Highlights of Captain D’s Seafood Kitchen’s Franchise Disclosure Document, Including Its Financial Performance Representations Under Item 19

Background Information

Headquartered in Nashville, Tennessee, Captain D’s offers its customers an array of seafood dishes at reasonable prices in a relaxed environment. Captain D’s restaurants serve a widely varied seafood menu that includes freshly prepared entrees, and the company’s signature fried fish which is freshly hand-battered and prepared to order to ensure freshness. The restaurants also offer premium-quality grilled, baked or broiled fish, as well as shrimp, chicken, a selection of home-style side dishes, hushpuppies, desserts and freshly brewed, southern style sweet tea, a Captain D’s favorite.

The sales and expense information set forth below reflects the operations of restaurants under the previous Captain D’s prototype. The new Captain D’s Seafood Kitchen restaurants built to date have experienced substantially similar sales and operating expenses.

The differences between the previous prototype and the Captain D’s Seafood Kitchen prototype consists of a new Captain D’s Seafood Kitchen logo and signage, new paint scheme for the restaurant’s exterior, and new interior paint scheme and decoration.

Average Gross Sales of Franchised and Company-Owned Captain D’s Restaurants

As of January 2, 2011, there were 515 Captain D’s restaurants operating one year or more, of which 240 were franchised and 275 were company-owned.

For fiscal year ended January 2, 2011, the average gross sales of both franchised and company-owned restaurants operating one year or more equaled $823,799. For franchised restaurants, the average was $807,540, and for company-owned locations, the average was $842,429.

Condensed Profit and Loss Statement for Company-Owned Captain D’s Restaurants

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The following section provides the average gross sales and selected expenses of Captain D’s company-owned restaurants grouped according to the amount of annual gross sales experienced by the restaurants during the fiscal year ended January 2, 2011.

The expense information specifically excludes occupancy expenses like rent, depreciation or debt payments for land, building, and improvements, as well as property taxes and insurance.

The amounts for labor include restaurant-level managers and employees, and consist of salaries, wages (net of any job credits), employee benefits, vacation pay, sick pay, performance bonuses, and payroll taxes.

Controllable operating expenses consist of utilities, uniforms, laundry, maintenance and repair, and miscellaneous expenses.

Other operating expenses consist of expenses for taxes, licenses, insurance, advertising, and guest surveys. Captain D’s company-owned restaurants spent, on average, 6.2% of their gross sales on advertising, advertising fees, and local restaurant marketing. These amounts were included under “other operating expenses.”

The P&L below also excludes expenses that franchisees will incur, but which Captain D’s corporate-owned restaurants do not experience. These expenses include royalty payments; advertising and local restaurant marketing fees and expenses; and legal, accounting, and other administrative expenses.

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