IRB Holding Corp.

Overview Key strengths Key risks Differentiated concepts with nationwide presence and good market position. Aggressive financial policy with elevated leverage and exposure to rising rates. Franchisor model drives consistent earnings and cash generation. Highly competitive and discretionary restaurant industry. Large scale allows for effective vendor negotiations and cost management. Commodity and wage inflation pressures at its company operated restaurants. Restaurant industry conditions remain challenging as operators contend with elevated costs while inflationary pressures limit consumers discretionary budgets. We believe Inspire is well situated to manage these challenges given its QSR concepts provide customers with value offerings while its roughly 93% franchised business model provides some insulation against direct restaurant operating expenses. Nevertheless, franchisee profitability is under pressure due to higher

... as operators contend with elevated costs while inflationary pressures limit consumers discretionary budgets. We believe Inspire is well situated to manage these challenges given its QSR concepts provide customers with value offerings while its roughly 93% franchised business model provides some insulation against direct restaurant operating expenses. Nevertheless, franchisee profitability is under pressure due to higher labor, commodity, and operating expenses. System sales performance could become challenged if franchisee pricing actions are too aggressive, impairing the brands relative value proposition, which is important to preserve in a weakening macroeconomic environment....

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