Marketing Spend 2015 Report Highlights Conclusions Table of Contents Page Marketing Spend Overview by Chain

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1 Industry Data Report Spend 2015 Report Highlights budget overviews by segment and chain. Changes in national and local/co-op spending allocations. Creative ad agency roster changes. Conclusions Aggregate 2014 marketing spend by $1B chains totaled $8.0B 1 (4.1% of sales). The +3.8% y/y increase was driven by higher system sales with marketing contribution as a percent of sales unchanged from Increased marketing contributions for the highly competitive pizza, chicken and casual segments were off-set by declines for sub-sandwich, fast casual and coffee (these segments are migrating to more cost effective social media and digital channels). Greater allocation towards national and larger overall budgets better leverage fixed admin and production fees, translating into more marketing dollars for media placement. 65% of national/brand ad contributions go towards media placement with 35% spent on admin costs (production and agency fees, print materials and other administrative support). The larger the marketing budget, the less admin costs run as a percent of sales. Table of Contents Page Key Findings 2-3 Spend Overview by Chain Sandwich 4-6 Pizza 7-8 Sub-Sandwich 9-10 Coffee/Bakery Chicken Casual Family Fast Casual RR Overview 22 Data in spreadsheet form available at Copyright: This Restaurant Research LLC document is copyrighted material. Due to the No Electronic Theft (NET) Act of 1997, electronic forwarding or other forms of redistribution, without the express permission of Restaurant Research LLC, are violations of law and could be subject to fines of up to $250,000 and up to five years of imprisonment, even when no financial gain or commercial advantage accrues to the forwarder/re-distributor. Copyright 2015 Restaurant Research LLC. All rights reserved. 1 Estimated total marketing budgets include contributions to national/brand funds, regional/local co-ops, local advertising and related administrative costs.

2 Overview of Key 2014 Changes Changes to Allocations Chain Effective Date National Local Net Budget Impact Buffalo Wild Wings Carl s Jr. Corner Bakery Five Guys Hardee s IHOP Krispy Kreme Panera Papa John s Pizza Hut Popeyes Red Robin Starbucks T.G.I. Friday s Wendy s Creative Ad Agency Changes Chain New Agency Date IDR: Spend 2015 Source: RR Estimates Page 2

3 Segment Comparisons IDR: Spend 2015 Source: RR Estimates Page 3

4 Sandwich IDR: Spend 2015 Source: RR Estimates Page 4

5 Restaurant Research Budget Summary Chain Arby's National/ Brand Fund Local/ Co-op Admin/ Support Total Total Estimated (% of System Sales) Creative Ad Agency Year Hired Spend Overview Burger King Carl's Jr. Chick-fil-A Dairy Queen Five Guys Hardee's Jack in the Box McDonald's Sonic Drive-In Taco Bell Wendy's Zaxby's Sandwich

6 Pizza IDR: Spend 2015 Source: RR Estimates Page 7

7 Restaurant Research Budget Summary Chain Domino's National/ Brand Fund Local/ Co-op Admin/ Support Total Total Estimated (% of System Sales) Creative Ad Agency Year Hired Spend Overview Little Caesar's Papa John's Pizza Hut Pizza

8 Sub-Sandwich IDR: Spend 2015 Source: RR Estimates Page 9

9 Restaurant Research Budget Summary Chain Firehouse Subs National/ Brand Fund Local/ Co-op Admin/ Support Total Total Estimated (% of System Sales) Creative Ad Agency Year Hired Spend Overview Jersey Mike's Jimmy John's Quizno's Subway Sub-Sandwich

10 Coffee/Bakery IDR: Spend 2015 Source: RR Estimates Page 11

11 Restaurant Research Budget Summary Chain National/ Brand Fund Local/ Co-op Admin/ Support Total Total Estimated (% of System Sales) Creative Ad Agency Year Hired Spend Overview Dunkin Donuts Krispy Kreme Starbucks Tim Horton's Coffee/Bakery

12 Chicken IDR: Spend 2015 Source: RR Estimates Page 13

13 Restaurant Research Budget Summary Chain National/ Brand Fund Local/ Co-op Admin/ Support Total Total Estimated (% of System Sales) Creative Ad Agency Year Hired Spend Overview Bojangles' Church's KFC Popeyes Chicken

14 Casual IDR: Spend 2015 Source: RR Estimates Page 15

15 Restaurant Research Budget Summary Chain National/ Brand Fund Local/ Co-op Admin/ Support Total Total Estimated (% of System Sales) Creative Ad Agency Year Hired Spend Overview Applebee's Buffalo Wild Wings Cheesecake Factory Chili's Grill & Bar LongHorn Olive Garden Outback Red Lobster Red Robin Ruby Tuesday

16 Restaurant Research Budget Summary Chain National/ Brand Fund Local/ Co-op Admin/ Support Total Total Estimated (% of System Sales) Creative Ad Agency Year Hired Spend Overview T.G.I. Friday's Texas Roadhouse Casual

17 Family IDR: Spend 2015 Source: RR Estimates Page 18

18 Restaurant Research Budget Summary Chain National/ Brand Fund Local/ Co-op Admin/ Support Total Total Estimated (% of System Sales) Creative Ad Agency Year Hired Spend Overview Bob Evans Cracker Barrel Denny's IHOP Perkins Family

19 Fast Casual IDR: Spend 2015 Source: RR Estimates Page 20

20 Restaurant Research Budget Summary Chain National/ Brand Fund Local/ Co-op Admin/ Support Total Total Estimated (% of System Sales) Creative Ad Agency Year Hired Spend Overview Chipotle Corner Bakery Café Panera Bread Qdoba Fast Casual

21 Visit or contact us at (203) or to: Sign-up for free RR Thermometer newsletter Ask us about custom research projects Inquire about RR Thermometer marketing opportunities Copyright: This Restaurant Research LLC document is copyrighted material. Copyright 2015 Restaurant Research LLC. All rights reserved. Disclosure: Restaurant Research LLC often sells report subscriptions to concepts under our coverage. Disclaimer of Liability: Although the information in this report has been obtained from sources Restaurant Research LLC believes to be reliable, RR does not guarantee its accuracy. The views expressed herein are subject to change without notice and in no case can be considered as an offer or solicitation with regard to the purchase or sales of any securities. Restaurant Research s analyses and opinions are not a guarantee of the future performance of any company or individual franchisee. RR disclaims all liability for any misstatements or omissions that occur in the publication of this report. In making this report available, no client, advisory, fiduciary or professional relationship is implied or established. This report is intended to provide an overview of the restaurant industry, but cannot be used as a substitute for independent investigations and sound business judgment.