TWST: Let's start out with some background information on Yogen Fruz, just to set the stage for our readers.

Mr. Serruya: The company was originally founded by my brother, Aaron and myself 13 years ago, when we started with the one shop here in Toronto. Within a couple of months of opening the first store we found ourselves dealing with an overwhelming response and request for franchising. Once we had made the decision to expand by using franchising as the vehicle for growth, we started opening locations in enclosed shopping malls coast to coast in the country. And by 1990, we had about 150 locations and we were the largest frozen yogurt franchisor in the country. At about the same time in 1990, we started expanding the concept internationally. We first set up an office in Ghent, Belgium for the purpose of selling master franchise territorial rights throughout Europe. We then set up an office in Panama City, Panama for the purpose of selling master franchise territorial rights throughout Latin America. Once this was in place, we set out with a very aggressive development schedule internationally. By 1984, we had decided that we were going to look at growing the concept in the U.S., however in this case we chose to grow primarily from an acquisition point of view. Our first acquisition was Bresler's Ice Cream, a strong regional player in the Wisconsin and Illinois marketplace. We are currently up to approximately 400 outlets under that Bresler's trademark. Subsequent to that acquisition, about a year or so later we acquired ICBY (I Can't Believe It's Yogurt), out of Dallas, Texas. Through this acquisition we inherited a manufacturing facility in Dallas. So in the recent years the company has really transformed itself quite significantly from its initial inception. Whereas initially we were strictly a franchisor of frozen yogurt outlets, through our many acquisitions in the U.S. the company has become a frozen yogurt/ice cream franchise operation with a global exposure. And then about a year and a-half ago, we acquired a company out of New York called Integrated Brands. What the Integrated Brands acquisition did for the company was to really expand our horizons in the frozen dessert sector once again. What Integrated Brands was very successful in achieving over the years was the signing of exclusive long-term agreements with some of the strongest and most significant household brands known to consumers across North America. As a result, we currently have deals with Tropicana whereby we control, through a long-term licensing agreement, the exclusive rights to manufacture, distribute, market and sell frozen dessert under the Tropicana trademark throughout North America as well as other markets around the world. As well, we have similarly exclusive long-term licensing agreements with General Mills, where we control the rights for the entire portfolio of frozen dessert products sold under the trademarks of Yoplait, Colombo Frozen Yogurt, Betty Crocker, Trix and Yoo-hoo. So under our Integrated Brands division, we are also responsible for the R&D of these new frozen dessert products. So we are very excited about the future prospects for the company. We think the company is uniquely positioned going forward. We truly are a global player in the frozen dessert category, with a vast distribution throughout our over 4,000 locations, which operate in 82 different countries around the world as well as our distribution in supermarkets across North America with our licensed products. This year our sales will be somewhere in the range of about $120 million up from $89 million last year. For the fiscal year-ending August 31, 1998, we showed net income profit after tax of about $12.9 million. So where Yogen Fruz was primarily focused on developing a strong franchise brand and distribution business in the franchising and retail sectors, the Integrated Brands division has expanded the company's distribution reach into the supermarket and convenience store channels across North America.

TWST: Analysts and investors like to find analogies for companies. When you look at your business model and the strategic alliances and partners that you have, what do you use as that broad analogy for an investor or an analyst to gain sort of a familiarity?

Mr. Serruya: I get asked this question quite often and it really is a difficult one to answer in that there aren't any other companies in North America that are using a business model similar to the one that we are. There are companies that are focused strictly on a franchising platform, or companies that are focused in the consumer products and licensing business. We've managed to bring both of these lucrative sectors under one umbrella, and along the way obviously, we've managed to synergize a lot of our back office functions as well as distribution and sales functions. But I have to reiterate, I really don't know of any other company, certainly in North America, that seems to be following a similar growth strategy.

TWST: Do you feel that you are classified as the right type of entity or enterprise when they do look at the parts of the business and try to value them?

Mr. Serruya: I feel that the diverse operations within our frozen dessert portfolio really offer individual, and institutional shareholders the opportunity to get involved with a company that has a strong global presence, a vast retail division throughout 82 countries with over 4,000 locations, and a portfolio including some of the strongest household brands known throughout North America. Our diversity is one of our major strengths. Our customers can purchase our products by visiting one of our retail outlets, or by visiting their local supermarkets or convenience stores. So we think we have a unique niche for any retail or institutional shareholder in that it's a very broad and diverse business model in the frozen dessert sector, and we truly have diversified ourselves to try to touch all the bases.

TWST: What should they understand about the margins that the various aspects of this business throw off?

Mr. Serruya: The margins on the consumer products business are as strong as the franchising side and that was certainly one of the big pluses and one of the things that caught our eye when we looked at doing the Integrated Brands acquisition. The fact that we were not going to be compromising margins by doing the Integrated Brands was one of the major factors for doing this deal. So the gross margins on the consumer products are as strong and as healthy as those on the franchising side, while along the way it's allowed us to really synergize distribution efficiencies.

TWST: What are the limitations as you go forward? Is cash or capital at all a limitation?

Mr. Serruya: Again, I think we're in a very unique position in that we are debt-free. We are sitting on roughly $30 million cash on hand, which has primarily been earmarked for future acquisitions. So we believe there's still a tremendous opportunity within the United States for us to continue to buy small to mid-sized regional players and continue to consolidate this industry. We now believe we have the platform and the critical mass necessary to really take this company to the next level.

TWST: Are there any points of inflection of growth where you feel capital will be needed or is this not necessarily a capital resource intensive business model?

Mr. Serruya: It's not a capital resource business at all. And as a matter of fact it's a tremendous cash flow business, so most of our requirements in the past, as minimal as they have been, have been funded just by internal cash flow. So when you couple that with the fact that we're currently sitting on roughly $30 million cash on hand, barring an extraordinarily large acquisition coming our way, I don't anticipate any capital requirements going forward.

TWST: At the top management level, are there any changes required to bring in skill sets or to bring in bench strength at this point?

Mr. Serruya: There haven't been. One of the benefits of growing through acquisition is really having the opportunity of cherry picking people from both organizations. So it gives us the opportunity to evaluate both's people and decide which ones we believe are best equipped to help take the company to the next level. In the case of Integrated Brands, most of the key personnel stayed on after the acquisition and are heavily incentivized either through stock options or because they converted their equity positions in Integrated Brands into equity positions in Yogen Fruz by converting through a stock swap.

TWST: At this point, how could the investment community better understand the company? As you speak with your analysts from this industry and the investors from your company, what are the misperceptions that you still have to address?

Mr. Serruya: Like I said earlier, the confusion that I find most analysts have with our company is not necessarily knowing how to classify us, because it's such a unique business model. They are not quite sure whether to classify us under the retail sector or as a consumer products business. Both are completely different business models and tend to prescribe different multiples. So that's been the biggest challenge, helping analysts really understand the business model going forward, the opportunities going forward and then having them break it out as to whether or not that should fall under a consumer products sector or a retail/franchising model.

TWST: What's the long-term vision? What does the ultimate enterprise look like and what time frame do you feel is appropriate, to look at that long-term result?

Mr. Serruya: We've had a tremendous amount of fun building this company over the last 13 years. Along with our new partners at Integrated Brands, we're very excited about the company's prospects going forward. I think the fundamentals of the company are stronger than they have ever been and a lot of the opportunities that are available to us today are much stronger and better opportunities than have ever been placed in front of us. The goals and objectives are to build the company into a significant player in the frozen dessert category on a global level. And I think we're well on our way to achieving this goal. With the current platform and the strong portfolios and brands that we control, I think we have a tremendous opportunity for growth still ahead of us.

TWST: What's the essential message then for an investor, the list of items that recommend and distinguish this company as an investment today, the reasons to buy in?

Mr. Serruya: Stocks tend to go up and down on a cyclical basis. But the one thing that is very important to consumers around the world, is that they get the quality that they have come to expect from those brands that they trust. Studies have shown time and time again that consumers will buy those products that they are most familiar with, and that is really where we have positioned this company today. If you had to sum up this company, we are a frozen dessert manufacturer, licensor, marketer and distributor of strong consumer brands. So from an investor's point of view, our vast portfolio of strong recognizable brands offers them a piece of a very large global pie.

TWST: You are on a Toronto exchange. Do you feel a need to move to an American exchange to either gain analysts' following or to gain recognition for global brands and global expertise?

Mr. Serruya: That's a good question. This question continues to come up at the board level. We have discussed this at length and there is a strong argument for this company seeking a U.S. listing. The company currently trades on the Toronto Stock Exchange, where we make up part of the TSE 300 and 200 Composite Index. Our story has been well disseminated here in Canada. It has a large institutional following, but the truth of the matter is that last year, 78% of our total revenues were derived from the U.S. This year it will probably escalate to about 81%. So with more and more of our growth coming from the U.S., there are those on the Board who believe that it's time for this story to be heard in the U.S. Our operational offices are headquartered in New York. Our manufacturing facilities are in Dallas, Texas and there's one other regional office in the U.S. There's no question that our brands have a strong consumer following in the U.S., more so probably than in Canada. I suspect that a decision will be made within the next six to nine months, about whether or not to seek a U.S. listing.

TWST: Thank you.

MICHAEL SERRUYA Chairman, President & CEO Yogen Fruz World-Wide Inc. 8300 Woodbine Ave., 5th Floor Markham, ON L3R9Y7 (905) 479-3275 (905) 479-8762 (905) 479-3275 - FAX

Each Executive who is the featured subject of a TWST Interview is offered the opportunity to include an Investors Brief or other highlight material to be provided and sponsored by and for the company.

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