4.

THE INDUSTRY

There are huge market share opportunities for strong multi-restaurant operators.

Casual dining chains account for only 27% of total segment sales. The majority of the restaurants in the segment are owned and operated independently. In contrast, chain operators account for more than 60% of sales in the quick service restaurant category. If casual dining chains can leverage their considerable resources to increase share, the 6% to 8% sales growth projected for the category understates the opportunity available.

DARDEN

Darden knows what it takes to succeed as a multi-restaurant casual dining operator.

Red Lobster and Olive Garden have emerged as two of the most popular brands in casual dining because of Darden’s skill at creating and evolving the systems it takes to provide more than five million exceptional dining experiences a week. These include systems for recruiting, training and leadership development; real estate development; marketing; and the information technology and distribution systems required to get the right food and beverage products from suppliers to the restaurants and our guests quickly and cost-effectively.

Operating successfully on this scale takes leadership - leadership in everything from service to culinary innovation to well-trained employees and managers. This leadership talent is the scarcest resource in the industry. That’s why Darden is committed to career and leadership development, spending five times more today than in the past on mentoring and teaching. It’s also why Darden has one of the industry’s most advanced management development programs, culminating in LADDR (Leadership Assessment and Development at Darden Restaurants) - a three-day assessment of readiness to be a general manager, with more than 2,000 participants in its first three years.

Darden also maintains a strong overall financial condition. This enables the Company to move with speed and flexibility as it works to acquire or develop new concepts, and also lets Darden continue to invest in people - the cornerstone of successful growth in casual dining - regardless of economic or industry conditions.