven days a week. Typical hours of operation are from 11:00 a.m. to 9:00 p.m. , Sunday through Thursday, and from 11:00 a.m. to 10:00 p.m. , Friday and Saturday. Restaurants that serve breakfast open at 8:00 a.m. Saturday and Sunday. In a Ryan's restaurant, the customer enters the restaurant, orders from the menu, and then enters the dining room. Beverages are brought to the table by servers. Entrees are cooked to order at most locations. The customer ordering the buffet is given unlimited access to the scatter bars and the bakery and dessert bar. Customers receive table service of the entree and beverage refills, except at stores with display cooking, which offer buffet only.

The Company operates its Ryan's restaurants under a Franchise Agreement with Ryan's Properties, Inc., (the Franchisor), which grants the right to operate Ryan's Family Steak House restaurants throughout North and Central Florida . The agreement extends through December 31, 2010 and provides for two additional 10-year renewal options. The renewal options are subject to certain conditions, including the condition that the Company has performed its obligations under the agreement during its original term.

The franchise agreement granted the Company the exclusive right to open Ryan's restaurants in North and Central Florida . In order to maintain this exclusivity, the Company was required to have a total of 25 Ryan's restaurants operating on December 31, 2001. At December 31, 2001 , the Company was only operating 23 restaurants. On January 4, 2002 , the Company was notified by Ryan's that it had exercised its option to terminate the exclusive nature of the franchise rights within North and Central Florida .

The Company is in the process of evaluating its options with respect to the exclusivity and other agreement issues, including possible legal action through binding arbitration proceedings seeking, among other things, the recision of the Franchisor's exercise of its option to terminate the Company's exclusivity. It is the Company's intention to pursue a legal remedy.

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