Piccadilly Cafeterias, Inc

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International Guild of Hospitality & Restaurant Managers

3232 Sherwood Forest Boulevard
P.O. Box 2467
Baton Rouge, LA 70816

Phone: (225) 293-9440
Fax: (225) 296-8370

www.piccadilly.com

Piccadilly Cafeterias, Inc., incorporated in 1965, is a cafeteria chain in the southeastern and mid-Atlantic regions of the United States, with 205 cafeterias in 16 states. The Company serves a diverse customer base consisting of families, groups of friends and co-workers, senior citizens, couples and students. Its patrons enjoy a wide selection of convenient, healthy, freshly prepared home-cooked meals at value-oriented prices for lunch and dinner.

During the fourth quarter of the year ended June 30, 2001 (fiscal 2001), the Company completed an evaluation of non-performing cafeterias and determined that 14 cafeterias should be closed. Its evaluation determined that future operating cash flows from these cafeterias would be insufficient to cover their lease-related payments and operating costs. These cafeterias were closed on July 31, 2001. In addition to the 14 cafeterias closed in July 2001, Piccadilly closed nine additional cafeterias during the year ended June 30, 2002 (fiscal 2002).

Piccadilly's traditional cafeterias average approximately 10,000 square feet in size and seat, on average, approximately 350 guests. During 1997, the Company completed the design of a more compact cafeteria model, which has approximately 7,500 square feet and seats approximately 200 guests. This smaller cafeteria allows Piccadilly to access a broader range of markets at a lower investment cost. As of July 2, 2002, the Company has 10 cafeterias utilizing this new design and format.

All of the Company's cafeterias are located in urban and suburban areas in a variety of strip shopping centers, malls and freestanding buildings. Piccadilly leases all of the cafeterias located in strip shopping centers and malls. Of the 75 cafeterias located in freestanding buildings, the Company owns the building and land for 12 of the cafeterias, and the remaining freestanding cafeterias are operated in Company-owned buildings located on leased land under long-term leases.

All of Piccadilly's cafeterias offer a wide variety of meals. Each of its cafeteria general managers has the ability to vary their menu to include local and seasonal favorites from its extensive proprietary recipe files. Its typical cafeteria line offers a wide food selection, including up to 18 entrees, two soups, 20 salads, 18 vegetables, seven breads and 22 desserts. Guests make their meal selections by combining these items according to their individual preferences. The Company sells most meals as bundled meals that include an entrée, side items and bread. Guests are also able to purchase meals on an a-la-carte basis. Approximately 65% of meals served in fiscal 2002 were sold as bundled meals.

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