Sizzler International, Inc

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International Guild of Hospitality & Restaurant Managers

Business Summary
NYSE: SZ

Sizzler International, Inc. and its subsidiaries are principally engaged in the operation, development and franchising of the Sizzler family steak house concept and the operation of Kentucky Fried Chicken (KFC) franchises. The Company operates and franchises approximately 348 Sizzler restaurants worldwide. Sizzler restaurants operate in the mid-scale dining market featuring a selection of grilled steak, chicken, seafood entrees, sandwiches, specialty platters, as well as a fresh fruit and salad bar in a family dining environment. The Company operates 101 KFC restaurants in Queensland, Australia under franchise agreements with Tricon Global Restaurants, Inc. (Franchisor). KFC restaurants in Australia operate in the quick service dining market and feature fried chicken, sandwiches and various side orders such as biscuits and mashed potatoes.

Expanded Business Summary

Financial Summary

Sizzler Int'l operates and franchises 348 Sizzler and 101 KFC restaurants worldwide. Sizzler restaurants operate in mid-scale dining market featuring a selection of grilled steak, chicken and seafood entrees, sandwiches and specialty platters. For the 40 weeks ended 2/4/01, revenues rose 1% to $186.2 million. Net income totalled $1.8 million vs. a loss of $282 thousand. Results reflect the opening of new stores, and the absence of $12.1 million in non-recurring charges

Expanded Business Summary

Sizzler International, Inc. and its subsidiaries are principally engaged in the operation, development and franchising of the Sizzler family steak house concept and the operation of Kentucky Fried Chicken (KFC) franchises. Sizzler International, Inc. was incorporated in January 1991 in connection with a reorganization of its parent company Collins Foods International, Inc. (CFI) undertaken in contemplation of CFI's merger with PepsiCo, Inc. As part of the reorganization, the Company's common stock was distributed to stockholders of CFI. In addition, as part of the transaction, the Company acquired the remaining outstanding shares of common stock of its 66%-owned subsidiary Sizzler Restaurants International, Inc. (SRI), which became the Company's wholly-owned subsidiary.

Sizzler Restaurants

The Company operates and franchises approximately 348 Sizzler restaurants worldwide. Sizzler restaurants operate in the mid-scale dining market featuring a selection of grilled steak, chicken, seafood entrees, sandwiches, specialty platters, as well as a fresh fruit and salad bar in a family dining environment. Sizzler restaurants provide guests with a service system in which guests place orders and pay upon entering the restaurant and are then seated and assisted by a server who delivers entrees and follows up on guest service. This system combines the benefits of convenience with the experience of a full service restaurant.

Sizzler restaurants are typically free-standing buildings that are 5,000 to 6,000 square feet providing seating for 150 to 200 guests. Sizzler restaurants are generally open for lunch and dinner seven days a week. During fiscal 2000, lunch and dinner sales were approximately 40% and 60%, respectively, in the United States. In Australia, lunch and dinner sales were approximately 33% and 67%, respectively. The average restaurant check was approximately $9.00 in the United States and $12.89 (in Australian dollars) in Australia.

Individual franchise agreements for a Sizzler restaurant provide a franchise term of 20 years. Payment of the initial franchise fee entitles the franchisee to assistance with planning and construction of the restaurant and initial employee training. Additionally, franchisees pay royalties based on a percentage of gross sales. Multi-unit franchise development agreements may offer reduced initial franchise fees and royalties. Franchisees are required to contribute a percentage of gross sales to a national advertising fund and may contribute to regional cooperative advertising funds.

Kentucky Fried Chicken Restaurants (KFC)

The Company operates 101 KFC restaurants in Queensland, Australia under franchise agreements with Tricon Global Restaurants, Inc. (Franchisor). KFC restaurants in Australia operate in the quick service dining market and feature fried chicken, sandwiches and various side orders such as biscuits and mashed potatoes. During fiscal 2000, lunch and dinner sales were approximately 40% and 60%, respectively. The average ticket was approximately $8.39 (in Australian dollars). KFC restaurants are typically free-standing buildings that are 1,875 to 2,500 square feet providing seating for 20 to 65 guests. Approximately 65% of the restaurants offer drive-through windows and approximately 15% are located in shopping mall food courts. The term of the Company's franchise agreements vary from 8 to 22 years and require payment of royalties based on a percentage of sales. As a franchisee, the Company is required to contribute a percentage of revenues to a national Australian cooperative advertising fund administered by the Franchisor and contribute to local advertising initiatives.

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