Mr. Forst: There really aren't common investment characteristics. Both are dependent on disposable income, and they are both, broadly defined leisure time activities, but I would not say that the investment characteristics are particularly close. Both industries are dependent on building new capacity and making the highest IRR on that capital, but that's about as far as it goes.
TWST: Let's begin with the approach that you've taken to the restaurant
industry.
Mr. Forst: It is probably no different from what most investors and
analysts are looking at. It includes looking at the long-term viability
of a concept, looking at the investment return on individual
restaurants, looking at the quality of managements. The restaurant
industry is one of the largest industries in the United States and it's
not going to go away. It's growing at a faster rate than inflation.
However, it is a highly speculative business. There is probably as much
failure in this industry as in any industry I've ever looked at. In the
short term, it is very fast moving and a lot of it depends on fads,
promotions and advertising.
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