Meritage Hospitality Group

Meritage Hospitality Group is primarily engaged in the franchised retail food service business. The company operates through two main business segments: Wendy's of Michigan and O'Charley's of Michigan. Meritage operates 48 "Wendy's Old Fashioned Hamburgers" quick-service restaurants in Western and Southern Michigan. As the nation's only publicly traded Wendy's franchisee, Meritage serves over nine million Wendy's customers annually. All Wendy's restaurants are operated under franchise agreements with Wendy's International, Inc. Between 1999 and 2002, Meritage opened a new Wendy's restaurant approximately every eight weeks. While development in the West Michigan market for Wendy's restaurants is complete, the company continues to evaluate developing or acquiring Wendy's restaurants in other market areas. The Wendy's restaurants are managed by Wendy's of Michigan, a Michigan limited partnership owned by a wholly-owned subsidiary of Meritage. In December 2003, Meritage entered into an exclusive multi-unit development agreement with O'Charley's Inc., a casual service restaurant franchisor, to develop O'Charley's restaurants across the State of Michigan. Meritage is the nation's first O'Charley's franchisee. Since August 2004, the company has opened five O'Charley's restaurants: two in the greater Grand Rapids area and three in the greater Detroit area. At least one additional O'Charley's restaurant is planned for fiscal year 2006.