TWST: Could we start out with a brief overview of Quality Dining, Inc.?

Mr. Fitzpatrick: Quality Dining has two major business lines, a quick service business, operating 71 Burger King restaurants as a franchisee, and a full-service business with three full-service concepts. They include: 31 Chili's franchise restaurants and two other concepts, Grady's American Grill, a 36-unit, high-end dinner house, and eight Papa Vino's, Italian dinner house restaurants.

TWST: Are you nationwide?

Mr. Fitzpatrick: We operate in 17 states.

TWST: Do you have plans for further geographical expansion?

Mr. Fitzpatrick: No, there is no driving geographic strategy. Our main focus is to continue building our two franchise concepts, Burger King and Chili's.

TWST: Can you tell us about Quality Dining's competitive advantages?

Mr. Fitzpatrick: We are 100% focused on being a great operator. One of the things we do as well, or better than anyone, is produce strong restaurant level margins. On a comparative basis, I think our performance is upper quartile or decile. This is a result of the significant operating disciplines that we maintain. We have a strong bias for narrow spans of control with our multi-unit supervisors. As an example, in our Burger King business, we have a ratio of three restaurants for every multi-unit supervisor, where we believe the standard practice in the industry is perhaps double this. This ratio contributes to higher average unit volumes and profitability. Our average unit volumes in Burger King are substantially higher, for example, than it is for the Burger King system as a whole. We experience other benefits too, such as higher margins, lower turnover and we are able to better maintain relationships between our supervisory people and restaurant teams.

TWST: Where would you like to see Quality Dining three years from now?

Mr. Fitzpatrick: We are one of those companies that probably is viewed as a little bit boring. We are focused on basic day-to-day execution. We have a simple formula: optimize our income and cash generation and use it to moderately grow and de-leverage. People who look at companies to see basic cash flow growth will be attracted to us. In the last few years reportable earnings have not been very important. We have been engineering a turnaround. We were one of the companies involved in the bagel business, which had negative and significant consequences for our company. We have turned our balance sheet around, and we have our P&L pointed in the right direction. Accordingly, with a focus on our cash flow, we will grow, reduce leverage and repurchase shares, all designed to drive long-term shareholder value. We are not a company that anyone should be looking to invest with a short-term view. Our shareholder base is comprised of shareholders oriented for long-term, and we hope they will be rewarded for their investment and patience. Three years from now, we should have a strengthened balanced sheet, a predictable income stream and a company that will be a steady, although fairly moderate grower.

TWST: What are your sales and marketing strategies?

Mr. Fitzpatrick: As a franchisee of Burger King and Chili's, we fit underneath the templates of those national concepts and their approach for a brand-strategy and marketing. With regard to our full-service concepts, each concept has its own niche. We are focused on delivering within those niches. We will not turn the formula on its head and do something that is not in sync with the consumer's expectation. Our fundamental approach is to produce a great product, high on flavor profile and portion size, deliver great value with an attractive price point, and serve the guest in a comfortable manner.

TWST: What major changes do you expect in your markets or in your industry over the next several years?

Mr. Fitzpatrick: Everything starts with the consumer. Although I do not know how long this economic expansion has been going, perhaps eight to 10 years, we have benefited from a consumer who has lots of cash. I am concerned that the consumer will maintain their strong cash position driven by robust disposable income. If this economy stumbles, there will be a problem for us all. We must remain competitive, we must pursue initiatives that keep our restaurants interesting. We have to execute well. But essentially, our success will be affected by the economy and being able to meet the consumers needs: as they change, we have to change with them.

TWST: Is there anything that keeps you awake at night about the company?

Mr. Fitzpatrick: Not really. We have a high quality and deep bench of management talent, so we do not have any internal concerns. Clearly, the economy is a concern. As long as the economy does not have any major hiccups, we should be fine.

TWST: Are these all franchised?

Mr. Fitzpatrick: No. We own the Grady's and Papa Vino's concepts. The Chili's and Burger King restaurants are all franchised.

TWST: How is the company taking advantage of the Internet?

Mr. Fitzpatrick: We really are not taking advantage of the Internet at all, candidly. I am not presently certain how we would exploit this. Our priorities have been on those things that I have already mentioned, and we are probably a little bit more primal, trying to make sure that we are on top of where we need to be with our guest and the concepts that we have.

TWST: How about some new restaurants ' Chili's, Grady's?

Mr. Fitzpatrick: We are a moderate grower with two or three casual dining restaurants and three or four Burger King restaurants a year. We may also supplement growth on the Burger King side through acquisition. We have traditionally been a grower rather than acquiror, but there may be deals that will become available.

TWST: What benchmarks or milestones can investors use to judge the progress of Quality Dining over the next two years?

Mr. Fitzpatrick: I think, principally, our growth of EBITDA and de- leveraging. This is a company whose leverage was well above 6:1 just three years ago. Now, our leverage ratio, debt to cash flow, is less than 4:1, and it is continuing to go down. I think if people looked at our growth of operating cash flow and reduction in leverage, they will see a hell of a lot of progress. We have made progress in the last few years and there is much more to come in the next few years.

TWST: As Chairman, President and CEO, where are you spending your time in the company and what are you concentrating on now?

Mr. Fitzpatrick: I am focused on the operating and execution within our restaurants. I am spending some time looking at acquisition opportunities. However, I am better served by insuring the day in and day out operating base of the business is on track. Once again, nothing too sexy and romantic, just basic management.

TWST: What kinds of programs have you put in place to attract and keep good people in this high employment environment?

Mr. Fitzpatrick: Like many of our peers, we have tried a lot of things. At the end of the day, we are focusing on what I call professional intimate relationships. The point is people do not work for companies, they work for people. In my view, we can have a company culture, mission and a company soul, but this is about the relationship that individuals have with one another. In the expanse of that professional, intimate relationship, we focus on each individual's needs, one to the other, learning how to work together, communicating, finding a mutuality of goals, plans, aspirations, helping one another, supplementing strengths and weaknesses and more. We try to match people of different strengths so that when you put them together they form a pretty good team, they can compensate for one another's weaknesses and leverage on each other's strengths. When I say that there is not a lot of 'sexy things' going on with our company, it is because we are spending time doing the basics. The results are there to demonstrate that this is working. I spend a lot of time doing things that are fairly mundane like talking to restaurant managers, and visiting restaurants, and finding out if people's problems are being addressed, and whether or not they have all the resources they need to do the job that will optimize every opportunity that comes along.

TWST: About how many employees do you have now?

Mr. Fitzpatrick: We are in the 7,000-8,000 employee range.

TWST: How do you feel about your current stock price?

Mr. Fitzpatrick: Probably like all CEOs of publicly held companies, it is never high enough. For a long time, we were a company the Street focused on. Then we got involved in the bagel business and we were punished for that investment, perhaps too harshly. On the other hand, we had a company that was extremely highly leveraged a few years ago. We have not been aggressive with the Street, as we would rather let our performance speak for itself. We perhaps suffer from not doing as good of a job as we should be communicating with the Street. We are not focused on getting fully valued, rather fairly valued. I cannot manage the Street and the investment community. What I can do is manage our company and at some point in time the Street will figure out that our company generates a lot of cash and uses it in a judicious manner, and we will be rewarded for that over time.

TWST: Can you give us two or three additional reasons why long-term investors should buy stock in Quality Dining today?

Mr. Fitzpatrick: I think that we are in a relatively stable business. The restaurant industry is not an annuity for sure, but some of the brands that we operate are quite reliable, where cash flow over extended periods of time has been fairly predictable. We have an experienced management team that has been here for a long time, whose performance is well known. This is a company that is rapidly de-leveraging, so I think the risk factor of our ultimate success is being mitigated appropriately. We have a lot of upside in front of us.

TWST: Thank you. (RF)

DANIEL B. FITZPATRICK Chairman, President & CEO Quality Dining, Inc. 4220 Edison Lakes Parkway Mishawaka, IN 46545 (219) 271-4600 (219) 243-4377 - FAX

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