Nathan's Famous, Inc

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International Guild of Hospitality & Restaurant Managers

Nathan's Famous, Inc., incorporated in July 1992, has historically operated and franchised fast food units featuring Nathan's famous brand all beef frankfurters, crinkle-cut french fried potatoes, and a variety of other menu offerings. Nathan's brand Company-owned and franchised units operate under the name "Nathan's Famous," the name first used at its original Coney Island restaurant opened in 1916. Since fiscal 1998, the Company supplemented its Nathan's franchise program with its Branded Product Program, which enables foodservice retailers to sell some of Nathan's proprietary products outside of the realm of a traditional franchise relationship. During fiscal 2000, the Company acquired the intellectual property rights, including trademarks, recipes and franchise agreements of Roasters Corp. and Roasters Franchise Corp. and also completed a merger with Miami Subs Corporation whereby the Company acquired the remaining 70% of Miami Subs common stock the Company did not already own.

At March 31, 2002 , the Company's system consisted of Nathan's Famous, Kenny Rogers Roasters and Miami Subs restaurants. This includes three units operating pursuant to management agreements, 22 Company-owned units concentrated in the New York metropolitan area (including New Jersey ) and Florida and approximately 1,500 branded product points of sale under its Branded Product Program, located in 39 states, the District of Columbia and 14 foreign countries.

At March 31, 2002 , its franchise system, including its Nathan's, Miami Subs and Kenny Rogers restaurant concepts, consisted of 364 units operating in 22 states and 14 foreign countries. Today, its franchise system counts among its 172 franchisees and licensees such companies as Host Marriott Services USA, Inc., ARAMARK Leisure Services, Inc., CA1 Services, Inc., Service America Corp., Culinart and Sodexho USA. As of March 31, 2002 , Host Marriott operated 34 franchised outlets, including 17 units at airports, 14 units within highway travel plazas and three units within malls.

Nathan's Concept and Menus

The Nathan's concept offers a wide range of facility designs and sizes, suitable to a vast variety of locations and features a core menu, consisting of the "Nathan's Famous" all-beef frankfurters, crinkle-cut french fries and beverages. Nathans' menu is designed to be tailored to take advantage of site-specific market opportunities by adding complementary food items to the core menu. The Nathan's concept is suitable to stand-alone or be co-branded with other nationally recognized brands.

Nathans' hot dogs are all-beef and are free from all fillers and starches. Hot dogs are flavored with the original secret blend of spices created by Ida Handwerker in 1916, which historically have distinguished Nathans' hot dogs. Hot dogs are prepared and served in accordance with procedures that have not varied significantly in more than 86 years. Its signature crinkle-cut french fried potatoes are featured at each Nathan's restaurant. Nathans' french fried potatoes are cooked to order in 100% cholesterol-free corn oil.

Individual Nathan's restaurants supplement their core menu of hot dogs, french fries and beverages with a variety of other quality menu choices: char grilled hamburgers, char grilled chicken sandwiches, Philly Cheesesteaks, selected seafood and other chicken items, a breakfast menu and assorted desserts and snacks. While the number of supplemental menus carried varies with the size of the unit, the specific supplemental menus chosen are tailored to local food preferences and market conditions. Each of these supplemental menu options consists of a number of individual items; for example, the hamburger menu may include char grilled bacon cheeseburgers, superburgers and super cheeseburgers.

Nathans' restaurant units are available in a range of sizes from 300 to 4,000 square feet. The Company has also developed Nathan's carts, kiosks and modular units. Its smaller units may not have customer seating areas, although they may often share seating areas with other fast food outlets in food court settings. Other units generally provide seating for 45 to 125 customers. Carts, kiosks and modular units generally carry only the core menu. This menu is supplemented by a number of other menu selections in its other restaurant types.

Miami Subs Concept and Menu

The Miami Subs concept features a wide variety of moderately priced lunch, dinner and snack foods, including hot and cold submarine sandwiches, various ethnic foods such as gyros and pita sandwiches, flame grilled hamburgers and chicken breast sandwiches, cheesesteaks, chicken wings, fresh salads, ice cream and other desserts. Soft drinks, iced tea, coffee, beer and wine are also offered. Freshness and quality of breads, produce and other ingredients are emphasized in Miami Subs restaurants. The Miami Subs menu may include low-fat selections such as salads, grilled chicken breasts, and non-fat frozen yogurt.

Miami Subs restaurants feature a distinctive decor unique to the Miami Subs concept. The exterior of freestanding restaurants feature an unusual roof design and neon pastel highlights for easy recognition. Interiors have a tropical motif in a neon pink and blue color scheme with murals of fish, mermaids, flamingos and tropical foliage. Exteriors and interiors are brightly lit to create an inviting, attractive ambience to distinguish its restaurants from those of its competitors.

Kenny Rogers Roasters Concept and Menu

The Kenny Rogers Roasters concept was first introduced in 1991 with the idea of serving home-style family foods based on a menu centered around wood-fire rotisserie chicken. Kenny Rogers Roasters' unique proprietary marinade and spice formula, combined with wood-fire roasting in a specifically designed rotisserie, became the basis of a breakthrough taste in rotisserie chicken. The menu, design and service style were created to position the concept midway between quick-serve and casual dining. This format, coupled with a customer friendly environment developed for dine-in or take-home consumers, is the precursor of the Kenny Rogers Roasters system.

The distinctive flavoring of its Kenny Rogers Roasters chicken is the result of a two-step process. First, its chickens are marinated using a specially flavored proprietary marinade. Then a second unique blend of spice is applied to the chicken prior to cooking in the open flame wood-fire rotisserie in full view of customers at the restaurant. Other entrees offered in Kenny Rogers Roasters restaurants may include Honey Bourbon BBQ ribs and rotisserie turkey. Complimenting Kenny Rogers Roasters main courses are a wide variety of freshly prepared side dishes, corn muffins, soups, salads and sandwiches. The menu offers a healthful alternative to traditional quick-serve menu offerings that caters to families and individuals.

The traditional Kenny Rogers Roasters restaurants are freestanding buildings offering dine-in and drive thru delivery options ranging in size between 3,000 and 4,000 square feet, with seating capacity for approximately 125 guests. Other prototype restaurant designs that are being considered include food court units and scaled down in-line and freestanding restaurant types. The Company has recently begun to co-brand Kenny Rogers Roasters with Nathan's by introducing Nathan's famous all-beef frankfurters, crinkle-cut french fries and hamburger menus to supplement Roasters' core menu offerings.

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