10-K

                          [LOGO]

                  TRIARC COMPANIES, INC.
   FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996







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            SECURITIES AND EXCHANGE COMMISSION
                  WASHINGTON, D.C.  20549

                         FORM 10-K
(MARK ONE)
(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [FEE REQUIRED]

     FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996.

                            OR

(  ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

     FOR THE TRANSITION PERIOD FROM _____________ TO ______________.

               COMMISSION FILE NUMBER 1-2207
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                  TRIARC COMPANIES, INC.

  (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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         DELAWARE                   38-0471180
     (STATE OR OTHER JURISDICTION OF(I.R.S. EMPLOYER
     INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

     280 PARK AVENUE
     NEW YORK, NEW YORK             10017
     (ADDRESS OF PRINCIPAL EXECUTIVE(ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 451-3000
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                             NAME OF EACH EXCHANGE
     TITLE OF EACH CLASS                     ON WHICH REGISTERED
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     CLASS A COMMON STOCK, $.10 PAR VALUE    NEW YORK STOCK EXCHANGE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                           NONE

     Indicate by check mark  whether the  registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     The aggregate  market value of the outstanding  shares of the  registrant's
Class A Common Stock (the only class of the registrant's voting securities) held
by non-affiliates  of the registrant was approximately  $286,000,000 as of March
15, 1997. There were 24,112,109 shares of the registrant's  Class A Common Stock
and 5,997,622 shares of the registrant's  Class B Common Stock outstanding as of
March 15, 1997.

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"ARBY'S," "RC COLA," "DIET RC," "ROYAL CROWN," "ROYAL CROWN
DRAFT COLA," "DIET RITE," "NEHI," "NEHI LOCKJAW," "UPPER 10," "KICK,"
  "THIRST THRASHER," "MISTIC," "ROYAL MISTIC" AND "PATCO"
ARE REGISTERED TRADEMARKS OF TRIARC COMPANIES, INC. OR ITS SUBSIDIARIES.











                          PART I

     SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

   Certain  statements  in this Annual  Report on Form 10-K (this "Form  10-K"),
including  statements  under  "Item  1.  Business"  and  "Item  7.  Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations,"
constitute  "forward-looking  statements"  within  the  meaning  of the  Private
Securities  Litigation  Reform  Act of 1995 (the  "Reform  Act").  Such  forward
looking  statements  involve known and unknown  risks,  uncertainties  and other
factors  which may cause the actual  results,  performance  or  achievements  of
Triarc  Companies,  Inc.  ("Triarc")  and  its  subsidiaries  to  be  materially
different  from any  future  results,  performance  or  achievements  express or
implied by such  forward-looking  statements.  Such factors include, but are not
limited  to,  the   following:   general   economic  and  business   conditions;
competition; success of operating initiatives;  development and operating costs;
advertising and promotional efforts;  brand awareness;  the existence or absence
of adverse publicity;  acceptance of new product  offerings;  changing trends in
customer tastes; the success of multi-branding;  changes in business strategy or
development plans; quality of management;  availability, terms and deployment of
capital; business abilities and judgment of personnel; availability of qualified
personnel;  Triarc not receiving from the Internal  Revenue  Service a favorable
ruling  that the  spinoff  referred to herein will be tax-free to Triarc and its
stockholders or the failure to satisfy other customary conditions to closing for
transactions of the types referred to herein;  labor and employee benefit costs;
availability  and cost of raw materials and supplies;  changes in, or failure to
comply with,  government  regulations;  regional weather conditions;  changes in
wholesale propane prices;  operating hazards and risks associated with handling,
storing  and  delivering  combustible  liquids  such  as  propane;  construction
schedules;  trends in and strength of the textile industry;  the costs and other
effects  of  legal  and   administrative   proceedings;   and  other  risks  and
uncertainties  referred in this Form 10-K,  National  Propane  Partners,  L.P.'s
registration  statement on Form S-1 and other  current and  periodic  filings by
Triarc,  RC/Arby's  Corporation  and National  Propane  Partners,  L.P. with the
Securities and Exchange  Commission.  Triarc will not undertake and specifically
declines any  obligation to publicly  release the result of any revisions  which
may be made to any forward-looking statements to reflect events or circumstances
after the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.

ITEM 1.    BUSINESS.

INTRODUCTION

     Triarc is a holding company which, through its subsidiaries,  is engaged in
four  businesses:  beverages,  restaurants,  dyes and  specialty  chemicals  and
liquefied  petroleum gas. The beverage  operations  are conducted  through Royal
Crown Company,  Inc.  ("Royal Crown") and Mistic Brands,  Inc.  ("Mistic");  the
restaurant   operations  are  conducted  through  Arby's,   Inc.  (d/b/a  Triarc
Restaurant Group)  ("Arby's");  the dyes and specialty  chemical  operations are
conducted through C.H. Patrick & Co., Inc. ("C.H.  Patrick");  and the liquefied
petroleum gas  operations are conducted  through  National  Propane  Corporation
("National Propane"), the managing general partner of National Propane Partners,
L.P. (the  "Partnership")  and its operating  subsidiary  partnership,  National
Propane,  L.P.  (the  "Operating  Partnership").  Prior  to June 29,  1995,  the
liquefied  petroleum  gas  operations  were also  conducted  through  Public Gas
Company ("Public Gas") which, on such date was merged with National Propane.  At
the time of such merger, Public Gas was an indirect  wholly-owned  subsidiary of
Southeastern  Public Service  Company  ("SEPSCO"),  which in turn is an indirect
wholly-owned subsidiary of Triarc (National Propane and Public Gas are sometimes
collectively referred to herein as the "LP Gas Companies").  In addition,  prior
to April 29,  1996,  Triarc was also  engaged in the  textile  business  through
Graniteville Company  ("Graniteville").  On such date the textile related assets
of Graniteville  were sold. See "Item 1.-- Business -- Strategic  Alternatives."
For information regarding the revenues, operating profit and identifiable assets
for Triarc's four  businesses for the year ended December 31, 1996, see "Item 7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations"  and Note 29 to the  Consolidated  Financial  Statements  of  Triarc
Companies, Inc. and Subsidiaries (the "Consolidated Financial Statements").  See
"Item 1.  Business  --  General  --  Discontinued  and Other  Operations"  for a
discussion of certain  remaining  ancillary  businesses  which Triarc intends to
dispose of or liquidate as part of its business strategy.

      Triarc's  corporate  predecessor was incorporated in Ohio in 1929.  Triarc
was  reincorporated in Delaware,  by means of a merger,  in June 1994.  Triarc's
principal  executive offices are located at 280 Park Avenue,  New York, New York
10017 and its telephone number is (212) 451-3000.

BUSINESS STRATEGY

     The key  elements  of  Triarc's  business  strategy  include  (i)  focusing
Triarc's  resources on its four businesses -- beverages,  restaurants,  dyes and
specialty  chemicals and liquefied petroleum gas, (ii) building strong operating
management teams for each of the businesses,  and permitting each of these teams
to operate in a decentralized environment,  (iii) providing strategic leadership
and financial  resources to enable the management teams to develop and implement
specific,   growth-oriented  business  plans  and  (iv)  rationalizing  Triarc's
organizational structure.

   In March 1995, Triarc retained  investment  banking firms to review strategic
alternatives  to  maximize  the value of its  specialty  chemicals,  textile and
liquefied  petroleum gas operations.  In April 1996, Triarc consummated the sale
of its textile business and in July 1996 formed a master limited  partnership to
hold its propane  business and sold  approximately  57.3% of the master  limited
partnership to the public.  In October 1996,  Triarc announced that its Board of
Directors  approved a plan to offer up to approximately 20% of the shares of its
beverage  and  restaurant  businesses  to the public  through an initial  public
offering  and to  spinoff  the  remainder  of the shares of such  businesses  to
Triarc's  stockholders.  Consummation of such spinoff is subject to receipt of a
favorable  ruling from the Internal Revenue Service (the "IRS") that the spinoff
will be tax-free to Triarc and its stockholders. The request for the ruling from
the IRS  contains  several  complex  issues and there can be no  assurance  that
Triarc will  receive the ruling or  consummate  the  spinoff.  In  addition,  in
February  1997,  Triarc  announced that certain of its  subsidiaries,  including
Arby's,  had entered  into an  agreement  with RTM,  Inc.  ("RTM"),  the largest
franchisee in the Arby's  system,  to sell to an affiliate of RTM all of the 355
company-owned Arby's restaurants owned by such subsidiaries.  On March 27, 1997,
Triarc  announced  that it had entered  into a  definitive  agreement to acquire
Snapple Beverage Corp. ("Snapple") from The Quaker Oats Company for $300 million
in cash, subject to certain post-closing adjustments. The acquisition,  which is
expected  to be  consummated  during the second  quarter of 1997,  is subject to
customary closing conditions,  including  Hart-Scott-Rodino antitrust clearance.
See "Item 1. Business -- Strategic Alternatives."

   The  senior  operating  officers  of  Triarc's  businesses  have  implemented
individual  plans  focused  on  increasing   revenues  and  improving  operating
efficiency. In addition, Triarc continuously evaluates acquisitions and business
combinations  to augment its  businesses.  The  implementation  of this business
strategy  may result in  increases  in  expenditures  for,  among other  things,
capital projects and acquisitions and, over time, marketing and advertising. See
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations."

STRATEGIC ALTERNATIVES

   Acquisition of Snapple Beverage Corp.

   On March 27,  1997,  Triarc  announced  that it had entered into a definitive
agreement  to acquire  Snapple  from The Quaker Oats Company for $300 million in
cash, subject to certain  post-closing  adjustments.  The acquisition,  which is
expected  to be  consummated  during the second  quarter of 1997,  is subject to
customary closing conditions,  including  Hart-Scott-Rodino antitrust clearance.
Snapple,  with its  ready-to-drink  teas and juice drinks, is a market leader in
the premium  beverage  category.  Snapple had 1996 sales of  approximately  $550
million.  Triarc,  which owns Mistic,  will operate Snapple and Mistic under the
leadership of Michael Weinstein,  chief executive officer of the Triarc Beverage
Group. See "Item 1. Business -- Business Segments -- Beverages."

   Spinoff Transactions

   On October 29, 1996, Triarc announced that its Board of Directors  approved a
plan  to  offer  up to  approximately  20% of the  shares  of its  beverage  and
restaurant  businesses to the public through an initial  public  offering and to
spinoff the remainder of the shares of such businesses to Triarc's  stockholders
(collectively,  the  "Spinoff  Transactions").  In  connection  with the Spinoff
Transactions,  it is expected that National  Propane may be merged with and into
Triarc,  with Triarc becoming the managing  partner,  and National  Propane SGP,
Inc., a subsidiary of National  Propane  ("SGP"),  remaining the special general
partner of the  Partnership and the Operating  Partnership.  Consummation of the
Spinoff  Transactions  will be subject  to,  among  other  things,  receipt of a
favorable ruling from the IRS that the Spinoff  Transactions will be tax-free to
Triarc and its  stockholders.  The request for the ruling from the IRS  contains
several  complex  issues and there can be no assurance  that Triarc will receive
the ruling or that Triarc will consummate the Spinoff Transactions.  The Spinoff
Transactions are not expected to occur prior to the end of the second quarter of
1997.  Triarc is  currently  evaluating  the  impact,  if any,  of the  proposed
acquisition of Snapple on the anticipated structure of the Spinoff Transactions.

   A registration  statement has not been filed with the Securities and Exchange
Commission  with  respect to the  proposed  offering of common stock of Triarc's
restaurant  and beverage  businesses.  The offering of common stock will be made
only by means of a prospectus.  The common stock may not be sold, nor may offers
to buy be  accepted  prior  to  the  time  the  registration  statement  becomes
effective.  This  Form  10-K  does  not  constitute  an  offer  to  sell  or the
solicitation of an offer to buy such common stock, nor will there be any sale of
the common stock in any state in which such an offer, solicitation or sale would
be unlawful prior to registration or qualification  under the securities laws of
any such state.

   Sale of Company-Owned Restaurants

   On February  13,  1997,  Triarc  announced  that  Arby's,  Arby's  Restaurant
Development Corporation ("ARDC"), Arby's Restaurant Holding Company ("ARHC") and
Arby's's Restaurant  Operations Company ("AROC"),  each an indirect wholly-owned
subsidiary of Triarc,  entered into a stock purchase  agreement with RTM and RTM
Partners Inc.  ("Holdco") pursuant to which Holdco would acquire from ARDC, ARHC
and AROC (the "Sellers") all of the stock of two  corporations  ("Newco") owning
all of the Sellers' 355 company-owned Arby's restaurants.  The purchase price is
approximately   $71  million,   consisting   primarily  of  the   assumption  of
approximately  $69  million  in  mortgage  indebtedness  and  capitalized  lease
obligations. The consummation of the transaction is subject to customary closing
conditions, including receipt of necessary consents and regulatory approvals.

   In  connection  with the  transaction,  the sellers will  receive  options to
purchase  from Holdco up to an  aggregate  of 20% of the common  stock of Newco.
RTM, Holdco and two affiliated entities also agreed to enter into a guarantee in
favor of the sellers and Triarc guaranteeing payment of, among other things, the
assumed  debt  obligations.  RTM has  also  agreed  to  cause  Newco to build an
additional  190  Arby's  restaurants  over  the  next  14  years  pursuant  to a
development agreement.  This is in addition to a previous commitment RTM entered
into in 1996 to build an additional 210 Arby's restaurants.

   Arby's  future role in the Arby's  system as a franchisor  will be to enhance
the strength of the Arby's brand by increasing  the number of restaurants in the
Arby's system and by establishing a "cut above" positioning for the Arby's brand
through  upgraded  menu  items and  facilities,  while  continuing  to bring new
concepts to the system,  such as P.T. Noodles,  ZuZu and T.J.  Cinnamons.  See "
Item 1. -- Business Segments -- Restaurants."

   Graniteville Sale

   On April 29, 1996 Triarc and Graniteville sold (the  "Graniteville  Sale") to
Avondale Mills, Inc. ("Avondale"),  Graniteville's textile business,  other than
the assets and operations of C.H. Patrick and certain other excluded assets, for
a net  purchase  price of $243 million in cash.  Pursuant to the Asset  Purchase
Agreement,  Avondale assumed all liabilities  relating to the textile  business,
other than  income  taxes,  long-term  debt  (which was repaid at  closing)  and
certain other specified liabilities.

   In connection with the Graniteville Sale, Avondale and C.H. Patrick entered
into a 10-year supply agreement (the "Supply Agreement") pursuant to which C.H.
Patrick has the right, subject to certain bidding procedures, to supply to the
combined Graniteville/Avondale textile operations certain of its dyes and
chemicals.   See "Item 1. Business -- Business Segments -- Dyes and Specialty
Chemicals."


   Formation of National Propane Master Limited Partnership

   In July 1996 National Propane  Partners,  L.P., a master limited  partnership
("MLP") formed by National  Propane,  completed an initial public  offering (the
"IPO") of approximately  6.3 million common units  representing  limited partner
interests and received therefrom net proceeds  aggregating  approximately $117.4
million.  Upon completion of the IPO, National Propane held an approximate 44.6%
interest  in the MLP (on a combined  basis) and the  public  held the  remaining
interest.

   Concurrently  with the  closing of the IPO,  both  National  Propane  and SGP
contributed  substantially all of their assets to the Operating Partnership (the
"Conveyance") as a capital  contribution and the Operating  Partnership  assumed
substantially  all of the  liabilities  of National  Propane and SGP (other than
certain income tax liabilities).  Immediately  thereafter,  National Propane and
SGP conveyed their limited partner interests in the Operating Partnership to the
Partnership. As a result of such contributions, each of National Propane and SGP
have a 1.0% general partner interest in the Partnership
and a  1.0101%  general  partner  interest  in  the  Operating  Partnership.  In
addition,  National  Propane  received in exchange for its  contribution  to the
Partnership  4,533,638  subordinated  units  and the  right to  receive  certain
incentive distributions.

   Also  immediately  prior to the closing of the IPO,  National  Propane issued
$125 million  aggregate  principal amount of 8.54% first mortgage notes due 2010
(the "First  Mortgage  Notes") to certain  institutional  investors in a private
placement.  Approximately $59.3 million of the net proceeds from the sale of the
First Mortgage Notes (the entire net proceeds of which were approximately $118.4
million)  were  used by  National  Propane  to pay a  dividend  to  Triarc.  The
remainder  of the net  proceeds  from  the  sale  of the  First  Mortgage  Notes
(approximately  $59.1  million)  were  contributed  by  National  Propane to the
Operating  Partnership  to repay a portion of National  Propane's  then existing
bank  debt  and  certain  other   indebtedness  of  National   Propane  and  its
subsidiaries.

   After the repayment of the indebtedness  described above, the net proceeds of
the IPO were contributed to the Operating  Partnership  which used such proceeds
to repay all remaining  indebtedness under National Propane's then existing bank
debt, to make a $40.7 million loan to Triarc (the "Partnership Loan") and to pay
certain  accrued  management  fees and tax sharing  payments  due to Triarc from
National Propane.

   Concurrently  with the closing of the IPO,  the  Operating  Partnership  also
entered  into a bank credit  facility,  which  includes a $15 million  revolving
credit  facility to the used for working  capital and other general  partnership
purposes  and a $40  million  acquisition  facility.  See "Item 7.  Management's
Discussion and Analysis of Financial Condition and Results of Operations."

   On November 7, 1996, the Partnership issued and sold an additional 400,000
common units in a private placement and received net proceeds of approximately
$7.4 million.  Upon completion of the private placement, National Propane's
interest in the MLP (on a combined basis) was reduced to approximately 42.7%.
 See "Item 1.  Business -- Business Segments -- Liquefied Petroleum Gas."


CHANGE IN FISCAL YEAR

   Effective  January 1, 1997, Triarc adopted a 52/53 week fiscal convention for
itself and each  subsidiary  (other  than  National  Propane)  pursuant to which
Triarc's fiscal year (and that of such subsidiaries) will end on the last Sunday
in December in each year.  Each fiscal year  generally will be comprised of four
13 week  fiscal  quarters,  although  in some  years  the  fourth  quarter  will
represent a 14 week period.

ORGANIZATIONAL STRUCTURE

   The  following  chart  sets forth the  current  organizational  structure  of
Triarc.  Triarc directly or indirectly owns 100% of all of its  subsidiaries and
approximately  42.7% of the  Partnership  and the  Operating  Partnership,  on a
combined basis. As noted above Triarc has entered into a definitive agreement to
purchase  100% of the  capital  stock  of  Snapple.  See  "Item 1.  Business  --
Strategic Alternatives."

[The organizational chart shows the following: (i) Triarc owns 75.7% of National
Propane,  the other 24.3% of which is owned by SEPSCO; (ii) Triarc owns 94.6% of
CFC  Holdings  Corp.,  the other 5.4% of which is owned by SEPSCO;  (iii) Triarc
owns 100% of Mistic Brands,  Inc.;  (iv) Triarc owns 100% of GS Holdings,  Inc.,
which owns 100% of SEPSCO and 50% of GVT Holdings,  Inc., the other 50% of which
is owned by  SEPSCO;  (v) GVT  Holdings,  Inc.  owns  (indirectly)  100% of C.H.
Patrick; (vi) CFC Holdings Corp. owns 100% of RC/Arby's Corporation,  which owns
100% of Royal Crown Company,  Inc., Arby's, Inc., Arby's Restaurant  Development
Corporation,  Arby's Restaurant Holding Company and Arby's Restaurant Operations
Company;  (vii) National  Propane owns 100% of National Propane SGP, Inc., which
owns a 1.0%  unsubordinated  general  partner  interest in the Partnership and a
l.01%  unsubordinated  general  partner  interest in the Operating  Partnership;
(viii) National Propane owns a 1.0% unsubordinated  general partner interest,  a
39.5%  subordinated  general  partner  interest in the  Partnership  and a 1.01%
unsubordinated general partner interest in the Operating  Partnership;  and (ix)
the  Partnership  owns a  97.98%  limited  partner  interest  in  the  Operating
Partnership.]



BUSINESS SEGMENTS

            BEVERAGES (ROYAL CROWN AND MISTIC)

TRIARC BEVERAGE GROUP

   On  October  29,  1996,  Triarc  announced  the  establishment  of the Triarc
Beverage  Group,   which  oversees  the  operations  of  Triarc's  two  beverage
subsidiaries,  Royal Crown and Mistic.  Michael  Weinstein,  the chief executive
officer of Mistic and Royal Crown is the chief  executive  officer of the Triarc
Beverage Group and has direct operating responsibility for both companies.  John
Carson,  the chairman of Royal Crown,  is chairman of the Triarc  Beverage Group
and oversees international  operations,  private label sales, domestic strategic
franchising and industry affairs. The Triarc Beverage Group is in the process of
consolidating its headquarters operations in White Plains, New York. Royal Crown
and Mistic  continue to operate  independent  sales and marketing  operations to
serve their different  distribution  systems and marketplace needs. The finance,
administrative  and  operational  functions  of  the  two  companies  are  being
consolidated to maximize efficiencies.

ACQUISITION OF SNAPPLE BEVERAGE CORP.

   On March 27 1997,  Triarc,  announced  that it had entered  into a definitive
agreement  to acquire  Snapple  from The Quaker Oats Company for $300 million in
cash, subject to certain  post-closing  adjustments.  The acquisition,  which is
expected  to be  consummated  during the second  quarter of 1997,  is subject to
customary closing conditions,  including  Hart-Scott-Rodino antitrust clearance.
Snapple, with its ready-to-drink juice drinks, is a market leader in the premium
beverage  category.  Snapple had 1996 sales of approximately  $550 million.  See
"Item 1. Business -- Strategic Alternatives."


                        ROYAL CROWN

   Royal Crown  produces and sells  concentrates  used in the production of soft
drinks which are sold domestically and internationally to independent,  licensed
bottlers who  manufacture  and  distribute  finished  beverage  products.  Royal
Crown's major products have significant  recognition and include:  RC COLA, DIET
RC COLA, DIET RITE COLA, DIET RITE flavors,  NEHI, UPPER 10, and KICK.  Further,
Royal Crown is the exclusive  supplier of cola  concentrate to Cott  Corporation
("Cott") which sells private label soft drinks to major  retailers in the United
States, Canada, the United Kingdom, Australia, Japan, Spain and South Africa.

   RC Cola is the third  largest  national  brand cola and is the only  national
brand cola available to non-Coca-Cola and non-Pepsi-Cola  bottlers. DIET RITE is
available in a cola as well as various other flavors and formulations and is the
only  national  brand  that is  sugar-free  (sweetened  with 100%  aspartame,  a
non-nutritive  sweetener),  sodium-free and  caffeine-free.  DIET RC COLA is the
no-calorie version of RC COLA containing aspartame as its sweetening agent. NEHI
is a line of  approximately  20 flavored  soft drinks,  UPPER 10 is a lemon-lime
soft drink and KICK is a citrus soft drink.  Royal  Crown's share of the overall
domestic  carbonated soft drink market was approximately  1.9% in 1996 according
to Beverage  Digest/Maxwell  estimates.  Royal  Crown's  soft drink  brands have
approximately a 2.1% share of national  supermarket  volume, as measured by data
of Information Resources, Inc. ("IRI").

   BUSINESS STRATEGY

   Royal  Crown's  management  is  pursuing  business   strategies  designed  to
strengthen  its  distribution  system,  make more effective use of its marketing
resources,  continue  the  expansion  of its  international  and  private  label
businesses,  develop new packages and concentrate  resources on its core brands.
Additionally,  in January  1997,  Triarc sold its interest in Saratoga  Beverage
Group,  Inc.  ("Saratoga")  and Royal Crown  terminated  its  relationship  with
Saratoga.  Royal Crown has also decided to discontinue selling Royal Crown Draft
Cola as a finished product. Royal Crown is evaluating the possibility of selling
concentrate for that product.

   ADVERTISING AND MARKETING

   A principal  determinant of success in the soft drink industry is the ability
to establish a recognized  brand name, the lack of which serves as a significant
barrier  to  entry  to  the  industry.  Advertising,  promotions  and  marketing
expenditures  in 1994,  1995 and 1996 were  approximately  $78.2 million,  $86.2
million and $76.8 million, respectively.  Royal Crown believes that its products
continue to enjoy nationwide brand recognition.

   ROYAL CROWN'S BOTTLER NETWORK

   Royal  Crown  sells  its  flavoring  concentrates  for  branded  products  to
independent  licensed  bottlers in the United  States and 61 foreign  countries,
including Canada. Consistent with industry practice, each bottler is assigned an
exclusive  territory  within which no other bottler may  distribute  Royal Crown
branded soft drinks. As of December 31, 1996, Royal Crown products were packaged
and/or distributed  domestically in 156 licensed territories,  by 174 licensees,
covering  50  states.  There  were a total of 56  production  centers  operating
pursuant to 49 production and distribution  agreements and 124 distribution only
agreements.

   Royal Crown enters into a license  agreement  with each of its bottlers which
it believes is comparable to those  prevailing in the industry.  The duration of
the license  agreements varies, but Royal Crown may terminate any such agreement
in the event of a material  breach of the terms  thereof by the bottler  that is
not cured within a specified period of time.

    Royal Crown's ten largest  bottler  groups  accounted for 63.6% and 68.4% of
Royal Crown's  domestic unit sales of concentrate  for branded  products  during
1995 and 1996,  respectively.  The two largest bottler groups,  Chicago Bottling
Group, and Beverage  America,  accounted for 20.1% and 10.2%,  respectively,  of
Royal Crown's  domestic unit sales of concentrate  for branded  products  during
1995 and 21.9% and 9.3%, respectively, during 1996.

   PRIVATE LABEL

   Royal Crown  believes  that  private  label  sales  through  Cott,  a leading
supplier of private label soft drinks,  represent an opportunity to benefit from
the increased emphasis by national retailers on the development and marketing of
quality store brand  merchandise at competitive  prices.  Royal Crown's  private
label  sales  began in late 1990 and,  as Cott's  business  expanded,  more than
tripled  from  calendar  year 1992 to  calendar  year  1994.  Unit sales to Cott
declined in 1995,  according to Cott, as a result of a significant  reduction in
worldwide  Cott  system  inventories  and a slowing of the rapid  growth  Cott's
business has  experienced.  In 1996,  sales to Cott rebounded as Cott's business
grew and its  inventory  normalized as Cott  increased its purchases  from Royal
Crown for certain non-cola  concentrates.  In 1994, 1995 and 1996, revenues from
the  Cott   business   represented   approximately   14.2%,   12.1%  and  12.6%,
respectively, of Royal Crown's total revenues.

   Royal Crown  provides  concentrate  to Cott pursuant to a concentrate  supply
agreement entered into in 1994 (the "Cott Worldwide Agreement").  Under the Cott
Worldwide Agreement,  Royal Crown is Cott's exclusive worldwide supplier of cola
concentrates for retailer-branded  beverages in various containers. In addition,
Royal Crown also supplies Cott with non-cola carbonated soft drink concentrates.
The Cott  Worldwide  Agreement  requires  that Cott purchase at least 75% of its
total worldwide  requirements for carbonated soft drink  concentrates from Royal
Crown.  The  initial  term of the Cott  Worldwide  Agreement  is 21 years,  with
multiple six-year extensions.

   Cott  delivers  the private  label  concentrate  and  packaging  materials to
independent  bottlers for bottling.  The finished  private label product is then
shipped to Cott's trade  customers,  including major retailers such as Wal-Mart,
A&P and Safeway.  The Cott  Worldwide  Agreement  provides that, as long as Cott
purchases a specified  minimum  number of units of private label  concentrate in
each year of the Cott Worldwide Agreement,  Royal Crown will not manufacture and
sell private label carbonated soft drink concentrates to parties other than Cott
anywhere in the world.

   Through its private  label  program,  Royal Crown  develops new  concentrates
specifically for Cott's private label accounts.  The proprietary  formulae Royal
Crown uses for its private label  program are customer  specific and differ from
those of Royal Crown's branded products.  Royal Crown works with Cott to develop
a concentrate  according to each trade  customer's  specifications.  Royal Crown
retains ownership of the formulae for such concentrates developed after the date
of the Cott Worldwide  Agreement,  except upon termination of the Cott Worldwide
Agreement as a result of breach or non-renewal by Royal Crown.

   PRODUCT DISTRIBUTION

   Bottlers   distribute   finished  product  through  four  major  distribution
channels: take home (consisting of food stores, drug stores, mass merchandisers,
warehouses and discount stores);  convenience  (consisting of convenience stores
and retail gas  station  mini-markets);  fountain/food  service  (consisting  of
fountain syrup sales and restaurant single drink sales); and vending (consisting
of bottle and can sales through vending machines).  The take home channel is the
principal  channel of distribution  for Royal Crown  products.  According to IRI
data, the volume of Royal Crown products in food stores and drug stores in
1996 was down approximately 7% and 9%, respectively,  as compared to 1995, while
the volume of Royal Crown products in mass  merchandisers was down approximately
12% in 1996. Royal Crown brands  historically have not been broadly  distributed
through vending  machines or convenience  outlets;  in 1996, the volume of Royal
Crown products in the convenience channel was down approximately 10% as compared
to 1995.

   INTERNATIONAL

   Sales outside the United States accounted for  approximately  9.9% , 9.6% and
10.3% of Royal  Crown's  sales in 1994,  1995,  and  1996,  respectively.  Sales
outside the United States of branded  concentrates  accounted for  approximately
8.9%,  10.2%  and 12.3% of  branded  concentrate  sales in 1994,  1995 and 1996,
respectively.  As of December 31, 1996,  90 bottlers  and 13  distributors  sold
Royal  Crown brand  products  outside the United  States in 61  countries,  with
international  sales in 1996 distributed  among Canada 11.3%,  Latin America and
Mexico 29.8%, Europe 33.3%, the Middle East/Africa 14.7% and the Far East 10.9%.
While the financial and managerial resources of Royal Crown have been focused on
the United States and Canada,  Royal  Crown's  management  believes  significant
opportunities  exist in  international  markets.  In those countries where Royal
Crown brands are currently  distributed,  Royal Crown traditionally has provided
limited advertising support due to capital constraints.  New bottlers were added
in 1996 to the following international markets:
Brazil (2), Sweden, Poland, Argentina, Korea, Syria and the C.I.S/Baltics (2).

   PRODUCT DEVELOPMENT AND RAW MATERIALS

   Royal  Crown  believes  that it has a  reputation  as an  industry  leader in
product innovation. Royal Crown introduced the first national brand diet cola in
1961.  The DIET RITE flavors line was  introduced in 1988 to complement the cola
line and to target the  non-cola  segment of the market,  which has been growing
faster than the cola segment due to a consumer trend toward  lighter  beverages.
In 1997, Royal Crown introduced a new version of DIET RITE COLA.

   From  time to time,  Royal  Crown  purchases  as much as a year's  supply  of
certain  raw  materials  to  protect  itself  against  supply  shortages,  price
increases  and/or  political  instabilities in the countries from which such raw
materials  are sourced.  Flavoring  ingredients  and  sweeteners  are  generally
available on the open market from several sources.


                          MISTIC

    Mistic's premium beverage  business,  acquired by Triarc in August 1995, has
expanded  rapidly  since  its  formation  in  late  1989  by  increasing  market
penetration  in  its  original  core  markets   located  in  the  Northeast  and
mid-Atlantic  regions  and,  since 1991,  by expanding  distribution  into other
domestic regional markets and selected international markets.

   Mistic develops, produces and markets a wide variety of premium non-alcoholic
beverages,  including non-carbonated and carbonated fruit drinks, ready-to-drink
brewed iced teas and naturally flavored sparkling waters under the Mistic, Royal
Mistic,  Mistic Breeze and Mistic Rain Forest brand names.  Mistic  products are
manufactured by independent bottlers or co-packers and are sold in all 50 states
in the United States and in Canada,  as well as in a number of foreign countries
through a network of approximately 225 beverage distributors.  Mistic's products
are distributed  through various channels  including channels in which sales are
not measured by industry  surveys.  Mistic believes that,  based on sales, it is
among the three leading premium beverage brands.

   Mistic's  management has developed and is  implementing  business  strategies
that focus on: (i)  improving  distributor  relations  by,  among other  things,
developing  long  term  relationships  with  key  distributors;  (ii)  expanding
distribution in existing and new geographic markets and channels of trade; (iii)
enhancing  promotional and equipment  programs;  (iv) improving  advertising and
advertising efficiencies; and (v) developing new products.


   PRODUCTS

   Mistic products compete in a number of premium  beverage product  categories,
including  carbonated and noncarbonated  beverages,  nectars (introduced in July
1996), teas and flavored teas, flavored seltzers and natural spring water.

These  products are  generally  available in some  combination  of 16, 20 and 24
ounce glass  bottles,  20 and 32 ounce PET (plastic)  bottles and 12 ounce cans.
Approximately  80% of Mistic's  1996 sales  consisted  of  non-carbonated  fruit
flavored beverages and 14% consisted of teas and lemonade.


   CO-PACKING ARRANGEMENTS

   Mistic's  products are produced by co-packers or bottlers  under  formulation
requirements and quality control procedures specified by Mistic.  Mistic selects
and  monitors  the  producers  to  ensure   adherence  to  Mistic's   production
procedures.  Mistic regularly analyzes samples from production runs and conducts
spot  checks  of the  production  facilities.  Mistic  also  purchases  most raw
materials  and  arranges  for their  shipment to its  co-packers  and  bottlers.
Mistic's  three  largest  co-packers  accounted  for 44% of its  aggregate  case
production during 1996.

   Mistic's  contractual  arrangements  with its  co-packers are typically for a
fixed term renewable at Mistic's option.  During the term of the agreement,  the
co-packer  generally commits a certain amount of its monthly production capacity
to Mistic.  Mistic has  committed to order a certain  guaranteed  volume (in one
case) or  percentage  of its products sold in a region (in another case) or make
payments in lieu thereof. As a result of its co-packing  arrangements,  Mistic's
operations have not required significant capital expenditures or investments for
bottling  facilities or equipment,  and its production  related fixed costs have
been minimal.

   Mistic's  management  believes it has sufficient  production capacity to meet
its 1997  requirements and that, in general,  the industry has excess production
capacity that it can utilize if required.

   RAW MATERIALS

   Most raw materials used in the preparation and packaging of Mistic's products
are  purchased by Mistic and supplied to its  co-packers.  Mistic has  available
adequate  sources  of such raw  materials,  which are  available  from  multiple
suppliers, although Mistic has chosen, for quality control purposes, to purchase
certain  raw  materials  on an  exclusive  basis from single  suppliers.  Mistic
purchases  all of its glass  bottles  from two  suppliers,  the largest of which
(representing  approximately  80% of Mistic's  purchases)  was recently  sold in
bankruptcy (in part to the smaller  supplier).  Mistic is currently  negotiating
new supply and pricing  arrangements with each of these suppliers and with third
parties.  Mistic believes that alternate  sources of glass bottles are available
to it.

   DISTRIBUTION

   Mistic's beverages are currently sold through a network of distributors, that
include   specialty   beverage,   carbonated   soft  drink  and  licensed   beer
distributors.  Such  distributors are typically granted exclusive rights to sell
Mistic products within a defined  territory.  Mistic has written agreements with
distributors  who represent  over 80% of Mistic's  volume.  Such  agreements are
typically for a fixed term,  are renewable at Mistic's  option and are generally
terminable by the distributor upon specified prior notice.

   Approximately 44.2%, 41.9% and 42.1% of Mistic's net sales in 1994, 1995, and
1996,  respectively,   were  attributable  to  sales  to  Mistic's  ten  largest
distributors. Net sales to its largest distributor represented approximately 11%
of Mistic's net sales during each of 1995 and 1996.

   Although  Mistic's   products   historically  have  been  sold  primarily  to
convenience   stores,   convenience   store  chains  and   delicatessens   as  a
"single-serve,   cold  box"  item,   Mistic  has   significantly   expanded  its
distribution to include supermarkets and other channels of distribution, such as
club store and national drug and convenience store chains (e.g., Sam's Wholesale
Clubs,   Walgreens  and   7-Eleven).   Sales  to   supermarkets   accounted  for
approximately 15% to 20% of total net sales at December 31, 1996.

   Mistic's international sales and distribution increased significantly in 1996
with  entry  into  a  new  Korean  distribution   arrangement   involving  local
production, to Mistic's standards, by the distributor.

   SALES AND MARKETING

   Mistic's sales and marketing  staff was  approximately  90 as of December 31,
1996.  Mistic's  sales force is organized  by zones under the  direction of Zone
Sales Vice  Presidents,  Division  Managers,  Regional  Sales Managers and Trade
Development Managers.

   Mistic  uses a mix of  consumer  and  trade  promotions  as well as radio and
television  advertising  to market its  products.  Advertising  and  promotional
activities include Mistic's "Show Your Colors" campaign,  commercials  involving
NBA player Dennis Rodman  (commencing  late Spring 1997) and  advertising on the
show of radio personality Howard Stern.

   Mistic intends to maintain a consistent  advertising campaign in its core and
expansion  markets as an integral  part of its  strategy to  stimulate  consumer
demand and increase brand loyalty.  In 1997 Mistic plans to employ a combination
of network  advertising  complemented  with local spot advertising in its larger
markets;  in most  markets,  television  will be the  primary  medium  and radio
secondary.



                   RESTAURANTS (ARBY'S)

TRIARC RESTAURANT GROUP

   On June 6, 1996,  Triarc  announced  that Arby's would do business  under the
name  Triarc  Restaurant  Group  to  reflect  the  company's  commitment  to the
multi-branded restaurant concept. See " -- Multi-Branding" below.

SALE OF COMPANY-OWNED RESTAURANTS

   On February 13, 1997, Triarc announced that Arby's, ARDC, ARHC and AROC, each
an indirect  wholly-owned  subsidiary of Triarc,  entered into a stock  purchase
agreement  with RTM and Holdco  pursuant to which Holdco would  acquire from the
Sellers  (ARDC,  ARHC and AROC) all of the stock of Newco  which will own all of
the  Sellers'  355  company-owned  Arby's  restaurants.  The  purchase  price is
approximately   $71  million,   consisting   primarily  of  the   assumption  of
approximately  $69  million  in  mortgage  indebtedness  and  capitalized  lease
obligations. The consummation of the transaction is subject to customary closing
conditions,  including receipt of necessary  consents and regulatory  approvals.
See "Item 1. --Business -- Strategic Alternatives."

GENERAL

   Arby's is the world's largest  franchise  restaurant  system  specializing in
slow-roasted  meat  sandwiches  with  an  estimated  market  share  in  1996  of
approximately  73% of the roast  beef  sandwich  segment  of the  quick  service
sandwich restaurant  category.  In addition,  Triarc believes that Arby's is the
11th largest  quick  service  restaurant  chain in the United  States,  based on
domestic  system-wide  sales. As of December 31, 1996,  Arby's restaurant system
consisted of 3,022 restaurants, of which 2,859 operated within the United States
and 163 operated  outside the United  States.  As of December  31, 1996,  Arby's
owned and operated 355  restaurants  and the remaining  2,667  restaurants  were
owned and operated by franchisees.  At December 31, 1996, all but 16 restaurants
outside the United States were franchised.  System-wide sales were approximately
$1.8 billion in 1994,  approximately $1.9 billion in 1995 and approximately $2.0
billion in 1996.

   In addition to its various  slow-roasted meat sandwiches,  Arby's restaurants
also offer a selected menu of chicken,  submarine  sandwiches,  side-dishes  and
salads.  A  breakfast  menu is also  available  at some Arby's  restaurants.  In
addition,  Arby's has entered into agreements with three multi-branding partners
and intends to expand its  multi-branding  efforts  which will add other brands'
items  to  Arby's  menu  items  at  such  multi-branded  restaurants.  See  " --
Multi-Branding" below.

   Arby's  revenues  are  derived  from three  principal  sources:  (i) sales at
company-owned  restaurants  (which  will  terminate  upon  the  closing  of  the
transaction with RTM, see "--Sale of Company-Owned Restaurants"); (ii) royalties
from franchisees and (iii) one-time franchise fees from new franchisees.  During
1994, 1995, and 1996  approximately  77% , 80% and 80%  respectively,  of Arby's
revenues were derived from sales at company-owned  restaurants and approximately
23% , 20%, and 20% respectively, were derived from royalties and franchise fees.

INDUSTRY

   The U.S. restaurant industry is highly fragmented, with approximately 415,000
units  nationwide.  Industry  surveys indicate that the largest chains accounted
for  approximately  18% of all  units  and 30% of all  industry  sales  in 1996.
According  to  data  compiled  by the  National  Restaurant  Association,  total
domestic  restaurant  industry  sales were  estimated to be  approximately  $200
billion in 1996, of which  approximately  $98 billion was estimated to be in the
quick service restaurant ("QSR") or fast food segment.


ARBY'S RESTAURANTS

   The  first  Arby's  restaurant  opened  in  Youngstown,  Ohio in 1964.  As of
December 31, 1996,  Arby's  restaurants  were being operated in 48 states and 13
foreign  countries.  At December 31, 1996,  the five leading states by number of
operating units were: Ohio, with 234 restaurants;  Texas,  with 183 restaurants;
California, with 166 restaurants;  Michigan, with 155 restaurants;  and Florida,
with 150  restaurants.  The leading  country outside the United States is Canada
with 111 restaurants.

           Arby's restaurants in the United States and Canada typically range in
size from 700 square feet to 4,000 square feet.  Restaurants in other  countries
typically are larger than U.S. and Canadian  restaurants.  Restaurants typically
have a  manager,  assistant  manager  and  as  many  as 20  full  and  part-time
employees.  Staffing  levels,  which vary  during the day,  tend to be  heaviest
during the lunch hours.

   The following  table sets forth the number of  company-owned  and  franchised
Arby's restaurants at December 31, 1994, 1995 and 1996.

                                                   THROUGH DECEMBER 31, 1996
                                                ----------------------------
                                           1994           1995          1996
                                          -----          -----         -----

Company-owned restaurants..                 288           373            355
Franchised restaurants.....               2,500         2,577          2,667
                                         ------         -----         ------
     Total restaurants.....               2,788         2,950          3,022

   From April 1993 through December 31, 1995, Arby's had an accelerated  program
of opening company-owned restaurants. Arby's opened 49 company-owned restaurants
in  1995,  as  compared  to nine  company-owned  restaurants  in 1994  and  five
company-owned  restaurants in Transition 1993. In 1996, new restaurant  openings
slowed down as management focused resources on converting  existing  restaurants
to multi-brand  restaurants and upgrading  facilities offering an expanded menu.
In 1996 Arby's opened three  company-owned  restaurants.  In order to facilitate
new company-owned  restaurant openings,  in 1995 and 1996,  RC/Arby's,  ARDC and
ARHC entered into a series of  transactions  including loan agreements with FFCA
Mortgage  Corp.  (formerly  known as FFCA  Acquisition  Corp.),  a subsidiary of
Franchise Finance  Corporation of America,  pursuant to which they borrowed,  in
the  aggregate,  $62.7 million  ($58.4  million of which was  outstanding  as of
December 31, 1996),  of the $87.3 million  available under such  agreements.  In
February 1997,  Triarc  announced that it had entered into an agreement with RTM
to sell to an affiliate of RTM all of the 355 company-owned  Arby's restaurants.
See "Item 1. Business -- Strategic Alternatives."

FRANCHISE NETWORK

   At December  31,  1996,  there were 571 Arby's  franchisees  operating  2,667
separate  locations.  The initial  term of the typical  "traditional"  franchise
agreement  is 20  years.  As of  December  31,  1996,  Arby's  did not offer any
financing  arrangements to its franchisees,  except that in certain  development
agreements Arby's has made available extended payment terms.

   As of December 31,  1996,  Arby's had received  prepaid  commitments  for the
opening  of up to 429 new  domestic  franchised  restaurants  over  the next ten
years.   Arby's  plans  opening   approximately  115  new  domestic   franchised
restaurants  in 1997.  Arby's also  expects that 20 new  franchised  restaurants
outside of the United States will open in 1997. In addition, as noted above, RTM
has agreed to cause Newco to build an additional 190 Arby's restaurants
pursuant to a  development  agreement.  See "Item 1. --  Business  --  Strategic
Alternatives."  Arby's  also  has  territorial   agreements  with  international
franchisees  in five  countries at December  31, 1996.  Under the terms of these
territorial agreements, many of the international franchisees have the exclusive
right to open Arby's restaurants in specific regions or countries,  and, in some
cases, the right to sub-franchise Arby's restaurants.  Arby's management expects
that future  international  franchise  agreements  will more narrowly  limit the
geographic   exclusivity   of  the   franchisees   and  prohibit   sub-franchise
arrangements.

   Arby's  offers  franchises  for the  development  of both single and multiple
"traditional"  restaurant  locations.  All  franchisees  are required to execute
standard  franchise   agreements.   Arby's  standard  U.S.  franchise  agreement
currently provides for, among other things, an initial $37,500 franchise fee for
the first  franchised  unit and $25,000 for each  subsequent  unit and a monthly
royalty payment based on 4.0% of restaurant  sales for the term of the franchise
agreement.  As a result of lower  royalty  rates still in effect  under  earlier
agreements,  the average royalty rate paid by franchisees  during 1996 was 3.1%.
Franchisees  typically  pay a  $10,000  commitment  fee,  credited  against  the
franchise  fee  referred  to above,  during the  development  process  for a new
traditional restaurant.

   In December 1994,  Arby's began granting  development  agreements  which give
developers rights to develop Arby's limited menu restaurants in conjunction with
either an existing  operating food service or other business in  non-traditional
locations for a specified term.  These agreements  require a $1,000  development
deposit per store which is then applied toward royalties which are to be paid at
a rate of 10% of sales (which includes the AFA contribution  referred to below).
The  developer/franchisee  is required to sign an individual franchise agreement
for a term of five years.  As of December  31,  1996,  there were 30  franchised
limited menu restaurants in operation.

   Franchised  restaurants  are operated in  accordance  with uniform  operating
standards and specifications relating to the selection,  quality and preparation
of menu items, signage, decor, equipment,  uniforms, suppliers,  maintenance and
cleanliness  of premises  and customer  service.  Arby's  continuously  monitors
franchisee  operations  and  inspects  restaurants  periodically  to ensure that
company practices and procedures are being followed.

MULTI-BRANDING

   Arby's  continues to pursue the  development  of a  multi-branding  strategy,
which  allows  a  single  restaurant  to  offer  the  consumer   distinct,   but
complementary,  brands at the same restaurant.  Collaborating to offer a broader
menu is  intended to increase  sales per square  foot of facility  space,  a key
measure  of return on  investment  in retail  operations.  Arby's  has  obtained
exclusive  worldwide  rights to operate  or grant  franchises  to  operate  ZuZu
restaurants,  which offer handmade  Mexican food, at multi-brand  locations.  In
addition,  in 1995 Arby's  acquired  P.T.  Noodle's,  which  offers a variety of
Asian,  Italian and American  dishes based on serving  corkscrew  noodles with a
variety of different  sauces.  In August 1996,  Arby's completed the purchase of
the  tradenames,  trademarks,  service  marks,  logos,  signs,  recipes,  secret
formulas and  technical  information  of T.J.  Cinnamons,  Inc., an operator and
franchisor of retail bakeries specializing in gourmet cinnamon rolls and related
products.  As of  March  1,  1997,  22  company-owned  Arby's  restaurants  were
multi-brand locations, including 14 that offer P.T. Noodles' products, five that
offer  ZuZu's  products  and three that offer T.J.  Cinnamons'  products.  While
multi-branding  with ZuZu  continues,  Triarc has  determined  to write-off  its
approximately $5.4 investment in the equity of ZuZu, Inc.

ADVERTISING AND MARKETING

   Arby's   advertises   primarily  through  regional   television,   radio  and
newspapers.  Payment for advertising time and space is made by local advertising
cooperatives in which owners of local franchised  restaurants and Arby's, to the
extent that it owns local company-owned  restaurants,  participate.  Franchisees
and Arby's  contribute 0.7% of gross sales to the Arby's  Franchise  Association
("AFA"), which produces advertising and promotion materials for the system. Each
franchisee is also required to spend a reasonable  amount,  but not less than 3%
of its  monthly  gross  sales,  for local  advertising.  This  amount is divided
between the  franchisee's  individual local market  advertising  expense and the
expenses of a cooperative  area advertising  program with other  franchisees who
are operating Arby's restaurants in that area.  Contributions to the cooperative
area  advertising  program are determined by the participants in the program and
are generally in the range of 3% to 5% of monthly gross sales. In 1994, 1995 and
1996,   Arby's   expenditures  for  advertising  and  marketing  in  support  of
company-owned  stores were $17.2  million,  $22.4  million,  and $25.8  million,
respectively.

QUALITY ASSURANCE

   Arby's  has  developed  a quality  assurance  program  designed  to  maintain
standards  and  uniformity  of the  menu  selections  at each of its  franchised
restaurants.  A full-time quality assurance  employee is assigned to each of the
four  independent  processing  facilities  that  process  roast  beef for Arby's
domestic restaurants. The quality assurance employee inspects the roast beef for
quality and uniformity.  In addition,  a laboratory at Arby's headquarters tests
samples  of  roast  beef   periodically   from  each   franchisee.   Each  year,
representatives of Arby's conduct unannounced  inspections of operations of each
franchisee to ensure that Arby's  policies,  practices and  procedures are being
followed.  Arby's  field  representatives  also  provide  a variety  of  on-site
consultative services to franchisees.

PROVISIONS AND SUPPLIES

   Arby's roast beef is provided by four independent meat processors.  Franchise
operators  are  required  to obtain  roast  beef  from one of the four  approved
suppliers.  Arby's,  through the non-profit  purchasing  cooperative ARCOP, Inc.
("ARCOP"),  which  negotiates  contracts  with  approved  suppliers on behalf of
Arby's and its franchisees, has entered into "cost-plus" contracts and purchases
with these suppliers.  Arby's believes that satisfactory  arrangements  could be
made to replace any of its current  roast beef  suppliers,  if  necessary,  on a
timely basis.

   Franchisees may obtain other products, including food, beverage, ingredients,
paper  goods,   equipment   and  signs,   from  any  source  that  meets  Arby's
specifications  and  approval,   which  products  are  available  from  numerous
suppliers.  Food,  proprietary  paper  and  operating  supplies  are  also  made
available,  through national contracts  employing volume  purchasing,  to Arby's
franchisees through ARCOP.


        DYES AND SPECIALTY CHEMICALS (C.H. PATRICK)

GENERAL

   C.H. Patrick produces and markets dyes and specialty chemicals primarily to
the textile industry.  In April 1996, Triarc and Avondale completed the sale of
the textile business of Graniteville to Avondale for a net purchase price of
$243 million in cash.  C.H. Patrick and certain other non-textile related assets
were excluded from the transaction.In connection with the Graniteville Sale,
Avondale and C.H. Patrick entered into the Supply Agreement pursuant to which
C.H. Patrick has the right, subject to certain bidding procedures, to supply the
combined Graniteville/Avondale textile operations certain of its dyes and 
chemicals.  See "Item 1.  Business -- Strategic Alternatives."

BUSINESS STRATEGY

   C.H.  Patrick  believes that it has a reputation  in the textile  industry as
both a consistent  producer of quality products and an innovator of new products
to meet the changing needs of its customers.  The management of C.H. Patrick has
developed and is implementing  business  strategies that focus on developing new
products  and  markets  and  developing   relationships  with  new  clients  who
previously  chose not to do business  with an  operation  directly  related to a
competitor.  Prior to the  Graniteville  Sale,  C.H.  Patrick was a wholly-owned
subsidiary of Graniteville.

PRODUCTS AND MARKETS

   C.H. Patrick develops, manufactures and markets dyes and specialty chemicals,
primarily to the textile  industry.  Management  believes that C.H.  Patrick has
earned a reputation  for producing high quality,  innovative  dyes and specialty
chemicals.  During each of 1994 and 1995,  approximately  59% of C.H.  Patrick's
sales were to  non-affiliated  manufacturers  and 41% were to  Graniteville.  In
connection with the  Graniteville  Sale, C.H.  Patrick and Avondale entered into
the Supply Agreement,  pursuant to which C.H. Patrick has the right,  subject to
certain  bidding  procedures,  to supply to the  combined  Graniteville/Avondale
textile   operations   certain  of  its  dyes  and   chemicals.   See  "Item  1.
Business--Strategic  Alternatives." In 1996, approximately 59% of C.H. Patrick's
sales    were   to    non-affiliated    manufacturers    and    41%    were   to
Graniteville/Avondale.

   C.H. Patrick processes dye presscakes and other basic materials to produce
and sell indigo, vat, sulfur and disperse liquid dyes, as well as disperse, vat
and aluminum powder dyes. The majority of C.H. Patrick's dye products are used
in the continuous dyeing of cotton and polyester/cotton blends. C.H. Patrick
also manufactures various textile
softeners,  surfactants,  dyeing auxiliaries and permanent press resins, as well
as several acrylic polymers used in textile finishing as soil release agents.

   In August  1994,  C.H.  Patrick  acquired  a  minority  interest  in  Taysung
Enterprise  Company,  Ltd.,  ("Taysung")  a Taiwanese  manufacturer  of dyes and
chemicals.  C.H. Patrick also obtained exclusive  distribution  rights in North,
Central and South  America for Taysung  products for a period of five years.  In
1995 C.H.  Patrick wrote off its investment in Taysung.  In February 1997,  C.H.
Patrick was advised that Taysung is considering winding down its business and/or
selling a substantial  portion of its business.  See Note 20 to the Consolidated
Financial Statements.

MARKETING AND SALES

   Major dye customers  rely on bidding  systems to obtain the most  competitive
pricing. The bidding might be quarterly,  semi-annual or annual.  Generally, the
bids are non-binding purchase orders.  Historically,  these agreements have been
honored.  In the  chemical  business,  customers  normally  do not use a bidding
procedure but order on an as-needed basis.

   Generally,  C.H. Patrick's sales are to domestic customers primarily based in
the Southeast,  where most of the U.S. textile  industry is  concentrated.  C.H.
Patrick has six salespeople and five technical service representatives, based in
North Carolina,  South Carolina and Georgia, who work closely with customers and
C.H.  Patrick's  technical and quality  management  groups.  Field personnel are
supported  by C.H.  Patrick's  laboratory  staff who  perform  services  such as
competitive  product analysis through such methods as gas  chromatography,  high
pressure liquid  chromatography,  infrared analysis,  nuclear magnetic resonance
and elemental analysis.

   C.H. Patrick advertises on a regular basis in textile trade journals. Direct
mail campaigns have been used in past years to market vat and sulfur dyes as
well as dyeing and preparation chemicals.  C.H. Patrick has utilized both
telemarketing and direct mail to introduce its services to the marketplace.

   C.H. Patrick distributes its products through its own salesforce.  C.H.
Patrick owns a fleet of nine tanktrucks, two box trailers, three tractors, and
two smaller trucks which deliver Patrick's products to customers from its
plants.  Common carriers are also used both for bulk deliveries and drum
shipments.

RAW MATERIALS

   C.H. Patrick purchases various raw materials, including indigo, vat and
sulfur crude presscakes and glyoxal, from a number of suppliers and does not
rely on a sole source to any material extent.  C.H. Patrick does not foresee any
significant difficulties in obtaining necessary raw materials or supplies.



        LIQUEFIED PETROLEUM GAS (NATIONAL PROPANE)

   National  Propane,  as managing  general  partner of the  Partnership and the
Operating  Partnership,  is engaged  primarily  in (i) the retail  marketing  of
liquefied  petroleum gas ("propane") to residential,  commercial and industrial,
and agricultural customers and to dealers that resell propane to residential and
commercial  customers and (ii) the retail  marketing of propane related supplies
and equipment,  including home and commercial  appliances.  Triarc believes that
the  Partnership  is the sixth  largest  retail  marketer  of LP gas in terms of
volume in the United States.  As of December 31, 1996, the  Partnership  had 166
service centers supplying markets in 25 states. The Partnership's operations are
located primarily in the Midwest, Northeast, Southeast, and Southwest regions of
the United States.

   Since April 1993, National Propane has, among other things,  consolidated its
operations into a single company with a national brand and logo. As part of such
consolidation,  Public Gas was merged with and into National  Propane during the
second quarter of 1995.  Prior to such merger,  Public Gas (which had been owned
99.7% by SEPSCO)  became a  wholly-owned  subsidiary  of SEPSCO.  In  connection
therewith,  on February 22, 1996, SEPSCO redeemed all of its outstanding 11-7/8%
Senior  Subordinated  Debentures  due  February  1,  1998 (the  "SEPSCO  11-7/8%
Debentures"). See Note 13 to the Consolidated Financial Statements. In July 1996
National  Propane  completed an initial  public  offering of common units in the
MLP. See "Item 1 -- Business -- Strategic Alternatives."

BUSINESS STRATEGY

   The Partnership's operating strategy is to increase efficiency, profitability
and  competitiveness,  while better  serving its  customers,  by building on the
efforts it is already  undertaken to improve pricing  management,  marketing and
purchasing and to consolidate its  operations.  In addition,  the  Partnership's
strategies for growth involve expanding its operations and increasing its market
share through strategic acquisitions and internal growth,  including the opening
of new  service  centers.  The  Partnership  intends to take two  approaches  to
acquisitions:  (i) primarily to build on its broad  geographic base by acquiring
smaller,  independent competitors that operate within the Partnership's existing
geographic  areas and  incorporating  them into the  Partnership's  distribution
network and (ii) to acquire  propane  businesses  in areas in the United  States
outside  of its  current  geographic  base  where it  believes  there is  growth
potential and where an attractive  return on its investment can be achieved.  In
1996  and  1997  National  Propane  and the  Partnership  acquired  six  propane
businesses for an aggregate  purchase price of  approximately  $3.0 million.  In
addition to pursuing expansion through  acquisition,  the Partnership intends to
pursue  internal  growth at its  existing  service  centers  and to  expand  its
business by opening new service  centers.  The Partnership  believes that it can
attract  new  customers  and expand its market  base by (i)  providing  superior
service,  (ii) introducing  innovative  marketing programs and (iii) focusing on
population  growth areas. The Partnership also intends to continue to expand its
business by opening new service  centers,  known as  "scratch-starts,"  in areas
where there is relatively little  competition.  Scratch-starts  are newly opened
service  centers  generally  staffed with one or two employees,  which typically
involve  minimal  startup  costs because the  infrastructure  of the new service
center is  developed as the customer  base expands and the  Partnership  can, in
many  circumstances,  transfer  existing  assets,  such  as  storage  tanks  and
vehicles,  to the new service center.  Under this program, by December 31, 1996,
the  Partnership  had opened three new service  centers in California and one in
each of Idaho, Georgia and South Carolina.

PRODUCTS, SERVICES AND MARKETING

   The Partnership  distributes  its propane  through a nationwide  distribution
network  integrating 166 service centers located in 24 states. The Partnership's
operations  are located  primarily  in the  Midwest,  Northeast,  Southeast  and
Southwest regions of the United States.

   Typically,  service  centers  are found in  suburban  and rural  areas  where
natural gas is not readily  available.  Generally,  such locations consist of an
office and a warehouse and service  facility,  with one or more 18,000 to 30,000
gallon  storage  tanks on the  premises.  Each  service  center is  managed by a
district manager and also typically employs a customer service representative, a
service  technician  and one or two bulk truck  drivers.  However,  new  service
centers established under the Partnership's "scratch start" program may not have
offices, warehouses or service facilities and are typically staffed initially by
one or two employees.

   In 1996 the Partnership  served  approximately  250,000 active customers.  No
single customer accounted for 10% or more of the Partnership's  revenues in 1995
or 1996. Generally, the number of customers increases during the fall and winter
and decreases during the spring and summer.  Historically,  approximately 67% of
the  Partnership's  retail  propane  volume has been sold  during the  six-month
season from October  through  March,  as many  customers use propane for heating
purposes. Consequently,  sales, gross profits and cash flows from operations are
concentrated in the Partnership's first and fourth fiscal quarters.

   Year-to-year  demand for propane is affected by the relative  severity of the
winter and other climatic conditions. For example, while the frigid temperatures
that were  experienced  by the United  States in January  and  February  of 1994
significantly  increased the overall demand for propane, the warm weather during
the winter of  1994-1995  significantly  reduced such  demand.  The  Partnership
believes,  however,  that the  geographic  diversity of its areas of  operations
helps to reduce its exposure to regional weather patterns. In addition, sales to
the commercial and industrial markets,  while affected by economic patterns, are
not as sensitive to variations in weather conditions as sales to residential and
agricultural markets.

   Retail  deliveries  of propane  are  usually  made to  customers  by means of
bobtail  and rack  trucks.  Propane  is pumped  from the  bobtail  truck,  which
generally holds 2,800 gallons of propane,  into a stationary storage tank on the
customer's   premises.   The  capacity  of  these  tanks  usually   ranges  from
approximately  50 to approximately  1,000 gallons,  with a typical tank having a
capacity of 250 to 500 gallons.  Typically,  service  centers deliver propane to
most of their
residential  customers  at  regular  intervals,   based  on  estimates  of  such
customers'  usage,  thereby  eliminating the customers' need to make affirmative
purchase decisions. The Partnership also delivers propane to retail customers in
portable cylinders,  which typically have a capacity of 23.5 gallons. When these
cylinders  are  delivered  to  customers,  empty  cylinders  are  picked  up for
replenishment  at the  Partnership's  distribution  locations or are refilled in
place. The Partnership also delivers propane to certain other retail  customers,
primarily  dealers and large  commercial  accounts,  in larger  trucks  known as
transports,  which have an average  capacity  of  approximately  9,000  gallons.
Propane is generally transported from refineries, pipeline terminals and storage
facilities  (including  the  Partnership's  underground  storage  facilities  in
Hutchinson,  Kansas and Loco Hills, New Mexico) to the Partnership's bulk plants
by a combination of common carriers, owner-operators, railroad tank cars and, in
certain circumstances, the Partnership's own highway transport fleet.

   The  Partnership  also sells,  leases and services  equipment  related to its
propane distribution  business. In the residential market, the Partnership sells
household  appliances  such as cooking  ranges,  water  heaters,  space heaters,
central furnaces and clothes dryers,  as well as less traditional  products such
as barbecue  equipment and gas logs. In the industrial  market,  the Partnership
sells or leases specialized  equipment for the use of propane as fork lift truck
fuel, in metal  cutting and  atmospheric  furnaces and for portable  heating for
construction.  In the agricultural  market,  specialized  equipment is leased or
sold for the use of propane as engine  fuel and for  chicken  brooding  and crop
drying.  The sale of  specialized  equipment,  service  income and rental income
represented less than 10% of the Partnership's  operating  revenues during 1996.
Parts and appliance  sales,  installation  and service  activities are conducted
through a wholly-owned corporate subsidiary of the Operating Partnership.

PROPANE SUPPLY AND STORAGE

   The  profitability  of the  Partnership  is  dependent  upon  the  price  and
availability of propane as well as seasonal and climatic factors.  Contracts for
the supply of propane are typically made on a year-to-year  basis, but the price
of the propane to be  delivered  depends upon market  conditions  at the time of
delivery.  Worldwide availability of both gas liquids and oil affects the supply
of  propane in  domestic  markets,  and from time to time the  ability to obtain
propane at  attractive  prices may be limited as a result of market  conditions,
thus affecting price levels to all distributors of propane.  Generally, when the
wholesale cost of propane declines, the Partnership believes that its margins on
its retail  propane  distribution  business  would  increase  in the  short-term
because  retail  prices  tend to change  less  rapidly  than  wholesale  prices.
Conversely,  when the  wholesale  cost of propane  increases,  retail  marketing
profitability  will likely be reduced at least for the  short-term  until retail
prices  can be  increased.  Since  1993,  the  Partnership  has  generally  been
successful  in  maintaining  retail  gross  margins on an annual  basis  despite
changes in the wholesale cost of propane.  There may be times, however, when the
Partnership  will be unable to fully pass on cost  increases  to its  customers.
Consequently,  the Partnership's  profitability  will be sensitive to changes in
wholesale  propane prices,  and a substantial  increase in the wholesale cost of
propane could  adversely  affect the  Partnership's  margins and  profitability.
Except  for  occasional   opportunistic  buying  and  storage  of  propane,  the
Partnership has not engaged in any significant  hedging  activities with respect
to its propane supply requirements.

   The  Partnership  purchased  propane  from  over  35  domestic  and  Canadian
suppliers during 1996,  primarily major oil companies and independent  producers
of both gas liquids and oil, and it also  purchased  propane on the spot market.
In 1996,  the  Partnership  purchased  approximately  82% and 18% of its propane
supplies from domestic and Canadian suppliers,  respectively.  Approximately 95%
of all propane  purchases by the Partnership in 1996 were on a contractual basis
(generally,  under  one year  agreements  subject  to annual  renewal),  but the
percentage of contract purchases may vary from year to year as determined by the
Managing General Partner.  Supply contracts  generally do not lock in prices but
rather  provide for  pricing in  accordance  with  posted  prices at the time of
delivery or the current prices established at major storage points, such as Mont
Belvieu,  Texas and Conway,  Kansas. The Partnership is not currently a party to
any supply contracts containing "take or pay" provisions.

   Warren  Petroleum  Company  ("Warren"),  supplied  16% of  the  Partnership's
propane  in 1996 and Amoco and  Conoco  each  supplied  approximately  10%.  The
Partnership  believes  that if  supplies  from  Warren,  Amoco  or  Conoco  were
interrupted,  it would be able to secure  adequate  propane  supplies from other
sources  without  a  material  disruption  of  its  operations;   however,   the
Partnership  believes that the cost of procuring  replacement  supplies might be
materially  higher,  at least on a short-term  basis.  No other single  supplier
provided more than 10% of the Partnership's total propane supply during 1996.

   The Partnership owns underground storage facilities in Hutchinson, Kansas and
Loco Hills, New Mexico, leases
above ground storage facilities in Crandon,  Wisconsin and Orlando, Florida, and
owns or leases  smaller  storage  facilities in other  locations  throughout the
United States. As of December 31, 1996, the Partnership's total storage capacity
was  approximately  33.1 million gallons  (including  approximately  one million
gallons of storage capacity  currently  leased to third parties).  For a further
description of these facilities, see "Item 2. Properties."


GENERAL

   TRADEMARKS

   Royal Crown considers its concentrate formulae,  which are not the subject of
any patents,  to be trade secrets.  In addition,  RC COLA, DIET RC, ROYAL CROWN,
ROYAL CROWN DRAFT COLA,  DIET RITE,  NEHI,  NEHI  LOCKJAW,  UPPER 10, KICK,  and
THIRST THRASHER are registered as trademarks in the United States,  Canada and a
number of other countries. Royal Crown believes that its trademarks are material
to its business.

   Mistic is the owner of the MISTIC,  ROYAL  MISTIC,  MISTIC  BREEZE and MISTIC
RAIN FOREST trademarks and considers them to be material to its business.

   Arby's is the sole  owner of the  ARBY'S  trademark  and  considers  it,  and
certain  other  trademarks  owned or licensed  by Arby's,  to be material to its
business.  Pursuant to its standard franchise  agreement,  Arby's grants each of
its  franchisees  the right to use Arby's  trademarks,  service  marks and trade
names in the manner specified therein.

   C.H. Patrick is the sole owner of the PATCO trademark and considers it to be
material to its business.

   The Partnership and the Operating  Partnership utilize a number of trademarks
and tradenames which they own (including  "National  PropaneTM"),  some of which
have a significant value in the marketing of their products.

   The material trademarks of Royal Crown,  Mistic,  Arby's and C.H. Patrick are
registered  in  the  U.S.  Patent  and  Trademark  Office  and  various  foreign
jurisdictions. Royal Crown's, Arby's, Mistic's and C.H. Patrick's rights to such
trademarks in the United States will last  indefinitely as long as they continue
to use  and  police  the  trademarks  and  renew  filings  with  the  applicable
governmental  offices.  No challenges  have arisen to Royal  Crown's,  Mistic's,
Arby's or C.H. Patrick's right to use the foregoing trademarks in the United
States.


   COMPETITION

   Triarc's four businesses  operate in highly competitive  industries.  Many of
the major competitors in these industries have substantially  greater financial,
marketing, personnel and other resources than does Triarc.

   Royal  Crown's soft drink  products and Mistic's  premium  beverage  products
compete  generally with all liquid  refreshments and in particular with numerous
nationally-known  soft  drinks  such as  Coca-Cola  and  Pepsi-Cola  and New Age
beverages such as Snapple and AriZona iced teas.  Royal Crown and Mistic compete
with other  beverage  companies  not only for consumer  acceptance  but also for
shelf  space in retail  outlets  and for  marketing  focus by Royal  Crown's and
Mistic's distributors,  most of which also distribute other beverage brands. The
principal  methods of  competition  in the  beverage  industry  include  product
quality and taste, brand advertising,  trade and consumer  promotions,  pricing,
packaging and the development of new products.

   Arby's faces direct and indirect  competition  from numerous well established
competitors,   including  national  and  regional  fast  food  chains,  such  as
McDonalds,  Burger King, Wendy's and Boston Market. In addition, Arby's competes
with  locally  owned  restaurants,  drive-ins,  diners  and other  food  service
establishments.  Key competitive factors in the QSR industry are price,  quality
of products,  quality and speed of service,  advertising,  name  identification,
restaurant location and attractiveness of facilities.


   In recent years, both the beverage and restaurant businesses have experienced
increased  price   competition   resulting  in  significant   price  discounting
throughout these industries.  Price competition has been especially intense with
respect to sales of  beverage  products  in food  stores,  with  local  bottlers
granting significant discounts and allowances off
wholesale prices in order to maintain or increase market share in the food store
segment.  When instituting its own discount  promotions,  Arby's has experienced
increases in sales but,  with respect to  company-owned  restaurant  operations,
lower gross margins. While the net impact of price discounting in the soft drink
and QSR industries  cannot be quantified,  such practices  could have an adverse
impact on Triarc.

   C.H. Patrick has many competitors, including large chemical companies and
smaller concerns. No single manufacturer dominates the industry in which C.H.
Patrick participates. The principal elements of competition include quality,
price and service.

   Most of the  Operating  Partnership's  service  centers  compete with several
marketers or  distributors  of LP gas and certain service centers compete with a
large number of marketers or distributors.  Each of the Operating  Partnership's
service  centers  operate  in its own  competitive  environment  because  retail
marketers  tend to locate in close  proximity to customers in order to lower the
cost of providing  service.  The principle  competitive  factors  affecting this
industry are reliability of service, responsiveness to customers and the ability
to maintain  competitive  prices.  LP gas competes  primarily  with natural gas,
electricity and fuel oil as an energy source, principally on the basis of price,
availability and portability.  LP gas serves as an alternative to natural gas in
rural and suburban  areas where natural gas is unavailable or portability of the
product is required.  LP gas is  generally  more  expensive  than natural gas in
locations  served by  natural  gas,  although  LP gas is sold in such areas as a
standby  fuel for use during  peak  demand  periods or during  interruptions  in
natural gas service.  Although the extension of natural gas  pipelines  tends to
displace LP gas  distribution in the areas affected,  National  Propane believes
that new  opportunities  for LP gas sales  arise as more  geographically  remote
areas are developed.  LP gas is generally less expensive to use than electricity
for space heating, water heating, clothes drying and cooking. Although LP gas is
similar to fuel oil in  certain  applications,  as well as in market  demand and
price,  LP gas  and  fuel  oil  have  generally  developed  their  own  distinct
geographic markets,  reducing  competition between such fuels. In addition,  the
use of  alternative  fuels,  including LP gas, is mandated in certain  specified
areas of the United States that do not meet federal air quality standards.

   WORKING CAPITAL

   Royal  Crown's and Arby's  working  capital  requirements  are  generally met
through  cash flow  from  operations.  Accounts  receivable  of Royal  Crown are
generally due in 30 days and Arby's  franchise  royalty fee  receivables are due
within 10 days after each month end.

   Mistic's  working  capital  requirements  are generally met through cash flow
from  operations,  supplemented by advances under a credit facility entered into
in connection with the Mistic Acquisition (as subsequently  amended, the "Mistic
Credit  Agreement") which initially provided Mistic with a $60 million term loan
facility  ($54 million at March 1, 1997) and a $20 million ($12 million at March
1, 1997)  revolving  credit  facility  (of which  approximately  $15 million was
available at March 1, 1997).  Accounts receivable of Mistic are generally due in
30 days.

   Working  capital  requirements  for  C.H.  Patrick  are  generally  met  from
operating cash flow  supplemented  by advances under a credit  facility  entered
into following the Graniteville Sale, which provides for a $35 million term loan
($33.8  million at March 1, 1997) and a $15  million  ($0.5  million at March 1,
1997)  revolving  credit  facility  (of which  approximately  $14.5  million was
available at March 1, 1997). Trade receivables of C.H. Patrick are generally due
in 30 days.

   Working capital requirements for the Operating  Partnership  fluctuate due to
the  seasonal  nature  of its  business.  Typically,  in late  summer  and fall,
inventories  are built up in anticipation of the heating season and are depleted
over the winter months.  During the spring and early summer,  inventories are at
low levels due to lower demand.  Accounts  receivable reach their highest levels
in the middle of the winter  and are  gradually  reduced as the volume of LP gas
sold declines  during the spring and summer.  Working capital  requirements  are
generally met through cash flow from operations supplemented by advances under a
revolving working capital facility which provides the Operating Partnership with
a $15 million  line of credit (of which $8.3  million was  available at March 1,
1997).  Accounts  receivable  are generally due within 30 days of delivery.  See
"Item 1. Business -- Strategic Alternatives" and "Business Segments -- Liquefied
Petroleum Gas."



   GOVERNMENTAL REGULATIONS

   Each of Triarc's  businesses  is subject to a variety of  federal,  state and
local laws, rules and regulations.

      Arby's is subject to regulation by the Federal Trade  Commission and state
laws governing the offer and sale of franchises and the  substantive  aspects of
the  franchisor-franchisee  relationship.  In addition, Arby's is subject to the
Fair Labor  Standards  Act and  various  state laws  governing  such  matters as
minimum wages,  overtime and other working conditions.  Pursuant to an amendment
to the Fair Labor  Standards  Act, the federal  minimum wage was increased  from
$4.25 per hour to $4.75 per hour,  effective October 1, 1996, with an additional
increase to $5.15 per hour to become effective on September 1, 1997. Significant
numbers of the food service  personnel at Arby's  restaurants  are paid at rates
related to the federal and state minimum wage, and increases in the minimum wage
may therefore increase the labor costs of Arby's and its franchisees.  Arby's is
also subject to the Americans with Disabilities Act (the "ADA"),  which requires
that all public  accommodations  and commercial  facilities meet certain federal
requirements related to access and use by disabled persons.  Compliance with the
ADA  requirements  could require removal of access  barriers and  non-compliance
could  result  in  imposition  of fines by the  U.S.  government  or an award of
damages to private  litigants.  Although  Arby's  management  believes  that its
facilities are substantially in compliance with these  requirements,  Arby's may
incur additional costs to comply with the ADA. However,  Triarc does not believe
that such costs will have a material  adverse  effect on  Triarc's  consolidated
financial  position  or results  of  operations.  From time to time,  Arby's has
received inquiries from federal, state and local regulatory agencies or has been
named  as a party  to  administrative  proceedings  brought  by such  regulatory
agencies.  Triarc does not believe that any such inquiries or  proceedings  will
have a material adverse effect on Triarc's  consolidated  financial  position or
results of operations.

   The production and marketing of Royal Crown and Mistic  beverages are subject
to the  rules and  regulations  of  various  federal,  state  and  local  health
agencies,  including the United States Food and Drug Administration (the "FDA").
The FDA also  regulates  the  labeling  of Royal Crown and Mistic  products.  In
addition,  Royal  Crown's and  Mistic's  dealings  with their  licensees  and/or
distributors  may,  in some  jurisdictions,  be subject to state laws  governing
licensor-licensee or distributor relationships.

   National  Propane  and the  Operating  Partnership  are  subject  to  various
federal,  state and local laws and  regulations  governing  the  transportation,
storage  and  distribution  of LP gas,  and the health  and  safety of  workers,
primarily OSHA and the regulations promulgated thereunder. On February 19, 1997,
the U.S.  Department  of  Transportation  published  its Interim  Final Rule for
Continued  Operation of Present Propane Trucks (the "Interim Rule"). The Interim
Rule is intended to address perceived risks during the transfer of propane.  The
Interim Rule required certain immediate  changes in the Partnership's  operating
procedures, and in the next six to 12 months, may require (i) some or all of the
Partnership's  cargo tanks to be retrofitted and (ii) some  modifications to the
Partnership's bulk plants. The Partnership,  as well as the National Propane Gas
Association and the propane  industry in general,  is in the process of studying
the  Interim  Rule and the  appropriate  response  thereto.  At this  time,  the
Partnership is not in a position to determine  what the ultimate  long-term cost
of compliance with the Interim Rule will be.

   Except as described  herein,  Triarc is not aware of any pending  legislation
that in its view is likely to affect  significantly  the  operations of Triarc's
subsidiaries.  Triarc  believes that the operations of its  subsidiaries  comply
substantially with all applicable governmental rules and regulations.

   ENVIRONMENTAL MATTERS

   Certain  of  Triarc's  operations  are  subject to  federal,  state and local
environmental laws and regulations concerning the discharge,  storage,  handling
and disposal of hazardous or toxic substances. Such laws and regulations provide
for  significant  fines,  penalties  and  liabilities,  in certain cases without
regard  to  whether  the  owner or  operator  of the  property  knew of,  or was
responsible for, the release or presence of such hazardous or toxic  substances.
In  addition,  third  parties may make claims  against  owners or  operators  of
properties for personal injuries and property damage associated with releases of
hazardous  or  toxic  substances.   Triarc  cannot  predict  what  environmental
legislation  or  regulations  will be enacted in the future or how  existing  or
future laws or regulations  will be administered  or interpreted.  Triarc cannot
predict  the amount of future  expenditures  which may be  required  in order to
comply with any environmental laws or regulations or to satisfy any such claims.
Triarc  believes that its operations  comply  substantially  with all applicable
environmental laws and regulations.

   As a result of certain  environmental  audits in 1991, SEPSCO became aware of
possible  contamination  by hydrocarbons and metals at certain sites of SEPSCO's
ice and cold storage operations of the refrigeration business and
has filed appropriate  notifications with state environmental authorities and in
1994 completed a study of remediation at such sites.  SEPSCO has removed certain
underground  storage and other tanks at certain  facilities of the refrigeration
operations and has engaged in certain remediation in connection therewith.  Such
removal and environmental  remediation involved a variety of remediation actions
at  various  facilities  of SEPSCO  located in a number of  jurisdictions.  Such
remediation  varied from site to site,  ranging  from testing of soil and ground
water for contamination, development of remediation plans and removal in certain
instances of certain  contaminated  soils.  Remediation  is required at thirteen
sites  which  were  sold to or leased by the  purchaser  of the ice  operations.
Remediation  has been  completed  on five of these sites and is ongoing at eight
others. Such remediation is being made in conjunction with the purchaser,  which
has satisfied its obligation to pay up to $1,000,000 of such remediation  costs.
Remediation  is also required at seven cold storage sites which were sold to the
purchaser of the cold storage operations.  Remediation has been completed at one
site,  and is ongoing at three other sites.  Remediation is expected to commence
on the remaining three sites in 1997 and 1998. Such remediation is being made in
conjunction  with such purchaser who is responsible for the first  $1,250,000 of
such costs. In addition,  there were fifteen additional  inactive  properties of
the former  refrigeration  business where  remediation  has been completed or is
ongoing and which have either been sold or are held for sale  separate  from the
sales of the ice and cold storage operation.  Of these, ten have been remediated
at an aggregate cost of $952,000 through December 31, 1996. In addition,  during
the environmental remediation efforts on idle properties, SEPSCO became aware of
two  sites  which may  require  demolition  in the  future.  Based on  currently
available  information and the current  reserve levels,  Triarc does not believe
that the ultimate outcome of the remediation  and/or removal and demolition will
have a material adverse effect on its consolidated financial position or results
of operations.  See "Item 7.  Management's  Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

   In May 1994 National Propane was informed of coal tar contamination which was
discovered  at  its  properties  in  Marshfield,   Wisconsin.  National  Propane
purchased  the  property  from a company  which had  purchased  the  assets of a
utility that had previously  owned the property.  National Propane believes that
the contamination occurred during the use of the property as a coal gasification
plant by such  utility.  In order to assess the extent of the problem,  National
Propane  engaged  environmental  consultants  who began work in August 1994.  In
December 1994, the environmental consultants issued a report to National Propane
which  estimated  the range of  potential  remediation  costs to be between $0.4
million and $0.9 million,  depending  upon the actual extent of impacted  soils,
the presence and extent,  if any, of impacted  ground water and the  remediation
method  actually  required to be implemented.  In February 1996,  based upon new
information, National Propane's environmental consultants issued a second report
which presented the two most likely remediation methods and revised estimates of
the costs of such methods. The report estimated the range of costs for the first
method,  which involved  treatment of groundwater and excavation,  treatment and
disposal of  contaminated  soil,  to be from $1.6 million to $3.3  million.  The
range for the  second  method,  which  involved  treatment  of ground  water and
building a containment wall, was from $0.4 million to $0.8 million.  As of March
1, 1997,  National Propane's  environmental  consultants have begun but have not
completed  additional testing.  Based upon the new information compiled to date,
which is not yet  complete,  it appears that the  containment  wall remedy is no
longer appropriate, and the likely remedy will involve treatment of ground water
and treatment by soil-vapor  extraction of certain  contaminated  "hot spots" in
the soil,  installation of a soil cap and, if necessary,  excavation,  treatment
and disposal of contaminated  soil. As a result,  the environmental  consultants
have revised the range of estimated  costs for the  remediation  to be from $0.8
million  to  $1.6  million.   Based  on  discussions  with  National   Propane's
environmental  consultants,  an acceptable  remediation  plan should fall within
this  range.  National  Propane  will have to agree upon the final plan with the
State of  Wisconsin.  Since  receiving  notice  of the  contamination,  National
Propane has engaged in discussions of a general  nature  concerning  remediation
with the State of  Wisconsin.  These  discussions  are  ongoing  and there is no
indication  as yet of the time frame for a decision by the State of Wisconsin on
the method of remediation.  Accordingly,  it is unknown what remediation  method
will be used.  Based on the  preliminary  results of the ongoing  investigation,
there  is a  potential  that the  contaminant  plume  may  extend  to  locations
downgradient  from the original  site.  If it is ultimately  confirmed  that the
contaminant   plume  extends  under  such   properties  and  if  such  plume  is
attributable to contaminants  emanating from the Marshfield  property,  there is
the potential for future third-party claims. National Propane is also engaged in
ongoing  discussions  of a general nature with the successor to the utility that
operated a coal gasification plant on the property. The successor has denied any
liability  for  the  costs  of  remediation  of the  Marshfield  property  or of
satisfying any related  claims.  If National  Propane is found liable for any of
such costs, it will attempt to recover them from the successor  owner.  National
Propane has notified its insurance  carriers of the contamination and the likely
incurrence  of costs to undertake  remediation  and the  possibility  of related
claims.  Pursuant to a lease relating to the Marshfield facility,  the ownership
of which was not transferred to the Operating  Partnership at the closing of the
IPO, the  Partnership  has agreed to be liable for any costs of  remediation  in
excess of amounts  recovered  from such successor or from  insurance.  Since the
remediation method to be used is
unknown, no amount within the cost ranges provided by the environmental
consultants can be determined to be a better estimate.  Triarc does not believe
that the outcome of this matter will have a material adverse effect on Triarc's
consolidated results of operations or financial position.  See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

   In 1993 Royal Crown became aware of possible  contamination from hydrocarbons
in groundwater  at two abandoned  bottling  facilities.  In 1994, as a result of
tests  necessitated  by the removal of four  underground  storage tanks at Royal
Crown's no longer used  distribution site in Miami,  Florida,  hydrocarbons were
discovered in the  groundwater.  Assessment is proceeding under the direction of
the Dade County  Department of Environmental  Resources  Management  ("DERM") to
determine  the extent of the  contamination.  Remediation  has commenced at this
site,  and  management  estimates  that  total  remediation  costs (in excess of
amounts  incurred  through  December 31, 1996) will be  approximately  $135,000,
depending on the actual extent of the contamination.  Additionally,  in 1994 the
Texas Natural  Resources  Conservation  Commission  approved the  remediation of
hydrocarbons in the groundwater by Royal Crown at its former  distribution  site
in San  Antonio,  Texas.  Remediation  has  commenced  at this site.  Management
estimates the total cost of remediation to be approximately  $110,000 (in excess
of amounts  incurred  through December 31, 1996), of which 60-70% is expected to
be reimbursed by the State of Texas  Petroleum  Storage Tank  Remediation  Fund.
Royal Crown has incurred  actual costs of $439,000,  in the  aggregate,  through
December 31, 1996 for these matters. Triarc does not believe that the outcome of
these  matters  will have a material  adverse  effect on  Triarc's  consolidated
results  of  operations  or  financial  position.   See  "Item  7.  Management's
Discussion  and Analysis of Financial  Condition  and Results of  Operations  --
Liquidity and Capital Resources."

   In 1987 Graniteville was notified by the South Carolina  Department of Health
and Environmental  Control (the "DHEC") that it discovered certain contamination
of Langley Pond  ("Langley  Pond") near  Graniteville,  South  Carolina and that
Graniteville may be one of the responsible  parties for such  contamination.  In
1990 and 1991,  Graniteville  provided  reports to DHEC summarizing its required
study and investigation of the alleged pollution and its sources which concluded
that pond sediments  should be left undisturbed and in place and that other less
passive  remediation  alternatives  either  provided no  significant  additional
benefits or themselves  involved adverse effects. In March 1994 DHEC appeared to
conclude  that  while  environmental   monitoring  at  Langley  Pond  should  be
continued,  the most  reasonable  alternative  was to leave  the pond  sediments
undisturbed and in place. In 1995  Graniteville  submitted a proposal  regarding
periodic  monitoring  of the site to which  DHEC  responded  with a request  for
additional information.  This information was provided to DHEC in February 1996.
Triarc is unable to predict at this time what  further  actions,  if any, may be
required in  connection  with  Langley  Pond or what the cost thereof may be. In
addition, Graniteville owns a nine acre property in Aiken County, South Carolina
(the "Vaucluse Landfill"),  which was used as a landfill from approximately 1950
to 1973. The Vaucluse  Landfill was operated  jointly by Graniteville  and Aiken
County. The United States Environmental  Protection Agency conducted an Expanded
Site  Inspection  (an  "ESI")  in  January  1994 and  Graniteville  conducted  a
supplemental  investigation  in February  1994.  In  response  to the ESI,  DHEC
indicated  its desire to have an  investigation  of the  Vaucluse  Landfill.  On
August 22, 1995 DHEC requested that Graniteville  enter into a consent agreement
to  conduct  an  investigation.  Graniteville  responded  to DHEC that a consent
agreement was inappropriate considering Graniteville's  demonstrated willingness
to cooperate with DHEC requests and asked DHEC to approve  Graniteville's April,
1995  conceptual  investigation  approach.  The cost of the  study  proposed  by
Graniteville  is  estimated  to be  between  $125,000  and  $150,000.  Since  an
investigation has not yet commenced,  Triarc is currently unable to estimate the
cost,  if any,  to  remediate  the  landfill.  Such cost could vary based on the
actual  parameters of the study. In connection with the  Graniteville  Sale, the
Company has agreed to  indemnify  Avondale for certain  costs  incurred by it in
connection  with the  foregoing  matters  that are in excess  of the  applicable
reserves. Based on currently available information, Triarc does not believe that
the outcome of these  matters  will have a material  adverse  effect on Triarc's
consolidated  results  of  operations  or  financial  position.   See  "Item  7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations -- Liquidity and Capital Resources."


   SEASONALITY

   Of Triarc's four businesses, the beverages, restaurants and LP gas businesses
are  seasonal.  In the beverage and  restaurants  businesses,  the highest sales
occur during spring and summer (April through September).  LP gas operations are
subject to the seasonal  influences of weather which vary by region.  Generally,
the  demand for LP gas during the winter  months,  November  through  April,  is
substantially  greater  than  during  the  summer  months at both the retail and
wholesale levels,  and is significantly  affected by climatic  variations.  As a
result of the  foregoing,  Triarc's  revenues  are highest  during the first and
fourth calendar quarters of the year.

   DISCONTINUED AND OTHER OPERATIONS

   Triarc  continues to own a few ancillary  business  assets.  Consistent  with
Triarc's strategy of focusing resources on its four principal  businesses,  from
1994 to 1996 SEPSCO completed its sale or discontinuance of substantially all of
its  ancillary  business  assets.  These sales or  liquidations  will not have a
material  impact on  Triarc's  consolidated  financial  position  or  results of
operations.  The  precise  timetable  for the sale or  liquidation  of  Triarc's
remaining  ancillary  business  assets  will  depend  upon  Triarc's  ability to
identify  appropriate  purchasers and to negotiate acceptable terms for the sale
of such businesses.

   Insurance  Operations:  Historically,  Chesapeake  Insurance  Company Limited
("Chesapeake  Insurance"),  an indirect  wholly-owned  subsidiary of Triarc, (i)
provided  certain  property  insurance  coverage  for Triarc and  certain of its
former affiliates;  (ii) reinsured a portion of certain insurance coverage which
Triarc  and  such  former  affiliates  maintained  with  unaffiliated  insurance
companies  (principally  workers'  compensation,  general liability,  automobile
liability and group life);  and (iii) reinsured  insurance risks of unaffiliated
third  parties  through  various  group  participations.   During  Fiscal  1993,
Chesapeake  Insurance ceased writing  reinsurance of risks of unaffiliated third
parties,   and  during  Transition  1993  Chesapeake  Insurance  ceased  writing
insurance or reinsurance  of any kind for periods  beginning on or after October
1, 1993.  Chesapeake  Insurance continues to wind down its operations and settle
the remaining existing insurance claims of third parties.

   In March 1994, Chesapeake Insurance consummated an agreement (which agreement
was effective as of December 31, 1993) with AIG Risk  Management,  Inc.  ("AIG")
concerning the  commutation to AIG of all insurance  previously  underwritten by
AIG on behalf of Triarc and its  subsidiaries  and affiliated  companies for the
years 1977-1993,  which insurance had been reinsured by Chesapeake Insurance. In
connection  with such  commutation,  AIG received an aggregate of  approximately
$63.5 million,  consisting of approximately  $29.3 million of commercial  paper,
common stock and other marketable  securities of unaffiliated third parties, and
a promissory note of Triarc in the original  principal  amount of  approximately
$34.2 million.  In December 1995,  such promissory note was amended and restated
in order to reflect the  forgiveness  of $3.0  million of such  indebtedness  in
April  1995.  In  July  1996  Triarc  paid  $27.2  million  in  return  for  the
cancellation of the promissory  note. See "Item 7.  Management's  Discussion and
Analysis of Financial  Condition  and Results of  Operations  --  Liquidity  and
Capital  Resources." For information  regarding Triarc's insurance loss reserves
relating to Chesapeake's  operations,  See Note 1 to the Consolidated  Financial
Statements.

   Discontinued  Operations:  In the Consolidated  Financial Statements,  Triarc
reports as "discontinued  operations" a few ancillary business assets, including
certain idle properties owned by SEPSCO.  In 1994,  SEPSCO completed its sale or
discontinuance  of  substantially  all  of its  ancillary  business  assets.  In
February 1995,  SEPSCO sold to a former member of its management  team the stock
of Houston  Oil & Gas  Company,  Inc.,  a  subsidiary  which was  engaged in the
natural  gas and oil  business  ("HOG"),  for an  aggregate  purchase  price  of
$800,000, consisting of $729,500 in cash, a waiver of certain bonuses payable by
SEPSCO to such former  management  member and a six month promissory note in the
original principal amount of $48,000, which has been paid in full. Since January
1996,  SEPSCO  has  sold  seven  idle  properties  for  an  aggregate  price  of
approximately $485,000. In addition, in January, 1997, SEPSCO completed the sale
of a 42,000  square  foot  parcel of land  located  in Miami,  Florida to a real
estate developer for a gross purchase price of approximately $1.6 million.

   EMPLOYEES

   As of December  31,  1996,  Triarc and its four  business  segments  employed
approximately 8,650 personnel,  including approximately 1,610 salaried personnel
and approximately  7,040 hourly  personnel.  Triarc's  management  believes that
employee relations are satisfactory.  At December 31, 1996, approximately 172 of
the total of Triarc's  employees were covered by various  collective  bargaining
agreements expiring from time to time from the present through 1999.


ITEM 2. PROPERTIES.

   Triarc maintains a large number of diverse  properties.  Management  believes
that these  properties,  taken as a whole, are generally well maintained and are
adequate  for  current  and  foreseeable  business  needs.  The  majority of the
properties are owned.  Except as set forth below,  substantially all of Triarc's
materially important physical properties are being fully utilized.

   Certain information about the major plants and facilities  maintained by each
of Triarc's four business segments, as well as Triarc's corporate  headquarters,
as of December 31, 1996 is set forth in the following table:

                                                                     APPROXIMATE
                                                                      SQ. FT. OF
ACTIVE FACILITIES            FACILITIES-LOCATION       LAND TITLE    FLOOR SPACE
- --------------------------------------------------------------------------------
Corporate Headquarters.......New York, NY                  1 leased      26,600
Beverages....................Concentrate Mfg:
                             Columbus, GA                  1 owned      216,000
                             (including office)
                             Cincinnati, OH                1 leased      23,000
                             Royal Crown
                             Corporate Headquarters
                             Ft. Lauderdale, FL            1 leased      19,180*
                             Mistic Corporate
                             Headquarters
                             White Plains, NY              1 leased     32,320**
Restaurant...................355 Restaurants              75 owned          ***
                             (all but 16 locations       280 leased
                             throughout the
                             United States)
                             Corporate Headquarters        1 leased       58,429
                             Ft. Lauderdale, FL
Specialty Chemical and Dyes..Greenville, SC                 2 owned      103,000
                             Williston, SC                  1 owned       75,000
LP Gas.......................Office                        1 leased       17,000
                             166 Service Centers          185 owned     532,000
                             81 Storage Facilities        62 leased       ****
                             (various locations
                             throughout the
                             United States)
                              2 Underground storage
                             terminals
                             2 Above ground
                             storage terminals




                                                                    APPROXIMATE
                                                                     SQ. FT. OF
INACTIVE FACILITIES          FACILITIES-LOCATION      LAND TITLE    FLOOR SPACE
- -------------------------------------------------------------------------------
Restaurant...................Restaurants                 1 owned          ***
                                                        10 leased
Textiles.....................Fabric Mfg.                 2 owned      382,000

- ------------
*    Royal Crown and Arby's also share 18,759 square feet of common space at the
     headquarters of their parent corporation, RC/Arby's.

**   In connection with the formation of the Triarc Beverage Group,
     approximately one-half of the lease obligation for Mistic's headquarters
     has been assumed by Royal Crown.  See "Item 1.  Business--Business
     Segments -- Beverages."

***  While Arby's  restaurants range in size from  approximately 700 square feet
     to 4,000 square feet, the typical  company-owned  Arby's  restaurant in the
     United States is  approximately  2,750 square feet. It is expected that all
     of the company-owned Arby's restaurants will be sold. See "Item 1. Business
     - Strategic Alternatives and "Business Segments -- Restaurants."

**** The LP gas facilities have approximately 33 million gallons of storage
     capacity (including approximately one million gallons of storage capacity
     currently leased to third parties).  All such properties were transferred
     to the Operating Partnership.  See "Item 1.  Business -- Strategic
     Alternatives" and "-- Business Segments -- Liquefied Petroleum Gas."

     Arby's also owns seven and leases fifteen  restaurants  which are leased or
sublet principally to franchisees.

     Substantially  all of the  properties  used in the and propane and dyes and
specialty  chemicals  segments are pledged as  collateral  for certain  debt. In
addition,  substantially all of the properties used by Mistic and certain of the
properties used in the restaurant  segment are pledged as collateral for certain
debt. All other properties owned by Triarc are without significant encumbrances.

     Certain  information about the materially  important physical properties of
Triarc's  discontinued and other operations as of December 31, 1996 is set forth
in the following table:


                                                                     APPROXIMATE
                                                                      SQ.FT. OF
INACTIVE FACILITIES        FACILITIES-LOCATION          LAND TITLE   FLOOR SPACE
- -------------------------------------------------------------------------------

Refrigeration.....         Ice mfg. and cold storage      4 owned        92,000
                           Ice mfg.                      13 owned       173,000
National Propane..         Undeveloped land               3 owned          N/A


ITEM 3. LEGAL PROCEEDINGS.

     In the fall of 1995, Granada Investments, Inc., Victor Posner and the three
former court-appointed  members of a special committee of the Triarc Board ("the
Triarc Special Committee") formed in 1993 by order of the United States District
Court  for  the  Northern   District  of  Ohio  (which  order  was  subsequently
terminated)  asserted  claims against  Triarc for money damages and  declaratory
relief,  and, in the case of the former  court-appointed  directors,  additional
fees.  On  January  30,  1996 the  court  held that it had no  jurisdiction  and
dismissed all proceedings in this matter.  Posner filed a notice of appeal,  but
subsequently withdrew the appeal voluntarily.

     In October  1995 Triarc  commenced  an action  against  Posner and a Posner
Entity in the United States District Court for the Southern District of New York
in which it asserted breaches by them of their  reimbursement  obligations under
the Settlement Agreement (see "Item 5. Market for Registrant's Common Equity and
Related Stockholder  Matters.") The defendants have asserted certain affirmative
defenses and a counterclaim  seeking a declaratory judgment that $2.9 million of
a $6.0 million  settlement  payment paid by defendants to Triarc pursuant to the
Settlement Agreement should be credited against defendants' obligations, if any,
to  reimburse  Triarc's  fees  and  expenses  under  the  Settlement  Agreement.
Cross-motions for summary judgment have been filed and are pending.

     In November,  1995, the Company commenced an action in New York State court
alleging  that  the  three  former   court-appointed   directors   violated  the
release/agreements  they  executed in March 1995 by seeking  additional  fees of
$3.0  million.  The  action  was  removed  to  federal  court in New  York.  The
defendants  have  filed  a  third-party  complaint  against  Nelson  Peltz,  the
Company's Chairman and Chief Executive Officer, seeking judgment against him for
any amounts  recovered by Triarc  against them.  On December 9, 1996,  the court
denied  Triarc's  motion  for  summary  judgment.  Discovery  in the  action has
commenced.

     On December 6, 1995, the three former court-appointed members of the Triarc
Special Committee

commenced  an action  in the  United  States  District  Court  for the  Northern
District of Ohio  seeking  (among  other  things),  an  adjudication  of certain
parties'  actual or potential  claims with respect to certain shares of Triarc's
Class A Common Stock held by the  plaintiffs,  an order restoring the plaintiffs
to Triarc's  Board of Directors and  additional  fees. On February 6, 1996,  the
court dismissed the action without  prejudice.  The plaintiffs filed a notice of
appeal, but subsequently dismissed the appeal voluntarily.

     On June 27, 1996, the three former  court-appointed  directors commenced an
action  against  Nelson  Peltz,  Victor  Posner and Steven  Posner in the United
States  District  Court  for the  Northern  District  of Ohio  seeking  an order
returning the plaintiffs to Triarc's Board of Directors,  a declaration that the
defendants  bear  continuing  obligations  to  refrain  from  certain  financial
transactions  under a  February  9, 1993  undertaking  given by DWG  Acquisition
Group,  L.P., and a declaration  that Mr. Peltz must honor all provisions of the
undertaking. On October 10, 1996, Mr. Peltz moved for judgment on the pleadings,
or, in the  alternative,  for a stay of the proceedings  pending a resolution of
the New York action described above. The motion is pending.

     In  addition  to the matters  described  immediately  above and the matters
referred to or  described  under "Item 1.  Business -- General --  Environmental
Matters,"  Triarc and its  subsidiaries  are involved in claims,  litigation and
administrative  proceedings  and  investigations  of  various  types in  several
jurisdictions.   As  discussed  below,   certain  of  these  matters  relate  to
transactions  involving  companies which, prior to April 1993 were affiliates of
Triarc  and  which  subsequent  to  April  1993  became  debtors  in  bankruptcy
proceedings.

     In  connection  with certain  former cost sharing  arrangements,  advances,
insurance   premiums,   equipment  leases  and  accrued  interest,   Triarc  had
receivables  due from APL  Corporation,  a former  affiliate  until  April 1993,
aggregating  $38,120,000  as of  April  30,  1992,  against  which  a  valuation
allowance of  $34,713,000  was  recorded.  In July 1993 APL became a debtor in a
proceeding  under Chapter 11 of the Bankruptcy Code (the "APL  Proceeding").  In
February  1994 the  official  committee  of  unsecured  creditors of APL filed a
complaint (the "APL Litigation")  against Triarc and certain companies  formerly
or presently  affiliated  with Victor Posner or with Triarc,  alleging causes of
action arising from various  transactions  allegedly  caused by the named former
affiliates. The Chapter 11 trustee of APL was subsequently added as a plaintiff.
The complaint  asserts  various claims against Triarc and seeks an  undetermined
amount of damages  from Triarc as well as certain  other  relief.  In April 1994
Triarc responded to the complaint by filing an Answer and Proposed Counterclaims
and  Set-Offs  (the  "Answer").  In  the  Answer,  Triarc  denies  the  material
allegations in the complaint and asserts counterclaims and set-offs against APL.
On June 8, 1995, the United States Bankruptcy Court for the Southern District of
Florida (the  "Bankruptcy  Court")  entered an order  confirming  the Creditors'
Committee's  First  Amended  Plan  of  Reorganization  (the  "Plan")  in the APL
Proceeding.  The Plan  provides,  among other things,  that Security  Management
Corporation  ("SMC"), a company controlled by Victor Posner, will own all of the
common stock of APL and that SMC, among other entities,  is authorized to object
to claims made in the APL  Proceeding.  The Plan also provides for the dismissal
with prejudice of the APL  Litigation.  In August,  1995, SMC filed an objection
(the  "Objection")  to the claims  against  APL filed by Triarc  and  Chesapeake
Insurance. On September 5, 1995, Triarc and Chesapeake Insurance filed responses
to the Objection denying the material allegations in the Objection. In addition,
Triarc and Chesapeake  Insurance  filed a motion to dismiss the Objection on the
basis that SMC is barred from  making the  Objections  because of the  dismissal
with  prejudice  of the APL  Litigation  under the Plan.  The  Bankruptcy  Court
entered an order that,  among other  things,  dismissed the APL  Litigation  and
dismissed the Objection.  In December 1995, APL filed a motion for rehearing and
reconsideration of the final judgment of dismissal of the APL Litigation and SMC
filed a motion for rehearing and  reconsideration  of the order  dismissing  the
Objection.  On March 12,  1996,  the  Bankruptcy  Court  denied  APL's and SMC's
motions for rehearing. SMC and APL have appealed, and their appeal is pending.

     On December 11, 1995,  Triarc and Chesapeake  commenced a proceeding in the
Bankruptcy  Court under  section  1144 of the  Bankruptcy  Code,  naming  Victor
Posner,  SMC and  APL as  defendants,  and  naming  the  official  committee  of
unsecured  creditors  of APL as a nominal  defendant  (the  "1144  Proceeding").
Triarc commenced the 1144 proceeding  because of motions pending on December 11,
1995 (the final date on which such a  proceeding  could be  commenced  under the
Bankruptcy  Code),  in which APL and SMC sought to continue  prosecuting the APL
Litigation against Triarc and Chesapeake Insurance notwithstanding that the Plan
required the dismissal of the APL Litigation  with  prejudice.  In the event APL
and SMC  were to  prevail  in  such  attempts,  Triarc  would  seek to have  the
confirmation order revoked or modified in certain respects, including to prevent
the prosecution of the APL Litigation  against Triarc and Chesapeake  Insurance.
On January 25, 1996, SMC and APL filed a motion to dismiss the 1144  Proceeding.
On February 26, 1996, the committee of unsecured creditors of APL filed an

answer and affirmative defenses to the complaint in the 1144 Proceeding, denying
that the Plan required the dismissal of the APL  Litigation.  On April 15, 1996,
the court  granted  SMC's and APL's  motion to dismiss  on the  ground  that the
action was moot. Plaintiffs have appealed, and the appeal is pending.

     On February 19, 1996,  Arby's  Restaurants S.A. de C.V. ("AR"),  the master
franchisee of Arby's in Mexico, commenced an action in the civil court of Mexico
against Arby's for breach of contract.  AR alleged that a non-binding  letter of
intent  dated  November  9, 1994  between  AR and Arby's  constituted  a binding
contract  pursuant to which Arby's had obligated itself to repurchase the master
franchise  rights  from AR for $2.5  million.  AR also  alleged  that Arby's had
breached a master development  agreement between AR and Arby's.  Arby's promptly
commenced  an  arbitration  proceeding  on the  ground  that the  franchise  and
development  agreements each provided that all disputes arising  thereunder were
to  be  resolved  by  arbitration.  Arby's  is  seeking  a  declaration  in  the
arbitration  to the effect that the  November 9, 1994 letter of intent was not a
binding contract and therefore AR has no valid breach of contract claim, as well
as a declaration that AR's commencement of suspension of payments proceedings in
February 1995 had automatically  terminated the master development agreement. In
the civil court  proceeding,  the court denied a motion by Arby's to suspend the
proceedings pending the results of the arbitration, and Arby's has appealed that
ruling.  In the  arbitration,  some evidence has been taken but proceedings have
been  suspended by the court  handling the  suspension of payments  proceedings.
Arby's is contesting AR's claims vigorously and believes that it has meritorious
defenses to AR's claims.

     On November 4, 1996, the bankruptcy  trustee appointed in the case of Prime
Capital Corporation ("Prime") (formerly known as Intercapital Funding Resources,
Inc.) made a demand on Chesapeake  Insurance  and SEPSCO,  seeking the return of
payments  aggregating  $5.3 million which Prime allegedly made to those entities
during 1994 and suggesting that litigation would be commenced against SEPSCO and
Chesapeake  Insurance  if  these  monies  were not  returned.  The  trustee  has
commenced avoidance actions against SEPSCO and Chesapeake  Insurance (as well as
actions  against  certain current and former officers of Triarc or their spouses
with respect to payments made  directly to them) in January  1997,  claiming the
payments  to  them  were  preferences  or  fraudulent  transfers.   (SEPSCO  and
Chesapeake  Insurance had entered into separate joint  ventures with Prime,  and
the  payments  at  issue  were  made  in  connection  with  termination  of  the
investments  in such  joint  ventures.)  Triarc  believes,  based on  advice  of
counsel,  that SEPSCO and Chesapeake  Insurance have meritorious defenses to the
trustee's claims and that discovery may reveal additional defenses. Accordingly,
SEPSCO and Chesapeake Insurance intend to vigorously contest the claims asserted
by the trustee.  However,  it is possible  that the trustee may be successful in
recovering  the  payments.   The  maximum  amount  of  SEPSCO's  and  Chesapeake
Insurance's  aggregate  liability is  approximately  $5.3 million plus interest;
however,  to the extent SEPSCO or Chesapeake  Insurance return to Prime's estate
any amount of the  challenged  payments,  they will be entitled to an  unsecured
claim  against such estate.  The court has scheduled a trial for the week of May
27, 1997.

     Other matters arise in the ordinary course of Triarc's business,  and it is
the  opinion of  management  that the outcome of any such matter will not have a
material adverse effect on Triarc's consolidated  financial condition or results
of operations.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     Triarc held its 1996 Annual  Meeting of  Shareholders  on June 6, 1996. The
matters acted upon by the shareholders at that meeting were reported in Triarc's
quarterly report on Form 10-Q for the quarter ended June 30, 1996.



                          PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY
         AND RELATED STOCKHOLDER MATTERS.

     The  principal  market for  Triarc's  Class A Common  Stock is the New York
Stock Exchange  ("NYSE")  (symbol:  TRY). On June 29, 1995, at Triarc's request,
the  Class A Common  Stock  was  delisted  from  trading  on the  Pacific  Stock
Exchange.  The high and low market prices for Triarc's Class A Common Stock,  as
reported in the consolidated transaction reporting system, are set forth below:


                                                               MARKET PRICE
                                                           --------------------
      FISCAL QUARTERS                                      HIGH            LOW
- -------------------------------------------------------------------------------

1995
   FIRST QUARTER ENDED MARCH 31..........................    $13 1/4   $ 11 1/8
   SECOND QUARTER ENDED JUNE 30..........................     16 3/4     13 1/8
   THIRD QUARTER ENDED SEPTEMBER 30......................     15 5/8     12 3/8
   FOURTH QUARTER ENDED DECEMBER 31......................     14 1/4      9 1/2
1996
   FIRST QUARTER ENDED MARCH 31..........................    $14 3/8   $ 10 7/8
   SECOND QUARTER ENDED JUNE 30..........................     13 3/8     11 1/2
   THIRD QUARTER ENDED SEPTEMBER 30......................     12 7/8     10
   FOURTH QUARTER ENDED DECEMBER 31......................     12 3/4     10 3/4

     Triarc did not pay any dividends on its common stock in Fiscal 1995, Fiscal
1996 or in the  current  year to date  and  does not  presently  anticipate  the
declaration of cash dividends on its common stock in the near future.

     On April 23, 1993,  DWG  Acquisition  Group,  L.P. ("DWG  Acquisition"),  a
Delaware limited partnership the sole general partners of which are Nelson Peltz
and Peter W. May,  acquired  shares of common stock of Triarc (then known as DWG
Corporation   ("DWG"))  from  Victor  Posner  ("Posner")  and  certain  entities
controlled by Posner (together with Posner, the "Posner Entities"), representing
approximately  28.6% of Triarc's then  outstanding  common stock. As a result of
such  acquisition  and  a  series  of  related   transactions  which  were  also
consummated on April 23, 1993, the Posner  Entities no longer hold any shares of
voting  stock of Triarc or any of its  subsidiaries.  Pursuant  to a  Settlement
Agreement dated as of January 9, 1995 (the "Settlement  Agreement") among Triarc
and Posner and certain  Posner  Entities,  a Posner  Entity  converted the $71.8
million stated value of Triarc's 8-1/8% Redeemable  Convertible  Preferred Stock
(which paid an aggregate dividend of approximately $5.8 million per annum) owned
by it into  4,985,722  shares of Triarc's  non-voting  Class B Common Stock.  In
addition,  an additional  1,011,900 shares of Triarc's Class B Common Stock were
issued to Posner and a Posner  Entity  (which  shares are,  among other  things,
subject to a right of first  refusal in favor of Triarc or its  designee).  Such
conversion  and  issuance  of  Class B Common  Stock  resulted  in an  aggregate
increase of approximately $83.8 million in Triarc's common shareholders' equity.
All such shares of Class B Common  Stock can be  converted  without  restriction
into  shares  of  Class A  Common  Stock  if  they  are  sold  to a third  party
unaffiliated  with the Posner  Entities.  Triarc,  or its designee,  has certain
rights of first refusal if such shares are sold to an unaffiliated  third party.
There is no  established  public  trading  market for the Class B Common  Stock.
Triarc has no class of equity securities currently issued and outstanding except
for the Class A Common Stock and the Class B Common Stock.

     Because  Triarc  is a  holding  company,  its  ability  to  meet  its  cash
requirements   (including  required  interest  and  principal  payments  on  the
Partnership  Loan) is primarily  dependent  upon its cash on hand and marketable
securities  and  cash  flows  from its  subsidiaries  including  loans  and cash
dividends and  reimbursement  by  subsidiaries  to Triarc in connection with its
providing certain management services and payments by subsidiaries under certain
tax  sharing  agreements.  In  connection  with the Spinoff  Transactions  it is
expected  that Triarc will retain all or  substantially  all of its cash on hand
and marketable securities. Upon completion of the Spinoff Transactions, however,
it is expected that Triarc will no longer be entitled to receive cash  dividends
or tax  sharing  payments  (relating  to the period  subsequent  to the  Spinoff
Transactions)  from its  restaurant and beverage  businesses.  It is anticipated
that Triarc may enter into a management and  administrative  services  agreement
with the businesses that are spun-off. Under the terms of various indentures and
credit  arrangements,  Triarc's  principal  subsidiaries  (other  than  National
Propane) are currently unable to pay any dividends or make any loans or advances
to Triarc.  The relevant  restrictions  of such debt  instruments  are described
under "Item 7. Management's  Discussion and Analysis of Financial  Condition and
Results of Operations  --Liquidity and Capital  Resources" and in Note 13 to the
Consolidated Financial Statements.

     On July 8, 1996, Triarc announced that its management was authorized,  when
and if market conditions
warranted,  to  purchase  from  time to time  during  the  twelve  month  period
commencing  July 8, 1996,  up to $20 million of its  outstanding  Class A Common
Stock.  As of March 15, 1997,  Triarc had  repurchased  44,300 shares of Class A
Common Stock at an aggregate cost of approximately $496,500.

     As of March 15, 1997, there were  approximately  5,650 holders of record of
the Class A Common Stock and two holders of record of the Class B Common Stock.


ITEM 6.  SELECTED FINANCIAL DATA



                                                         EIGHT MONTHS
                                                            ENDED
                             FISCAL YEAR ENDED APRIL 30,   DECEMBER               YEAR ENDED DECEMBER 31,
                           -----------------------------  ----------  ----------------------------------------------
                                1992 (1)     1993           1993 (3)        1994          1995            1996
                                ----         ----           -----           ----          ----            ----
                                                 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
 
                                                                                           
   Revenues................$1,074,703   $1,058,274      $ 703,541      $1,062,521     $1,184,221       $ 989,249
   Operating profit (loss).    58,552      34,459 (4)      29,969(5)       68,933 (6)     33,989 (7)      (6,979)(9)
   Loss from continuing
    operations.............   (10,207)    (44,549)(4)     (30,439)(5)      (2,093)(6)    (36,994)(7)      (8,485)(9)
   Income (loss) from
    discontinued operations,
    net ...................     2,705      (2,430)         (8,591)         (3,900)           --              --
   Extraordinary items ....       --       (6,611)           (448)         (2,116)           --           (5,416)
   Cumulative effect of
    changes in accounting
    principles, net........       --       (6,388)            --              --             --              --
   Net loss................    (7,502)    (59,978)(4)     (39,478)(5)      (8,109)(6)    (36,994)(7)     (13,901)(9)
   Preferred stock dividend
    requirements (2).......       (11)       (121)         (3,889)         (5,833)           --              --
   Net loss applicable to
    common stockholders....    (7,513)    (60,099)        (43,367)        (13,942)       (36,994)        (13,901)
   Loss per share:
    Continuing operations..      (.39)      (1.73)          (1.62)           (.34)         (1.24)           (.28)
    Discontinued operations       .10        (.09)           (.40)           (.17)           --              --
    Extraordinary items....       --         (.26)           (.02)           (.09)           --             (.18)
    Cumulative effect of
      changes in accounting
      principles...........       --         (.25)            --              --             --              --
    Net loss per share.....      (.29)      (2.33)          (2.04)           (.60)         (1.24)           (.46)
   Total assets............   821,170     910,662         897,246         922,167      1,085,966         854,404
   Long-term debt..........   289,758     488,654         575,161         612,118        763,346         500,529
   Redeemable preferred stock     --       71,794          71,794          71,794            --  (8)         --
   Stockholders' equity
      (deficit)                86,482     (35,387)        (75,981)        (31,783)        20,650 (8)       6,765
   Weighted-average common
    shares outstanding.....    25,867      25,808          21,260          23,282         29,764          29,898




(1) Selected  Financial  Data for the fiscal  year ended April 30, 1992 has been
    retroactively  restated  to  reflect  the  discontinuance  of the  Company's
    utility and municipal services and refrigeration operations in 1993.

(2) The Company has not paid any  dividends on its common  shares  during any of
    the periods presented.

(3) The Company  changed its fiscal year from a fiscal year ending April 30 to a
    calendar year ending  December 31 effective for the  eight-month  transition
    period ended December 31, 1993 ("Transition 1993").

(4) Reflects certain  significant  charges recorded during the fiscal year ended
    April  30,  1993  as  follows:   $51,689,000  charged  to  operating  profit
    representing    $43,000,000   of   facilities   relocation   and   corporate
    restructuring  relating to a change in control of the Company and $8,689,000
    of other net charges; $48,698,000 charged to loss from continuing operations
    representing the  aforementioned  $51,689,000  charged to operating  profit,
    $8,503,000 of other net charges,  less $19,391,000 of income tax benefit and
    minority interest effect relating to the aggregate of the above charges, and
    plus  $7,897,000 of provision for income tax  contingencies  and $67,060,000
    charged to net loss representing the aforementioned  $48,698,000  charged to
    operating  profit,  a $5,363,000  write-down  relating to the  impairment of
    certain unprofitable  operations and accruals for environmental  remediation
    and losses on certain  contracts in progress,  net of income tax benefit and
    minority  interests,  a  $6,611,000  extraordinary  charge  from  the  early
    extinguishment  of debt and  $6,388,000  cumulative  effect  of  changes  in
    accounting principles.
- -------------------------------------------

(5) Reflects  certain  significant  charges  recorded during  Transition 1993 as
    follows:  $12,306,000  charged to operating profit principally  representing
    $10,006,000 of increased  insurance  reserves;  $25,617,000  charged to loss
    from  continuing  operations  representing  the  aforementioned  $12,306,000
    charged to operating profit,  $5,050,000 of certain  litigation  setttlement
    costs,  $3,292,000 of reduction to net  realizable  value of certain  assets
    held for sale other than discontinued operations,  less $2,231,000 of income
    tax benefit and minority  interest  effect  relating to the aggregate of the
    above charges, and plus a $7,200,000 provision for income tax contingencies;
    and  $34,437,000   charged  to  net  loss  representing  the  aforementioned
    $25,617,000  charged to loss from  continuing  operations  and an $8,820,000
    loss from discontinued operations.

(6) Reflects  certain  significant  charges  recorded  during  1994 as  follows:
    $9,972,000 charged to operating profit representing $8,800,000 of facilities
    relocation  and  corporate   restructuring  and  $1,172,000  of  advertising
    production costs that in prior periods were deferred;  $4,782,000 charged to
    loss from continuing operations  representing the aforementioned  $9,972,000
    charged to operating profit,  $7,000,000 of costs of a proposed  acquisition
    not  consummated  less  $6,043,000  of gain on sale of  natural  gas and oil
    business,  less income tax benefit  relating to the  aggregate  of the above
    charges of $6,147,000;  and $10,798,000 charged to net loss representing the
    aforementioned  $4,782,000 charged to loss from the early  extinguishment of
    debt  from  continuing   operations,   $3,900,000  loss  from   discontinued
    operations   and  a   $2,116,000   extraordinary   charge   from  the  early
    extinguishment of debt.

(7) Reflects  certain  significant  charges  recorded  during  1995 as  follows:
    $19,331,000  charged to operating profit  representing a $14,647,000  charge
    for a reduction in the carrying value of long-lived assets impaired or to be
    disposed of, $2,700,000 of facilities relocation and corporate restructuring
    and $1,984,000 of other net charges;  and  $15,199,000  charged to loss from
    continuing   operations  and  net  loss   representing  the   aforementioned
    $19,331,000 charged to operating profit,  $7,794,000 of equity in losses and
    write-down of  investments  in  affiliates,  less  $15,088,000  of net gains
    consisting  of  $11,945,000  of  gain  on  sale  of  excess  timberland  and
    $3,143,000  of other  net  gains,  less  $2,938,000  of income  tax  benefit
    relating  to the  aggregate  of the  above  charges  and  plus a  $6,100,000
    provision for income tax contingencies.

(8) In 1995 all of the  redeemable  preferred  stock was  converted  into common
    stock and an  additional  1,011,900  common shares were issued (see Notes 16
    and 17 to the Consolidated Financial Statements) resulting in an $83,811,000
    improvement in stockholders' equity (deficit).

(9) Reflects  certain  significant  charges and credits  recorded during 1996 as
    follows:  $73,100,000 charged to operating profit representing a $64,300,000
    charge for a reduction in the carrying value of long-lived  assets  impaired
    or to be disposed of and  $8,800,000 of facilities  relocation and corporate
    restructuring; and $1,279,000 charged to loss from continuing operations and
    net loss representing the  aforementioned  $73,100,000  charged to operating
    profit,  $77,000,000 of gains on sale of businesses, net (see Note 19 to the
    Consolidated  Financial  Statements)  and  plus  $5,179,000  of  income  tax
    provision on the above net credits.




ITEM 7.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
         RESULTS OF OPERATIONS.

INTRODUCTION

    This  "Management's  Discussion  and  Analysis of  Financial  Condition  and
Results  of  Operations"  should be read in  conjunction  with the  consolidated
financial  statements  included herein of Triarc Companies,  Inc.  ("Triarc" or,
collectively with its  subsidiaries,  the "Company").  Certain  statements under
this caption  "Management's  Discussion and Analysis of Financial  Condition and
Results of Operations" constitute "forward-looking  statements" under the Reform
Act.  See  "Special  Note  Regarding  Forward-Looking  Statements"  in  "Part I"
preceding  "Item 1". As used  herein,  "1996",  "1995" and  "1994"  refer to the
calendar years ended December 31, 1996, 1995 and 1994, respectively.

RESULTS OF OPERATIONS

    The  diversity of the  Company's  business  segments  precludes  any overall
generalization about trends for the Company.

    Trends  affecting  the beverage  segment in recent  years have  included the
increased market share of private label beverages,  increased price  competition
throughout  the  industry,  the  development  of  proprietary  packaging and the
proliferation of new products being introduced including "premium" beverages.

    Trends affecting the restaurant  segment in recent years include  consistent
growth  of  the  restaurant  industry  as a  percentage  of  total  food-related
spending,  with the quick service  restaurant  ("QSR"),  or fast food segment in
which the Company operates (see below), being the fastest growing segment of the
restaurant industry. In addition,  there has been increased price competition in
the QSR industry,  particularly evidenced by the value menu concept which offers
comparatively  lower prices on certain menu items, the combination meals concept
which offers a combination  meal at an aggregate price lower than the individual
food and beverage items, couponing and other price discounting.  Some QSR's have
been adding selected  higher-priced  premium quality items to their menus, which
appeal  more  to  adult  tastes  and  recover  some of the  margins  lost in the
discounting  of other menu  items.  Assuming  consummation  of the RTM sale (see
discussion  below  under  "Liquidity  and  Capital  Resources"),  the  Company's
restaurant operations will be exclusively franchising.

    Propane,  relative to other forms of energy,  is gaining  recognition  as an
environmentally  superior,  safe,  convenient,  efficient and easy-to-use energy
source in many  applications.  The other significant trend affecting the propane
segment in recent  years is the energy  conservation  trend,  which from time to
time has  negatively  impacted  the demand for  energy by both  residential  and
commercial customers.

    The dye and chemical business portion of the textile segment (see discussion
below of the April 1996 sale of the  Textile  Business)  is subject to  cyclical
economic  trends  and  foreign  competition  that  affect the  domestic  textile
industry. This competition creates pricing pressure which is passed along to the
suppliers of the textile  industry who are then forced to absorb price decreases
or surrender  business.  This situation has been further  exacerbated by (i) the
rapid growth of producers in China and India  resulting in exports to the United
States  markets  in  the  domestic  dye  and  chemical  industry  and  (ii)  the
establishment  by European dye and chemical  and fabric  manufacturers  of joint
ventures in Asian countries where labor,  raw material and  environmental  costs
are lower.

1996 COMPARED WITH 1995

    Revenues,  excluding sales of $505.7 million and $157.5 million for 1995 and
1996, respectively,  associated with the Textile Business sold on April 29, 1996
(see below), increased $153.2 million (22.6%) to $831.8 million in 1996.

    Beverages - Revenues  increased  $94.6 million (44.1%) to $309.1 million due
    to (i) $89.2 million of higher revenues from Mistic Brands, Inc. ("Mistic"),
    the  Company's  premium  beverage  business,  reflecting  the 1996 full year
    effect of the  Mistic  acquisition  on August 9, 1995,  (ii) a $6.9  million
    increase in finished  beverage product sales (as opposed to concentrate) and
    (iii) a $1.7 million volume increase in private label concentrate sales, all
    partially offset by a $3.2 million decrease in branded concentrate sales.

    Restaurants - Revenues  increased $15.6 million (5.7%) to $288.3 million due
    to (i) a $14.1 million increase in net sales principally  resulting from the
    inclusion  in 1996  of a full  year of net  sales  for the 85  company-owned
    restaurants  added  in  1995  (net  of  closings)  and a  0.5%  increase  in
    same-store sales and (ii) a $1.5 million increase in royalties and franchise
    fees  primarily  resulting  from  a net  increase  of 90  (3.5%)  franchised
    restaurants,  a 0.8% increase in same-store sales of franchised  restaurants
    and  a  2.0%  increase  in  average  royalty  rates  due  to  the  declining
    significance of older franchise  agreements with lower rates, the effects of
    which were  partially  offset by a $1.8 million  decrease in franchise  fees
    resulting from fewer franchise store openings in 1996.

    Propane - Revenues  increased $24.3 million (16.3%) to $173.3 million due to
    the effect of higher selling prices of $15.8 million  resulting from passing
    on a portion of higher  propane costs to customers and higher volume of $9.4
    million   primarily   resulting   from  an  increase  in  gallons   sold  to
    non-residential  customers, both partially offset by a $0.9 million decrease
    in revenues from other product lines.

    Textiles - (including  specialty dyes and chemicals) - As discussed  further
    below in "Liquidity  and Capital  Resources",  on April 29, 1996 the Company
    sold its textile business segment other than its specialty dyes and chemical
    business and certain other  excluded  assets and  liabilities  (the "Textile
    Business").  Principally  as a result of such sale,  revenues of the Textile
    Business  decreased  $329.3 million (60.1%) to $218.6 million.  In addition,
    lower  revenues  ($16.3  million) of the Textile  Business in the four-month
    period ended April 1996 compared with the comparable 1995 period contributed
    to the decrease  principally  reflecting lower volume due to weak demand for
    utility wear fabrics ($15.9 million). Overall revenues of the specialty dyes
    and chemicals  business decreased $0.6 million (0.9%) while revenues of this
    business reported in consolidated "Net sales" in the accompanying  condensed
    consolidated  statements of operations  increased  $18.9 million  (44.7%) to
    $61.1  million  in 1996 as  revenues  from  sales  of $19.2  million  to the
    purchaser of the Textile  Business  subsequent to the April 29, 1996 sale of
    the  Textile  Business  were  no  longer   eliminated  in  consolidation  as
    intercompany sales.

    Gross profit (total revenues less cost of sales),  excluding gross profit of
$44.9 million and $16.9 million for 1995 and 1996, respectively, associated with
the Textile  Business,  increased  $40.9 million to $320.3 million in 1996. Such
increase is  principally  due to $34.0 million of higher gross profit due to the
full year effect of the Mistic  acquisition  in 1996. In addition,  gross profit
was  positively  impacted  by overall  higher  revenues in the  Company's  other
businesses partially offset by lower overall gross margins in such businesses.

    Beverages  -  Margins  decreased  to 54.0%  from  61.5% due to the full year
    effect in 1996 from the  inclusion of  lower-margin  finished  product sales
    principally  associated  with Mistic  (38.5% gross margin in 1996)  compared
    with margins from concentrate sales.

    Restaurants - Margins  increased to 33.7% from 33.0%  primarily due to lower
    beef  costs  and  health   insurance  costs  and  an  improvement  in  labor
    efficiencies  due to fewer new store openings and related  start-up costs in
    1996 versus 1995, the effects of which were  partially  offset by a slightly
    lower percentage of royalties and franchise fees (with no associated cost of
    sales) to total revenues.

    Propane - Margins  decreased to 23.4% from 26.8% due to higher propane costs
    that could not be fully passed through to customers, a shift in customer mix
    toward lower-margin commercial accounts,  slightly higher operating expenses
    attributable  to the  increased  cost  of fuel  for  delivery  vehicles  and
    start-up  costs of six new propane plants opened in the last quarter of 1995
    and the first half of 1996.

    Textiles - As noted above, the Textile Business was sold in April 1996. As a
    result,  for the year ended  December  31,  1996,  margins for this  segment
    increased to 14.9% from 11.4% reflecting the  higher-margin  revenues of the
    remaining specialty dyes and chemicals  business.  Margins for the specialty
    dyes and  chemicals  business  decreased  to 22.3%  from  24.6%  due to weak
    pricing reflecting  competitive pressures currently being experienced in the
    textile industry.

    Advertising,  selling and distribution  expenses  increased $10.5 million to
$139.7  million in 1996 due to (i) $21.4  million of  expenses  associated  with
Mistic  resulting  from  (a) the  1996  full  year  effect  of its  August  1995
acquisition and, to a lesser extent, (b) the nonrecurring  effect of cooperative
advertising  reimbursements  to Mistic by distributors in 1995 which program was
discontinued  in 1996 and  replaced by  increased  selling  prices and (ii) $3.4
million of higher  advertising  costs in the  restaurant  segment  primarily  in
response  to  competitive  pressures,  a  larger  company-owned  store  base and
multi-brand restaurant development.  Such increases were partially offset by (i)
$9.4 million of  decreases  related to the  beverage  segment  other than Mistic
reflecting  (a) a net  reduction  in  media  spending  for  branded  concentrate
products and Royal Crown Premium Draft Cola ("Draft Cola"),  for which there had
been  higher  costs in  connection  with its  launch in  mid-1995  and (b) lower
beverage coupon costs  reflecting  reduced  bottler  utilization and (ii) a $5.1
million decrease reflecting the sale of the Textile Business in April 1996.

    General  and  administrative  expenses  decreased  $15.5  million  to $131.4
million in 1996  resulting  from $16.4 million of lower  expenses of the textile
segment primarily  reflecting the sale of the Textile Business and net decreases
in the remaining operations of the Company principally  reflecting the effect of
cost reduction efforts and non-recurring 1995 charges including (i) $2.7 million
relating to the settlement of a patent infringement  lawsuit,  (ii) $2.2 million
of  increased  amortization  of  restricted  stock  reflecting  $3.3  million of
accelerated  vesting in 1995 of all grants of such stock and (iii) $2.1  million
for the  closing  of  certain  unprofitable  restaurants.  Such  decreases  were
partially offset by $8.6 million of higher expenses resulting from the full year
effect of Mistic in 1996.

     The  1995 and 1996  reductions  in  carrying  value  of  long-lived  assets
impaired  or to be disposed of result  from the  application  of the  evaluation
measurement  requirements  under  Statement  of Financial  Accounting  Standards
No.121,  "Accounting for the Impairment of Long-Lived  Assets and for Long-Lived
Assets to be Disposed Of" which was adopted in 1995. The 1996 provision of $64.3
million  was  recorded  principally  to reduce  the  carrying  value of  certain
long-lived assets and certain  identifiable  intangibles to estimated fair value
principally  relating  to the  estimated  loss on the  anticipated  disposal  of
long-lived  assets in  connection  with the  planned  sale of all  company-owned
restaurants   (see  further   discussion  below  under  "Liquidity  and  Capital
Resources"). The reduction in carrying value of long-lived assets impaired or to
be disposed of in the amount of $14.6  million in 1995  reflects a $12.0 million
reduction in the net carrying value of certain  restaurants and other long-lived
restaurant  assets  which were  determined  to be  impaired  and a $2.6  million
reduction in the net carrying value of certain other  restaurants  and equipment
to be disposed of.

    The 1996 facilities  relocation and corporate  restructuring  charge of $8.8
million results from (i) $3.7 million of estimated  losses on planned  subleases
(principally  for  the  write-off  of   nonrecoverable   unamortized   leasehold
improvements  and furniture  and fixtures) of surplus  office space in excess of
anticipated  sublease  proceeds as a result of the planned sale of company-owned
restaurants  discussed  below under  "Liquidity  and Capital  Resources" and the
relocation of the  headquarters  of Royal Crown Company,  Inc.  ("Royal  Crown")
which are being  centralized  with Mistic's  offices in White Plains,  New York,
(ii) $2.2 million of employee  severance costs associated with the relocation of
Royal  Crown's  headquarters,  (iii) $1.3  million  for  terminating  a beverage
distribution  agreement,  (iv) $0.6  million for the  shutdown  of the  beverage
segment's Ohio production  facility and other asset disposals,  (v) $0.6 million
for consultant fees paid associated with combining  certain  operations of Royal
Crown and Mistic and (vi) $0.4 million of costs  related to the planned  spinoff
of the Company's  restaurant/beverage group discussed below under "Liquidity and
Capital  Resources".  The 1995  charge  of $2.7  million  principally  reflected
severance costs for terminated corporate employees.


    Prior to 1994 the Company had fully  reserved for secured  receivables  from
Pennsylvania Engineering Corporation ("PEC"), a former affiliate which had filed
for  protection  under the  bankruptcy  code. In 1995 the Company  received $3.0
million  with  respect to amounts  owed to the Company by PEC  representing  the
Company's  allocated  portion  of the  bankruptcy  settlement;  such  amount was
classified  as  "Recovery  of  doubtful   accounts  of  affiliates   and  former
affiliates" in the accompanying consolidated statement of operations.

    Interest  expense  decreased  $10.8  million to $73.4 million in 1996 due to
lower  average  levels of debt  reflecting  repayments  prior to maturity of (i)
$191.4  million of debt of the Textile  Business in connection  with its sale on
April 29, 1996, (ii) the $36.0 million principal amount of the Company's 11 7/8%
senior  subordinated  debentures due February 1, 1998 (the "11 7/8% Debentures")
on  February  22,  1996 and (iii)  $34.7  million  principal  amount of a 9 1/2%
promissory note (the "9 1/2% Note") on July 1, 1996, partially offset by (i) the
full year effect in 1996 of (a) borrowings resulting from the Mistic acquisition
($68.7  million  outstanding  as of December  31,  1996) and (b)  financing  for
capital spending at the restaurant segment principally during the second through
fourth quarters of 1995 ($58.4 million  outstanding as of December 31, 1996) and
(ii)  borrowings   under  the  Patrick  Facility  (see  discussion  below  under
"Liquidity  and Capital  Resources")  entered  into in May 1996  ($33.9  million
outstanding as of December 31, 1996).

    Gain on sales of  businesses,  net of $77.0 million in 1996 resulted from an
$85.2  million  pretax  gain  resulting  from  the sale of a 57.3%  interest  in
National Propane Partners,  L.P. (the  "Partnership"),  a partnership  formed by
National Propane Corporation ("National Propane"), a wholly-owned  subsidiary of
the  Company,  to acquire,  own and operate the propane  business  (see  further
discussion  below under "Liquidity and Capital  Resources")  partially offset by
(i) a $4.5  million  pretax loss on the sale of the Textile  Business and (ii) a
$3.7  million  pretax  loss  associated  with the  write-down  of  MetBev,  Inc.
("MetBev"),  a distributor  of the Company's  beverage  products in the New York
City metropolitan area. Loss on sale of businesses,  net in 1995 of $0.1 million
reflects  a $1.0  million  write-down  of  MetBev  substantially  offset by $0.9
million of gains related to the sales of the natural gas and oil businesses.

    Other income,  net decreased $4.3 million to $8.0 million in 1996.  This was
due to a  nonrecurring  1995  gain  of  $11.9  million  on the  sale  of  excess
timberland  partially  offset by (i) increased  interest  income of $5.1 million
from the Company's  increased  portfolio of cash equivalents and debt securities
as a result of proceeds in connection  with the sale of (a) a 57.3%  interest in
the Partnership and (b) the Textile Business and (ii) other net improvements.

    The Company's  provision from income taxes for 1996 represented an effective
rate of 244% which  differs from the Federal  income tax  statutory  rate of 35%
principally due to (i) a non-deductible loss on the sale of the Textile Business
of  $2.9  million,  or  63%,  (ii)  an  additional   provision  for  income  tax
contingencies  of $2.6 million,  or 56%, (iii) the effect of the amortization of
nondeductible  costs in excess of net assets of acquired companies  ("Goodwill")
of $2.2 million,  or 47%, and (iv) the effect of net operating  losses for which
no tax benefit is available of $1.3 million,  or 27%. The Company's benefit from
income  taxes  for  1995   represented   an  effective  rate  of  3%  which  was
significantly  less than the statutory rate  principally  due to (i) a provision
for income tax contingencies relating to the examination of the Company's income
tax  returns  for the years 1989  through  1992 of $6.1  million,  or 16%,  (ii)
nondeductible  amortization  of  Goodwill  of  $2.3  million,  or 6%  and  (iii)
nondeductible amortization of restricted stock of $1.4 million, or 4%.

    The minority  interests  in net income of  consolidated  subsidiary  of $1.8
million in 1996  represent the limited  partners'  interest in the net income of
the  Partnership  since the sale of such  interest  in July  1996  (see  further
discussion below under "Liquidity and Capital Resources").

    The extraordinary  items aggregating a charge of $5.4 million in 1996 result
from the early  extinguishment  of the 11 7/8%  Debentures on February 22, 1996,
all  of  the  debt  of TXL  Corp.  ("TXL",  formerly  Graniteville  Company),  a
wholly-owned  subsidiary  of the  Company,  including  its credit  facility,  in
connection  with  the  sale of the  Textile  Business  on  April  29,  1996  and
substantially  all of the long-term debt of National Propane and the 9 1/2% Note
in July 1996,  and consist of (i) the write-off of $10.4 million of  unamortized
deferred  financing  costs  and  $1.8  million  of  unamortized  original  issue
discount,  (ii) the payment of  prepayment  penalties  and related costs of $5.7
million and (iii) fees of $0.3  million,  partially  offset by (i) discount from
principal  of $9.2  million on the early  extinguishment  of the 9 1/2% Note and
(ii) income tax benefit of $3.6 million.

1995 COMPARED WITH 1994

    Revenues increased $121.7 million (11.5%) to $1,184.2 million in 1995.

    Restaurants  - Revenues  increased  $49.6  million  (22.2%) due to (i) $50.1
    million of net sales resulting from 85 additional company-owned  restaurants
    (including  acquired  restaurants)  to a total  of 373 at the  end of  1995,
    partially offset by a $5.3 million decrease in company-owned store sales due
    primarily to  increased  competitive  discounting  and a decline in customer
    orders,  (ii) a $3.5  million  increase in  royalties  resulting  from a net
    increase of 77 franchised  restaurants,  a 3.3% increase in average  royalty
    rates due to the declining  significance of older franchise  agreements with
    lower rates, and a 0.9% increase in franchised  same-store sales and (iii) a
    $1.3 million increase in franchise fees and other revenues.

    Beverages - Revenues increased $63.8 million (42.3%) consisting  principally
    of (i) $41.9  million of  revenues  from  Mistic  and (ii) $20.8  million of
    finished beverage product sales (as opposed to concentrate) arising from the
    Company's January 1995 acquisition of TriBev Corporation ("TriBev").

    The remaining  increase reflected sales from the launch of Draft Cola in the
    New York and Los Angeles  metropolitan  areas  during the second  quarter of
    1995.

    Textiles - Revenues  increased $11.0 million (2.0%)  principally  reflecting
    higher  sales of  indigo-dyed  sportswear  ($33.8  million) and utility wear
    ($8.9 million) significantly offset by lower sales of piece- dyed sportswear
    ($27.6 million) and specialty  products ($3.7  million).  Selling prices for
    the utility wear and  sportswear  product lines rose  reflecting the partial
    pass-through of higher cotton and polyester costs and indigo-dyed sportswear
    was positively  impacted by higher volume  amounting to $21.1 million due to
    improved market conditions  reflecting the continued  turnaround (since late
    1994) in the denim market. The decrease in piece-dyed sportswear revenue was
    attributable to a poor retail market.

    Propane - Revenues decreased $2.7 million principally due to reduced propane
    sales volume reflecting the exceptionally  warm weather in the first quarter
    of 1995 partially offset by the impact of acquisitions.

    Gross profit  increased  $11.7 million to $324.3  million in 1995 due to the
operating results of the 1995 acquisition of (i) Mistic ($16.5 million) and (ii)
TriBev ($2.4 million), offset by lower margins in the existing businesses.

    Restaurants  - Margins  decreased  to 33.0% from 37.3% due  primarily to (i)
    $3.0 million of costs associated with replacing the  point-of-sale  register
    system in all domestic  company-owned  restaurants  and (ii) start-up  costs
    associated with the significantly  higher number of new restaurant  openings
    (49 in 1995  versus  9 in  1994).  Also  affecting  margins  was  the  lower
    percentage of royalties and franchise fees to total revenues.

    Beverages - Margins  decreased  to 61.5% from 76.5%  principally  due to the
    inclusion in 1995 of the lower-margin finished product sales associated with
    Mistic  (39.3%) and TriBev  (11.4%) and lower  margins  associated  with the
    finished product sales of Draft Cola noted above.

    Textiles - Margins  decreased  to 11.4% from  13.4%  principally  due to the
    higher raw material  cost of cotton (which  reached its highest  levels this
    century) and polyester and other  manufacturing cost increases in 1995 which
    could not be fully  passed  on to  customers  in the form of higher  selling
    prices.

    Propane - Margins  decreased to 26.8% from 27.7% due to higher propane costs
    which could only be  partially  passed on to customers in the form of higher
    selling  prices  because  of  increased  competition  as  a  result  of  the
    continuing effects of the substantially  warmer weather in the first quarter
    of 1995.

    Advertising,  selling and distribution  expenses  increased $19.5 million to
$129.2  million in 1995,  of which $10.3  million  relates to the results of the
acquired beverage  operations.  The remaining  increase of $9.2 million reflects
(i) higher expenses in the beverage segment,  reflecting  increased  spending in
connection with the  introduction of Draft Cola, and (ii) higher expenses in the
restaurant   segment   primarily   attributable  to  the  increased   number  of
company-owned  restaurants  and  increased  promotional  food costs  relating to
competitive discounting.

    General  and  administrative  expenses  increased  $21.7  million  to $146.8
million  in 1995 of which  $7.5  million  relates  to the  results of the Mistic
acquisition.  Among the factors causing the remaining  increase of $14.2 million
are (i) $7.0  million of increases in the  restaurant  and beverage  segments in
employee  compensation,  relocation and severance costs  principally  associated
with building an infrastructure to facilitate the then growth plans primarily in
the restaurant segment, (ii) a $2.7 million charge relating to the settlement of
a patent infringement lawsuit,  (iii) a $2.2 million increase in amortization of
restricted stock  reflecting $3.3 million of accelerated  vesting in 1995 of all
grants of such stock,  (iv) a $2.1 million  provision for the closing of certain
unprofitable restaurants and (v) other general inflationary increases.

    The 1995 $14.6  million  reduction in carrying  value of  long-lived  assets
impaired  or to be  disposed  of, the $2.7  million  facilities  relocation  and
corporate  restructuring  charge  and the  $3.0  million  recovery  of  doubtful
accounts of  affiliates  and former  affiliates  are discussed  above.  The 1994
facilities  relocation  and  corporate  restructuring  charges  of $8.8  million
consisted of (i) costs  associated  with the  relocation  of Triarc's  corporate
office from West Palm Beach,  Florida to New York City and (ii) severance  costs
related to terminated corporate employees.

    Interest  expense  increased  $11.2  million to $84.2 million in 1995 due to
higher average levels of debt  reflecting the Mistic  acquisition  and financing
for higher capital  spending at the restaurant  segment and, to a lesser extent,
higher interest rates on certain of the Company's floating rate debt.

    Loss on sale of businesses,  net in 1995 of $0.1 million is discussed above.
Gain on sale of businesses in 1994 of $6.0 million resulted from the sale of the
Company's natural gas and oil business.

    Other  income,  net  increased  $13.5  million  to  $12.3  million  in  1995
principally due to the $11.9 million gain on sale of excess timberland.

    The Company's  benefit from income taxes for 1995  represented  an effective
rate of 3% which differed from the statutory rate due to the reasons  previously
discussed.  The  1994  rate of 199%  differed  due to (i)  the  amortization  of
Goodwill  and (ii) state  income  taxes which  exceed  pretax  losses due to the
effect of losses in certain states for which no benefit is available,  partially
offset by the release of valuation allowances in connection with the utilization
of operating loss, depletion and tax credit carryforwards from prior periods.

    The minority interest in income of consolidated subsidiaries of $1.3 million
in 1994 represents the minority  interest in the income of  Southeastern  Public
Service Company  ("SEPSCO"),  a 71.1% owned subsidiary of Triarc until the 28.9%
minority  ownership  was  acquired  on  April  14,  1994  (see  Note  26 to  the
consolidated financial statements).

    The loss from  discontinued  operations of $3.9 million in 1994 reflects the
revised estimate of the loss on disposal of the Company's  utility and municipal
services and refrigeration businesses. Such loss reflects increased estimates of
$6.4 million from the  nonrecognition  of notes received as partial  proceeds on
the sale of certain  businesses  and  operating  losses of $2.0 million  through
their  respective  dates of disposal,  less  minority  interests  and income tax
benefit aggregating $4.5 million.  The additional operating loss reflects delays
in disposing of the businesses from the estimated  disposal dates as of December
31, 1993.

     The extraordinary  charge in 1994 of $2.1 million represents a loss, net of
tax benefit, resulting from the early extinguishment in October 1994 of National
Propane's 13 1/8% senior  subordinated  debentures  due March 1, 1999 which were
refinanced  with a  revolving  credit and term loan  facility.  Such  charge was
comprised of the  write-offs of  unamortized  deferred  financing  costs of $0.9
million and of  unamortized  original  issue  discount of $2.6 million offset by
$1.4 million of income tax benefit.

LIQUIDITY AND CAPITAL RESOURCES

     Consolidated cash and cash equivalents (collectively "cash") and short-term
investments increased $134.5 million during 1996 to $206.1 million of which cash
increased  $90.2  million to $154.4  million.  Such  increase in cash  primarily
reflects  cash  provided by (i)  operating  activities of $34.8 million and (ii)
investing  activities  of  $161.0  million  partially  offset  by  cash  used in
financing  activities  of $107.3  million.  The net cash  provided by  operating
activities  principally  reflects (a) non-cash  charges for (i) the reduction in
carrying value of long-lived  assets of $64.3  million,  (ii)  depreciation  and
amortization  of $52.7  million and (b) $12.7  million of other  adjustments  to
reconcile  net loss to net cash  provided  by  operating  activities,  partially
offset by net loss of $13.9 million and an aggregate  $77.0 million  pretax gain
on sale of businesses,  net (the proceeds of which are reported as financing and
investing activities, respectively,- see further discussion below) and cash used
in changes in operating assets and liabilities of $4.0 million. The cash used in
changes in operating assets and liabilities of $4.0 million  reflects  increases
in inventories of $15.8 million and  receivables of $12.2 million  substantially
offset by $23.2 million increase in accounts payable and accrued  expenses.  The
increase in receivables reflected increased consolidated revenues,  exclusive of
those  attributable  to the  Textile  Business,  in the  fourth  quarter of 1996
compared  with  the  fourth   quarter  of  1995.  The  increase  in  inventories
principally reflected higher inventories (i) of the textile segment prior to the
April 29, 1996 sale of the Textile  Business  resulting  from lower sales of the
Textile  Business in the first quarter of 1996 compared with the last quarter of
1995,  (ii) of Mistic due to lower than expected  sales  reflecting a relatively
cool and rainy peak spring and summer  selling  season (April to September)  and
(iii) of the propane segment  reflecting  higher product costs.  The increase in
accounts  payable and accrued  expenses was  principally  due to a $21.9 million
increase in accounts  payable  reflecting  higher  product  costs in the propane
segment  during the fourth quarter of 1996 versus the fourth quarter of 1995 and
higher consolidated  inventories,  other than the Textile Business,  at December
31, 1996 compared with December 31, 1995. The Company expects continued positive
cash flows from  operations  during  1997.  The net cash  provided by  investing
activities  principally  reflected  net  proceeds  from the sale of the  Textile
Business discussed below of $236.8 million partially offset by (i) net purchases
of short-term  investments of $42.8 million,  (ii) capital expenditures of $30.1
million and (iii) business  acquisitions  of $4.0 million.  The net cash used in
financing  activities  reflects  long-term  debt  repayments of $413.2  million,
including  $191.4  million  repaid in  connection  with the sale of the  Textile
Business (see below),  and $128.5 million repaid in connection  with the sale of
partnership  units  in  the  Partnership  in  July  1996  (see  below)  and  the
refinancing of the propane business,  partially offset by (i) the $124.7 million
net  proceeds  from the sale of units in the  Partnership,  (ii)  proceeds  from
long-term debt borrowings of $164.0 million including $125.0 million  associated
with the  refinancing  of the  propane  business  and  (iii)  $30.0  million  of
restricted cash used to pay long-term debt.

     Working  capital  (current  assets  less  current  liabilities)  was $195.2
million at December 31, 1996, reflecting a current ratio (current assets divided
by current  liabilities) of 1.8:1. Such amount represents an increase in working
capital of $36.9 million over the working capital at December 31, 1995 of $158.3
million,  which  represented a current  ratio of 1.6:1.  The increase in working
capital principally reflects an aggregate net increase in cash, cash equivalents
and short-term investments reflecting net proceeds from sales of businesses (see
further discussion below)  substantially offset by (i) the working capital as of
December 31, 1995 of the Textile Business sold in April 1996 and (ii) the effect
of the proposed sale of restaurants to RTM (see below)  consisting of the excess
of (a) long-term  debt to be assumed by the purchaser  reclassified  to current,
(b) the accrual of the current  portion of  operating  lease  payments not being
assumed by the purchaser and (c) the accrual of other costs related to the sale,
over the reclassification to current assets of assets held for sale.

    The $275.0 million aggregate principal amount of 9 3/4% senior secured notes
due 2000 (the "9 3/4%  Senior  Notes")  of  RC/Arby's  Corporation  ("RCAC"),  a
wholly-owned  subsidiary of Triarc,  mature on August 1, 2000 and do not require
any amoritzation of the principal amount thereof prior to such date.

    Mistic  maintains an $80.0 million credit agreement (as amended December 30,
1996,  the  "Mistic  Bank  Facility")  with a group of banks.  The  Mistic  Bank
Facility  consists of a $20.0  million  revolving  credit  facility  and a $60.0
million term facility. Borrowings under the revolving credit facility are due in
their entirety in August 1999. However,  Mistic must reduce the borrowings under
the revolving  credit facility for a period of thirty  consecutive  days between
October 1 and  March 31 of each year to less than or equal to (a) $12.5  million
between  October 1, 1996 and March 31,  1997 (such  requirement  has been met in
February/March  1997) and (b) zero between  October 1 and the following March 31
for each of the two years  thereafter.  There were $15.0 million of  outstanding
borrowings  under the revolving credit facility and $53.8 million under the term
facility as of December 31, 1996.  The $53.8 million  outstanding  amount of the
term  facility  amortizes  $6.2 million in 1997,  $10.0  million in 1998,  $11.3
million in 1999, $15.0 million in 2000 and $11.3 million in 2001. As of December
31, 1996 Mistic  effectively had no availability  under the Mistic Bank Facility
due to the fact that it was required to pay down its revolving credit borrowings
to $12.5 million for thirty  consecutive  days prior to March 31.  Following the
paydown,  Mistic had availability of approximately  $2.0 million as of March 31,
1997.

    Two  subsidiaries  of RCAC maintain loan and financing  agreements with FFCA
Mortgage Corporation  ("FFCA") which, as amended,  permit borrowings in the form
of mortgage notes (the  "Mortgage  Notes") and equipment  notes (the  "Equipment
Notes")  aggregating  $87.3 million (the "FFCA Loan  Agreements").  The Mortgage
Notes and Equipment Notes are repayable in equal monthly installments, including
interest,  over twenty years and seven years,  respectively.  As of December 31,
1996,  borrowings  under  the FFCA  Loan  Agreements  aggregated  $62.7  million
(including  cumulative  repayments  of $4.3 million  through  December 31, 1996)
resulting in remaining  availability of $24.6 million through  December 31, 1997
to finance  new  company-owned  restaurants  whose sites are  identified  to the
lender  by  September  30,  1997  on  terms  similar  to  those  of  outstanding
borrowings.  The assets of one of the borrowers,  Arby's Restaurant  Development
Corporation,  will not be available to pay  creditors of Triarc,  RCAC or RCAC's
subsidiary  Arby's,  Inc.  ("Arby's")  until  all  loans  under  the  FFCA  Loan
Agreements  have been repaid in full. As discussed  below,  in February 1997 the
Company  entered into an agreement to sell all of its  restaurants  and, if such
sale is  consummated on terms as they  currently  exist,  the buyer would assume
$54.7  million of  borrowings  under the FFCA Loan  Agreements,  and the Company
would have no further availability under these financing agreements.

    On May 16, 1996 C.H.  Patrick & Co., Inc. ("C.H.  Patrick"),  a wholly-owned
subsidiary of TXL,  entered into a $50.0 million credit  agreement (the "Patrick
Facility")  consisting  of a $15.0  million  revolving  credit  facility with no
outstanding  borrowings  as of  December  31,  1996  and a  term  loan  facility
consisting  of two term loans  (the "Term  Loans")  with  aggregate  outstanding
balances  of $33.9  million as of  December  31,  1996.  C.H.  Patrick had $15.0
million of availability  under the Patrick Facility as of December 31, 1996. The
remaining  balance of Term Loans amortizes $3.2 million in 1997, $2.9 million in
1998, $3.8 million in 1999,  $4.4 million in 2000,  $6.1 million in 2001,  $10.4
million in 2002 and $3.1 million in 2003.

     On July 2, 1996,  National (see below) issued $125.0 million of 8.54% first
mortgage notes due June 30, 2010 (the "First Mortgage  Notes") and repaid $128.5
million of National's  long-term debt  (including  $123.2 million of outstanding
borrowings  under  National's  then existing bank facility (the "Former  Propane
Facility").  The First Mortgage Notes amortize in equal annual  installments  of
$15.625  million  commencing  June 2003  through  June  2010.  On July 2,  1996,
National  entered into a $55.0  million bank credit  facility (the "Propane Bank
Credit  Facility")  with a group of banks.  The  Propane  Bank  Credit  Facility
includes  a  $15.0  million  working  capital  facility  (the  "Working  Capital
Facility")  and  a  $40.0  million   acquisition   facility  (the   "Acquisition
Facility"),  the use of which is restricted to business acquisitions and capital
expenditures for growth. There were $6.0 million of outstanding borrowings under
the Working Capital Facility and $1.9 million under the Acquisition  Facility as
of December 31, 1996 leaving  remaining  availability  of $9.0 million and $38.1
million,  respectively,  as of December 31, 1996.  Borrowings  under the Working
Capital Facility mature in their entirety in July 1999. However, the Partnership
must  reduce the  borrowings  under the Working  Capital  Facility to zero for a
period of at least 30  consecutive  days in each year between March 1 and August
31. The Acquisition  Facility converts to a term loan in July 1998 and amortizes
thereafter in twelve equal quarterly installments through July 2001.

    Under the Company's  various debt agreements,  substantially all of Triarc's
and its  subsidiaries'  assets other than cash and  short-term  investments  are
pledged as security. In addition,  (i) obligations under the 9 3/4% Senior Notes
have  been  guaranteed  by RCAC's  wholly-owned  subsidiaries,  Royal  Crown and
Arby's,  (ii)  obligations  under the First  Mortgage Notes and the Propane Bank
Credit Facility have been guaranteed by National  Propane and (iii)  obligations
under the Mistic Bank  Facility,  the  Patrick  Facility,  and $24.7  million of
borrowings  under  the FFCA Loan  Agreements  have been  guaranteed  by  Triarc.
Assuming  consummation  of  the  RTM  sale  (see  below),  Triarc  would  remain
contingently liable under the guarantee upon the failure, if any, of RTM and its
acquisition   entity  to  satisfy  such  obligation.   As  collateral  for  such
guarantees,  all of the stock of Royal Crown, Arby's, Mistic and C.H. Patrick is
pledged  as well  as  approximately  2% of the  Unsubordinated  General  Partner
Interest (see below).  Although the stock of National  Propane is not pledged in
connection  with any guaranty of debt  obligations,  it is pledged in connection
with the Partnership Loan (see below).

    The Company's debt instruments require aggregate principal payments of $24.5
million  during  1997.  Such  repayments  consist of (i) $6.3  million  and $2.5
million of term loan  repayments  under the Mistic Bank Facility and the Patrick
Facility,  respectively,  (ii) $6.0 million and $2.5 million,  respectively,  of
required  paydowns,  as discussed  above, on the  Partnership's  Working Capital
Facility and Mistic's  revolving credit facility,  respectively,  and (iii) $7.2
million of other debt repayments.

     In July 1996 the  Partnership  consummated an initial public  offering (the
"Offering")  of an  aggregate of  approximately  6.3 million of its common units
representing  limited partner  interests (the "Common  Units"),  representing an
approximate  55.8% interest in the Partnership,  for an offering price of $21.00
per Common Unit aggregating  $117.4 million net of $15.0 million of underwriting
discounts and commissions and other estimated  expenses related to the Offering.
In November 1996 the  Partnership  sold an additional 400 thousand  Common Units
through a private  placement  (the  "Equity  Private  Placement")  at a price of
$21.00 per Common Unit  aggregating  $8.4  million  before  related fees of $1.0
million  resulting  in net  proceeds to the  Partnership  of $7.4  million.  The
combined  sales of the Common Units  resulted in a pretax gain to the Company in
1996 of $85.2  million  before a provision  for income  taxes of $33.2  million.
Concurrently  with the  Offering,  the  Partnership  issued to National  Propane
approximately  4.5  million  subordinated  units  (the  "Subordinated   Units"),
representing an approximate 38.7%  subordinated  general partner interest in the
Partnership  after giving effect to the Equity Private  Placement.  In addition,
National Propane and a subsidiary hold a combined aggregate 4.0%  unsubordinated
general partner interest (the "Unsubordinated  General Partner Interest") in the
Partnership  and  a  subpartnership,  National  Propane,  L.P.  (the  "Operating
Partnership").   In   connection   therewith,   National   Propane   transferred
substantially all of its propane-related assets and liabilities (principally all
assets and liabilities other than a receivable from Triarc,  deferred  financing
costs and net income tax  liabilities of $81.4  million,  $4.1 million and $21.6
million,  respectively),  aggregating net  liabilities of $88.2 million,  to the
Operating  Partnership.  The entity representative of both the operations of (i)
National  Propane prior to such transfer of assets and  liabilities and (ii) the
Partnership subsequent thereto, is referred to herein as "National".

    On April 29, 1996, the Company completed the sale (the "Graniteville  Sale")
of the Textile Business to Avondale Mills, Inc.  ("Avondale") for $236.8 million
in  cash,  net of  expenses  of  $8.4  million  and  net  of  $12.3  million  of
post-closing  adjustments.  Avondale  assumed  all  liabilities  relating to the
Textile Business other than income taxes, long-term debt of $191.4 million which
was repaid at the closing and certain other specified liabilities.

     In  February  1997 the  principal  subsidiaries  comprising  the  Company's
restaurant  segment  entered into an agreement (the "RTM  Agreement")  with RTM,
Inc.  ("RTM"),  the  largest  franchisee  in the  Arby's  system,  to sell to an
affiliate of RTM all of the 355 company-owned  Arby's restaurants.  The purchase
price consists of cash and a promissory  note  aggregating  $2.0 million and the
assumption of  approximately  $69.7 million in mortgage and equipment  notes and
substantially all capitalized lease obligations. The consummation of the sale is
subject to customary closing conditions, including receipt of necessary consents
and regulatory approvals,  and is expected to occur during the second quarter of
1997.  After the  consummation of the sale, RTM's affiliate will operate the 355
restaurants  as a franchisee  and will pay royalties to the Company at a rate of
4% of those  restaurants' net sales. As part of the transaction,  RTM has agreed
to build an additional 190 Arby's restaurants over the next 14 years pursuant to
a  development  agreement.  This is in  addition  to a previous  commitment  RTM
entered into last year to build an additional 210 Arby's restaurants.

    Consolidated capital expenditures, including $0.2 million of capital leases,
amounted to $30.3 million in 1996. The Company expects that capital expenditures
during 1997,  exclusive of those of the propane  segment,  will approximate $9.5
million. These anticipated expenditures include expenditures of (i) $4.0 million
in the restaurant  segment which is significantly  less than 1996 as a result of
the cessation of restaurant-related  spending as a result of the planned sale to
RTM, (ii) $3.0 million for the specialty dyes and chemical business,  (iii) $2.0
million  in the  beverage  segment  and  (iv)  $0.5  million  at  the  corporate
headquarters. In addition, 1997 capital expenditures for the propane segment for
growth capital and maintenance  capital  expenditures are anticipated to be $6.0
million.  As of  December  31,  1996 there were  approximately  $2.8  million of
outstanding  commitments for such capital expenditures.  The Company anticipates
that it will meet its capital  expenditure  requirements  through existing cash,
cash flows from operations and leasing arrangements.

    In  furtherance  of the Company's  growth  strategy,  the Company  considers
selective acquisitions,  as appropriate, to grow strategically and explore other
alternatives to the extent it has available  resources to do so. During 1996 the
Company  consummated  several  business  acquisitions,   principally  restaurant
operations  and propane  businesses for $4.0 million of cash and the issuance of
$1.8 million of debt.  More  significantly,  on March 27, 1997 Triarc  announced
that it has entered into a  definitive  agreement  to acquire  Snapple  Beverage
Corp.  ("Snapple")  from The Quaker  Oats  Company for $300  million  subject to
certain post-closing adjustments.  The acquisition is expected to be consummated
during the second  quarter of 1997,  subject to  customary  closing  conditions,
including  antitrust  clearance.  Triarc will seek third party  financing  for a
portion of the  purchase  price.  Snapple  is a  producer  and seller of premium
beverages  and had sales for the year ended  December 31, 1996 of  approximately
$550 million.

     The Federal  income tax returns of the  Company  have been  examined by the
Internal Revenue Service (the "IRS") for the tax years 1989 through 1992 and has
issued   notices  of  proposed   adjustments   increasing   taxable   income  by
approximately $145 million, the tax effect of which has not yet been determined.
The  Company  is  contesting  the  majority  of the  proposed  adjustments  and,
accordingly,  the amount of any  payments  required as a result  thereof  cannot
presently  be  determined.  However,  management  of the  Company  expects to be
required to make  payments in the latter part of 1997 relating to the portion of
the adjustments that are agreed to.

    Under a program  announced in July 1996,  management of the Company has been
authorized  to  repurchase  until July 1997,  up to $20.0 million of its Class A
Common  Stock.  During 1996,  the Company  repurchased  44,300 shares of Class A
Common Stock for an aggregate cost of $0.5 million.  Additional purchases may be
made until June 1997 when and if market conditions warrant.

    The Company maintains two defined benefit pension plans under which benefits
are  frozen.  While the  Company has no current  plans to  terminate  the plans,
should  interest  rates  increase  to  a  level  at  which  there  would  be  an
insignificant  cash cost to the Company to terminate the plans,  the Company may
decide to do so. As of December 31, 1996,  based on the 4.75%  interest  rate as
currently  recommended by the Pension Benefit Guaranty  Corporation (the "PBGC")
for purposes of such calculation,  the Company would have incurred a cash outlay
of $2.8 million. Such liability upon plan termination is significantly dependent
upon the  interest  rate assumed for such  calculation  purposes  and,  within a
reasonable   range,   such  contingent   liability   increases   (decreases)  by
approximately  $0.5  million for each 1/2%  decrease  (increase)  in the assumed
interest rate.  Based upon current interest rates, the Company believes it would
be able to  liquidate  the pension  obligations  for less than the $2.8  million
determined using the PBGC rate should it choose to terminate the plans.

    As of December 31, 1996 the Company's most  significant cash requirement for
1997 is funding for the proposed  Snapple  acquisition  which it expects to meet
through a combination of (i) existing cash and cash  equivalents  and short-term
investments  ($206.1  million  at  December  31,  1996)  and  (ii)  third  party
financing.  The Company's  remaining  principal cash requirements,  exclusive of
operations,  for 1997 consist  principally  of capital  expenditures,  excluding
those  for  the  propane  segment,   of  approximately  $9.5  million,   capital
expenditures  for the propane segment of $6.0 million,  debt principal  payments
currently aggregating $24.5 million,  quarterly distributions by the Partnership
to  holders of the Common  Units  estimated  to be $24.6  million  (see  below),
acquisitions  other than  Snapple,  payments  related to the portion of proposed
adjustments agreed to from income tax examinations and treasury stock purchases,
if any. The Company anticipates meeting such requirements  through existing cash
and cash  equivalents and short-term  investments,  cash flows from  operations,
availability under the Propane Bank Credit Facility and the Patrick Facility and
financing  a  portion  of  its  capital   expenditures   through  capital  lease
arrangements.

    On October 29, 1996, Triarc announced that its Board of Directors approved a
plan  to  offer  up to  approximately  20% of the  shares  of its  beverage  and
restaurant  businesses  (operated through Mistic and RCAC) to the public through
an initial  public  offering and to spin off the remainder of the shares of such
businesses to Triarc stockholders  (collectively,  the "Spinoff  Transactions").
Consummation of the Spinoff Transactions will be subject to, among other things,
receipt of a favorable ruling from the IRS that the Spinoff Transactions will be
tax-free to the Company  and its  stockholders.  The request for the ruling from
the IRS  contains  several  complex  issues and there can be no  assurance  that
Triarc  will  receive  the ruling or that  Triarc  will  consummate  the Spinoff
Transactions.  The Spinoff  Transactions  are not expected to occur prior to the
end of the second quarter of 1997. Triarc is currently evaluating the impact, if
any, of the proposed acquisition of Snapple on the anticipated  structure of the
Spinoff Transactions.

TRIARC

    Triarc is a holding  company whose ability to meet its cash  requirements is
primarily  dependent  upon its cash on hand and short-term  investments  ($175.2
million as of December 31, 1996) and cash flows from its subsidiaries  including
loans  and  cash  dividends  (see  limitations   below)  and   reimbursement  by
subsidiaries  to Triarc in connection  with the providing of certain  management
services  and  payments  under  certain  tax  sharing  agreements  with  certain
subsidiaries.

    In  connection  with  the  issuance  of the  First  Mortgage  Notes  and the
Partnership's  Offering  discussed  above,  on July 2, 1996  Triarc  received an
aggregate of $112.2 million from National.  Such amount  consisted of a dividend
of $59.3 million (from the proceeds of the First  Mortgage  Notes),  a loan from
the  Partnership  of $40.7  million  (the  "Partnership  Loan")  and  payment of
previously  unpaid  management  fees,  tax sharing  payments  and certain  other
intercompany  indebtedness aggregating $12.2 million. The Partnership Loan bears
interest  at 13 1/2%  payable  in cash and is due in  equal  annual  amounts  of
approximately  $5.1 million  commencing  2003 through 2010.  Concurrent with the
above  transactions,  an $81.4 million  non-interest  bearing advance payable to
National  Propane was reduced to $30.0  million and  converted  to a demand note
payable  bearing  interest at 13 1/2% payable in cash (the "$30 Million  Note").
Triarc does not anticipate it will be required to make any principal payments on
the $30 Million  Note during 1997;  however,  if it should be required to do so,
Triarc believes it has adequate cash on hand to make such payments.

    Triarc's  principal  subsidiaries,  other  than CFC  Holdings  Corp.  ("CFC"
Holdings"),  the parent of RCAC,  and  National  Propane,  are unable to pay any
dividends or make any loans or advances to Triarc during 1997 under the terms of
the various indentures and credit arrangements.  While there are no restrictions
applicable to National  Propane,  National  Propane is dependent upon cash flows
from the Partnership to pay dividends. Such cash flows are principally quarterly
distributions   from  the  Partnership  on  the   Subordinated   Units  and  the
Unsubordinated  General  Partner  Interest  (see  below).  While  there  are  no
restrictions  applicable to CFC Holdings,  CFC Holdings  would be dependent upon
cash flows from RCAC to pay  dividends  and, as of December 31,  1996,  RCAC was
unable to make any loans or advances to CFC Holdings.

    Triarc's  indebtedness to  subsidiaries  has been  significantly  reduced to
$72.4  million as of  December  31,  1996  compared  with  $229.3  million as of
December 31, 1995  principally as a result of dividends or cancellations of such
indebtedness  in connection  with the  Graniteville  Sale and the  Partnership's
issuance of the Common Units. Such $72.4 million of indebtedness consists of the
$40.7 million  Partnership  Loan, the $30 Million Note and a $1.7 million demand
note to a  subsidiary  of RCAC  and  requires  no  principal  payments  in 1997,
assuming no demand is made under the $30 Million  Note or the $1.7  million note
payable to a subsidiary of RCAC.

     Triarc's  sources of cash consist  principally of cash and cash equivalents
on hand and  short-term  investments  ($175.2  million as of December 31, 1996),
reimbursement of general corporate expenses from subsidiaries in connection with
management services agreements, distributions from the Partnership, net payments
received under tax-sharing  agreements with certain  subsidiaries and investment
income on its cash  equivalents and short-term  investments.  As a result of the
Graniteville Sale and the  Partnership's  issuance of the Common Units discussed
above,  payments received under tax sharing  agreements and the reimbursement of
general  corporate  expenses by the Textile  Business have been  eliminated  and
payments from National Propane and the Partnership are limited.  Management fees
and tax-sharing payments from C.H. Patrick (which prior to April 29, 1996 were a
component of the payments from the Textile Business) and distributions,  if any,
from the Partnership  and full year earnings on the additional cash  equivalents
and short-term  investments  resulting from cash flows to Triarc  resulting from
the Graniteville Sale and the Partnership's  Offering will partially offset such
decreases.  As a result,  Triarc is expected to  experience  negative cash flows
from operations for its general corporate expenses for 1997.  Triarc's principal
cash  requirements are a portion of the funding for the proposed  acquisition of
Snapple,  general corporate  expenses,  any required advances to RCAC and Mistic
(see below),  capital  expenditures  estimated to be approximately $0.5 million,
payments  related to the portion of proposed  adjustments  agreed to from income
tax  examinations  and interest due on the $30 Million Note and the  Partnership
Loan.  Such  interest  will be higher in 1996 compared with 1995 due to the full
year effect of (i)  changing  the terms on the $30 Million  Note to require cash
interest  and (ii) the  issuance  of the  Partnership  Loan,  both in July 1996.
Although Triarc probably will  experience  negative cash flows from  operations,
considering  its cash and cash  equivalents and short-term  investments,  Triarc
should be able to meet all of its 1997 cash requirements discussed above.

RCAC

    As  of  December  31,  1996,  RCAC's  cash  requirements  for  1997  consist
principally of capital  expenditures of approximately $6.0 million,  funding for
acquisitions,  if any, and debt (including  capitalized leases and an affiliated
note) principal repayments of $19.1 million, subject to Triarc's requirement for
RCAC to repay any or all of the outstanding balance under a $12.0 million demand
promissory  note (the  "Demand  Note")  included  in the $19.1  million  and the
assumption of debt  obligations by RTM with respect to the RTM  Agreement.  RCAC
anticipates  meeting such  requirements  through existing cash and/or cash flows
from  operations,  and, to the extent cash is required other than for repayments
to Triarc under the Demand Note, borrowings from Triarc to the extent available.
RCAC may be required to make  repayments  under the Demand Note to the extent of
its remaining  cash balances in excess of its ongoing  requirements  for working
capital.

MISTIC

    As of December 31,  1996,  Mistic's  principal  cash  requirements  for 1997
consist  principally  of $6.3  million of term loan  payments  and the  required
reduction  of its  revolving  credit  loans  under  its  bank  facility.  Mistic
anticipates  meeting such  requirements  through cash flows from  operations and
borrowings  from Triarc to the extent  available ($3.5 million was borrowed from
Triarc in February 1997).

THE PARTNERSHIP

    As of December 31, 1996, the  Partnership's  principal cash requirements for
1997  consist of  quarterly  distributions  estimated  to be $24.6  million (see
below),  capital  expenditures of  approximately  $6.0 million,  (including $3.5
million for maintenance and $2.5 million for growth),  funding for  acquisitions
(including  $1.0 million paid in January  1997),  and the $6.0 million  required
reduction of its Working Capital Facility.  The Partnership expects to meet such
requirements  through a combination of cash flows from operations,  availability
under the Propane Bank Credit  Facility and interest  income on the  Partnership
Loan. The Partnership must make quarterly  distributions of its cash balances in
excess of reserve requirements,  as defined, to holders of the Common Units, the
Subordinated  Units and the  Unsubordinated  General Partner  Interest within 45
days after the end of each fiscal quarter. Accordingly, positive cash flows will
generally  be used  to  make  such  distributions.  On  February  14,  1997  the
Partnership  paid a quarterly  distribution  for the quarter ended  December 31,
1996 of $.525 per Common and Subordinated  Unit with a proportionate  amount for
the  Unsubordinated  General Partner Interest,  or an aggregate of $6.1 million,
including  $2.6 million  paid to National  Propane  related to the  Subordinated
Units and the Unsubordinated General Partner Interest.

C.H. PATRICK

    As of December 31, 1996, C.H. Patrick's principal cash requirements for 1997
consist  principally of principal  payments under its Term Loans of $2.5 million
and capital expenditures of $3.0 million.  C.H. Patrick anticipates meeting such
requirements  through cash flows from  operations.  Should C.H.  Patrick need to
supplement  its cash  flows,  it has $15.0  million  of  availability  under the
revolving credit portion of the Patrick Facility.

DISCONTINUED OPERATIONS

    As of December 31, 1996, the Company has completed the sale of substantially
all of its  discontinued  operations but there remain certain  liabilities to be
liquidated  (the  estimates  of which  have  been  accrued)  as well as  certain
contingent  assets  (principally  a note  from  the  sale  of the  cold  storage
business) which may be collected,  the benefits of which, however, have not been
recorded.

CONTINGENCIES

      In July  1993 APL  Corporation  ("APL"),  which  was  affiliated  with the
Company  until an April 1993 change in control,  became a debtor in a proceeding
under  Chapter 11 of the  Federal  Bankruptcy  Code (the "APL  Proceeding").  In
February  1994 the  official  committee  of  unsecured  creditors of APL filed a
complaint  (the "APL  Litigation")  against the  Company  and certain  companies
formerly or presently  affiliated with Victor Posner, the former Chief Executive
Officer of the  Company  ("Posner"),  or with the  Company,  alleging  causes of
action arising from various  transactions  allegedly  caused by the named former
affiliates. The Chapter 11 trustee of APL was subsequently added as a plaintiff.
The complaint asserts various claims and seeks an undetermined amount of damages
from the Company,  as well as certain  other  relief.  In April 1994 the Company
responded to the  complaint by filing an answer and proposed  counterclaims  and
set-offs  denying  the  material  allegations  in the  complaint  and  asserting
counterclaims  and  set-offs  against  APL.  In June 1995 the  bankruptcy  court
confirmed the  plaintiffs'  plan of  reorganization  (the "APL Plan") in the APL
Proceeding. The APL Plan provides, among other things, that affiliates of Posner
(the  "Posner  Entities")  will  own  all of the  common  stock  of APL  and are
authorized  to object to claims  made in the APL  Proceeding.  The APL Plan also
provides for the dismissal of the APL  Litigation.  Previously,  in January 1995
Triarc received an  indemnification  pursuant to a settlement  agreement entered
into by the  Company  and the Posner  Entities  on January 9, 1995 (the  "Posner
Settlement")  relating to, among other things,  the APL  Litigation.  The Posner
Entities  have filed  motions  asserting  that the APL Plan does not require the
dismissal of the APL  Litigation.  In November 1995 the bankruptcy  court denied
the motions and in March 1996 the court denied the Posner  Entities'  motion for
reconsideration. Posner and APL have appealed and their appeal is pending.

      On December 6, 1995 the three former court-appointed  members of a special
committee  of  Triarc's  Board of  Directors  commenced  an action in the United
States  District  Court for the Northern  District of Ohio seeking,  among other
things, additional fees of $3.0 million. On February 6, 1996 the court dismissed
the action  without  prejudice.  The  plaintiffs  filed a notice of appeal,  but
subsequently dismissed the appeal voluntarily.

     In 1987 TXL was  notified by the South  Carolina  Department  of Health and
Environmental  Control  ("DHEC") that DHEC discovered  certain  contamination of
Langley  Pond  ("Langley  Pond")  near  Graniteville,  South  Carolina  and DHEC
asserted that TXL may be one of the parties  responsible for such contamination.
In 1990 and 1991 TXL provided reports to DHEC summarizing its required study and
investigation of the alleged pollution and its sources which concluded that pond
sediments  should be left  undisturbed  and in place and that other less passive
remediation  alternatives either provided no significant  additional benefits or
themselves  involved  adverse  effects.  In March 1994 DHEC appeared to conclude
that while environmental  monitoring at Langley Pond should be continued,  based
on currently available information,  the most reasonable alternative is to leave
the pond sediments  undisturbed  and in place. In April 1995 TXL, at the request
of DHEC,  submitted  a  proposal  concerning  periodic  monitoring  of  sediment
dispositions  in the pond.  In February 1996 TXL responded to a DHEC request for
additional  information on such proposal.  TXL is unable to predict at this time
what further actions, if any, may be required in connection with Langley Pond or
what the cost  thereof may be. In  addition,  TXL owned a nine acre  property in
Aiken County,  South  Carolina (the  "Vaucluse  Landfill"),  which was used as a
landfill from  approximately  1950 to 1973.  The Vaucluse  Landfill was operated
jointly  by TXL and  Aiken  County  and may have  received  municipal  waste and
possibly industrial waste from TXL as well as sources other than TXL. The United
States Environmental  Protection Agency conducted an Expanded Site Inspection in
January  1994 and in  response  thereto  DHEC  indicated  its  desire to have an
investigation of the Vaucluse Landfill. In April 1995 TXL submitted a conceptual
investigation approach to DHEC. Subsequently, the Company responded to an August
1995  DHEC  request  that TXL enter  into a  consent  agreement  to  conduct  an
investigation  indicating that a consent agreement is inappropriate  considering
TXL's demonstrated willingness to cooperate with DHEC requests and asked DHEC to
approve  TXL's April 1995  conceptual  investigation  approach.  The cost of the
study  proposed by TXL is  estimated  to be between  $125.0  thousand and $150.0
thousand.  Since an investigation has not yet commenced, TXL is currently unable
to estimate the cost, if any, to remediate  the  landfill.  Such cost could vary
based on the actual parameters of the study. In connection with the Graniteville
Sale, the Company  agreed to indemnify the purchaser for certain costs,  if any,
incurred  in  connection  with  the  foregoing  matters  that are in  excess  of
specified reserves, subject to certain limitations.

      As a result of certain  environmental  audits in 1991, SEPSCO became aware
of  possible  contamination  by  hydrocarbons  and  metals at  certain  sites of
SEPSCO's ice and cold storage  operations of the refrigeration  business and has
filed appropriate notifications with state environmental authorities and in 1994
completed  a study of  remediation  at such sites.  SEPSCO has  removed  certain
underground  storage and other tanks at certain  facilities of its refrigeration
operations and has engaged in certain remediation in connection therewith.  Such
removal and environmental  remediation involved a variety of remediation actions
at  various  facilities  of SEPSCO  located in a number of  jurisdictions.  Such
remediation  varied  from  site to  site,  ranging  from  testing  of  soil  and
groundwater for  contamination,  development of remediation plans and removal in
some  instances  of certain  contaminated  soils.  Remediation  is  required  at
thirteen  sites  which  were  sold  to or  leased  by the  purchaser  of the ice
operations. Remediation has been completed on five of these sites and is ongoing
at  eight  others.  Such  remediation  is  being  made in  conjunction  with the
purchaser  who has  satisfied  its  obligation to pay up to $1.0 million of such
remediation  costs.  Remediation  is also  required at seven cold storage  sites
which were sold to the purchaser of the cold storage operations. Remediation has
been  completed at one site and is ongoing at three other sites.  Remediation is
expected  to  commence  on the  remaining  three  sites in 1997 and  1998.  Such
remediation is being made in  conjunction  with the purchaser who is responsible
for the first  $1.25  million of such  costs.  In  addition,  there are  fifteen
additional  inactive  properties  of the  former  refrigeration  business  where
remediation  has been completed or is ongoing and which have either been sold or
are  held  for  sale  separate  from  the  sales  of the  ice and  cold  storage
operations.  Of these, ten have been remediated  through December 31, 1996 at an
aggregate  cost  of  $1.0  million.   In  addition,   during  the  environmental
remediation  efforts on idle properties,  SEPSCO became aware that plants on two
of the fifteen sites may require demolition in the future.

     In May 1994  National  was  informed  of coal tar  contamination  which was
discovered  at  one of its  properties  in  Wisconsin.  National  purchased  the
property  from a company (the  "Successor")  which had purchased the assets of a
utility  which had  previously  owned the property.  National  believes that the
contamination  occurred  during the use of the  property as a coal  gasification
plant by such  utility.  In order to assess the extent of the problem,  National
engaged  environmental  consultants  in 1994.  As of March 1,  1997,  National's
environmental consultants have begun but not completed their testing. Based upon
the new information  compiled to date which is not yet complete,  it appears the
likely remedy will involve  treatment of groundwater  and treatment of the soil,
installation of a soil cap and, if necessary, excavation, treatment and disposal
of contaminated soil. As a result, the environmental  consultants' current range
of  estimated  costs for  remediation  is from  $0.8  million  to $1.6  million.
National  will have to agree  upon the final  plan with the state of  Wisconsin.
Since receiving notice of the contamination, National has engaged in discussions
of a general nature  concerning  remediation with the state of Wisconsin.  These
discussions  are ongoing and there is no indication as yet of the time frame for
a decision by the state of Wisconsin or the method of remediation.  Accordingly,
the precise  remediation method to be used is unknown.  Based on the preliminary
results of the ongoing investigation, there is a potential that the contaminants
may extend to locations downgradient from the original site. If it is ultimately
confirmed that the  contaminant  plume extends under such properties and if such
plume is  attributable to  contaminants  emanating from the Wisconsin  property,
there is the potential for future third-party  claims.  National is also engaged
in ongoing discussions of a general nature with the Successor. The Successor has
denied any liability for the costs of remediation  of the Wisconsin  property or
of satisfying any related claims. However,  National, if found liable for any of
such  costs,  would  still  attempt  to recover  such costs from the  Successor.
National has notified its insurance  carriers of the  contamination,  the likely
incurrence  of costs to undertake  remediation  and the  possibility  of related
claims.  Pursuant to a lease related to the Wisconsin facility, the ownership of
which  was not  transferred  to the  Operating  Partnership  at the  closing  of
Offering,  the  Partnership has agreed to be liable for any costs of remediation
in excess of amounts  recovered from the Successor or from insurance.  Since the
remediation  method to be used is  unknown,  no amount  within  the cost  ranges
provided  by the  environmental  consultants  can be  determined  to be a better
estimate.

      In  1993  Royal  Crown  became  aware  of  possible   contamination   from
hydrocarbons  in groundwater at two abandoned  bottling  facilities.  Tests have
confirmed  hydrocarbons  in the groundwater at both of the sites and remediation
has  commenced.  Remediation  costs  estimated  by Royal  Crown's  environmental
consultants  aggregate  $0.56 million to $0.64 million with  approximately  $125
thousand  to $145  thousand  expected  to be  reimbursed  by the  State of Texas
Petroleum Storage Tank Remediation Fund at one of the two sites.

      In 1994 Chesapeake Insurance Company Limited ("Chesapeake  Insurance"),  a
wholly-owned  subsidiary of the Company, and SEPSCO invested  approximately $5.1
million  in  a  joint   venture  with  Prime  Capital   Corporation   ("Prime").
Subsequently  in  1994,  SEPSCO  and  Chesapeake   Insurance   terminated  their
investments in such joint venture.  In March 1995 three creditors of Prime filed
an involuntary  bankruptcy  petition under the Federal  bankruptcy  code against
Prime. In November 1996 the bankruptcy trustee appointed in the Prime bankruptcy
case  made a demand  on  Chesapeake  Insurance  and  SEPSCO  for  return  of the
approximate  $5.3  million.  In January 1997 the  bankruptcy  trustee  commenced
avoidance actions against Chesapeake  Insurance and SEPSCO seeking the return of
the  approximate  $5.3 million  allegedly  received by Chesapeake  Insurance and
SEPSCO during 1994 and alleging such  payments from Prime were  preferential  or
constituted  fraudulent  transfers.  The  Company  believes,  based on advice of
counsel,  that it has  meritorious  defenses  to these  claims  and  intends  to
vigorously  contest  them.  However,  it is possible  that the  trustee  will be
successful  in  recovering  the  payments.  The maximum  amount of SEPSCO's  and
Chesapeake  Insurance's aggregate liability is the approximate $5.3 million plus
interest;  however, to the extent SEPSCO or Chesapeake Insurance return to Prime
any amount of the  challenged  payments,  they will be entitled to an  unsecured
claim for such amount.  The court has  scheduled a trial for the week of May 27,
1997.

     On February 19, 1996, Arby's  Restaurantes S.A. de C.V. ("AR"),  the master
franchisee of Arby's in Mexico, commenced an action in the civil court of Mexico
against Arby's for breach of contract.  AR alleged that a non-binding  letter of
intent  dated  November  9, 1994  between  AR and Arby's  constituted  a binding
contract  pursuant to which Arby's had obligated itself to repurchase the master
franchise  rights  from AR for $2.5  million.  AR also  alleged  that Arby's had
breached a master development  agreement between AR and Arby's.  Arby's promptly
commenced  an  arbitration   proceeding  since  the  franchise  and  development
agreements  each  provided  that  all  disputes  arising  thereunder  were to be
resolved by  arbitration.  Arby's is seeking a declaration in the arbitration to
the effect that the November 9, 1994 letter of intent was not a binding contract
and,  therefore,  AR has no  valid  breach  of  contract  claim,  as  well  as a
declaration  that  the  master  development  agreement  has  been  automatically
terminated  as  a  result  of  AR's   commencement  of  suspension  of  payments
proceedings  in February 1995. In the civil court  proceeding,  the court denied
Arby's  motion  to  suspend  such   proceedings   pending  the  results  of  the
arbitration,  and Arby's has appealed  that  ruling.  In the  arbitration,  some
evidence  has been  taken  but  proceedings  have  been  suspended  by the court
handling the suspension of payments proceedings. Arby's is vigorously contesting
AR's claims and believes it has meritorious defenses to such claims.

      The  Company  has  accruals  for  all of  the  above  matters  aggregating
approximately $4.3 million.  Based on currently available  information and given
(i) DHEC's apparent  conclusion in 1994 with respect to the Langley Pond matter,
(ii) the  indemnification  limitations  with  respect to the SEPSCO cold storage
operations,   Langley  Pond  and  the   Vaucluse   Landfill,   (iii)   potential
reimbursements  by other  parties  as  discussed  above  and (iv) the  Company's
aggregate  reserves for such legal and environmental  matters,  the Company does
not believe that the legal and environmental  matters referred to above, as well
as  ordinary  routine  litigation  incidental  to its  businesses,  will  have a
material adverse effect on its  consolidated  results of operations or financial
position.

INFLATION AND CHANGING PRICES

    Management  believes that  inflation  did not have a  significant  effect on
gross  margins  during 1994,  1995 and 1996,  since  inflation  rates  generally
remained at relatively low levels. Historically, the Company has been successful
in  dealing  with  the  impact  of  inflation  to  varying  degrees  within  the
limitations of the competitive environment of each segment of its business.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In October  1996,  the  Accounting  Standards  Executive  Committee  of the
American  Institute of Certified Public Accountants issued Statement of Position
96-1,  "Environmental  Remediation  Liabilities" ("SOP 96-1"). SOP 96-1 provides
guidance for the recognition and measurement of environmental liabilities and is
effective as of January 1, 1997.  While an  evaluation of the impact of SOP 96-1
has not been  completed,  the  Company  does not believe it will have a material
impact on its consolidated results of operations or financial position.




ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.


                    INDEX TO FINANCIAL STATEMENTS



                                                                           PAGE

Independent Auditors' Report.....................................
Consolidated Balance Sheets as of December 31, 1995 and 1996.....
Consolidated Statements of Operations for the years ended December 31,
   1994, 1995 and 1996......................................................
Consolidated Statements of Additional Capital for the years ended December 31,
   1994, 1995 and 1996.................................................
Consolidated Statements of Cash Flows for the years ended December 31, 1994,
  1995 and 1996..................................................
Notes to Consolidated Financial Statements.......................


                   INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
TRIARC COMPANIES, INC.:
New York, New York


      We have audited the  accompanying  consolidated  balance  sheets of Triarc
Companies,  Inc. and  subsidiaries  (the  "Company") as of December 31, 1996 and
1995, and the related consolidated statements of operations, additional capital,
and cash flows for each of the three  years in the  period  ended  December  31,
1996.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

      We conducted our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, such consolidated  financial statements present fairly, in
all material respects,  the financial position of the Company as of December 31,
1996 and 1995, and the results of their operations and their cash flows for each
of the three years in the period  ended  December  31, 1996 in  conformity  with
generally accepted accounting principles.

      As discussed in Note 1 to the consolidated  financial statements,  in 1995
the Company changed its method of accounting for impairment of long-lived assets
and for long-lived assets to be disposed of.




DELOITTE & TOUCHE, LLP

New York, New York
March 31, 1997




                              TRIARC COMPANIES, INC. AND SUBSIDIARIES
                                    CONSOLIDATED BALANCE SHEETS


                                                                                 DECEMBER 31,
                                                                                 ------------
                                                                             1995            1996
                                                                             ----            ----
                                                                                 (IN THOUSANDS)
                                             ASSETS
                                                                                         
Current assets:
   Cash and cash equivalents ($45,965,000 and $134,869,000)...............$    64,205    $ 154,405
   Restricted cash and cash equivalents (Note 4) .........................     34,033        3,057
   Short-term investments  (Note 5).......................................      7,397       51,711
   Receivables, net (Note 6)..............................................    168,534       80,613
   Inventories (Note 7)...................................................    118,549       55,340
   Assets held for sale (Note 1)..........................................        --        71,116
   Deferred income tax benefit (Note 15)..................................      8,848       16,409
   Prepaid expenses and other current assets..............................     11,262       13,011
                                                                          -----------    ---------
        Total current assets..............................................    412,828      445,662
Properties, net (Note 8)..................................................    331,589      107,272
Unamortized costs in excess of net assets of acquired companies (Note 9)..    227,825      203,914
Trademarks (Note 10)......................................................     57,146       57,257
Deferred costs and other assets (Note 11).................................     56,578       40,299
                                                                          -----------    ---------
                                                                          $ 1,085,966    $ 854,404
                                                                          ===========    =========

                               LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt (Notes 13 and 14)....................$    83,531    $  93,567
   Accounts payable ......................................................     61,908       52,437
   Accrued expenses (Note 12).............................................    109,119      104,483
                                                                          -----------    ---------
        Total current liabilities.........................................    254,558      250,487
Long-term debt (Notes 13 and 14)..........................................    763,346      500,529
Insurance loss reserves ..................................................      9,398        9,828
Deferred income taxes (Note 15)...........................................     24,013       34,455
Deferred income and other liabilities.....................................     14,001       18,616
Minority interests (Note 19)..............................................        --        33,724
Commitments and contingencies  (Notes 15, 23, 24 and 25)
Stockholders' equity (Notes 5, 16 and 17):
   Class A common stock, $.10 par value; authorized 100,000,000 shares,
         issued 27,983,805 shares ........................................      2,798        2,798
   Class B common stock, $.10 par value; authorized 25,000,000 shares,
         issued 5,997,622 shares..........................................        600          600
   Additional paid-in capital.............................................    162,020      161,170
   Accumulated deficit....................................................    (97,923)    (111,824)
   Less Class A common stock held in treasury at cost; 4,067,380 and
         4,097,606 shares.................................................    (45,931)     (46,273)
   Other..................................................................       (914)         294
                                                                          -----------    ---------
         Total stockholders' equity ......................................     20,650        6,765
                                                                          -----------    ---------
                                                                          $ 1,085,966    $ 854,404
                                                                          ===========    =========



                   See accompanying notes to consolidated financial statements.






                              TRIARC COMPANIES, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                 YEAR ENDED DECEMBER  31,
                                                                 ------------------------
                                                            1994          1995            1996
                                                            ----          ----            ----
                                                         (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                                                                    
Revenues:
  Net sales..........................................   $ 1,011,428    $1,128,390    $   931,920
  Royalties, franchise fees and other revenues.......        51,093        55,831         57,329
                                                        -----------    ----------    -----------
                                                          1,062,521     1,184,221        989,249
                                                        -----------    ----------    -----------
Costs and expenses:
  Cost of sales (Note 7).............................       749,930       859,928        652,109
  Advertising, selling and distribution (Note 1).....       109,669       129,164        139,662
  General and administrative.........................       125,189       146,842        131,357
  Reduction in carrying value of long-lived assets
     impaired or to be disposed of (Note 1)..........           --         14,647         64,300
  Facilities relocation and corporate restructuring
     (Note 18).......................................         8,800         2,700          8,800
  Recovery of doubtful accounts from affiliates
     and former affiliates (Note 28).................           --         (3,049)           --
                                                        -----------    ----------    -----------
                                                            993,588     1,150,232        996,228
                                                        -----------    ----------    -----------
        Operating profit (loss)......................        68,933        33,989         (6,979)
Interest expense ....................................       (72,980)      (84,227)       (73,379)
Gain (loss) on sale of businesses, net (Note 19).....         6,043          (100)        77,000
Other income (expense), net (Note 20)................        (1,185)       12,314          7,996
                                                        -----------    ----------    -----------
        Income (loss) from continuing operations
           before income taxes and minority interests           811       (38,024)         4,638
Benefit from (provision for) income taxes (Note 15)..        (1,612)        1,030        (11,294)
Minority interests in income of consolidated
    subsidiaries (Note 19)...........................        (1,292)          --          (1,829)
                                                        -----------    ----------    -----------
        Loss from continuing operations..............        (2,093)      (36,994)        (8,485)
Loss from discontinued operations (Note 21)..........        (3,900)          --             --
                                                        -----------    ----------    ----------- 
        Loss before extraordinary items..............        (5,993)      (36,994)        (8,485)
Extraordinary items (Note 22)........................        (2,116)          --          (5,416)
                                                        -----------    ----------    -----------
        Net loss.....................................        (8,109)      (36,994)       (13,901)
Preferred stock dividend requirements (Note 16)......        (5,833)          --             --
                                                        -----------    ----------    -----------
        Net loss applicable to common stockholders...   $   (13,942)   $  (36,994)   $   (13,901)
                                                        ===========    ==========    =========== 
Loss per share (Note 1):
        Continuing operations........................   $      (.34)   $    (1.24)   $      (.28)
        Discontinued operations......................          (.17)          --             --
        Extraordinary items..........................          (.09)          --            (.18)
                                                        -----------    ----------    -----------
        Net loss.....................................   $      (.60)   $    (1.24)   $      (.46)
                                                        ===========    ==========    =========== 






                   See accompanying notes to consolidated financial statements.







                              TRIARC COMPANIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF ADDITIONAL CAPITAL
                                                                                       YEAR ENDED DECEMBER 31,
                                                                                       -----------------------
                                                                                    1994         1995          1996
                                                                                    ----         ----          ----
                                                                                            (IN THOUSANDS)
Additional paid-in capital:
                                                                                                             
  Balance at beginning of period................................................   $  50,654    $  79,497    $ 162,020
  Common stock issued (Note 17):
     Excess of book value of redeemable preferred stock
      over par value of common stock issued upon conversion
      in connection with the Posner Settlement (Note 16) .......................        --         71,296         --
     Excess of fair value over par value from issuance of common shares in
       connection with the Posner Settlement (Note 28) .........................        --         11,915         --
     Other issuances ...........................................................           6           17         --
     Excess (deficiency) of fair value of shares issued from treasury stock
       over average cost of treasury shares in connection with:
         SEPSCO Merger (Note 26) ...............................................      25,492         --           --
         Grants of restricted stock ............................................         601           (8)        --
  Excess of fair value at date of grant of common  shares over the option
     price for stock options granted (forfeited) (Note 17) .....................       3,000         (588)        (852)
  Other ........................................................................        (256)        (109)           2
                                                                                   ---------    ---------    ---------
  Balance at end of period......................................................   $  79,497    $ 162,020    $ 161,170
                                                                                   =========    =========    =========
Accumulated deficit:
  Balance at beginning of period................................................   $ (46,987)   $ (60,929)   $ (97,923)
  Net loss .....................................................................      (8,109)     (36,994)     (13,901)
  Dividends on preferred stock .................................................      (5,833)        --           --
                                                                                   ---------    ---------    ---------
  Balance at end of period......................................................   $ (60,929)   $ (97,923)   $(111,824)
                                                                                   =========    =========    ========= 

Treasury stock (Note 17):
  Balance at beginning of period................................................   $ (75,150)   $ (45,473)   $ (45,931)
  Shares issued for SEPSCO Merger (Note 26) ....................................      30,364         --           --
  Grants of restricted stock ...................................................         775           76         --
  Purchases of common shares in open market transactions .......................      (1,025)        (489)        (496)
  Other ........................................................................        (437)         (45)         154
                                                                                   ---------    ---------    ---------
  Balance at end of period......................................................   $ (45,473)   $ (45,931)   $ (46,273)
                                                                                   =========    =========    =========
Other (Note 17):
  Unearned compensation:
     Balance at beginning of period.............................................   $  (7,304)   $  (7,416)   $  (1,013)
     Grants of restricted stock ................................................      (1,376)         (68)        --
     Forteiture (grant) of below market stock options ..........................      (3,000)         319          219
     Amortization of below market stock options ................................         907          761          489
     Amortization of restricted stock:
       Scheduled amortization ..................................................       3,357        1,950         --
       Accelerated vesting .....................................................        --          3,331         --
     Other .....................................................................        --            110         --
                                                                                   ---------    ---------     --------
     Balance at end of period ..................................................      (7,416)      (1,013)        (305)
                                                                                   ---------    ---------     --------
  Net unrealized gains (losses) on  "available-for-sale"  marketable
    securities (Note 5)
     Balance at beginning of period ............................................           8         (260)          99
     Net change in unrealized gains (losses) on marketable securities ..........        (268)         359          500
                                                                                   ---------    ---------    ---------
     Balance at end of period ..................................................        (260)          99          599
                                                                                   ---------    ---------    ---------
                                                                                   $  (7,676)   $    (914)   $     294
                                                                                   =========    =========    =========


                   See accompanying notes to consolidated financial statements.








                              TRIARC COMPANIES, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                             YEAR ENDED DECEMBER 31,
                                                                                             -----------------------
                                                                                         1994        1995          1996
                                                                                         ----        ----          ----
                                                                                                 (IN THOUSANDS)
                                                                                                              
Cash flows from operating activities:
  Net loss ........................................................................   $  (8,109)   $ (36,994)   $ (13,901)
  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
     (Gain) loss on sale of businesses ............................................      (6,043)         100      (77,000)
     Reduction in carrying value of long-lived assets .............................        --         14,647       64,300
     Depreciation and amortization of properties ..................................      33,901       38,893       30,685
     Amortization of costs in excess of net assets of acquired
       companies, trademarks and other amortization ...............................      11,125       17,100       16,317
     Amortization of original issue discount and deferred financing costs .........       6,957        7,558        5,733
     Provision for doubtful accounts ..............................................       1,021        4,067        6,104
     (Gain) loss on sale of assets, net ...........................................        (975)     (10,264)          32
     Other, net ...................................................................      (2,754)       2,110        6,547
     Changes in operating assets and liabilities:
           Decrease in restricted cash and cash equivalents  ......................         548        2,771          976
           Increase in receivables ................................................     (18,079)     (12,812)     (12,214)
           Decrease (increase) in inventories .....................................       2,544       (2,484)     (15,765)
           Decrease (increase) in prepaid expenses and other current assets .......       2,776         (677)        (190)
           Increase (decrease) in accounts payable and accrued expenses ...........     (29,196)      (9,453)      23,164
                                                                                      ---------    ---------    ---------
                 Net cash provided by (used in) operating activities...............      (6,284)      14,562       34,788
                                                                                      ---------    ---------    ---------
Cash flows from investing activities:
  Net proceeds from the sale of the textile business ..............................        --           --        236,824
  Business acquisitions, net of cash acquired of $2,067,000 in 1995 ...............     (18,790)    (111,204)      (4,018)
  Proceeds from sales of non-core businesses and properties........................      39,077       19,599        2,196
  Capital expenditures ............................................................     (61,639)     (69,974)     (30,079)
  Cost of short-term investments purchased ........................................     (10,308)     (27,490)     (64,409)
  Proceeds from short-term investments sold .......................................      11,033       29,805       21,598
  Investments in affiliates .......................................................      (7,368)      (6,340)        --
  Other ...........................................................................        (633)         254       (1,077)
                                                                                      ---------    ---------    ---------
                 Net cash provided by (used in) investing activities ..............     (48,628)    (165,350)     161,035
                                                                                      ---------    ---------    ---------
Cash flows from financing activities:
  Repayments of long-term debt ....................................................     (90,899)     (31,953)    (413,176)
  Proceeds from long-term debt ....................................................     121,232      208,871      164,026
  Restricted cash (from the proceeds of) used to repay long-term debt..............        --        (30,000)      30,000
  Net proceeds from sale of partnership units in the propane subsidiary ...........        --           --        124,749
  Distributions paid on partnership units of propane subsidiary....................        --           --         (3,309)
  Deferred financing costs ........................................................      (5,573)      (9,244)      (9,129)
  Payment of preferred dividends ..................................................      (5,833)        --           --
  Other ...........................................................................      (1,281)      (1,226)        (438)
                                                                                      ---------    ---------    ---------
                  Net cash provided by (used in) financing activities .............      17,646      136,448     (107,277)
                                                                                      ---------    ---------    ---------

Net cash provided by (used in) continuing operations ..............................     (37,266)     (14,340)      88,546
Net cash provided by (used in) discontinued operations ............................      (1,471)      (1,519)       1,654
                                                                                      ---------    ---------    ---------
Net increase (decrease) in cash and cash equivalents ..............................     (38,737)     (15,859)      90,200
Cash and cash equivalents at beginning of period ..................................     118,801       80,064       64,205
                                                                                      ---------    ---------    ---------
Cash and cash equivalents at end of period ........................................   $  80,064    $  64,205    $ 154,405
                                                                                      =========    =========    =========

Supplemental  disclosures of cash flow information:
  Cash paid during the period for:
     Interest......................................................................  $   64,634    $   73,918   $  67,880
                                                                                     ==========    ==========   =========
     Income taxes, net.............................................................  $    5,925    $    6,911   $   1,529
                                                                                     ==========    ==========   =========

Supplemental schedule of noncash investing and financing activities:
     Total capital expenditures....................................................  $   65,831    $    71,220  $   30,320
     Amounts representing capitalized leases and other secured financing...........      (4,192)        (1,246)       (241)
                                                                                     ----------    -----------  ----------
     Capital expenditures paid in cash.............................................  $   61,639    $    69,974  $   30,079
                                                                                     ==========    ===========  ==========


     Due to  their  noncash  nature,  the  following  transactions  are also not
reflected in the respective consolidated statements of cash flows:

     Pursuant to a settlement agreement, in January 1995 Triarc Companies,  Inc.
("Triarc")  issued  4,985,722 shares of its Class B Common Stock in exchange for
all of its then outstanding  redeemable  convertible preferred stock owned by an
affiliate of Victor Posner,  the former Chairman and Chief Executive  Officer of
Triarc  ("Posner"),  resulting in a decrease in  redeemable  preferred  stock of
$71,794,000  and equal  aggregate  increases in Class B Common Stock of $498,000
and additional paid-in capital of $71,296,000.  Further, an additional 1,011,900
shares of Class B Common  Stock  valued at  $12,016,000  were issued to entities
controlled by Posner  pursuant to such  agreement in settlement  of, among other
matters,  a $12,326,000  previously  accrued  liability  owed to an affiliate of
Posner,  resulting  in a gain  of  $310,000.  See  Note  28 to the  consolidated
financial statements for further discussion.

     In  April  1994  Triarc  acquired  the  28.9%  minority   interest  in  its
subsidiary,  Southeastern  Public Service  Company,  that it did not already own
through the issuance of 2,691,824  shares of its Class A Common Stock.  See Note
26 to the consolidated financial statements for further discussion.



          See accompanying notes to consolidated financial statements.




                     TRIARC COMPANIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1996


(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

    The  consolidated  financial  statements  include  the  accounts  of  Triarc
Companies,  Inc.  (referred  to herein as "Triarc"  and,  collectively  with its
subsidiaries,  as the "Company") and its principal  subsidiaries.  The principal
subsidiaries of the Company,  all  wholly-owned as of December 31, 1996, are CFC
Holdings Corp.  ("CFC  Holdings" - 98.4% owned prior to April 14, 1994),  Mistic
Brands,  Inc. ("Mistic" - acquired August 9, 1995), TXL Corp.  ("TXL",  formerly
Graniteville  Company - 85.8% owned prior to April 14, 1994),  National  Propane
Corporation   ("National  Propane")  and  Southeastern  Public  Service  Company
("SEPSCO"  - 71.1%  owned  prior to April 14,  1994).  CFC  Holdings  has as its
wholly-owned  subsidiaries  Chesapeake  Insurance  Company Limited  ("Chesapeake
Insurance") and RC/Arby's  Corporation  ("RCAC"),  and RCAC has as its principal
wholly-owned  subsidiaries Arby's, Inc. ("Arby's") and Royal Crown Company, Inc.
("Royal Crown").  Additionally,  RCAC has three wholly-owned  subsidiaries which
own and/or operate Arby's restaurants, Arby's Restaurant Development Corporation
("ARDC"),  Arby's  Restaurant  Holding  Company  ("ARHC") and Arby's  Restaurant
Operations  Company.  TXL  has as its  principal  wholly-owned  subsidiary  C.H.
Patrick & Co., Inc. ("C.H.  Patrick") and operated the Textile Business prior to
the sale of such business in April 1996 (see Note 19).  National Propane and its
subsidiary  National  Propane SGP Inc.  ("SGP") own a combined 42.7% interest in
National  Propane  Partners,  L.P. (the  "Partnership"),  a limited  partnership
organized in 1996 to acquire,  own and operate the propane  business of National
Propane, and a subpartnership. National Propane and SGP are the general partners
of the  Partnership.  The entity  representative  of both the  operations of (i)
National Propane prior to a July 2, 1996 conveyance of certain of its assets and
liabilities  (see Note 19) to a subsidiary  partnership of the  Partnership  and
(ii) the Partnership  subsequent  thereto,  is referred to herein as "National".
All significant  intercompany  balances and transactions have been eliminated in
consolidation.  See  Note 19 for a  discussion  of the  April  1996  sale of the
Textile Business, Note 27 for a discussion of the August 1995 Mistic acquisition
and Note 26 for a discussion  of the April 1994 merger  pursuant to which Triarc
acquired the remaining  28.9% of SEPSCO and, as a result,  the 14.2% of TXL that
it did not already own.

CASH EQUIVALENTS

    All highly liquid  investments  with a maturity of three months or less when
acquired are considered  cash  equivalents.  The Company  typically  invests its
excess cash in commercial paper of high  credit-quality  entities and repurchase
agreements with high credit-quality  financial institutions.  Securities pledged
as collateral for repurchase agreements are segregated and held by the financial
institution until maturity of each repurchase agreement.  While the market value
of the  collateral  is sufficient  in the event of default,  realization  and/or
retention of the collateral may be subject to legal  proceedings in the event of
default or bankruptcy by the other party to the agreement.

SHORT-TERM INVESTMENTS

    The Company's  marketable  securities with readily  determinable fair values
are accounted for as "available for sale" and, as such, net unrealized  gains or
losses are reported as a separate component of stockholders' equity. Investments
in equity securities which are not readily marketable are accounted for at cost.
The cost of securities  sold for all marketable  securities is determined  using
the specific identification method.

INVENTORIES

    The Company's  inventories are stated at the lower of cost or market.  After
the April 1996 sale of the Textile  Business,  for which the cost of inventories
was  determined  on the  last-in,  first-out  ("LIFO")  basis,  the  cost of the
inventories  of the  remaining  businesses  of the Company is  determined on the
first-in, first-out ("FIFO") basis (74% of inventories as of December 31, 1996),
the average cost basis (25% of inventories)  which  approximated  the FIFO basis
and the LIFO basis (1% of inventories).

DEPRECIATION AND AMORTIZATION

    Depreciation and  amortization of properties is computed  principally on the
straight-line  basis  using the  estimated  useful  lives of the  related  major
classes of properties: 3 to 8 years for transportation  equipment; 3 to 30 years
for machinery and  equipment;  and 14 to 60 years for  buildings.  Leased assets
capitalized and leasehold  improvements  are amortized over the shorter of their
estimated useful lives or the terms of the respective leases.


AMORTIZATION OF INTANGIBLES

    Costs in excess of net assets of  acquired  companies  ("Goodwill")  arising
after November 1, 1970 are being amortized on the straight-line basis over 15 to
40 years; Goodwill arising prior to that date is not being amortized. Trademarks
are  being  amortized  on the  straight-line  basis  principally  over 15 years.
Deferred financing costs and original issue debt discount are being amortized as
interest  expense over the lives of the respective  debt using the interest rate
method.

IMPAIRMENTS

Intangible Assets

    The amount of impairment,  if any, in unamortized Goodwill is measured based
on projected  future  results of  operations.  To the extent  future  results of
operations  of those  subsidiaries  to which the  Goodwill  relates  through the
period such  Goodwill is being  amortized  are  sufficient to absorb the related
amortization, the Company has deemed there to be no impairment of Goodwill.

Long-Lived Assets

    Effective October 1, 1995 the Company adopted SFAS No. 121, "Accounting  for
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of".
This  standard  requires  that  long-lived   assets  and  certain   identifiable
intangibles  held and used by an  entity be  reviewed  for  impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.  In 1996 the Company recorded a provision of $64,300,000
in order  to  reduce  the  carrying  value  of  certain  long-lived  assets  and
identifiable  intangibles  principally  relating  to the  estimated  loss on the
anticipated sale of all company-owned restaurants (see Note 3).

DERIVATIVE FINANCIAL INSTRUMENT

    The Company had an interest  rate swap  agreement  entered  into in order to
synthetically  alter the interest  rate of certain of the  Company's  fixed-rate
debt (see Note 13) until the swap's maturity in 1996. The Company calculated the
estimated  remaining  amount to be paid or received under the interest rate swap
agreement for the period from the periodic  settlement date immediately prior to
the  financial  statement  date  through the end of the  agreement  based on the
interest rate  applicable at the financial  statement date and  recognized  such
amount  which  applied  to the period  from the last  periodic  settlement  date
through the financial  statement  date as a component of interest  expense.  The
recognition  of  gain  or  loss  from  the  interest  rate  swap  agreement  was
effectively  correlated  with the  underlying  debt.  A payment  received at the
inception of the  agreement,  which was deemed to be a fee to induce the Company
to enter into the  agreement,  was amortized over the full life of the agreement
since the Company was not at risk for any gain or loss on such payment.

STOCK-BASED COMPENSATION

    In  1996  the  Company   adopted  SFAS  123,   "Accounting  for  Stock-Based
Compensation"  ("SFAS  123").  SFAS 123  defines a fair  value  based  method of
accounting for employee stock-based compensation and encourages adoption of that
method of accounting  but permits  accounting  under the intrinsic  value method
prescribed  by an  accounting  pronouncement  prior to SFAS 123. The Company has
elected to continue to measure  compensation costs for its employee  stock-based
compensation  under the intrinsic value method.  Accordingly,  compensation cost
for the Company's stock options and restricted  stock is measured as the excess,
if any, of the market price of the Company's stock at the date of grant over the
amount, if any, an employee must pay to acquire the stock. Compensation cost for
stock  appreciation  rights is recognized  currently  based on the change in the
market price of the Company's common stock during each period.

ADVERTISING COSTS

    The Company  accounts for  advertising  production  costs by expensing  such
production costs the first time the related advertising takes place. Advertising
costs amounted to $86,091,000,  $101,251,000 and $108,728,000 for 1994, 1995 and
1996, respectively.

INCOME TAXES

     The Company files a consolidated  Federal income tax return with all of its
subsidiaries except Chesapeake  Insurance,  a foreign corporation,  and prior to
April 14, 1994, TXL and SEPSCO.  The income of the Partnership is taxable to its
partners and not the Partnership and, accordingly, income taxes are not provided
on the  income  of the  Partnership  to the  extent of its  minority  ownership.
Deferred  income  taxes are  provided to  recognize  the tax effect of temporary
differences  between the bases of assets and  liabilities  for tax and financial
statement purposes.

REVENUE RECOGNITION

    The  Company  records  sales   principally  when  inventory  is  shipped  or
delivered.  Prior to the sale of the Textile Business, the Company also recorded
sales to a lesser extent (7%, 6% and 2% of consolidated  revenues for 1994, 1995
and  1996,  respectively)  on a bill and hold  basis.  In  accordance  with such
policy, the goods are completed, packaged and ready for shipment; such goods are
effectively  segregated from inventory which is available for sale; the risks of
ownership of the goods have passed to the customer; and such underlying customer
orders are supported by written  confirmation.  Franchise fees are recognized as
income when a franchised restaurant is opened.  Franchise fees for multiple area
developments  represent the  aggregate of the  franchise  fees for the number of
restaurants  in the area  development  and are  recognized  as income  when each
restaurant  is  opened  in the same  manner  as  franchise  fees for  individual
restaurants.  Royalties  are based on a percentage  of  restaurant  sales of the
franchised outlet and are accrued as earned.

INSURANCE LOSS RESERVES

    Insurance  loss  reserves  include  reserves  for  incurred but not reported
claims  of  $2,056,000  and  $2,469,000  as  of  December  31,  1995  and  1996,
respectively.  Such reserves for current and former affiliated  company business
are based on either  actuarial  studies using  historical loss experience or the
Company's  calculations  when historical loss information is not available.  The
balance of the reserves for non-affiliated company business were either reported
by  unaffiliated  reinsurers,  calculated  by the  Company  or based  on  claims
adjustors' evaluations. Management believes that the reserves are fairly stated.
Adjustments  to  estimates   recorded   resulting  from   subsequent   actuarial
evaluations or ultimate  payments are reflected in the operations of the periods
in which  such  adjustments  become  known.  The  Company  no longer  insures or
reinsures any risks for periods commencing on or after October 1, 1993.

LOSS PER SHARE

    Loss per share has been  computed by  dividing  the net loss  applicable  to
common  stockholders  (net loss plus  dividend  requirements  on  Triarc's  then
outstanding  preferred  stocks  in  1994)  by the  weighted  average  number  of
outstanding  shares of common stock during the period.  Such  weighted  averages
were   23,282,000,   29,764,000  and   29,898,000  for  1994,   1995  and  1996,
respectively.  Common stock equivalents were not used in the computation of loss
per share because such  inclusion  would have been  antidilutive.  Fully diluted
loss per share is not applicable since the inclusion of contingent  shares would
also be antidilutive.

RECLASSIFICATIONS

    Certain  amounts  included  in  the  prior  years'  consolidated   financial
statements   have  been   reclassified   to  conform  with  the  current  year's
presentation.

(2) SIGNIFICANT RISKS AND UNCERTAINTIES

NATURE OF OPERATIONS

    The Company is a holding  company which is engaged in four lines of business
(each with the indicated percentage of the Company's  consolidated  revenues for
the year ended December 31, 1996): beverages (31%),  restaurants (29%), dyes and
chemicals  (included in the textile  business  segment) and the Textile Business
until its sale in April 1996 (22%) and propane (18%).

     The beverage  segment  produces and sells a broad  selection of  carbonated
beverages and  concentrates  under the principal  brand names RC COLA,  DIET RC,
ROYAL CROWN,  ROYAL CROWN DRAFT COLA, DIET RITE,  NEHI, NEHI LOCKJAW,  UPPER 10,
KICK and THIRST THRASHER and premium  beverages and  ready-to-drink  brewed iced
teas under the principal  brand names MISTIC,  ROYAL MISTIC,  MISTIC RAIN FOREST
and MISTIC BREEZE. The restaurant segment primarily franchises and operates (see
Note  3  regarding  the  February  1997  agreement  to  sell  all  company-owned
restaurants) Arby's quick service restaurants representing the largest franchise
restaurant system specializing in roast beef sandwiches.  The propane segment is
engaged  primarily in the retail marketing of propane to residential  customers,
commercial and industrial customers,  agricultural customers and resellers.  The
propane segment also markets  propane-related  supplies and equipment  including
home and commercial  appliances.  The textile segment  produces and markets dyes
and specialty  chemicals  primarily for the textile  industry and,  prior to the
1996  sale  of  the  Textile   Business  (see  Note  19),  the  textile  segment
manufactured,  dyed and  finished  cotton,  synthetic  and  blended  (cotton and
polyester) apparel fabrics principally for (i) utility wear and (ii) sportswear,
casual wear and outerwear.  The Company's operations  principally are throughout
the United States.

USE OF ESTIMATES

    The  preparation of  consolidated  financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of contingent  assets and liabilities at the date of the consolidated
financial statements and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

SIGNIFICANT ESTIMATES

     The Company's  significant estimates are for costs related to (i) insurance
loss reserves (see Note 1), (ii)  provisions for  examinations of its income tax
returns by the Internal  Revenue Service ("IRS") (see Note 15), (iii) provisions
for impairment of long-lived  assets and for long-lived assets to be disposed of
(see Note 3) and (iv) provisions for environmental and other legal contingencies
(see Note 25).

CERTAIN RISK CONCENTRATIONS

     The Company's  vulnerability to risk concentrations  related to significant
customers  and  vendors,  products  sold and sources of its raw  materials,  are
mitigated due to the  diversification  of the segments,  of which none accounted
for more  than  31% of  consolidated  revenues  in  1996.  Risk of  geographical
concentration  is also minimized since each of the segments  generally  operates
throughout the United States with minimal foreign exposure.

(3) PLANNED TRANSACTIONS

SPINOFF

     On October 29,  1996,  the Company  announced  that its Board of  Directors
approved a plan to offer up to  approximately  20% of the shares of its beverage
and  restaurant  businesses  (operated  through  Mistic  and RCAC) to the public
through an initial  public  offering and to spin off the remainder of the shares
of  such  businesses  to  Triarc   stockholders   (collectively,   the  "Spinoff
Transactions").  Consummation  of the Spinoff  Transactions  will be subject to,
among other things,  receipt of a favorable ruling from the IRS that the Spinoff
Transactions will be tax-free to the Company and its  stockholders.  The request
for the ruling from the IRS contains  several complex issues and there can be no
assurance that Triarc will receive the ruling or that Triarc will consummate the
Spinoff  Transactions.  The Spinoff Transactions are not expected to occur prior
to the end of the second  quarter of 1997.  Triarc is currently  evaluating  the
impact, if any, of the proposed  acquisition of Snapple Beverage Corp. (see Note
31) on the anticipated structure of the Spinoff Transactions.

SALE OF RESTAURANTS

     In  February  1997 the  principal  subsidiaries  comprising  the  Company's
restaurant  segment  entered into an agreement (the "RTM  Agreement")  with RTM,
Inc.  ("RTM"),  the  largest  franchisee  in the  Arby's  system,  to sell to an
affiliate of RTM all of the 355  company-owned  restaurants.  The purchase price
consists of $50,000 of cash and a promissory note aggregating $2,000,000 and the
assumption of approximately  $69,735,000 in mortgage and equipment notes payable
to FFCA Mortgage  Corporation (see Note 13) and capitalized  lease  obligations.
The  consummation  of the  sale is  subject  to  customary  closing  conditions,
including  receipt  of  necessary  consents  and  regulatory  approvals,  and is
expected to occur during the second quarter of 1997.

     In 1996 the  Company  recorded  a  $58,900,000  charge  to (i)  reduce  the
carrying value of the long-lived assets to be sold (reported as "Assets held for
sale" in the accompanying consolidated balance sheet as of December 31, 1996) by
approximately  $46,000,000 to estimated fair value  consisting of adjustments to
"Properties, net" of $36,343,000,  "Unamortized costs in excess of net assets of
acquired  companies"  of  $5,214,000  and  "Deferred  costs and other assets" of
$4,443,000  and (ii) provide for associated  net  liabilities  of  approximately
$12,900,000,  principally  reflecting  the  present  value of certain  equipment
operating  lease  obligations  which will not be assumed  by the  purchaser  and
estimated  closing costs.  The estimated fair value was determined  based on the
terms of the RTM Agreement  including the anticipated  sales price.  During 1996
the  operations  of  the  restaurants  to  be  disposed  of  had  net  sales  of
$231,041,000 and a pretax loss of $3,897,000.  Such loss reflects $10,071,000 of
allocated general and administrative expenses and $8,692,000 of interest expense
related to the mortgage and equipment  notes and capitalized  lease  obligations
directly related to the operations of the restaurants being sold to RTM.

     In 1995 the Company  recorded a provision of  $14,647,000 in its restaurant
segment  consisting  of a  $12,019,000  reduction in the net  carrying  value of
certain  restaurants and other  restaurant-related  long-lived assets which were
determined to be impaired and a $2,628,000  reduction to a net carrying value of
$975,000 of certain  restaurants  and related  equipment  to be  disposed.  Such
provision reduced "Properties, net" by $12,425,000, "Unamortized costs in excess
of net assets of acquired companies" by $1,260,000 and "Deferred costs and other
assets" by $962,000 to reflect the fair value of the respective assets. The fair
value was generally determined by applying a fair market  capitalization rate to
the estimated  expected  future annual cash flows.  The results of operations of
the  restaurants  to be disposed  resulted in a pre-tax loss of $806,000 for the
year ended December 31, 1995.

(4) RESTRICTED CASH AND CASH EQUIVALENTS

    The following is a summary of the  components  of  restricted  cash and cash
equivalents (in thousands):



                                                                                                 DECEMBER 31,
                                                                                                 ------------
                                                                                             1995            1996
                                                                                             ----            ----

                                                                                                               
         Indemnity escrow account relating to sale of business (Note 21).................$      500      $     464
         Deposits securing outstanding letters of credit principally for the purpose
           of securing certain performance and other bonds and payments due
              under leases...............................................................     3,533          2,593
         Borrowings restricted to the February 22, 1996 redemption of
           long-term debt (Note 13)......................................................    30,000             --
                                                                                         ----------      ---------
                                                                                         $   34,033      $   3,057
                                                                                         ==========      =========


(5) SHORT-TERM INVESTMENTS
     The Company's  short-term  investments are stated at fair value, except for
an  investment  in  limited  partnerships  which is  stated  at  cost.  The cost
(amortized  cost for corporate  debt  securities),  gross  unrealized  gains and
losses,  fair  value  and  carrying  value,  as  appropriate,  of the  Company's
short-term  investments  at  December  31,  1995  and 1996  are as  follows  (in
thousands):


                                                     1995                                             1996
                                 ------------------------------------------   --------------------------------------------------
                                                                  CARRYING
                                               GROSS       GROSS  VALUE AND                GROSS      GROSS
                                  AMORTIZED UNREALIZED  UNREALIZED  FAIR      AMORTIZED UNREALIZED UNREALIZED   FAIR  CARRYING
                                    COST       GAINS      LOSSES    VALUE       COST       GAINS     LOSSES     VALUE   VALUE
                                    ----       -----      ------    -----       ----       -----     ------     -----   -----
Marketable securities:
                                                                                                 
     Equity securities..............$   661    $  103  $    (63)  $   701     $ 14,373   $    982  $  (424) $   14,931  $  14,931
     Corporate debt securities......  5,732       116       (40)    5,808       16,113         24      (36)     16,101     16,101
     Mutual fund....................    --        --        --        --        10,312        367      --       10,679     10,679
     Debt securities issued by
       foreign governments..........    873        15       --        888          --         --       --         --          --
                                    -------    ------  --------   -------     --------   --------  -------   ---------  ---------
          Total marketable
             securities.............  7,266    $  234  $   (103)    7,397       40,798   $  1,373  $  (460)  $  41,711     41,711
                                               ======  ========                          ========  =======   =========
Investment in limited
     partnerships...................    --                            --        10,000                                     10,000
                                    -------                       -------     --------                                  ---------
                                    $ 7,266                       $ 7,397     $ 50,798                                  $  51,711
                                    =======                       =======     ========                                  =========

    Maturities  of corporate  debt  securities  (all of which are  classified as
available-for-sale) are as follows at December 31, 1996 (in thousands):



                                                              AMORTIZED     FAIR
                                                                COST        VALUE
                                                                ----        -----

                                                                        
    Due within one year.....................................   $ 3,086     $ 3,089
    Due after one year through five years...................    12,670      12,657
    Due after five years through eight years................       357         355
                                                               -------    --------
                                                               $16,113     $16,101
                                                               =======    ========


    Gross  realized  gains and  gross  realized  losses  on sales of  marketable
securities  are included in "Other income  (expense),  net" (see Note 20) in the
accompanying  consolidated  statements  of  operations  and are as  follows  (in
thousands):

                                            1994       1995       1996
                                            ----       ----       ----

    Gross realized gains...................$  404      $ 314     $1,034
    Gross realized losses..................  (539)      (568)      (333)
                                           ------      -----     ------
                                           $ (135)     $(254)    $  701
                                           ======      =====     ======

    The  net  unrealized  gains  on  marketable  securities  (all of  which  are
classified as available-for-sale) consist of the following (in thousands):

                                                         DECEMBER 31,
                                                         ------------
                                                       1995       1996
                                                       ----       ----

      Net unrealized gains............................$  131     $  913
      Income tax provision............................   (32)      (314)
                                                      ------     ------
                                                      $   99     $  599
                                                      ======     ======

      The net  changes in the  unrealized  after tax gain  (loss) on  marketable
securities  included as a component  of  stockholders'  equity were  $(268,000),
$359,000 and $500,000 in 1994, 1995 and 1996, respectively.

(6) RECEIVABLES, NET

    The following is a summary of the components of receivables (in thousands):



                                                                         DECEMBER 31,
                                                                        ------------
                                                                     1995            1996
                                                                     ----            ----
      Receivables:
                                                                                  
         Trade.............................................          $ 160,920    $  81,161
         Other.............................................             15,109        6,649
                                                                     ---------    ---------
                                                                       176,029       87,810
         Less allowance for doubtful accounts (trade)......              7,495        7,197
                                                                     ---------    ---------
                                                                     $ 168,534    $  80,613
                                                                     =========    =========


    Substantially  all  receivables  are pledged as collateral  for certain debt
(see Note 13).

(7) INVENTORIES

    The following is a summary of the components of inventories (in thousands):



                                                                          DECEMBER 31,
                                                                          ------------
                                                                         1995      1996
                                                                         ----      ----

                                                                                
    Raw materials....................................................$  40,195   $ 25,405
    Work in process..................................................    6,976        467
    Finished goods...................................................   71,378     29,468
                                                                     ---------   --------
                                                                     $ 118,549   $ 55,340
                                                                     =========   ========

    The current cost of LIFO inventories  exceeded the carrying value thereof by
approximately   $8,739,000   and   $330,000  at  December  31,  1995  and  1996,
respectively.  In 1994 and  1995  certain  inventory  quantities  were  reduced,
resulting in  liquidations of LIFO inventory  quantities  carried at lower costs
from prior years. The effect of such  liquidations was to decrease cost of sales
by $2,462,000 and  $1,206,000,  respectively.  There was no such  liquidation in
1996;  the lower  LIFO  inventories  resulted  from the  April  1996 sale of the
Textile Business (see Note 19).

    Substantially  all  inventories  are pledged as collateral  for certain debt
(see Note 13).

(8) PROPERTIES

    The  following is a summary of the  components  of  properties,  at cost (in
thousands):


                                                                     DECEMBER 31,
                                                                     ------------
                                                                  1995          1996
                                                                  ----          ----

                                                                           
Land .......................................................... $  32,441   $   9,199
Buildings and improvements and leasehold improvements..........   147,505      31,932
Machinery and equipment .......................................   329,886     157,237
Transportation equipment ......................................    27,262      24,950
Leased assets capitalized .....................................    19,296         888
                                                                ---------   ---------
                                                                  556,390     224,206
Less accumulated depreciation and amortization ................   224,801     116,934
                                                                ---------   ---------
                                                                $ 331,589   $ 107,272
                                                                =========   =========


    The  decrease in  properties  from  December  31, 1995 to December  31, 1996
principally  resulted  from (i) the April 1996 sale of the Textile  Business and
(ii) the 1996  reduction in carrying  value of certain  long-lived  assets to be
disposed  of and  reclassification  as of  December  31,  1996 of such assets to
"Assets held for sale" (see Note 3).

    Substantially all properties are pledged as collateral for certain debt (see
Note 13).

(9) UNAMORTIZED COSTS IN EXCESS OF NET ASSETS OF ACQUIRED COMPANIES

    The  following is a summary of the  components of the  unamortized  costs in
excess of net assets of acquired companies (in thousands):


                                                                  DECEMBER 31,
                                                                  ------------
                                                              1995           1996
                                                              ----           ----

                                                                              
      Costs in excess of net assets of acquired
          companies (Notes 19, 26 and 27)................$  290,630       $  274,037
      Less accumulated amortization......................    62,805           70,123
                                                         ----------       ----------
                                                         $  227,825       $  203,914
                                                         ==========       ==========


(10)TRADEMARKS

    The following is a summary of the components of trademarks (in thousands):



                                                                   DECEMBER 31,
                                                                   ------------
                                                               1995            1996
                                                               ----            ----

                                                                         
    Trademarks (Note 27)....................................$  59,021      $  63,348
    Less accumulated amortization...........................    1,875          6,091
                                                            ---------      ---------
                                                            $  57,146      $  57,257
                                                            =========      =========


(11)DEFERRED COSTS AND OTHER ASSETS

    The  following is a summary of the  components  of deferred  costs and other
assets (in thousands):


                                                                    DECEMBER 31,
                                                                    ------------
                                                               1995            1996
                                                               ----            ----

                                                                       
    Deferred financing costs................................$  45,802      $  34,102
    Other...................................................   27,259         17,712
                                                            ---------      ---------
                                                               73,061         51,814
    Less accumulated amortization of deferred financing costs  16,483         11,515
                                                            ---------      ---------
                                                            $  56,578      $  40,299
                                                            =========      =========


(12)ACCRUED EXPENSES

    The  following  is a summary  of the  components  of  accrued  expenses  (in
thousands):


                                                                       DECEMBER 31,
                                                                       ------------
                                                                     1995        1996
                                                                     ----        ----

                                                                              
Accrued interest.................................................  $  27,370  $  25,563
Accrued compensation and related benefits .......................     23,181     20,511
Accrued advertising .............................................     11,357     12,504
Net current liabilities of discontinued operations (Note 21).....      3,462      3,589
Other ...........................................................     43,749     42,316
                                                                   ---------  ---------
                                                                   $ 109,119  $ 104,483
                                                                   =========  =========


                     TRIARC COMPANIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1996


(13)LONG-TERM DEBT



      Long-term debt consisted of the following (in thousands):
                                                                                                        DECEMBER 31,
                                                                                                        ------------
                                                                                                   1995              1996
                                                                                                   ----              ----

                                                                                                                  
      9 3/4% senior secured notes due 2000 (a)................................................$    275,000     $    275,000
      8.54% first mortgage notes due June 30, 2010 (b)........................................         --           125,000
      Mistic Bank Facility (c)
          Term loan, bearing interest at a weighted average rate of 8.28% at
             December 31, 1996................................................................      58,750           53,750
          Revolving loan, bearing interest at a weighted average rate of 8.45% at
             December 31, 1996................................................................       6,500           14,950
      Mortgage notes payable to FFCA Mortgage Corporation ("FFCA"), bearing
        interest at a weighted average rate of 11.09% as of December 31, 1996, due
        through 2016 (d)......................................................................      51,685           52,136
      Equipment notes payable to FFCA, bearing interest at a weighted average
         rate of 10.89% at December 31, 1996, due through 2003 (d)............................       6,545            6,236
      Patrick Facility term loans, bearing interest at a weighted average rate of
         9.20% as of December 31, 1996, due through 2002 (e)..................................         --            33,875
      Propane Bank Credit Facility (f)
          Working capital facility, bearing interest at a rate of 8 1/4% at
              December 31, 1996...............................................................         --             6,000
          Acquisition facility, bearing interest at a weighted average rate of 
              7.16% at December 31, 1996......................................................         --             1,885
      Graniteville Credit Facility repaid in April 1996 prior to maturity (g)
          Revolving loan......................................................................     113,435              --
          Term loan ..........................................................................      85,200              --
      Former Propane Facility repaid in July 1996 prior to maturity (b)
          Term loan ..........................................................................      84,083              --
          Revolving loan .....................................................................      43,229              --
      11 7/8% senior subordinated debentures due February 1, 1998 repaid in
        February 1996 (less unamortized original issue discount of $1,920) (h)................      43,080              --
      9 1/2% promissory note repaid in July 1996 (i) .........................................      37,697              --
      Notes, bearing interest at 7.94% to 13 1/2%, due through 2002 secured by
        equipment ............................................................................      13,651            3,436
      Capitalized lease obligations (j)  .....................................................      19,143           15,974
         Other................................................................................       8,879            5,854
                                                                                              ------------     ------------

                          Total debt .........................................................     846,877          594,096
              Less amounts payable within one year............................................      83,531           93,567
                                                                                              ------------     ------------
                                                                                              $    763,346     $    500,529
                                                                                              ============     ============


      Aggregate annual maturities of long-term debt, including capitalized lease
obligations, are as follows as of December 31, 1996 (in thousands):

         YEAR ENDING DECEMBER 31,
         ------------------------

          1997................................................ $  93,567
          1998................................................    27,330
          1999................................................    17,049
          2000................................................   296,391
          2001................................................    17,006
          Thereafter..........................................   142,753
                                                               ---------
                                                               $ 594,096
                                                               =========

(a) In  September  1993  RCAC  entered  into a  three-year  interest  rate  swap
    agreement (the "Swap  Agreement") in the amount of  $137,500,000.  Under the
    Swap Agreement, interest on $137,500,000 was paid by RCAC at a floating rate
    (the  "Floating  Rate") based on the 180-day London  Interbank  Offered Rate
    ("LIBOR") and RCAC received  interest at a fixed rate of 4.72%. The Floating
    Rate was set at the inception of the Swap Agreement through January 31, 1994
    and  thereafter  was  retroactively  reset  at  the  end of  each  six-month
    calculation  period  through  July 31, 1996 and on September  24, 1996.  The
    transaction  effectively changed RCAC's interest rate on $137,500,000 of the
    9 3/4%  senior  secured  notes due 2000 (the "9 3/4% Senior  Notes")  from a
    fixed-rate to a floating-rate  basis.  Under the Swap Agreement  during 1994
    RCAC  received  $614,000  which was  determined at the inception of the Swap
    Agreement.  Thereafter RCAC paid (i) $439,000 during 1994 in connection with
    the six-month reset period ended July 31, 1994, (ii) $2,271,000  during 1995
    in  connection  with such  year's  two  six-month  reset  periods  and (iii)
    $1,631,000  during 1996 in connection  with such year's two six-month  reset
    periods and the reset period ending with the agreement's termination date of
    September 24, 1996.

(b) On July 2, 1996 National  issued  $125,000,000 of 8.54% first mortgage notes
    due June 30, 2010 (the "First Mortgage  Notes") and repaid the  $123,188,000
    of then  outstanding  borrowings  under its former revolving credit and term
    loan facility (the "Former  Propane  Facility").  The First  Mortgage  Notes
    amortize in equal annual  installments  of $15,625,000  commencing June 2003
    through June 2010.

(c)  During 1995 Mistic entered into an $80,000,000 credit agreement (as amended
     by an amendment dated December 30, 1996, the "Mistic Bank Facility") with a
     group  of  banks.  The  Mistic  Bank  Facility  consists  of a  $20,000,000
     revolving credit facility and a $60,000,000 term facility. Borrowings under
     the Mistic Bank Facility  bore  interest at the prime rate through  October
     16, 1995 and thereafter,  at Mistic's  option,  at either (i) 30, 60, 90 or
     180-day  LIBOR (5.5% to 5.6% as of December  31,  1996) plus 2 3/4% or (ii)
     the higher of (a) the prime rate or (b) the  Federal  funds rate plus 1/2%,
     in either case, plus 1 1/2%. Borrowings under the revolving credit facility
     are due in their entirety in August 1999.  However,  Mistic must reduce the
     borrowings  under  the  revolving  credit  facility  for a period of thirty
     consecutive  days between  October 1 and March 31 of each year to less than
     or equal to (a) $12,500,000  between October 1, 1996 and March 31, 1997 and
     (b) zero between  October 1 and the following  March 31 for each of the two
     years thereafter (such requirement was met in  February/March  1997 for the
     period between  October 1, 1996 and March 31, 1997).  Mistic must also make
     mandatory prepayments in an amount equal to 75% for the year ended December
     31, 1997 and 50% thereafter of excess cash flow, as defined. The term loans
     amortize  in  installments  of  $6,250,000  in 1997,  $10,000,000  in 1998,
     $11,250,000  in 1999,  $15,000,000  in 2000  and  $11,250,000  in 2001.  In
     connection with the amendment dated December 30, 1996,  commencing February
     28, 1997, the borrowing base for the revolving  credit  facility is the sum
     of 80% of eligible accounts receivable and 50% of eligible inventory,  both
     as defined.

(d)  During 1995 ARDC and ARHC entered into loan and financing  agreements  with
     FFCA Mortgage Corporation ("FFCA") which, as amended,  permit borrowings in
     the form of mortgage notes (the "Mortgage  Notes") and equipment notes (the
     "Equipment  Notes")  aggregating  $87,294,000 (the "FFCA Loan Agreements").
     The Mortgage Notes and Equipment  Notes bear interest at rates in effect at
     the  time of the  borrowings  ranging  from 10 1/8% to 11 1/2%  plus,  with
     respect to the Mortgage Notes,  participating  interest to the extent gross
     sales of the financed  restaurants  exceed certain defined levels which are
     in excess of current  levels.  The Mortgage  Notes and Equipment  Notes are
     repayable in equal monthly  installments,  including interest,  over twenty
     years and  seven years, respectively. As of  December 31, 1996, borrowings 
     under the FFCA Loan Agreements aggregated $62,697,000 (including cumulative
     repayments of $4,325,000  through December 31, 1996) resulting in remaining
     availability  of  $24,597,000  through  December  31,  1997 to finance  new
     company-owned  restaurants  whose sites are identified to FFCA by September
     30, 1997 on terms similar to those of outstanding borrowings. The assets of
     ARDC of approximately $37,000,000 will not be available to pay creditors of
     Triarc,  RCAC or Arby's until all loans under the FFCA Loan Agreements have
     been repaid in full.  As discussed in Note 3, in February  1997 the Company
     entered into an agreement to sell all of its restaurants  and, if such sale
     is consummated on terms as they currently exist, the purchaser would assume
     $54,709,000 of borrowings under the FFCA Loan Agreements.

(e) On May 16, 1996 C.H.  Patrick  entered into a $50,000,000  credit  agreement
    (the  "Patrick  Facility")  consisting  of a  $15,000,000  revolving  credit
    facility  with no  outstanding  borrowings  as of  December  31,  1996 and a
    $35,000,000  term facility  consisting of two term loans (the "Term Loans").
    Borrowings  under the Patrick  Facility  bore  interest at the higher of the
    prime rate or 1/2% over the  Federal  funds rate (the "Base  Rate")  through
    July 29, 1996. Subsequent thereto, one of the Term Loans with an outstanding
    balance of  $14,000,000  as of December  31, 1996 and  borrowings  under the
    revolving credit facility  ("Revolving Loans") bear interest,  at the option
    of C.H. Patrick,  at (i) 30, 60, 90 or 180-day LIBOR plus 2 3/4% or (ii) the
    Base Rate plus 1 3/4%, and the other Term Loan with an  outstanding  balance
    of  $19,875,000  as of December 31, 1996 bears interest at (i) 30, 60, 90 or
    180-day  LIBOR plus 3 1/4% or (ii) the Base Rate plus 2 1/4%.  The remaining
    $33,875,000 of Term Loans amortizes $3,187,000 in 1997,  $2,938,000 in 1998,
    $3,750,000 in 1999, $4,375,000 in 2000,  $6,125,000 in 2001,  $10,438,000 in
    2002  and  $3,062,000  in  2003.  C.H.  Patrick  must  also  make  mandatory
    prepayments  in an amount  equal to 75% of excess cash flow,  as defined (no
    such  prepayments  were required in 1996).  The borrowing base for revolving
    credit  loans  is the sum of (i) 85% of  eligible  accounts  receivable,  as
    defined  (excludes  accounts  receivable  due from the buyer of the  Textile
    Business - see Note 19), (ii) 75% of accounts  receivable due from the buyer
    of the Textile Business,  (iii) the lesser of (a) 50% of eligible inventory,
    as defined and (b) $10,000,000 and (iv) any amounts deposited with the
    lenders in respect of letter of credit liabilities, less $50,000.

(f) On July 2, 1996  National  entered into a $55,000,000  bank credit  facility
    (the "Propane Bank Credit Facility") with a group of banks. The Propane Bank
    Credit  Facility  includes  a  $15,000,000  working  capital  facility  (the
    "Working  Capital  Facility")  and a $40,000,000  acquisition  facility (the
    "Acquisition  Facility"),  the  use  of  which  is  restricted  to  business
    acquisitions and capital  expenditures  for growth.  The Propane Bank Credit
    Facility bears interest,  at National's  option, at either (i) 30, 60, 90 or
    180-day LIBOR plus a margin generally ranging from 1% to 1 3/4% depending on
    National's  financial  condition  (such  margin  was 1 1/4% with  respect to
    borrowings  under the Working  Capital  Facility  and 1 1/2% with respect to
    borrowings under the Acquisition  Facility at December 31, 1996) or (ii) the
    higher of (a) the prime rate and (b) the Federal  funds rate plus 1/2 of 1%,
    in either case,  plus a margin of up to 1/4%.  Borrowings  under the Working
    Capital  Facility  mature  in their  entirety  in July  1999.  However,  the
    Partnership must reduce the borrowings under the Working Capital Facility to
    zero for a period of at least 30 consecutive days in each year between March
    1 and August 31. The  Acquisition  Facility  converts to a term loan in July
    1998 and amortizes thereafter in twelve equal quarterly installments through
    July 2001.

(g) In April 1996 all then outstanding obligations under a senior secured credit
    facility (the  "Graniteville  Credit  Facility")  maintained by TXL and C.H.
    Patrick  with a  commercial  lender  aggregating  $180,243,000  were  repaid
    concurrently with the sale of the Textile Business (see Note 19).

(h) On February 22, 1996 the 11 7/8% senior subordinated debentures due February
    1,  1998  (the  "11  7/8%  Debentures")  were  redeemed.  The  cash for such
    redemption came from the proceeds of $30,000,000 of 1995  borrowings,  which
    were restricted to the redemption of the 11 7/8% Debentures,  under National
    Propane's  former  revolving  credit and term loan facility,  liquidation of
    marketable securities and existing cash balances.

(i) On July 1, 1996 Triarc paid  $27,250,000  to National  Union Fire  Insurance
    Company of Pittsburgh,  PA ("National  Union") in full  satisfaction  of a 9
    1/2%  promissory  note payable to National Union (the "National Union Note")
    with a then outstanding  balance of $36,487,000  (including accrued interest
    of $1,790,000).  If the settlement of certain insurance liabilities commuted
    to  National  Union  effective  December  31,  1993 did not  exceed  certain
    predetermined  levels,  the  National  Union Note was to be reduced by up to
    $3,000,000 in each of 1995 and 1996.  Prior to the repayment of the National
    Union Note, the Company  received such  $3,000,000 in the form of reductions
    in the  principal  of the  National  Union Note in each of 1995 and 1996 and
    recorded such amounts as reductions of "General and  administrative"  in the
    accompanying consolidated statements of operations.

(j) As  discussed  in Note 3, in  February  1997  the  Company  entered  into an
    agreement to sell all of its restaurants and, if such sale is consummated on
    terms as they currently  exist,  the purchaser  would assume all capitalized
    lease obligations  associated with the restaurants currently estimated to be
    $15,025,000.

     Under the Company's various debt agreements,  substantially all of Triarc's
and its  subsidiaries'  assets other than cash and  short-term  investments  are
pledged as security. In addition,  (i) obligations under the 9 3/4% Senior Notes
have been guaranteed by Royal Crown and Arby's, (ii) obligations under the First
Mortgage  Notes and the Propane Bank Credit  Facility  have been  guaranteed  by
National  Propane  and (iii)  obligations  under the Mistic Bank  Facility,  the
Patrick  Facility and  $24,698,000 of borrowings  under the FFCA Loan Agreements
have been guaranteed by Triarc.  Assuming consummation of the RTM sale (see Note
3) Triarc would remain contingently liable under its guarantee upon the failure,
if any,  of RTM and its  acquisition  entity  to  satisfy  such  obligation.  As
collateral for such guarantees,  all of the stock of Royal Crown, Arby's, Mistic
and C.H. Patrick is pledged as well as  approximately  2% of the  unsubordinated
general partner interest in the Partnership (see Note 19). Although the stock of
National  Propane  is not  pledged  in  connection  with  any  guaranty  of debt
obligations,  it is pledged in connection with a $40,700,000  intercompany  loan
payable by Triarc to the Partnership.

    The Company's debt agreements  contain  various  covenants which (a) require
meeting  certain  financial  amount  and ratio  tests;  (b) limit,  among  other
matters, (i) the incurrence of indebtedness, (ii) the retirement of certain debt
prior to  maturity,  (iii)  investments,  (iv) asset  dispositions,  (v) capital
expenditures and (vi) affiliate  transactions other than in the normal course of
business;  and (c)  restrict  the payment of  dividends  by  Triarc's  principal
subsidiaries to Triarc.

    Triarc's  principal  subsidiaries,  other  than CFC  Holdings  and  National
Propane, are unable to pay any dividends or make any loans or advances to Triarc
during 1997 under the terms of the various  indentures and credit  arrangements.
While there are no restrictions applicable to National Propane, National Propane
is  dependent  upon  cash  flows  from the  Partnership,  principally  quarterly
distributions  from  the  Partnership  on  the  Subordinated  Units  and  the 4%
unsubordinated  general partner interest (see Note 19), to pay dividends.  While
there are no  restrictions  applicable  to CFC Holdings,  CFC Holdings  would be
dependent upon cash flows from RCAC to pay dividends and as of December 31, 1996
RCAC was  unable  to pay any  dividends  or make any  loans or  advances  to CFC
Holdings.

(14)FAIR VALUE OF FINANCIAL INSTRUMENTS

    The carrying amounts and fair values of the Company's financial  instruments
for which such amounts differ in total are as follows (in thousands):



                                                                 DECEMBER 31,
                                                                 ------------
                                                      1995                        1996
                                           -------------------------     ------------------------
                                              CARRYING         FAIR       CARRYING        FAIR
                                               AMOUNT          VALUE       AMOUNT         VALUE
                                               ------          -----       ------         -----
                                                                                
 Long-term debt (Note 13):
      9 3/4% Senior Notes.................$   275,000    $   226,000  $    275,000    $  283,000
      First Mortgage Notes ...............        --             --        125,000       125,000
      Mistic Bank Facility................     65,250         65,250        68,700        68,700
      FFCA Loan Agreements................     58,230         61,264        58,372        61,814
      Patrick Facility....................        --             --         33,875        33,875
      Propane Bank Credit Facility........        --             --          7,885         7,885
      Graniteville Credit Facility........    198,635        198,635           --            --
      Former Propane Facility.............    127,312        127,312           --            --
      11 7/8% Debentures..................     43,080         45,000           --            --
      National Union Note ................     37,697         36,128           --            --
      Other long-term debt ...............     41,673         41,673        25,264        25,264
                                          -----------    -----------  ------------    ----------
                                          $   846,877    $   801,262  $    594,096    $  605,538
                                          ===========    ===========  ============    ==========
 Swap Agreement (liability) (Note 13).....$      (684)   $      (896) $        --     $      --
                                          ===========    ===========  ============    ==========



     The fair  values of the 9 3/4%  Senior  Notes  are  based on quoted  market
prices at the respective  reporting  dates. The fair value of the First Mortgage
Notes was assumed to reasonably  approximate  their  carrying value due to their
recent  issuance in July 1996 and an  insignificant  change in  borrowing  rates
since that time. The fair values of the revolving loans and the term loans under
the Mistic Bank Facility and the Patrick Facility at December 31, 1995 and 1996,
the Propane  Bank Credit  Facility  at  December  31, 1996 and the  Graniteville
Credit   Facility  and  the  Former  Propane   Facility  at  December  31,  1995
approximated  their carrying values due to their floating  interest  rates.  The
fair  value of the  Mortgage  Notes  and  Equipment  Notes  under  the FFCA Loan
Agreements  at December  31, 1995 and 1996 was  determined  by  discounting  the
future  monthly  payments  using  the  rate of  interest  available  under  such
agreements  at  December  31,  1995 and  1996.  The  aggregate  par value of the
outstanding  11  7/8%  Debentures  as  of  December  31,  1995  was  assumed  to
approximate  fair value since all were redeemed at par on February 22, 1996. The
fair value of the National  Union Note as of December 31, 1995 was determined by
using a discounted cash flow analysis based on an estimate of the Company's then
current  borrowing  rate for a similar  security.  The fair  values of all other
long-term debt were assumed to reasonably  approximate  their  carrying  amounts
since (i) for  capitalized  lease  obligations,  the weighted  average  implicit
interest rate  approximates  current  levels and (ii) for equipment  notes,  the
remaining maturities are relatively short-term.

      The fair value of the Swap Agreement at December 31, 1995  represented the
estimated amount RCAC would have paid to terminate the Swap Agreement, as quoted
by the counterparty.

(15)INCOME TAXES

      The income  (loss) from  continuing  operations  before  income  taxes and
minority  interests  in income of  consolidated  subsidiaries  consisted  of the
following components (in thousands):

                                               1994        1995         1996
                                               ----        ----         ----

      Domestic.............................$  (1,659)  $  (36,076)   $    8,046
      Foreign..............................    2,470       (1,948)       (3,408)
                                           ---------   ----------    ----------
                                           $     811   $  (38,024)   $    4,638
                                           =========   ==========    ==========

         The  provision  (benefit) for income taxes from  continuing  operations
consists of the following components (in thousands):

                                               1994        1995      1996
                                               ----        ----      ----
    Current:
      Federal.............................$   2,167   $    (965)  $   2,888
      State...............................    2,310       1,091       5,725
      Foreign.............................    2,228         357         370
                                           --------   ---------   ---------
                                              6,705         483       8,983
                                           --------    --------   ---------
                    
     Deferred:
       Federal............................   (4,985)        (69)      7,547
       State..............................      645      (1,444)     (5,236)
       Foreign............................     (753)        --          --
                                          ---------   ---------   ---------
                                             (5,093)     (1,513)      2,311
                                          ---------   ---------   ---------
                 Total....................$   1,612   $  (1,030)  $  11,294
                                          =========   =========   =========

    The net current  deferred income tax asset and the net non-current  deferred
income tax (liability) resulted from the following components (in thousands):



                                                                DECEMBER 31,
                                                                ------------
                                                              1995        1996
                                                              ----        ----
                                                                       
      Current deferred income tax assets (liabilities):
        Accrued employee benefit costs................    $   4,799     $   4,218
        Facilities relocation and corporate
          restructuring...............................        2,221         2,366
        Allowance for doubtful accounts ..............        2,474         2,135
        Closed facilities reserves....................        1,252         1,059
        Other, net....................................          (99)        8,430
                                                          ---------     ---------
                                                             10,647        18,208
        Valuation allowance...........................       (1,799)       (1,799)
                                                          ---------     ---------
                                                              8,848        16,409
      Non-current deferred income tax assets (liabilities):
        Reserve for income tax contingencies and other
           tax matters................................      (26,065)      (29,005)
        Gain on sale of propane business (see Note 19)          --        (33,163)
        Net operating loss and alternative minimum tax
           credit carryforward........................       41,524        23,954
        Depreciation and other properties basis
          differences.................................      (36,328)        9,743
        Insurance losses not deducted.................        7,061         7,061
        Other, net....................................        7,433         4,593
                                                          ---------     ---------
                                                             (6,375)      (16,817)
        Valuation allowance...........................      (17,638)      (17,638)
                                                          ---------     ---------
                                                            (24,013)      (34,455)
                                                          ---------     ---------
                                                          $ (15,165)    $ (18,046)
                                                          =========     =========


    As of December 31, 1996 Triarc had a net  operating  loss  carryforward  for
Federal income tax purposes of  approximately  $19,000,000  expiring in the year
2008, the utilization of which is subject to annual limitations through 1998. In
addition,  the Company has (i) alternative  minimum tax credit  carryforwards of
approximately  $6,900,000  and (ii)  depletion  carryforwards  of  approximately
$600,000, both of which have an unlimited carryforward period.

    A  "valuation  allowance"  is provided  when it is more likely than not that
some  portion of  deferred  tax assets  will not be  realized.  The  Company has
established  valuation  allowances  principally  for  that  portion  of the  net
operating  loss  carryforwards  and other net  deferred  tax  assets  related to
Chesapeake  Insurance  which  entity as set forth in Note 1 is not  included  in
Triarc's consolidated income tax return.

    The difference  between the reported income tax provision  (benefit) and the
tax  provision  (benefit)  that  would  result  from  applying  the 35%  Federal
statutory  rate to the income (loss) from  continuing  operations  before income
taxes and minority interests is reconciled as follows (in thousands):



                                                                                         1994          1995            1996
                                                                                         ----          ----            ----

                                                                                                                  
         Income tax (benefit) computed at Federal statutory rate.....................$      284   $    (13,308)    $     1,623
         Increase (decrease) in Federal taxes resulting from:
              Non-deductible loss on sale of Textile Business (see Note 19)..........       --             --            2,928
              Provision for income tax contingencies and other tax matters...........       --           6,100           2,582
              Amortization of non-deductible Goodwill ...............................     2,171          2,286           2,166
              Effect of net operating losses for which no tax carryback benefit
                 is available (utilization of operating loss, depletion and tax
                 credit carryforwards)...............................................    (3,643)           986           1,269
              State taxes (benefit), net of Federal income tax benefit (provision)...     1,921           (229)            318
              Foreign tax rate in excess of United States Federal statutory rate
                 and foreign withholding taxes, net of Federal income tax benefit....       479            307             241
              Minority interests.....................................................       --             --             (640)
              Non-deductible amortization of restricted stock........................       --           1,440             --
              Other non-deductible expenses..........................................       324          1,340             807
              Other, net.............................................................        76             48             --
                                                                                     ----------   ------------     -----------
                                                                                     $    1,612   $     (1,030)    $    11,294
                                                                                     ==========   ============     ===========


      The Federal  income tax returns of the Company  have been  examined by the
IRS for the tax years 1985  through  1988.  The Company has  resolved all issues
related to such audit and in connection  therewith paid  $5,182,000 and $674,000
in 1994 and 1996,  respectively,  in final settlement of such examination.  Such
amounts had been fully  reserved in years prior to 1994.  The IRS has  completed
its  examination  of the Company's  Federal income tax returns for the tax years
from 1989 through 1992 and has issued notices of proposed adjustments increasing
taxable income by  approximately  $145,000,000,  the tax effect of which has not
yet been  determined.  The Company is  contesting  the  majority of the proposed
adjustments and,  accordingly,  the amount of any payments  required as a result
thereof  cannot  presently  be  determined.  During  1995 and  1996 the  Company
provided  $6,100,000  and  $2,582,000,  respectively,  included in "Benefit from
(provision   for)  income  taxes"  and  during  1994,  1995  and  1996  provided
$1,400,000,  $2,900,000,  and  $2,000,000,  respectively,  included in "Interest
expense" relating to such examinations and other tax matters.  Management of the
Company believes that adequate  aggregate  provisions have been made in 1996 and
prior periods for any tax liabilities,  including interest, that may result from
the 1989 through 1992 examination and other tax matters.

(16)REDEEMABLE PREFERRED STOCK

      The  Company  had  5,982,866  shares  of its  Redeemable  Preferred  Stock
outstanding  at  December  31,  1994,  with a stated  value of $12.00 per share,
bearing  a  cumulative   annual  dividend  of  8  1/8%  payable   semi-annually,
convertible  into 4,985,722  shares of class B common stock (the "Class B Common
Stock") (see Note 17) at $14.40 per share and requiring mandatory  redemption on
April 23, 2005 at $12.00 per share.  All of such Redeemable  Preferred Stock was
owned  by one  of the  affiliates  (the  "Posner  Entities")  of  Victor  Posner
("Posner"),  the Company's former Chairman and Chief Executive Officer before an
April 1993 change in control. Pursuant to a settlement agreement entered into by
the  Company  and  the  Posner   Entities  on  January  9,  1995  (the   "Posner
Settlement"), all of the Redeemable Preferred Stock was converted into 4,985,722
shares of Class B Common Stock issued to a Posner Entity (the "Conversion" - see
Note 17). In  connection  therewith,  the Company has no further  obligation  to
declare or pay dividends on the  Redeemable  Preferred  Stock  subsequent to the
last payment date of September 30, 1994.

(17)STOCKHOLDERS' EQUITY

     The  Company's  class A common  stock (the "Class A Common  Stock") and its
Class B Common  Stock are  identical,  except that Class A Common  Stock has one
vote per share  and Class B Common  Stock is  non-voting.  Class B Common  Stock
issued  to the  Posner  Entities  can only be sold  subject  to a right of first
refusal in favor of the  Company or its  designee.  If held by a  person(s)  not
affiliated with Posner,  each share of Class B Common Stock is convertible  into
one share of Class A Common  Stock.  There  were no  changes  in the  27,983,805
issued  shares of Class A Common  Stock  during  1994,  1995 and 1996.  Prior to
January 9, 1995 no shares of Class B Common Stock had been issued. On January 9,
1995 pursuant to the Posner  Settlement the Company issued (i) 4,985,722  shares
of Class B Common  Stock as a result of the  Conversion  and (ii) an  additional
1,011,900  shares  of  Class B  Common  Stock  to the  Posner  Entities  with an
aggregate fair value of $12,016,000 in  consideration  for, among other matters,
(i) the settlement of all amounts due to the Posner  Entities in connection with
the  termination of the lease for the Company's  former  headquarters  effective
February 1, 1994 and (ii) an  indemnification  by certain of the Posner Entities
of any claims or expenses  incurred  after  December 1, 1994  involving  certain
litigation  relating to NVF Company  and APL  Corporation  (see Note 25) and any
potential   litigation   relating  to  the  bankruptcy  filing  of  Pennsylvania
Engineering Corporation (see Note 28).

    A summary of the  changes  in the  number of shares of Class A Common  Stock
held in treasury is as follows (in thousands):


                                                                                      1994         1995        1996
                                                                                      ----         ----        ----

                                                                                                      
       Number of shares at beginning of period...................................... 6,661        4,028        4,067
       Common shares acquired in open market transactions...........................    91           42           45
       Restricted stock exchanged (see below) or reacquired.........................    40           11            4
       Common shares issued from treasury upon exercise of stock options............   --           --           (10)
       Common shares issued from treasury to directors..............................    (3)          (7)          (8)
       Common shares issued from treasury in the SEPSCO Merger (Note 26)............(2,692)         --           --
       Restricted stock grants from treasury (see below)............................   (69)          (7)         --
                                                                                    ------      -------      -------
       Number of shares at end of period............................................ 4,028        4,067        4,098
                                                                                    ======      =======      =======

    The Company has 25,000,000  authorized  shares of preferred  stock including
5,982,866 designated as Redeemable Preferred Stock, none of which were issued as
of December 31, 1995 and 1996.

    The Company maintains a 1993 Equity  Participation Plan (the "Equity Plan"),
which  provides for the grant of stock options and  restricted  stock to certain
officers, key employees,  consultants and non-employee  directors.  In addition,
non-employee directors are eligible to receive shares of Class A Common Stock in
lieu of retainer or meeting  attendance  fees.  The Equity Plan  provides  for a
maximum  of  10,000,000  shares  of Class A Common  Stock  to be  issued  on the
exercise  of  options,  granted as  restricted  stock or issued to  non-employee
directors in lieu of fees and there remain 1,049,902 shares available for future
grants under the Equity Plan as of December 31, 1996.

    A summary of changes in  outstanding  stock options is as follows  (weighted
average  option price data is not  presented  for periods  prior to December 31,
1995 since such data was not required until the adoption of SFAS 123 in 1996):



                                                                                        WEIGHTED AVERAGE
                                                    OPTIONS        OPTION PRICE           OPTION PRICE
                                                    -------        ------------           ------------

                                                                      
      Outstanding at January 1, 1994..........     1,972,500     $ 18.00 - $ 30.75
      Granted during 1994.....................     5,753,400     $ 10.75 - $ 24.125
      Terminated during 1994..................      (156,000)    $ 18.00 - $ 30.75
                                                ------------
      Outstanding at December 31, 1994........     7,569,900     $ 10.75 - $ 30.00
      Granted during 1995.....................     1,239,500     $ 10.125- $ 16.25
      Terminated during 1995..................      (210,700)    $ 10.75 - $ 30.00
                                                ------------
      Outstanding at December 31, 1995........     8,598,700     $ 10.125- $ 30.00          $17.19
      Granted during 1996 (a).................       136,000     $ 11.00 - $ 13.00          $12.16
      Exercised during 1996...................        (9,999)         $10.75                $10.75
      Terminated during 1996..................      (293,869)    $ 10.125- $ 30.00          $13.51
                                                ------------
      Outstanding at December 31, 1996........     8,430,832     $ 10.125- $ 30.00          $17.24
                                                ============
      Exercisable at December 31, 1996........     3,476,486     $ 10.125- $ 30.00          $15.86
                                                ============


      (a) The weighted  average grant date fair value of stock  options  granted
during 1996 was $6.81 (see discussion of stock option valuation below).

      The  following  table sets forth  information  relating  to stock  options
outstanding at December 31, 1996:



                             STOCK OPTIONS OUTSTANDING                                     STOCK OPTIONS EXERCISABLE
      ----------------------------------------------------------------------------   --------------------------------------
                         OUTSTANDING AT      WEIGHTED AVERAGE      WEIGHTED AVERAGE    OUTSTANDING AT      WEIGHTED AVERAGE
      OPTION PRICE      DECEMBER 31, 1996    YEARS REMAINING         OPTION PRICE     DECEMBER 31, 1996      OPTION PRICE
      ------------      -----------------    ---------------         ------------     -----------------      ------------

                                                                                                
     $ 10.125- $ 10.75          1,945,999            8.4                $10.43              1,192,820          $10.54
     $ 11.00 - $ 16.25            396,500            8.6                $13.78                106,833          $15.02
     $ 18.00 - $ 20.00          1,827,500            6.4                $18.23              1,600,832          $18.17
          $20.125               3,850,000            7.3                $20.13                350,000          $20.13
     $ 21.00 - $ 30.00            410,833            7.2                $21.32                226,001          $21.33
                               ----------                                                  ----------
                                8,430,832            7.4                                    3,476,486
                               ==========                                                  ==========


      Stock  options under the Equity Plan  generally  have maximum terms of ten
years and vest ratably over periods not exceeding five years from date of grant.
However, an aggregate  3,500,000  performance stock options granted on April 21,
1994 to the Chairman and Chief  Executive  Officer and the  President  and Chief
Operating  Officer vest in one-third  increments  upon attainment of each of the
three  closing  price  levels  for the  Class A  Common  Stock  for 20 out of 30
consecutive trading days by the indicated dates as follows:

    ON OR PRIOR
    TO APRIL 21,                                                      PRICE
    ------------                                                      -----

      1999......................................................    $ 27.1875
      2000......................................................    $ 36.25
      2001......................................................    $ 45.3125

     Each option not previously vested, should such price levels not be attained
no later than each indicated date, will vest on October 21, 2003. In addition to
the 3,500,000  performance stock options discussed above,  350,000 of such stock
options were granted on April 21, 1994 to the Vice Chairman of the Company since
April 1993 (the "Vice Chairman"). In December 1995, it was decided that the Vice
Chairman's  employment  contract would not be extended and as of January 1, 1996
the Vice  Chairman  resigned as a director,  officer and employee of the Company
and  entered  into a  consulting  agreement  pursuant  to which  no  substantial
services are expected to be provided. In accordance therewith, effective January
1, 1996 all of the 513,333  non-vested  stock options  previously  issued to the
Vice Chairman  (including  350,000  performance stock options which were granted
April 21,  1994) were  vested in full.  In  January  1997  Triarc  paid the Vice
Chairman  $353,000 in  consideration  of the  cancellation  of all 680,000 stock
options  previously  granted to him. Such amount was included in the "Facilities
relocation and corporate restructuring" provision in 1995 (see Note 18).

      Stock options under the Equity Plan are generally granted at not less than
the fair market value of the Class A Common Stock at the date of grant. However,
options  granted,  net of  terminations,  prior to 1994 included 275,000 options
issued at an option price of $20.00 which was below the $31.75 fair market value
of the  Class A Common  Stock at the date of  grant  representing  an  aggregate
difference of $3,231,000.  Such amount is being recorded as compensation expense
over the applicable vesting period of one to five years. Prior to 1994, $231,000
of the aggregate  difference was recognized as compensation  expense.  Effective
January 1, 1994 the Company  recorded the remaining  $3,000,000 of the aggregate
difference as unearned  compensation  and during 1994, 1995 and 1996,  $907,000,
$761,000 and $489,000,  respectively,  was amortized to compensation expense and
credited to "Other  stockholders'  equity".  During 1995 and 1996 certain  below
market options were forfeited. Such forfeitures resulted in decreases to (i) the
"Unearned compensation" component of "Other stockholders' equity" of $319,000 in
1995 and $219,000 in 1996  representing the reversals of the unamortized  values
at the dates of forfeiture,  (ii)  "Additional  paid-in  capital" of $588,000 in
1995 and $852,000 in 1996  representing the reversal of the initial value of the
forfeited below market stock options and (iii) "General and  administrative"  of
$269,000 in 1995 and  $633,000  in 1996  representing  the  reversal of previous
amortization of unearned  compensation  relating to forfeited below market stock
options.  The  remaining  unamortized  balance  relating to below  market  stock
options included in "Unearned compensation" is $305,000 at December 31, 1996.

      A summary of the changes in the  outstanding  shares of  restricted  stock
granted by the Company from treasury stock is as follows:

   Outstanding at January 1, 1994........................      429,500
   Granted during 1994...................................       68,750
   Converted to Rights (see below) during 1994...........      (26,000)
   Repurchased by the Company............................       (3,500)
                                                              --------
   Outstanding at December 31, 1994......................      468,750
   Granted during 1995...................................        6,700
   Converted to Rights (see below) during 1995...........       (4,550)
   Forfeited during 1995.................................       (6,700)
   Vested during 1995 (see below)........................     (464,200)
                                                              --------
   Outstanding at December 31, 1995 and 1996.............          --
                                                              ========

     Grants of  restricted  stock,  which  provided  for vesting over periods of
three to four years,  resulted in aggregate unearned  compensation of $1,376,000
and $68,000 for 1994 and 1995, respectively,  based upon the market value of the
Company's  Class A Common  Stock at the  respective  dates of grant which ranged
from  $10.125 to $24.125.  The  vesting of 150,000  shares of  restricted  stock
granted prior to 1994 to three court-appointed members of a special committee of
Triarc's Board of Directors (the "Special Committee Members") was accelerated in
connection  with their decision not to stand for re-election as directors of the
Company  at the 1995  annual  stockholders  meeting  resulting  in a charge  for
amortization of unearned  compensation in 1995 of $1,691,000 (including $723,000
which would have  otherwise  been amortized  during the  post-acceleration  1995
period).  On December 7, 1995 the  Compensation  Committee of Triarc's  Board of
Directors authorized  management of the Company to accelerate the vesting of all
of the then  outstanding  shares  of  restricted  stock.  On  January  16,  1996
management of the Company  accelerated the vesting and the Company  recorded the
resulting additional  amortization of unearned compensation of $1,640,000 in its
entirety  in 1995 which  together  with the  $1,691,000  related to the  Special
Committee Members,  resulted in aggregate  amortization of unearned compensation
in connection with accelerated vesting of $3,331,000. Prior to these accelerated
vestings of the restricted stock, the unearned  compensation was being amortized
over the  applicable  vesting  period  and  together  with the  amortization  of
unearned  compensation  related to the  accelerated  vesting,  was  recorded  as
"General and  administrative".  Such compensation expense was $3,122,000 in 1994
and  $1,950,000 in 1995  (excluding  the  $3,331,000  relating to the previously
discussed accelerated vesting of restricted stock).

      Effective January 1, 1996 the Company adopted SFAS 123. In accordance with
the intrinsic value method of accounting for stock options,  the Company has not
recognized any  compensation  expense for stock options granted in 1995 and 1996
since the  option  price  for all of such  stock  options  was equal to the fair
market value of the Class A Common Stock at the respective  dates of grant.  Had
compensation  expense been recognized for such 1995 and 1996 stock option grants
based on the fair value method as provided for in SFAS 123,  the  Company's  net
loss and loss per share  would have been as  follows  (in  thousands  except per
share data):

                                                1995           1996
                                                ----           ----

      Net loss.........................    $  (37,284)    $   (16,356)
      Loss per share...................         (1.25)           (.55)

      The fair value of stock options granted on the date of grant was estimated
using the Black-Scholes option pricing model with the following weighted average
assumptions:

      Risk-free interest rate.....................          5.74%
      Expected option life........................        7 years
      Expected volatility.........................         45.56%
      Dividend yield..............................           None

     Prior to 1994 and during the years ended  December  31, 1994 and 1995,  the
Company  agreed to pay to  employees  terminated  during  each such  period  and
directors who were not reelected  during 1994 and 1995 who held restricted stock
and/or  stock  options,  an amount in cash equal to the  difference  between the
market value of Triarc's  Class A Common Stock and the base value (see below) of
such  restricted  stock and stock  options  (the  "Rights") in exchange for such
restricted stock or stock options.  Such exchanges for restricted stock were for
10,000,   26,000  and  4,550  Rights  prior  to  1994  and  in  1994  and  1995,
respectively,  and for stock  options  were 40,000,  126,000,  97,700 and 12,500
Rights  prior  to 1994  and in  1994,  1995  and  1996,  respectively.  All such
exchanges  were for an equal  number  of  shares  of  restricted  stock or stock
options except that the 4,550 Rights granted in 1995 were in exchange for 11,250
shares of restricted stock. The Rights which resulted from the exchange of stock
options have base prices  ranging from $10.75 to $30.75 per share and the Rights
which  resulted from the exchange of  restricted  stock all have a base price of
zero. The restricted stock for which Rights were granted (exclusive of the 6,700
shares for which Rights were not granted) was fully vested upon  termination  of
the  employees.  As a result of such  accelerated  vesting the Company  incurred
charges representing  unamortized unearned  compensation of $331,000 and $13,000
during 1994 and 1995, respectively, included in "General and administrative". Of
the 316,750 Rights  granted,  (i) 36,000 and 4,550 relating to restricted  stock
were exercised in 1995 and 1996,  respectively,  (ii) 16,000, 55,000 and 108,700
relating to stock options expired in 1994, 1995 and 1996, respectively and (iii)
16,500  relating to stock options were exercised in 1996.  The remaining  80,000
Rights  expire in 1997.  Upon  issuance  of the  Rights the  Company  recorded a
liability  equal to the  excess of the then  market  value of the Class A Common
Stock over the base price of the stock  options or restricted  stock  exchanged.
Such liability has been adjusted to reflect  changes in the fair market value of
Class A Common Stock subject to a lower limit of the base price of the Rights.

(18)  FACILITIES RELOCATION AND CORPORATE RESTRUCTURING

      The "Facilities  relocation and corporate  restructuring" set forth in the
accompanying  consolidated  statements  of  operations  for 1994,  1995 and 1996
consists of the following charges (in thousands):



                                                                                    1994(A)      1995(B)     1996(C)
                                                                                    -------      -------     -------

                                                                                                         
      Estimated costs related to sublease of excess office space .................$    --      $     --     $   3,700
      Estimated restructuring charges associated with employee
         severance costs..........................................................   1,700           510        2,200
      Costs of terminating beverage distribution agreement........................     --            --         1,300
      Estimated costs of beverage plant closing and other asset disposals.........     --            --           600
      Consulting fees paid associated with combining certain
         operations of Royal Crown and Mistic and other...........................     --            --           600
      Costs related to the planned spinoff of the Company's
         restaurant/beverage group................................................     --            --           400
      Cost related to consulting agreements between the Company
         and its former Vice Chairman ............................................     --          2,500          --
      Employee relocation costs...................................................   3,800           --           --
      Estimated costs (reductions) to relocate the Company's headquarters.........   3,300          (310)         --
                                                                                  --------     ---------    ---------
                                                                                  $  8,800     $   2,700    $   8,800
                                                                                  ========     =========    =========


      (a)  The 1994 facilities  relocation and corporate  restructuring  charges
           principally  related  to the 1994  closing  of the  Company's  former
           corporate office in West Palm Beach, Florida, including the estimated
           loss  ($3,300,000)  on the  sublease of such office space in 1994 and
           the write-off of unamortized leasehold improvements,  severance costs
           related  to  corporate  employees  terminated  during  1994  and  the
           relocation during 1994 of certain employees  formerly located in that
           facility  either to another  South  Florida  location or the New York
           City corporate office.

     (b)  The 1995  facilities  relocation  and corporate  restructuring  charge
          related to (i) a $310,000  reduction of the estimated  costs  provided
          prior to 1994 to terminate  the lease on the  Company's  then existing
          corporate  facilities  resulting from the Posner  Settlement (see Note
          28) and (ii) severance  costs  associated  with the resignation of the
          Vice  Chairman  of  Triarc,  who had  served  from  April 23,  1993 to
          December  31, 1995 (see Note 17),  and the 1995  termination  of other
          corporate  employees  in  conjunction  with a reduction  in  corporate
          staffing.

     (c)  The 1996  facilities  relocation  and corporate  restructuring  charge
          principally  relates to costs  associated with (i) estimated losses on
          planned  subleases  (principally  for the write-off of  nonrecoverable
          unamortized  leasehold  improvements  and  furniture  and fixtures) of
          excess office space in excess of  anticipated  sublease  proceeds as a
          result  of the RTM  sale  (see  Note 3) and the  relocation  of  Royal
          Crown's  headquarters which is being centralized with Mistic's offices
          in White Plains,  New York, (ii) employee  severance costs  associated
          with the relocation of Royal Crown's headquarters, (iii) terminating a
          beverage  distribution  agreement,  (iv) the  shutdown of the beverage
          segment's  Ohio  production  facility and other asset  disposals,  (v)
          consultant fees paid associated with combining  certain  operations of
          Royal Crown and Mistic and (vi) the planned  spinoff of the  Company's
          restaurant/beverage group (see Note 3).


(19)  GAIN (LOSS) ON SALES OF BUSINESSES, NET AND MINORITY INTEREST

      The  "Gain  (loss)  on  sales  of  businesses,  net" as  reflected  in the
accompanying  consolidated  statements of operations was $6,043,000,  $(100,000)
and  $77,000,000 in 1994, 1995 and 1996,  respectively.  During 1994 the Company
sold  substantially  all of the operating assets of SEPSCO's natural gas and oil
business for cash of  $16,250,000  net of $750,000  initially  held in escrow to
cover  certain  indemnities  given to the buyer  resulting  in a pretax  gain of
$6,043,000.  During 1995 $250,000 of such escrow was released and a gain of such
amount was recognized.  Also in 1995, the Company (i) sold the remaining natural
gas and oil assets for net proceeds of $728,000  which resulted in a pretax gain
of $650,000  and (ii) wrote off its then  investment  in MetBev (see Note 28), a
beverage  distributor  in the  New  York  metropolitan  area  when  the  Company
determined  the  decline in value of such  investment  was other than  temporary
which resulted in a pretax loss of $1,000,000. The gain in 1996 consisted of (i)
a pretax loss of $4,500,000 from the sale of the Company's textile business (see
below),  (ii) a pretax gain of $85,175,000 from the sale of the Partnership (see
below) and (iii) a pretax loss of $3,675,000  associated  with the write-down of
MetBev (see Note 28).

      SALE OF TEXTILE BUSINESS
      ------------------------

      On April 29,  1996,  the  Company  completed  the sale (the  "Graniteville
Sale")  of its  textile  business  segment  other  than the  specialty  dyes and
chemicals  business  of C.H.  Patrick  and  certain  other  excluded  assets and
liabilities (the "Textile Business"), to Avondale Mills, Inc. ("Avondale"),  for
$236,824,000  in  cash,  net  of  $8,437,000  of  expenses  and  $12,250,000  of
post-closing  adjustments.  Avondale  assumed  all  liabilities  relating to the
Textile Business other than income taxes,  long-term debt of $191,438,000  which
was repaid at the closing and certain other specified liabilities. In connection
with the  Graniteville  Sale,  Avondale  and C.H.  Patrick  have  entered into a
10-year supply  agreement  pursuant to which C.H.  Patrick is supplying  certain
textile dyes and  chemicals to the combined  Textile  Business/Avondale  entity.
C.H.  Patrick's  right to supply  Avondale is conditioned  upon certain  bidding
procedures  which could result in Avondale  purchasing the products from another
seller.  As a result of the  Graniteville  Sale, the Company  recorded a pre-tax
loss of $4,500,000  (including an $8,367,000  write-off of unamortized  Goodwill
which has no tax benefit) and an income tax provision of $1,500,000 resulting in
an  after-tax  loss  of  $6,000,000  exclusive  of an  extraordinary  charge  in
connection  with the early  extinguishment  of debt (see Note 22). As previously
set forth,  the results of operations of the Textile Business have been included
in the  accompanying  consolidated  statements of  operations  through April 29,
1996.  See  below for  supplemental  pro forma  information  for the year  ended
December 31, 1996 giving effect to the sale of the Textile Business.

      The  assets  and   liabilities   of  the  Textile   Business  sold  and  a
reconciliation  to the net cash  proceeds  received from the sale of the Textile
Business, net of post-closing adjustments and expenses paid of $20,805,000,  are
as follows (in thousands):



                                                                                  
      Receivables, net.....................................................  $    91,135
      Inventories..........................................................       76,294
      Prepaid expenses and other current assets............................        1,421
      Accounts payable and accrued expenses................................      (46,060)
      Properties, net......................................................      111,039
      Unamortized costs in excess of net assets of acquired companies......        8,367
      Other non-current liabilities, net...................................         (872)
                                                                             -----------
         Net assets of the Textile Business................................      241,324
      Pre-tax loss on sale of Textile Business.............................       (4,500)
                                                                             -----------
         Net cash proceeds from sale of the Textile Business ..............  $   236,824
                                                                             ===========


      SALE OF PROPANE BUSINESS
      ------------------------

      In July 1996 the  Partnership  consummated an initial public offering (the
"Offering") of an aggregate  6,301,550 of its common units representing  limited
partner  interests  (the "Common  Units"),  representing  an  approximate  55.8%
interest in the  Partnership,  for an  offering  price of $21.00 per Common Unit
aggregating  $117,382,000  net of  $14,951,000  of  underwriting  discounts  and
commissions  and other  expenses  related to the offering.  In November 1996 the
Partnership sold an additional  400,000 Common Units through a private placement
(the  "Private  Placement  Offering")  at a price  of  $21.00  per  Common  Unit
aggregating $7,367,000 net of fees and expenses of $1,033,000.  The sales of the
Common Units resulted in a pretax gain to the Company in 1996 of $85,175,000 and
a provision for income taxes of $33,163,000.

      Concurrently with the Offering, the Partnership issued to National Propane
4,533,638  subordinated  units  (the  "Subordinated  Units"),   representing  an
approximate  38.7%  subordinated  general  partner  interest in the  Partnership
(after giving effect to the subsequent  July and November  sales).  In addition,
National  Propane and a  subsidiary  (the  "General  Partners")  hold a combined
aggregate 4.0%  unsubordinated  general  partner  interest (the  "Unsubordinated
General Partner  Interest") in the Partnership  and a  subpartnership,  National
Propane, L.P. (the "Operating Partnership").  In connection therewith,  National
Propane  transferred   substantially  all  of  its  propane-related  assets  and
liabilities (principally all assets and liabilities other than a receivable from
Triarc,  deferred  financing costs and net income tax  liabilities  amounting to
$81,392,000,   $4,127,000  and  $21,615,000,   respectively),   aggregating  net
liabilities of $88,222,000, to the Operating Partnership. The $36,527,000 excess
of the aggregate net proceeds from the sales of the Common Units of $124,749,000
over the $88,222,000 of aggregate net  liabilities  contributed to the Operating
Partnership less (i) $1,323,000 of 1996 Partnership distributions to the General
Partners  over  the  General  Partners'  interest  in  the  net  income  of  the
Partnership  and (ii)  $3,309,000 of 1996  distributions  relating to the Common
Units, plus the $1,829,000 minority interest in 1996 (see below), is recorded as
minority interest liability at December 31, 1996.

     To the extent the  Partnership  has net positive  cash flows,  it must make
quarterly  distributions of its cash balances in excess of reserve requirements,
as  defined,  to holders of the Common  Units,  the  Subordinated  Units and the
Unsubordinated  General  Partner  Interest  within 45 days after the end of each
fiscal  quarter.  On November 14, 1996 the  Partnership  paid a distribution  of
$0.525 per  Common and  Subordinated  Unit with a  proportionate  amount for the
Unsubordinated  General Partner Interest, or an aggregate $5,924,000,  including
$2,616,000 to the General Partners.

      The following  unaudited  supplemental  pro forma  condensed  consolidated
summary  operating  data of the Company for 1996 gives effect to the sale of the
Textile  Business and the repayment of related debt (see above) and, in a second
step,  the formation of the  Partnership,  the Offering,  the Private  Placement
Offering,  the issuance of the First Mortgage  Notes,  the repayment of existing
indebtedness  and  certain  related  transactions  (collectively,  the  "Propane
Transactions")  as if such  transactions  had been  consummated as of January 1,
1996. The pro forma effects of the Propane Transactions include (i) the addition
of the estimated  stand-alone  general and administrative  costs associated with
the operation of the propane  business as a  partnership,  (ii) net decreases to
interest  expense  reflecting  (a) the  elimination  of interest  expense on the
refinanced  debt partially  offset by the interest  expense  associated with the
First  Mortgage Notes and (b) the reduction in interest  expense  resulting from
the assumed  repayment  of other debt of the Company with the  $114,680,000  net
proceeds of the Offering and the Private Placement  Offering  ($124,749,000) and
the issuance of the First  Mortgage  Notes  ($118,400,000,  net of $6,600,000 of
related   deferred   debt  costs),   net  of  the  repayment  of  existing  debt
($128,469,000), (iii) the net benefit from income taxes and increase in minority
interest in income of  consolidated  subsidiaries  resulting from the effects of
the above transactions and related transactions which do not affect consolidated
pretax earnings. Such pro forma information does not purport to be indicative of
the Company's actual results of operations had such  transactions  actually been
consummated on January 1, 1996 or of the Company's  future results of operations
and are as follows (in thousands except per share amounts):



                                                                       PRO FORMA FOR
                                                     PRO FORMA        THE SALE OF THE
                                                  FOR THE SALE OF   TEXTILE BUSINESS AND
                                                    THE TEXTILE         THE PROPANE
                                                     BUSINESS           TRANSACTIONS
                                                     --------           ------------

                                                                        
     Revenues...................................      $841,240           $ 841,240
     Operating loss.............................       (13,024)            (13,774)
     Loss before extraordinary items............        (6,467)             (7,703)
     Loss before extraordinary items per share..          (.22)               (.26)


     MINORITY INTEREST
     -----------------

     The 1994  minority  interest  in income  of  consolidated  subsidiaries  of
$1,292,000  consists of minority interest in the 1994 net income of SEPSCO until
the 28.9%  minority  interest  was acquired on April 14, 1994 (see Note 26). The
1996 minority interest of $1,829,000  represents the limited partners'  weighted
average  interest  in the net  income  of the  Operating  Partnership  since  it
commenced  operations in July 1996. (See further discussion above under "Sale of
Propane Business").

(20) OTHER INCOME (EXPENSE), NET

     Other  income  (expense),  net  consists of the  following  components  (in
thousands):


                                                                           1994           1995          1996
                                                                           ----           ----          ----
                                                                                                  
      Interest income .............................................    $    4,664   $     3,547     $    8,612
      Net realized gain (loss) on sales of marketable
        securities (Note 5)........................................          (135)         (254)           701
      Gain on sale of excess timberland ...........................           --         11,945            --
      Net gain (loss) on other sales of assets.....................           975        (1,681)           (34)
      Posner Settlement (a)........................................           --          2,312            --
      Insurance settlement for fire-damaged equipment..............           --          1,875            --
      Columbia Gas Settlement (b)..................................           --          1,856            --
      Equity in losses of affiliate ...............................          (573)       (2,170)           --
      Write-down of investment in Taysung (c)......................           --         (4,624)           --
      Costs of a proposed acquisition not consummated (d)..........        (7,000)          --             --
      Other, net ..................................................           884          (492)        (1,283)
                                                                       ----------   -----------     ----------
                                                                       $   (1,185)  $    12,314     $    7,996
                                                                       ==========   ===========     ==========


(a)  Pursuant to the Posner Settlement, Posner paid the Company $6,000,000 in
     January 1995 in exchange for,  among other things,  the release by the
     Company of the Posner  Entities  from certain  claims that it may have with
     respect  to (i) legal fees in  connection  with a  modification  to certain
     litigation  against  the  Company  and  certain of the  present  and former
     directors (see Note 25), (ii) fees payable to the  court-appointed  members
     of a special  committee of the Company's Board of Directors and (iii) legal
     fees paid or payable  with  respect to  matters  referred  to in the Posner
     Settlement,  subject to the  satisfaction by the Posner Entities of certain
     obligations under the Posner Settlement. The Company used such funds to pay
     (i) $2,000,000 to the court-appointed  members of the special committee for
     services  rendered  in  connection  with  the  consummation  of the  Posner
     Settlement,  (ii)  attorney's  fees of  $850,000  in  connection  with such
     modification,  (iii) $200,000 in connection  with the settlement of certain
     litigation  and (iv)  $100,000  of other  expenses  resulting  in a gain of
     $2,850,000,  of which $538,000  reduced "General and  administrative"  as a
     recovery of legal expenses  originally  reported therein and $2,312,000 was
     reported as "Other income (expense), net".

(b)   The Company was a party to a class action lawsuit brought against Columbia
      Gas System,  Inc.  ("Columbia  Gas") in which the  claimants  charged that
      Columbia Gas had  overcharged  the claimants for purchases of propane gas.
      During the fourth quarter of 1995 the Company received  $2,406,000 in full
      settlement  of the lawsuit which  resulted in a gain of $1,856,000  net of
      estimated expenses (the "Columbia Gas Settlement").

(c)   The  Taiwanese  joint  venture  investment  made  by the  Company  in 1994
      ("Taysung")  was  written  off in 1995  when the  Company  determined  the
      decline in value of such investment was other than temporary.

(d)  In 1994 the Company  entered into a definitive  merger  agreement with Long
     John  Silver's  Restaurants,  Inc.  ("LJS"),  an owner,  operator  and
     franchisor  of quick  service  fish and  seafood  restaurants,  whereby the
     Company would acquire all of the outstanding stock of LJS. In December 1994
     the Company  decided not to proceed with the  acquisition of LJS due to the
     higher interest rate environment and difficult  capital markets which would
     have  resulted  in  significantly   higher  than   anticipated   costs  and
     unacceptable terms of financing. Accordingly, the Company recorded a charge
     of $7,000,000 in 1994 for the expenses  relating to the failed  acquisition
     of LJS representing commitment fees, legal, consulting and other costs.

(21)  DISCONTINUED OPERATIONS

      On July 22,  1993  SEPSCO's  Board  of  Directors  authorized  the sale or
liquidation  of  SEPSCO's  utility  and  municipal  services  and  refrigeration
business  segments  (consisting of ice and cold storage  operations)  which have
been  accounted for as  discontinued  operations  in the Company's  consolidated
financial statements.  Prior to 1994 the Company sold the assets or stock of the
companies  comprising  SEPSCO's utility and municipal services business segment.
The sale of one of the businesses was subject to certain deferred purchase price
adjustments  which were settled in March 1995 for (i) cash  payments of $500,000
of which  $300,000 was collected in 1995 and $200,000 was collected in 1996 plus
(ii) the  proceeds  from the sale of a  property  which was sold in May 1996 for
$164,000.  Recognition of such proceeds in 1995 and 1996 has been deferred.

      In April 1994 the Company sold  substantially  all of the operating assets
of the ice  operations to unrelated  third parties and in December 1994 sold the
stock  or  operating  assets  of  the  companies  comprising  the  cold  storage
operations to National Cold Storage, Inc., a company formed by two then officers
of SEPSCO. Such sales resulted in aggregate losses of approximately  $9,300,000,
excluding any consideration of the then remaining $6,881,000 aggregate principal
payments  then due on notes  from the  buyers of such  businesses,  since  their
collection was not reasonably assured.  The note relating to the sale of the ice
operations  (the "Ice Note") had an original  principal of  $4,295,000  and bore
interest at 5% and the note relating to the sale of the cold storage  operations
(the "CS Note") had an original  principal of $3,000,000  and bears  interest at
8%.  Collections  by the  Company  on the Ice Note were  $120,000  of  scheduled
principal payments and $294,000 of principal payments in advance during 1995 and
$120,000  of  scheduled  principal  payments  and  $2,245,000  (discounted  from
$3,761,000)  of principal  payments in advance during 1996 (of which $450,000 is
being held in escrow for future  environmental  spending).  Recognition  of such
proceeds  from the Ice Note  has  been  deferred.  The CS Note is due in full in
2000.

      In connection with the dispositions  referred to above, SEPSCO reevaluated
the estimated losses from the sale of its discontinued operations provided prior
to  1994  and  the  Company  provided  $8,400,000  ($3,900,000  net of  minority
interests of $2,425,000  and income tax benefit of  $2,075,000)  for the revised
estimated loss during 1994. The revised estimate in 1994 results from additional
unanticipated  losses on disposal of the  businesses of $6,400,000 and operating
losses from discontinued  operations  through their respective dates of disposal
of $2,000,000  principally reflecting delays in disposing of the businesses from
their estimated  disposal dates.  The increased loss on disposal was principally
due to  nonrecognition  of the  Ice  Note  and  the CS Note  compared  with  the
previously  anticipated  full recognition of all proceeds from the sales of such
business once the businesses were sold.

      After  consideration  of amounts  provided  in prior  years,  the  Company
expects  the  liquidation  of the  remaining  liabilities  associated  with  the
discontinued  operations  will not  have  any  material  adverse  impact  on its
financial position or results of operations.

      The loss from  operations  during 1994,  which had been  recognized  prior
thereto, consisted of the following (in thousands):

     Revenues ................................................ $       11,432
     Operating loss ..........................................            (80)
     Loss before income taxes and net loss ...................           (405)

      The principal remaining accounts of the discontinued  operations relate to
liquidating  obligations  not  transferred  to the  buyers  of the  discontinued
businesses  and  are  reflected  as  net  current  liabilities  of  discontinued
operations  aggregating $3,461,000 and $3,589,000 included in "Accrued expenses"
(see Note 12).

(22)  EXTRAORDINARY ITEMS

      In  connection  with the early  extinguishment  of the  Company's  13 1/8%
debentures  in 1994 and the early  extinguishment  of (i) the  Company's 11 7/8%
Debentures  due February 1, 1998 on February  22, 1996,  (ii) all of the debt of
TXL, including the Graniteville Credit Facility,  in connection with the sale of
the Textile Business (see Note 19) on April 29, 1996, (iii) substantially all of
the long-term debt of National  Propane  including the Former  Propane  Facility
(see Note 13) on July 2, 1996 and (iv) the  National  Union Note on July 1, 1996
(see Note 13), the Company  recognized  extraordinary  charges consisting of the
following (in thousands):


                                                              1994          1996
                                                              ----          ----

                                                                         
 Write-off of unamortized deferred financing costs........$     (875)    $(10,469)
 Write-off of unamortized original issue discount.........    (2,623)      (1,776)
 Prepayment penalties.....................................       --        (5,744)
 Fees....................................................        --          (250)
 Discount from principal on early extinguishment.........        --         9,237
                                                          ----------   ----------
                                                              (3,498)      (9,002)
 Income tax benefit.......................................     1,382        3,586
                                                          ----------   ----------
                                                          $   (2,116)  $   (5,416)
                                                          ==========   ==========


(23)  PENSION AND OTHER BENEFIT PLANS

      The Company maintains several 401(k) defined  contribution  plans covering
all employees who meet certain  minimum  requirements  and elect to  participate
including  employees of Mistic subsequent to January 1, 1996 and excluding those
employees  covered  by  plans  under  certain  union  contracts.  Employees  may
contribute various percentages of their compensation  ranging up to a maximum of
15%,  subject to certain  limitations.  The plans  provide for Company  matching
contributions at either 25% or 50% of employee  contributions up to the first 5%
of an  employee's  contributions.  The plans also provide for annual  additional
contributions  either equal to 1/4% of 1% of employee's total compensation or an
arbitrary aggregate amount to be determined by the employer.  In connection with
these employer  contributions,  the Company provided $2,200,000,  $3,024,000 and
$1,885,000 in 1994, 1995 and 1996, respectively.  The decrease from 1995 to 1996
is principally due to the effect of the April 1996 sale of the Textile Business.

      The Company  provides or provided  defined  benefit plans for employees of
certain subsidiaries. Prior to 1994 all of the plans were frozen.

      The  components  of the net  periodic  pension  cost  are as  follows  (in
thousands):


                                                                         1994        1995        1996
                                                                         ----        ----        ----

                                                                                          
      Current service cost (represents plan expenses)..............    $    177    $   151     $   160
      Interest cost on projected benefit obligation................         466        503         481
      Return on plan assets (gain) loss............................         138     (1,445)       (762)
      Net amortization and deferrals...............................        (654)       993         240
                                                                       --------    -------     -------
          Net periodic pension cost ...............................    $    127    $   202     $   119
                                                                       ========    =======     =======


      The following table sets forth the plans' funded status (in thousands):



                                                                AGGREGATE OF PLANS WHOSE
                                                        ------------------------------------------
                                                           ASSETS EXCEEDED    ACCUMULATED BENEFITS
                                                        ACCUMULATED BENEFITS     EXCEEDED ASSETS
                                                            DECEMBER 31,           DECEMBER 31,
                                                        --------------------  --------------------
                                                          1995       1996       1995        1996
                                                          ----       ----       ----        ----
                                                                                    
Actuarial present value of benefit obligations
    Vested benefit obligation.........................$   2,386   $   2,227   $   4,711   $   4,634
    Non-vested benefit obligation.....................       --          --          19          18
                                                      ---------   ---------   ---------   ---------
    Accumulated and projected benefit obligation......    2,386       2,227       4,730       4,652
    Plan assets at fair value.........................   (2,762)     (2,751)     (3,941)     (4,351)
                                                      ---------   ---------   ---------   ---------
    Funded status.....................................     (376)       (524)        789         301
    Unrecognized net gain from plan experience........      488         629          72         230
                                                      ---------   ---------   ---------   ---------
        Accrued pension cost..........................$     112   $     105   $     861   $     531
                                                      =========   =========   =========   =========


      Significant  assumptions  used in measuring the net periodic  pension cost
for the plans included the following:  (i) the expected long-term rate of return
on plan assets was 8% and (ii) the  discount  rate was 7% for 1994,  8% for 1995
and 7% for 1996. The discount rate used in determining  the benefit  obligations
above was 7% at December 31, 1995 and 7.5% at December 31, 1996.  The effects of
the 1995 increase and the 1996 decrease in the discount rate did not  materially
affect the net periodic  pension  cost.  The 1996  increase in the discount rate
used in  determining  the  benefit  obligation  resulted  in a  decrease  in the
accumulated and projected benefit obligation of $253,000.

      Plan assets as of December  31,  1996 are  invested in managed  portfolios
consisting of government and government agency obligations  (51%),  common stock
(39%), corporate debt securities (5%) and other investments (5%).

      Under certain union contracts, the Company is required to make payments to
the unions' pension funds based

upon hours  worked by the eligible  employees.  In  connection  with these union
plans,  the Company  provided  $756,000 in 1994 and $669,000 in each of 1995 and
1996.  Information  from the  administrators  of the plans is not  available  to
permit the Company to  determine  its  proportionate  share of  unfunded  vested
benefits, if any.

      The Company maintains  unfunded  postretirement  medical and death benefit
plans for a limited  number of  employees  who have  retired  and have  provided
certain  minimum  years  of  service.   The  medical  benefits  are  principally
contributory while death benefits are  noncontributory.  Prior to the April 1996
sale of the  Textile  Business,  a  limited  number of  active  employees,  upon
retirement,  were also covered.  The net  postretirement  benefit cost for 1994,
1995 and 1996 as well as the accumulated postretirement benefit obligation as of
December 31, 1996 were insignificant.

(24)  LEASE COMMITMENTS

      The Company leases buildings and improvements and machinery and equipment.
Some leases provide for contingent rentals based upon sales volume.

      Rental expense under operating leases consists of the following components
(in thousands):

                                            1994         1995         1996
                                            ----         ----         ----

         Minimum rentals.............  $   20,218  $    25,898    $   28,795
         Contingent rentals..........       1,454          987           794
                                       ----------  -----------    ----------
                                           21,672       26,885        29,589
         Less sublease income........       3,459        5,358         5,460
                                       ----------  -----------    ----------
                                       $   18,213  $    21,527    $   24,129
                                       ==========  ===========    ==========

      The Company's  future minimum rental  payments and sublease  rental income
for leases having an initial lease term in excess of one year as of December 31,
1996 are set forth  below.  Such  future  minimum  rental  payments  exclude  an
aggregate  $11,540,000 of future operating lease payments  relating to equipment
to be transferred to RTM assuming  consummation of the RTM sale (see Note 3) but
the obligations for which will remain with the Company.  As such the Company has
provided  for the  present  value  of  $9,677,000  of  such  lease  payments  in
"Reduction  in carrying  value of long-lived  assets  impaired or to be disposed
of".  Such future  minimum  rental  payments  include an aggregate  $105,165,000
($9,844,000,  $9,264,000,  $8,403,000, $7,828,000, $7,476,000 and $62,350,000 in
1997, 1998,  1999, 2000, 2001 and thereafter,  respectively) of future operating
lease  payments and, in addition,  substantially  all of the future  capitalized
lease payments which will be assumed by RTM assuming consummation of the sale to
RTM.  Such  rental  payments  and  sublease  rental  income  were as follows (in
thousands):



                                                             RENTAL PAYMENTS          SUBLEASE INCOME
                                                          ----------------------    ----------------------
                                                          CAPITALIZED  OPERATING    CAPITALIZED  OPERATING
                                                             LEASES      LEASES        LEASES      LEASES
                                                             ------      ------        ------      ------

                                                                                        
       1997.............................................$     16,170  $   22,350  $       81  $   5,925
       1998.............................................         105      17,098          60      3,639
       1999.............................................          87      13,857          60      1,898
       2000.............................................          87      12,038          57        973
       2001.............................................          87      10,994          43        342
       Thereafter.......................................         397      85,344         219      1,300
                                                        ------------  ----------  ----------  ---------
       Total minimum payments...........................      16,933  $  161,681  $      520  $  14,077
                                                                      ==========  ==========  =========
       Less interest....................................         959
                                                        ------------
       Present value of minimum capitalized
         lease payments.................................$     15,974
                                                        ============


      The present value of minimum  capitalized  lease payments is included,  as
applicable,  with long-term debt or the current portion of long-term debt in the
accompanying consolidated balance sheets (see Note 13).

      In August 1994 the Company  completed  the sale and  leaseback of the land
and buildings of fourteen company-owned restaurants.  The net cash sale price of
such  properties  was  $6,703,000.  The  Company  has  entered  into  individual
twenty-year land and building leases for such properties and has capitalized the
building portion of such leases while the land portion is being accounted for as
operating leases,  reflected in the table above. Such sale resulted in a gain of
$605,000 which is being  amortized to income over the  twenty-year  lives of the
leases.

(25)  LEGAL AND ENVIRONMENTAL MATTERS

      In July  1993 APL  Corporation  ("APL"),  which  was  affiliated  with the
Company  until an April 1993 change in control,  became a debtor in a proceeding
under  Chapter 11 of the  Federal  Bankruptcy  Code (the "APL  Proceeding").  In
February  1994 the  official  committee  of  unsecured  creditors of APL filed a
complaint  (the "APL  Litigation")  against the  Company  and certain  companies
formerly  or  presently  affiliated  with Posner or with the  Company,  alleging
causes of action arising from various transactions allegedly caused by the named
former  affiliates.  The Chapter 11 trustee of APL was  subsequently  added as a
plaintiff. The complaint asserts various claims and seeks an undetermined amount
of damages from the Company,  as well as certain other relief. In April 1994 the
Company   responded   to  the   complaint  by  filing  an  answer  and  proposed
counterclaims and set-offs denying the material allegations in the complaint and
asserting  counterclaims  and set-offs  against APL. In June 1995 the bankruptcy
court confirmed the plaintiffs' plan of  reorganization  (the "APL Plan") in the
APL  Proceeding.  The APL Plan  provides,  among other  things,  that the Posner
Entities will own all of the common stock of APL and are authorized to object to
claims made in the APL Proceeding.  The APL Plan also provides for the dismissal
of  the  APL  Litigation.   Previously,  in  January  1995  Triarc  received  an
indemnification  pursuant  to the Posner  Settlement  relating  to,  among other
things,  the APL Litigation.  The Posner  Entities have filed motions  asserting
that the APL Plan does not  require  the  dismissal  of the APL  Litigation.  In
November  1995 the  bankruptcy  court  denied the  motions and in March 1996 the
court denied the Posner  Entities'  motion for  reconsideration.  Posner and APL
have appealed and their appeal is pending.

     On December 6, 1995 the three former  court-appointed  members of a special
committee  of  Triarc's  Board of  Directors  commenced  an action in the United
States  District  Court for the Northern  District of Ohio seeking,  among other
things,  additional fees of $3,000,000.  On February 6, 1996 the court dismissed
the action  without  prejudice.  The  plaintiffs  filed a notice of appeal,  but
subsequently dismissed the appeal voluntarily.

     In 1987 TXL was  notified by the South  Carolina  Department  of Health and
Environmental  Control  ("DHEC") that DHEC discovered  certain  contamination of
Langley  Pond  ("Langley  Pond")  near  Graniteville,  South  Carolina  and DHEC
asserted that TXL may be one of the parties  responsible for such contamination.
In 1990 and 1991 TXL provided reports to DHEC summarizing its required study and
investigation of the alleged pollution and its sources which concluded that pond
sediments  should be left  undisturbed  and in place and that other less passive
remediation  alternatives either provided no significant  additional benefits or
themselves  involved  adverse  effects.  In March 1994 DHEC appeared to conclude
that while environmental  monitoring at Langley Pond should be continued,  based
on currently available information,  the most reasonable alternative is to leave
the pond sediments  undisturbed  and in place. In April 1995 TXL, at the request
of DHEC,  submitted  a  proposal  concerning  periodic  monitoring  of  sediment
dispositions  in the pond.  In February 1996 TXL responded to a DHEC request for
additional  information on such proposal.  TXL is unable to predict at this time
what further actions, if any, may be required in connection with Langley Pond or
what the cost  thereof may be. In  addition,  TXL owned a nine acre  property in
Aiken County,  South  Carolina (the  "Vaucluse  Landfill"),  which was used as a
landfill from  approximately  1950 to 1973.  The Vaucluse  Landfill was operated
jointly  by TXL and  Aiken  County  and may have  received  municipal  waste and
possibly industrial waste from TXL as well as sources other than TXL. The United
States Environmental  Protection Agency conducted an Expanded Site Inspection in
January 1994 and in response  thereto the DHEC  indicated  its desire to have an
investigation of the Vaucluse Landfill. In April 1995 TXL submitted a conceptual
investigation approach to DHEC. Subsequently, the Company responded to an August
1995  DHEC  request  that TXL enter  into a  consent  agreement  to  conduct  an
investigation  indicating that a consent agreement is inappropriate  considering
TXL's demonstrated willingness to cooperate with DHEC requests and asked DHEC to
approve  TXL's April 1995  conceptual  investigation  approach.  The cost of the
study proposed by TXL is estimated to be between $125,000 and $150,000. Since an
investigation  has not yet  commenced,  TXL is currently  unable to estimate the
cost,  if any,  to  remediate  the  landfill.  Such cost could vary based on the
actual  parameters of the study. In connection with the  Graniteville  Sale, the
Company agreed to indemnify the purchaser for certain costs, if any, incurred in
connection with the foregoing matters that are in excess of specified  reserves,
subject to certain limitations.

      As a result of certain  environmental  audits in 1991, SEPSCO became aware
of  possible  contamination  by  hydrocarbons  and  metals at  certain  sites of
SEPSCO's ice and cold storage  operations of the refrigeration  business and has
filed appropriate notifications with state environmental authorities and in 1994
completed  a study of  remediation  at such sites.  SEPSCO has  removed  certain
underground  storage and other tanks at certain  facilities of its refrigeration
operations and has engaged in certain remediation in connection therewith.  Such
removal and environmental  remediation involved a variety of remediation actions
at  various  facilities  of SEPSCO  located in a number of  jurisdictions.  Such
remediation  varied  from  site to  site,  ranging  from  testing  of  soil  and
groundwater for  contamination,  development of remediation plans and removal in
some  instances  of certain  contaminated  soils.  Remediation  is  required  at
thirteen  sites  which  were  sold  to or  leased  by the  purchaser  of the ice
operations (see Note 21).  Remediation has been completed on five of these sites
and is ongoing at eight others.  Such  remediation  is being made in conjunction
with the purchaser  who has satisfied its  obligation to pay up to $1,000,000 of
such remediation costs. Remediation is also required at seven cold storage sites
which were sold to the purchaser of the cold storage  operations  (see Note 21).
Remediation  has been completed at one site and is ongoing at three other sites.
Remediation  is expected to  commence on the  remaining  three sites in 1997 and
1998.  Such  remediation is being made in conjunction  with the purchaser who is
responsible  for the first  $1,250,000  of such costs.  In  addition,  there are
fifteen  additional  inactive  properties of the former  refrigeration  business
where  remediation  has been  completed or is ongoing and which have either been
sold or are held for sale  separate  from the sales of the ice and cold  storage
operations.  Of these, ten have been remediated  through December 31, 1996 at an
aggregate cost of $952,000.  In addition,  during the environmental  remediation
efforts  on idle  properties,  SEPSCO  became  aware  that  plants on two of the
fifteen sites may require demolition in the future.

     In May 1994  National  was  informed  of coal tar  contamination  which was
discovered  at  one of its  properties  in  Wisconsin.  National  purchased  the
property  from a company (the  "Successor")  which had purchased the assets of a
utility  which had  previously  owned the property.  National  believes that the
contamination  occurred  during the use of the  property as a coal  gasification
plant by such  utility.  In order to assess the extent of the problem,  National
engaged  environmental  consultants  in 1994.  As of March 1,  1997,  National's
environmental consultants have begun but not completed their testing. Based upon
the new information  compiled to date which is not yet complete,  it appears the
likely remedy will involve  treatment of groundwater  and treatment of the soil,
installation of a soil cap and, if necessary, excavation, treatment and disposal
of contaminated soil. As a result, the environmental  consultants' current range
of estimated costs for remediation is from $764,000 to $1,559,000. National will
have to agree upon the final plan with the state of Wisconsin.  Since  receiving
notice of the  contamination,  National has engaged in  discussions of a general
nature concerning remediation with the state of Wisconsin. These discussions are
ongoing  and there is no  indication  as yet of the time frame for a decision by
the state of Wisconsin or the method of  remediation.  Accordingly,  the precise
remediation  method to be used is unknown.  Based on the preliminary  results of
the ongoing investigation, there is a potential that the contaminants may extend
to locations  downgradient from the original site. If it is ultimately confirmed
that the  contaminant  plume extends under such  properties and if such plume is
attributable to contaminants emanating from the Wisconsin property, there is the
potential  for future  third-party  claims.  National is also engaged in ongoing
discussions of a general nature with the Successor. The Successor has denied any
liability  for  the  costs  of  remediation  of  the  Wisconsin  property  or of
satisfying any related  claims.  However,  National,  if found liable for any of
such  costs,  would  still  attempt  to recover  such costs from the  Successor.
National has notified its insurance  carriers of the  contamination,  the likely
incurrence  of costs to undertake  remediation  and the  possibility  of related
claims.  Pursuant to a lease related to the Wisconsin facility, the ownership of
which  was not  transferred  to the  Operating  Partnership  at the  closing  of
Offering,  the  Partnership has agreed to be liable for any costs of remediation
in excess of amounts  recovered from the Successor or from insurance.  Since the
remediation  method to be used is  unknown,  no amount  within  the cost  ranges
provided  by the  environmental  consultants  can be  determined  to be a better
estimate.

      In  1993  Royal  Crown  became  aware  of  possible   contamination   from
hydrocarbons  in groundwater at two abandoned  bottling  facilities.  Tests have
confirmed  hydrocarbons  in the groundwater at both of the sites and remediation
has  commenced.  Remediation  costs  estimated  by Royal  Crown's  environmental
consultants  aggregate  $560,000  to  $640,000  with  approximately  $125,000 to
$145,000  expected to be reimbursed by the State of Texas Petroleum Storage Tank
Remediation Fund at one of the two sites.

     In 1994 Chesapeake Insurance and SEPSCO invested  approximately  $5,100,000
in a joint venture with Prime Capital  Corporation  ("Prime").  Subsequently  in
1994, SEPSCO and Chesapeake Insurance terminated their investments in such joint
venture. In March 1995 three creditors of Prime filed an involuntary  bankruptcy
petition under the Federal  bankruptcy  code against Prime. In November 1996 the
bankruptcy  trustee  appointed  in the  Prime  bankruptcy  case made a demand on
Chesapeake  Insurance and SEPSCO for return of the  approximate  $5,300,000.  In
January  1997  the  bankruptcy  trustee  commenced   avoidance  actions  against
Chesapeake Insurance and SEPSCO seeking the return of the approximate $5,300,000
allegedly  received by Chesapeake  Insurance and SEPSCO during 1994 and alleging
such payments from Prime were preferential or constituted  fraudulent transfers.
The  Company  believes,  based on advice  of  counsel,  that it has  meritorious
defenses to these claims and intends to vigorously contest them.  However, it is
possible that the trustee will be successful  in  recovering  the payments.  The
maximum amount of SEPSCO's and Chesapeake Insurance's aggregate liability is the
approximate  $5,300,000  plus  interest;   however,  to  the  extent  SEPSCO  or
Chesapeake Insurance return to Prime any amount of the challenged payments, they
will be entitled to an unsecured claim for such amount.  The court has scheduled
a trial for the week of May 27, 1997.

     On February 19, 1996, Arby's  Restaurantes S.A. de C.V. ("AR"),  the master
franchisee of Arby's in Mexico, commenced an action in the civil court of Mexico
against Arby's for breach of contract.  AR alleged that a non-binding  letter of
intent  dated  November  9, 1994  between  AR and Arby's  constituted  a binding
contract  pursuant to which Arby's had obligated itself to repurchase the master
franchise  rights  from AR for  $2,500,000.  AR also  alleged  that  Arby's  had
breached a master development  agreement between AR and Arby's.  Arby's promptly
commenced  an  arbitration   proceeding  since  the  franchise  and  development
agreements  each  provided  that  all  disputes  arising  thereunder  were to be
resolved by  arbitration.  Arby's is seeking a declaration in the arbitration to
the effect that the November 9, 1994 letter of intent was not a binding contract
and,  therefore,  AR has no  valid  breach  of  contract  claim,  as  well  as a
declaration  that  the  master  development  agreement  has  been  automatically
terminated  as  a  result  of  AR's   commencement  of  suspension  of  payments
proceedings  in February 1995. In the civil court  proceeding,  the court denied
Arby's  motion  to  suspend  such   proceedings   pending  the  results  of  the
arbitration,  and Arby's has appealed  that  ruling.  In the  arbitration,  some

evidence  has been  taken  but  proceedings  have  been  suspended  by the court
handling the suspension of payments proceedings. Arby's is vigorously contesting
AR's claims and believes it has meritorious defenses to such claims.

     The  Company  has  accruals  for  all  of  the  above  matters  aggregating
approximately $4,300,000. Based on currently available information and given (i)
the DHEC's apparent  conclusion in 1994 with respect to the Langley Pond matter,
(ii) the  indemnification  limitations  with  respect to the SEPSCO cold storage
operations,   Langley  Pond  and  the   Vaucluse   Landfill,   (iii)   potential
reimbursements  by other  parties  as  discussed  above  and (iv) the  Company's
aggregate  reserves for such legal and environmental  matters,  the Company does
not believe that the legal and environmental  matters referred to above, as well
as  ordinary  routine  litigation  incidental  to its  businesses,  will  have a
material adverse effect on its  consolidated  results of operations or financial
position.

(26)  SEPSCO MERGER AND LITIGATION SETTLEMENT

     In  December  1990 a purported  shareholder  derivative  suit (the  "SEPSCO
Litigation")  was brought  against  SEPSCO's  directors at that time and certain
corporations,  including  Triarc,  in the United States  District  Court for the
Southern  District of Florida (the  "District  Court").  On January 11, 1994 the
District Court approved a settlement  agreement with the plaintiff in the SEPSCO
Litigation.  In conjunction  therewith,  on April 14, 1994 SEPSCO's shareholders
other than the Company  approved an agreement and plan of merger  between Triarc
and SEPSCO (the "SEPSCO Merger")  pursuant to which on that date a subsidiary of
Triarc was merged into SEPSCO in  accordance  with a  transaction  in which each
holder of shares of SEPSCO's common stock (the "SEPSCO Common Stock") other than
the  Company,  aggregating  a 28.9%  minority  interest  in SEPSCO,  received in
exchange for each share of SEPSCO Common Stock,  0.8 shares of Triarc's  Class A
Common Stock or an aggregate 2,691,824 shares.  Following the SEPSCO Merger, the
Company owns 100% of the SEPSCO Common Stock.  All  settlement and related legal
costs were principally  accrued in 1993 since it was during such period that the
Company determined that the litigation settlement was more likely than not to be
approved by the District Court.

     The fair  value as of April  14,  1994 of the  2,691,824  shares of Class A
Common  Stock  issued  in  the  SEPSCO   Merger,   net  of  $3,750,000  of  such
consideration  which the Company estimated  represented  settlement costs of the
SEPSCO  Litigation,  aggregated  $52,105,000 (the "Merger  Consideration").  The
SEPSCO  Merger was  accounted  for in  accordance  with the  purchase  method of
accounting  and the Company's  minority  interest in SEPSCO of  $28,217,000  was
eliminated. In accordance therewith, the excess of the Merger Consideration over
the  Company's  minority  interest  in SEPSCO of  $23,888,000  was  assigned  to
"Properties"  ($8,684,000),  investment in the natural gas and oil business sold
in  August  1994  (see  Note  19)  ($2,455,000),  "Net  current  liabilities  of
discontinued  operations" ($2,425,000 - see Note 12) and "Deferred income taxes"
($2,485,000) with the excess of $17,659,000 recorded as Goodwill.

(27)  ACQUISITIONS

     On August 9, 1995 Mistic,  a  wholly-owned  subsidiary of Triarc,  acquired
(the  "Mistic  Acquisition")  substantially  all of the assets  and  operations,
subject to related operating liabilities, as defined, of certain companies which
develop,   market  and  sell   carbonated  and   non-carbonated   fruit  drinks,
ready-to-drink  brewed iced teas and naturally  flavored  sparkling waters under
various  trademarks  and  tradenames  including  MISTIC  and ROYAL  MISTIC.  The
purchase price for the Mistic Acquisition,  aggregating  $98,324,000  (including
$2,067,000  of  cash  acquired)  consisted  of (i)  $93,000,000  in  cash,  (ii)
$1,000,000 to be paid in eight equal quarterly  installments  which commenced in
November 1995, (iii) non-compete  agreement  payments to the seller  aggregating
$3,000,000 and (iv) $1,324,000 of related  expenses.  The non-compete  agreement
payments were or are payable $900,000 in August 1996, 1997 and 1998 and $300,000
in December  1998.  In accordance  with the Mistic  acquisition  agreement,  the
non-compete  payment due in 1996 was offset against amounts due from the seller.
The Mistic  Acquisition was financed through (i) $71,500,000 of borrowings under
the Mistic Bank Facility (see Note 13) and (ii)  $25,000,000 of borrowings under
the Graniteville Credit Facility.

      The Company  granted the  syndicating  lending bank in connection with the
Mistic  Bank  Facility  agreement  and  two  senior  officers  of  Mistic  stock
appreciation  rights (the "Mistic  Rights") for the  equivalent  of 3% and 9.7%,
respectively,  of Mistic's  outstanding  common stock plus the equivalent shares
represented by such stock appreciation  rights. The Mistic Rights granted to the
syndicating  lending bank were  immediately  vested and of those  granted to the
senior  officers,  one-third vest over time and two-thirds vest depending on the
performance  of Mistic.  The  Mistic  Rights  provide  for  appreciation  in the
per-share  value of Mistic common stock above a base price of $28,637 per share,
which is equal to the  Company's  per share  capital  contribution  to Mistic in
connection with the Mistic Acquisition.  The Company recognizes periodically the
estimated increase or decrease in the value of the Mistic Rights;  such amounts,
which are being  charged or credited to  "Interest  expense"  and  "General  and
administrative"  for the Mistic Rights granted to the  syndicating  lending bank
and the two senior officers, respectively, were not significant in 1995 or 1996.

      In addition to the Mistic  Acquisition,  the Company  consummated  several
additional  business   acquisitions  during  1994,  1995  and  1996  principally
restaurant   operations  and  propane   businesses  for  cash  of   $18,790,000,
$18,947,000  and $4,018,000,  respectively,  and the issuance of debt in 1994 of
$3,763,000  and in 1996 of  $1,750,000.  All such  acquisitions,  including  the
Mistic  acquisition,  have been  accounted for in  accordance  with the purchase
method of accounting and in accordance therewith the purchase price was assigned
as follows (in thousands):



                                                                      DECEMBER 31,
                                                                      ------------
                                                          1994             1995           1996
                                                          ----             ----           ----
                                                                                    
 Current assets....................................... $     --       $    31,560     $      257
 Properties...........................................    14,803           12,641            838
 Goodwill.............................................     8,414           34,438            162
 Trademarks...........................................       --            58,100          3,950
 Other intangible assets..............................     1,711            5,373          1,107
 Other assets.........................................       351            1,128            --
 Current liabilities .................................       --           (24,790)          (358)
 Long-term debt assumed including current portion.....    (2,726)          (3,180)           --
 Other liabilities....................................       --            (4,066)          (188)
                                                       ---------      -----------     ----------
                                                       $  22,553      $   111,204     $    5,768
                                                       =========      ===========     ==========


(28)  TRANSACTIONS WITH RELATED PARTIES

     Until January 31, 1994 Triarc leased office space in Miami Beach,  both for
its former  corporate  headquarters and on behalf of its subsidiaries and former
affiliates from one of the Posner Entities.  Triarc gave notice to terminate the
lease  prior to 1994  and all  remaining  lease  obligations  subsequent  to the
termination were provided as facilities  relocation and corporate  restructuring
prior to 1994. Pursuant to the Posner Settlement (see note 16), all payments due
to the Posner  Entities in connection  with the  termination  of such lease were
settled  resulting  in a  reduction  of  "Facilities  relocation  and  corporate
restructuring"  of $310,000  in 1995 (see Note 18).  Such gain  represented  the
excess of a net  accrued  liability  for the lease  termination  of  $12,326,000
($13,000,000  less a security  deposit of  $674,000)  over the fair value of the
1,011,900 shares of Class B Common Stock issued (see Note 17) of $12,016,000. In
addition, the Company reversed to "Interest expense" a 1994 accrual for interest
of $638,000 on the lease termination obligation.

      The  Company  leases   aircraft  owned  by  Triangle   Aircraft   Services
Corporation  ("TASCO"),  a company owned by Messrs.  Peltz and May for an annual
rent as of January 1, 1994 of  $2,200,000,  plus annual  indexed  cost of living
adjustments.  Effective  October 1, 1994 the original rent was reduced  $400,000
reflecting the  termination of the lease for one of the aircraft which was sold.
In connection with the sale of the aircraft the Company paid $130,000 of related
costs on behalf of TASCO.  In  connection  with such lease the  Company had rent
expense  of  $2,100,000,  $1,910,000  and  $1,973,000  for 1994,  1995 and 1996,
respectively.  Pursuant to this arrangement, the Company also pays the operating
expenses of the aircraft directly to third parties.

      The  Company  subleased  through  January 31,  1996 from an  affiliate  of
Messrs. Peltz and May approximately 26,800 square feet of furnished office space
in New York, New York owned by an unaffiliated  third party (subsequent  thereto
and through  December 1996, the Company  subleased the same office facility from
an unaffiliated  third party).  In addition,  the Company  subleased through its
expiration  in September  1994 from another  affiliate of Messrs.  Peltz and May
approximately  15,000  square feet of office  space in West Palm Beach,  Florida
owned by an  unaffiliated  landlord.  The aggregate  amounts paid by the Company
during 1994,  1995 and 1996 with respect to affiliates of Messrs.  Peltz and May
for such subleases, including operating expenses, but net of amounts received by
the Company for  sublease of a portion of such space  through  January 1996 (see
below  -  $358,000,   $357,000  and  $30,000,   respectively)  were  $1,620,000,
$1,350,000  and  $1,100,000  respectively,  which  are less  than the  aggregate
amounts such affiliates paid to the unaffiliated landlords but represent amounts
the  Company  believes it would pay to an  unaffiliated  third party for similar
improved office space.

      On December 20, 1994 the Company sold either the stock or operating assets
of  the   companies   comprising   the  cold  storage   operations  of  SEPSCO's
refrigeration business segment to National Cold Storage, Inc. ("NCS"), a company
formed by two then officers of SEPSCO, for cash of $6,500,000, a $3,000,000 note
and the assumption by the buyer of certain liabilities of $2,750,000. Such sale,
excluding any consideration of the $3,000,000 note from NCS since its collection
is  not  reasonably  assured,   resulted  in  approximately  $3,600,000  of  the
$9,300,000 of losses on disposition of the  refrigeration  business segment (see
Note 21).

      The  Company  had  secured   receivables  from  Pennsylvania   Engineering
Corporation ("PEC"), a former affiliate, aggregating $6,664,000 which were fully
reserved prior to 1994. PEC had filed for protection  under the bankruptcy  code
and, moreover, the Company had significant doubts as to the net realizability of
the  underlying  collateral.  During the fourth  quarter  of 1995,  the  Company
received  $3,049,000  with  respect to amounts  owed from PEC  representing  the
Company's allocated portion of the bankruptcy settlement (the "PEC Settlement").

      During 1995 the Company paid  $1,000,000  and  contributed a license for a
period of five years for the Royal Crown distribution rights for its products in
New York City and certain  surrounding  counties to MetBev,  Inc.  ("MetBev") in
exchange for preferred stock in MetBev  representing a 37.5% voting interest and
a warrant to acquire 37.5% of the common stock of MetBev.  The  remaining  62.5%
was owned by other parties and was subject to certain vesting  provisions.  Upon
consummation of the sale of the MetBev distribution rights (see below), Triarc's
voting  interest  in MetBev was 44.7%  principally  due to the  cancellation  of
nonvested stock. Additionally,  pursuant to a revolving credit agreement between
Triarc and MetBev, Triarc loaned $2,000,000 and $2,475,000 to MetBev in 1995 and
1996,  respectively,  which were secured by the  receivables  and inventories of
MetBev.  MetBev has  incurred  significant  losses  from its  inception  and had
stockholders'  deficits  as of  December  31,  1995 and 1996 of  $2,524,000  and
$8,943,000,  respectively.  In December 1996, the distribution  rights of MetBev
were sold to a third party and MetBev commenced the liquidation of its remaining
assets and liabilities.  In connection therewith, in 1995 the Company provided a
reserve of $800,000 (included in "General and  administrative")  relating to its
loans to MetBev  and wrote off its  $1,000,000  investment  (see Note 19) and in
1996 wrote down the remaining  $3,675,000  (see Note 19).  Further,  the Company
provided $1,751,000 and $2,000,000 (included in "General and administrative") in
1995 and 1996,  respectively,  for  uncollectible  receivables  from sales (with
minimal gross  profit) of finished  product to MetBev and in 1995 a guarantee of
MetBev third party accounts payable.

See also Notes 16, 17 and 18 with  respect to other  transactions  with  related
parties.

(29)  BUSINESS SEGMENTS

      The  Company  operates  in four major  segments,  beverages,  restaurants,
textiles  and  propane  (see  Note 2 for a  description  of each  segment).  The
beverage  segment  includes the operations  acquired in the Mistic  Acquisition
commencing  August 9, 1995 (see Note 27). The textile  segment  represents only
the chemicals and dyes business after the sale of the Textile Business (see Note
19) on April 29, 1996.

     Information  concerning the various  segments in which the Company operates
is shown in the table below.  Operating  profit is total revenue less  operating
expenses.  In computing  operating profit,  interest expense,  general corporate
expenses and non-operating income and expenses,  including interest income, have
not been  considered.  Operating  profit  for the  restaurant  segment  reflects
provisions in 1995 and 1996 of $14,647,000 and  $64,300,000,  respectively,  for
reductions in carrying value of long lived assets  impaired or to be disposed of
(see Note 3).  Identifiable  assets by segment are those assets that are used in
the Company's  operations  in each segment.  General  corporate  assets  consist
primarily of cash and cash equivalents  (including restricted cash),  short-term
investments and other non-current investments and deferred financing costs.

      No customer accounted for more than 10% of consolidated  revenues in 1994,
1995 or 1996.


                                                     1994           1995            1996
                                                     ----           ----            ----
                                                               (IN THOUSANDS)
                                                                                 
 Revenues:
      Beverages...............................$   150,750     $    214,587    $     309,142
      Restaurants.............................    223,155          272,739          288,293
      Textiles................................    536,918          547,897          218,554
      Propane.................................    151,698          148,998          173,260
                                              -----------     ------------    -------------
          Consolidated revenues...............$ 1,062,521     $  1,184,221    $     989,249
                                              ===========     ============    =============

 Operating profit:
      Beverages...............................$    14,607     $      4,662    $      17,195
      Restaurants.............................     15,542           (6,437)         (48,741)
      Textiles................................     33,955           23,544           15,190
      Propane.................................     20,378           14,516           15,586
                                              -----------     ------------    -------------
          Segment operating profit (loss).....     84,482           36,285             (770)
      Interest expense........................    (72,980)         (84,227)         (73,379)
      Non-operating income net................      4,858           12,214           84,996
      General corporate expenses..............    (15,549)          (2,296)          (6,209)
                                              -----------     ------------    -------------
          Consolidated income (loss) from
            continuing operations before
            income taxes and minority
            interests ........................$       811     $    (38,024)   $       4,638
                                              ===========     ============    =============

 Identifiable assets:
      Beverages ..............................$   190,568     $    306,349    $     304,538
      Restaurants.............................    137,943          180,734          132,296
      Textiles................................    327,793          328,726           39,243
      Propane.................................    133,321          139,025          156,192
                                              -----------     ------------    -------------
          Total identifiable assets...........    789,625          954,834          632,269
      General corporate assets................    132,542          131,132          222,135
                                              -----------     ------------    -------------
          Consolidated assets.................$   922,167     $  1,085,966    $     854,404
                                              ===========     ============    =============

 Capital expenditures:
      Beverages...............................$     1,309     $      1,656    $       1,529
      Restaurants.............................     34,875           47,444           15,584
      Textiles................................     22,965           13,097            1,715
      Propane.................................      6,599            8,966            6,973
      Corporate...............................         83               57            4,519
                                              -----------     ------------    -------------
          Consolidated capital expenditures...$    65,831     $     71,220    $      30,320
                                              ===========     ============    =============
 Depreciation and amortization of properties:
      Beverages ..............................$       772     $      1,005    $       1,480
      Restaurants.............................      9,335           12,927           13,096
      Textiles................................     13,867           15,082            5,953
      Propane.................................      9,337            9,546           10,017
      Corporate...............................        590              333              139
                                              -----------     ------------    -------------
          Consolidated depreciation and
           amortization...................... 
                                              $    33,901     $     38,893    $      30,685
                                              ===========     ============    =============


(30)  QUARTERLY INFORMATION (UNAUDITED)



                                                                                THREE MONTHS ENDED
                                                                                ------------------
                                                          MARCH 31,      JUNE 30,       SEPTEMBER 30,    DECEMBER 31,(A)
                                                          ---------      --------       -------------    ---------------
                                                                       (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
      1995
                                                                                                      
          Revenues.......................................$   297,993   $     279,281   $    291,875     $     315,072
          Gross profit...................................     85,046          75,556         81,193            82,498
          Operating profit (loss)........................     24,741          12,279         12,713           (15,744)
          Net income (loss)..............................      6,719           1,010         (5,776)          (38,947)
          Income (loss) per share (b)....................       0.23            0.03          (0.19)            (1.30)



                                                                                THREE MONTHS ENDED
                                                                                ------------------
                                                          MARCH 31,      JUNE 30,     SEPTEMBER 30, (D)  DECEMBER 31,(E)
                                                          ---------      --------     -----------------  ---------------
                                                                       (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                                                                                       
      1996
          Revenues........................................$   328,893   $     246,477   $    206,447      $    207,432
          Gross profit....................................     92,970          86,948         77,800            79,422
          Operating profit (loss).........................     25,420          17,710         11,385           (61,494)
          Income (loss) before extraordinary items .......      1,785          (3,583)        47,332           (54,019)
          Extraordinary charge (Note 22)..................     (1,387)         (7,151)         3,122               --
          Net income (loss)...............................        398         (10,734)        50,454           (54,019)
          Income (loss) per share (b):
          Before extraordinary charge.....................        .06            (.12)          1.50             (1.81)
          Extraordinary items (c).........................       (.05)           (.24)           .10               --
          Net income (loss)...............................        .01            (.36)          1.60             (1.81)


      (a) The  results  for the  three  months  ended  December  31,  1995  were
materially  affected by charges of $25,308,000 or $17,347,000  net of income tax
benefit of  $7,961,000.  Such net charges  included  (i) a reduction in carrying
value  of  long-lived  assets  impaired  or  to  be  disposed  of  amounting  to
$14,647,000 (see Note 3), (ii) an aggregate  $7,798,000  consisting of equity in
losses and writedown of  investments  in  affiliates  of $5,247,000  and related
provision for  additional  MetBev  related  losses of $2,551,000  (see Note 28),
(iii) facilities  relocation and corporate  restructuring  charges of $3,010,000
(see Note 18),  (iv) costs related to the  settlement  of a patent  infringement
lawsuit of $1,718,000, (v) accelerated vesting of restricted stock of $1,640,000
(see Note 17) and (vi) interest  accruals related to income tax contingencies of
$1,400,000  (see Note 15) less the PEC Settlement (see Note 28) and the Columbia
Gas Settlement (see Note 20) aggregating $4,905,000.  Additionally,  the results
for the three months ended  December 31, 1995 include a provision for income tax
contingencies of $6,100,000 (see Note 15).

      (b) The shares for income (loss) per share purposes represent the weighted
average  shares  outstanding  plus,  with  respect  to the  three  months  ended
September 30, 1996,  2,519,000  shares for the effect of dilutive stock options.
Net income  for  income per share  purposes  for such  period was  increased  by
$1,335,000 from the assumed reduction in interest expense,  net of income taxes,
resulting  from the  utilization  of the proceeds  from the assumed  exercise of
certain  stock options to  repurchase  debt and  eliminate the related  interest
expense.  Fully diluted income (loss) per share was not applicable to any period
since contingent issuances of common shares would have been antidilutive.

      (c) The results for the three months  ended March 31, 1996,  June 30, 1996
and September 30, 1996 include extraordinary (charges) income in connection with
the early extinguishment of debt consisting of the following (in thousands):



                                                                   THREE MONTHS ENDED
                                                                   ------------------
                                                      MARCH 31,       JUNE 30,    SEPTEMBER 30,
                                                      ---------       --------    -------------

                                                                                    
 Write-off of unamortized deferred financing costs.$      (358)   $    (5,985)      $    (4,126)
 Write-off of unamortized original issue discount..     (1,776)           --                --
 Prepayment penalties..............................        --          (5,519)             (225)
 Fees..............................................        --             --               (250)
 Discount from principal on early extinguishment...        --             --              9,237
                                                    ----------    -----------        ----------
                                                        (2,134)       (11,504)            4,636
 Income tax (provision) benefit....................        747          4,353            (1,514)
                                                    ----------    -----------        -----------
                                                    $   (1,387)   $    (7,151)       $    3,122
                                                    ===========   ===========        ==========


      (d) The  results  for the  three  months  ended  September  30,  1996 were
materially  affected by a net gain from the sale of businesses of $77,123,000 or
$46,899,000 net of income tax benefit of  $30,224,000.  Such net gains consisted
of an $83,447,000 gain on the Offering, partially offset by a $3,500,000 loss on
the sale of the Textile  Business  and a  $2,825,000  loss  associated  with the
write-down of MetBev. See Note 19 for further discussion.

     (e) The  results  for  the  three  months  ended  December  31,  1996  were
materially  affected by (i) facilities  relocation  and corporate  restructuring
charges of $7,500,000  (see Note 18) or  $4,701,000  net of $2,799,000 of income
tax  benefit  and  (ii) a  provision  for the  reduction  in  carrying  value of
long-lived  assets to be disposed of  amounting to  $64,300,000  (see Note 3) or
$39,444,000  net of  $24,856,000  of income tax benefit.

(31)  SUBSEQUENT EVENT

      On March 27, 1997 Triarc  announced  that it has entered into a definitive
agreement to acquire  Snapple  Beverage  Corp.  from The Quaker Oats Company for
$300,000,000,  subject to certain post-closing  adjustments.  The acquisition is
expected  to be  consummated  during  the  second  quarter  of 1997,  subject to
customary closing conditions,  including antitrust  clearance.  Triarc will seek
third party financing for a portion of the purchase price. Snapple is a producer
and seller of premium  beverages  and had sales for the year ended  December 31,
1996 of approximately $550,000,000.
                                                          

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     Not applicable.


                         PART III

ITEMS 10, 11, 12 AND 13.

     Items 10, 11, 12 and 13 to be furnished by amendment  hereto on or prior to
April 30, 1997 or Triarc will otherwise have filed a definitive  proxy statement
involving  the  election  of  directors  pursuant to  Regulation  14A which will
contain such information.

                          PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(A) 1. Financial Statements:

     See Index to Financial Statements (Item 8)

    2. Financial Statement Schedules:

Independent Auditors' Report


Schedule I  -- Condensed  Balance Sheets (Parent Company Only) -- as of December
            31,  1995 and  1996;  Condensed  Statements  of  Operations  (Parent
            Company  Only) -- for the years ended  December 31,  1994,  1995 and
            1996;  Condensed  Statements of Cash Flows (Parent  Company Only) --
            for the years ended December 31, 1994, 1995 and 1996

Schedule II -- Valuation and  Qualifying  Accounts for the years ended December 
            31, 1994, 1995 and 1996

Schedule V  -- Supplemental  Information  Concerning Property Casualty Insurance
            Operations for the years ended December 31, 1994, 1995 and 1996

     All other schedules have been omitted since they are either not applicable
or the information is contained elsewhere in "Item  8. Financial Statements and
Supplementary Data."

3.  Exhibits:
     Copies of the following exhibits are available at a charge of $.25 per page
upon written  request to the  Secretary of Triarc at 280 Park Avenue,  New York,
New York 10017.

     EXHIBIT
     NO.          DESCRIPTION
     -------  -----------------------------------------------------------------

      2.1--   Stock Purchase Agreement dated as of October 1, 1992 among DWG
              Acquisition, Victor Posner, Security Management Corp. and Victor
              Posner Trust No. 20, incorporated herein by reference to Exhibit
              10 to Amendment No. 4 to Triarc's Current Report on Form 8-K dated
              October 5, 1992 (SEC file No. 1-2207).
     2.2 --   Amendment dated as of October 1, 1992 between Triarc and DWG
              Acquisition, incorporated herein by reference to Exhibit 11 to
              Amendment No. 4 to Triarc's Current Report on Form 8-K dated
              October 5, 1992 (SEC file No. 1-2207).
     2.3 --   Exchange  Agreement  dated as of October 1, 1992 between Triarc
              and Security Management Corp., incorporated herein by reference to
              Exhibit 12 to Amendment No. 4 to Triarc's  Current  Report on Form
              8-K dated October 5, 1992 (SEC file No. 1-2207).
     2.4 --   Asset Purchase Agreement dated as of March 31, 1996 by and among
              Avondale Mills Inc., Avondale Incorporated, Graniteville Company
              and the Registrant incorporated herein by reference to Exhibit 2.1
              to the Triarc's Current Report on Form 8-K dated April 18, 1996
              (SEC file No. 1-2207).
     2.5 --   Asset Purchase Agreement dated as of August 9, 1995 among Mistic
              Brands, Inc., Joseph Victori Wines, Inc., Best Flavors, Inc.,
              Nature's Own Beverage Company and Joseph Umbach, the Companies,
              and Joseph Umbach, incorporated herein by reference to Exhibit
              2.1 to Triarc's Quarterly Report on Form 8-K dated August 9, 1995
              (SEC file No. 1-2207).
     2.6 --   Stock Purchase Agreement dated as of March 27, 1997 between The
              Quaker Oats Company and Triarc, incorporated herein by reference
              to Exhibit 2.1 to Triarc's Current Report on Form 8-K dated
              March 31, 1997 (SEC file No.  1-2207).
     3.1 --   Certificate of Incorporation of Triarc, as currently in effect,
              incorporated herein by reference to Exhibit B to the 1994 Proxy 
              (SEC file No. 1-2207).
     3.2 --   By-laws of Triarc, incorporated herein by reference to Exhibit
              3.1 to Triarc's Current Report on Form 8-K dated March 31, 1997
             (SEC file No. 1-2207).
     4.1 --   Note Purchase Agreement dated as of April 23, 1993 among RCAC,
              Triarc, RCRB Funding, Inc. and Merrill Lynch, Pierce, Fenner &
              Smith Incorporated, incorporated herein by reference to Exhibit 4
              to Triarc's Current Report on Form 8-K dated April 23, 1993 (SEC
              file No. 1-2207).
     4.2 --   Indenture  dated as of April 23, 1993 among RCAC,  Royal Crown,
              Arby's and The Bank of New York,  incorporated herein by reference
              to Exhibit 5 to  Triarc's  Current  Report on Form 8-K dated April
              23, 1993 (SEC file No. 1-2207).
     4.3 --   Form of Indenture among RCAC, Royal Crown, Arby's and The Bank of
              New York, as Trustee, relating to the 9 3/4% Senior Secured Notes
              Due 2000, incorporated herein by reference to Exhibit 4.1 to
              RCAC's Registration Statement on Form S-1 dated May 13, 1993
              SEC file No. 33-62778).
     4.4 --   Amended and Restated Loan Agreement dated as of October 13, 1995
              by and between FFCA Acquisition Corporation and Arby's Restaurant
              Development Corporation, incorporated herein by reference to
              Exhibit 10.1 to RC/Arby's Corporation Quarterly Report on Form
              10-Q for the quarter ended September 30, 1995 (SEC file No.
              0-20286).
     4.5 --   Loan Agreement dated as of October 13, 1995 by and between FFCA
              Acquisition Corporation and Arby's Restaurant Holding Company,
              incorporated herein by reference to Exhibit 10.2 to RC/Arby's
              Corporation Quarterly Report on Form 10-Q for the quarter
              ended September 30, 1995 (SEC file No. 0-20286).
     4.6 --   Credit Agreement dated as of August 9, 1995 among Mistic Brands,
              Inc., The Chase Manhattan Bank (National Association) as agent,
              and the other lenders party thereto (the "Mistic Credit
              Agreement"), incorporated herein by reference to Exhibit 10.1 to
              Triarc's Current Report on Form 8-K dated August 9, 1995 (SEC file
              No. 1-2207).
     4.7 --   Letter Agreement dated December 15, 1995 among Arby's Restaurant
              Holding Company, Arby's Restaurant Development Corporation and
              FFCA Acquisition Corporation, incorporated herein by reference to
              Exhibit 4.25 to Triarc's Annual Report on Form 10-K for the year
              ended December 31, 1995 (SEC file No. 1-2207).
     4.8 --   Amendment  Agreement  dated as of October 6, 1995 among Mistic
              Brands,  Inc., The Chase  Manhattan Bank,  incorporated  herein by
              reference to Exhibit 4.26 to Triarc's  Annual  Report on Form 10-K
              for the year ended December 31, 1995 (SEC file No. 1-2207).
     4.9 --   Second Amendment Agreement dated as of March 15, 1996 among Mistic
              Brands, Inc., The Chase Manhattan Bank, N.A., as agent, and the
              other lenders party to the Mistic Credit Agreement incorporated
              herein by reference to Exhibit 4.27 to Triarc's Annual Report on
              Form 10-K for the year ended December 31, 1995 (SEC file No.
              1-2207).
     4.10 --  Third  Amendment  Agreement  dated as of  December  30, 1996 among
              Mistic Brands,  Inc.,The Chase Manhattan Bank, N.A., as agent, and
              the  other  lenders   party  to  the  Mistic   Credit   Agreement,
              incorporated  herein  by  reference  to  Exhibit  4.4 to  Triarc's
              Current  Report  on Form 8-K dated  March  31,  1997 (SEC file No.
              1-2207).
     4.11 --  Credit  Agreement,  dated  as of June  26,  1996,  among  National
              Propane,   L.P.,   The  First   National   Bank  of   Boston,   as
              administrative  agent and a lender,  Bank of America NT & SA, as a
              lender,   and  BA   Securities,   Inc.,  as   syndication   agent,
              incorporated herein by reference to Exhibit 10.1 to Current Report
              of National Propane Partners, L.P. (the "Partnership") on Form 8-K
              dated August 13, 1996 (SEC file No. 1-11867).
     4.12 --  Note Purchase Agreement, dated as of June 26, 1996 ("Note Purchase
              Agreement"),   among  National  Propane,  L.P.  and  each  of  the
              Purchasers  listed in Schedule A thereto  relating to $125 million
              aggregate  principal amount of 8.54% First Mortgage Notes due June
              30, 2010,  incorporated herein by reference to Exhibit 10.2 to the
              Partnership's  Current  Report on Form 8-K dated  August 13,  1996
              (SEC file No. 1-11867).
     4.13 --  Consent,  Waiver  and  Amendment  dated  November  5,  1996  among
              National  Propane,  L.P. and each of the Purchasers under the Note
              Purchase  Agreement,  incorporated  herein by reference to Exhibit
              4.1 to  Triarc's  Current  Report on Form 8-K dated March 31, 1997
              (SEC file No. 1-2207).
     4.14 --  Second Consent,  Waiver and Amendment dated January 14, 1997 among
              National  Propane,  L.P. and each of the Purchasers under the Note
              Purchase  Agreement,  incorporated  herein by reference to Exhibit
              4.2 to  Triarc's  Current  Report on Form 8-K dated March 31, 1997
              (SEC file No. 1-2207).
     4.15 --  Credit  Agreement dated as of May 16, 1996 between:  CH. Patrick &
              Co.,  Inc.,  the  Registrant,  each of the lenders party  thereto,
              Internationale  Nederlanden (U.S.) Capital Corporation,  as agent,
              and The First National Bank of Boston,  as co-agent,  incorporated
              herein by reference to Exhibit 4.3 to Triarc's  Current  Report on
              Form 8-K dated March 31, 1997 (SEC file No. 1-2207).
     4.16 --  Note  dated  July 2,  1996 of  Triarc,  payable  to the  order  of
              National  Propane,  L.P.,  incorporated  herein  by  reference  to
              Exhibit 10.5 to the Partnership's Current Report on
              Form 8-K dated August 13, 1996 (SEC file No.  1-11867).
     4.17 --  Loan Agreement dated as of September 5, 1996 by and between FFCA
              Mortgage Corporation and Arby's  Restaurant  Holding Company,
              incorporated herein by  reference  to Exhibit  4.1 to  RC/Arby's
              Corporation's Current  Report on Form 8-K dated  November 14, 1996
             (SEC file No. 0-20286).
     4.18 --  Supplement  to Loan  Agreement  as of June  26,  1996  among  FFCA
              Acquisition Corporation, Arby's Restaurant Holding Company, Arby's
              Restaurant    Development    Corporation   and   the   Registrant,
              incorporated  herein by  reference  to  Exhibit  4.2 to  RC/Arby's
              Corporation's  Current  Report on Form 8-K dated November 14, 1996
              (SEC file No. 0-20286).
     4.19 --  Agreement  Regarding  Cross  Collateralization  and  Cross-Default
              Provisions  as of June  26,  1996 by and  among  FFCA  Acquisition
              Corporation,  Arby's Restaurant  Development  Corporation,  Arby's
              Restaurant Holding Company and Arby's,  Inc.,  incorporated herein
              by  reference to Exhibit 4.3 to  RC/Arby's  Corporation's  Current
              Report  on  Form  8-K  dated  November  14,  1996  (SEC  file  No.
              0-020286).
     4.20 --  First  Amendment  dated  as of  March  27,  1997,  to  the  Credit
              Agreement dated as of June 26, 1996, among National Propane, L.P.,
              The First National Bank of Boston, as  administrative  agent and a
              lender,  Bank of America NT & SA, as a lender,  and BA Securities,
              Inc., as syndication  agent,  incorporated  herein by reference to
              Exhibit 10.3 to National Propane  Partners,  L.P.'s Current Report
              on Form 8-K dated March 31, 1997 (SEC file No. 1- 11867).
     10.1 --  Employment  Agreement dated as of April 24, 1993 between Donald L.
              Pierce and Arby's,  incorporated  herein by reference to Exhibit 7
              to Triarc's  Current  Report on Form 8-K dated April 23, 1993 (SEC
              file No. 1-2207).
     10.2 --  Employment  Agreement  dated as of April 24,  1993  among  John C.
              Carson,  Royal Crown and Triarc,  incorporated herein by reference
              to Exhibit 8 to  Triarc's  Current  Report on Form 8-K dated April
              23, 1993 (SEC file No. 1-2207).
     10.3 --  Employment  Agreement dated as of April 24, 1993 between Ronald D.
              Paliughi  and  National   Propane   Corporation   (the   "Paliughi
              Employment  Agreement"),   incorporated  herein  by  reference  to
              Exhibit 9 to Triarc's  Current  Report on Form 8-K dated April 23,
              1993 (SEC file No. 1-2207).
     10.4 --  Memorandum  of  Understanding  dated  September  13, 1993  between
              Triarc and William Ehrman, individually and derivatively on behalf
              of SEPSCO,  incorporated  herein by  reference  to Exhibit 10.1 to
              Triarc's  Current Report on Form 8-K dated September 13, 1993 (SEC
              file No. 1-2207).
     10.5 --  Stipulation of Settlement of Ehrman Litigation dated as of October
              18,  1993,  incorporated  herein  by  reference  to  Exhibit  1 to
              Triarc's  Current  Report on Form 8-K dated  October 15, 1993 (SEC
              File No. 1-2207).
     10.6 --  Triarc's 1993 Equity Participation Plan, as amended,  incorporated
              herein by reference to Exhibit 10.1 to Triarc's  Current Report on
              Form 8-K dated March 31, 1997 (SEC file No.
              1-2207).
     10.7 --  Form  of  Non-Incentive  Stock  Option  Agreement  under  Triarc's
              Amended and Restated 1993 Equity Participation Plan,  incorporated
              herein by reference to Exhibit 10.2 to Triarc's  Current Report on
              Form 8-K dated March 31, 1997 (SEC file No. 1-2207).
     10.8 --  Form of Restricted  Stock  Agreement  under  Triarc's  Amended and
              Restated 1993 Equity  Participation  Plan,  incorporated herein by
              reference  to Exhibit 13 to  Triarc's  Current  Report on Form 8-K
              dated April 23, 1993 (SEC file No. 1-2207).
     10.9 --  Consulting Agreement dated as of April 23, 1993 between Triarc and
              Steven Posner, incorporated herein by reference to Exhibit 10.8 to
              Triarc's  Annual  Report on Form 10-K for the  fiscal  year  ended
              April 30, 1993 (SEC file No. 1-2207).
     10.10 -- Form of New Management  Services  Agreement  dated as of April 23,
              1993 between Triarc and certain of its subsidiaries,  incorporated
              herein by reference to Exhibit 10.11 to Triarc's  Annual Report on
              Form 10-K for the fiscal  year ended  April 30, 1993 (SEC file No.
              1-2207).
     10.11 -- Concentrate Sales Agreement dated as of January 28, 1994 between
              Royal Crown and Cott, -- Confidential treatment has been granted
              for portions of the agreement -- incorporated herein by reference
              to Exhibit 10.12 to Amendment No. 1 to Triarc's Registration
              Statement
              on Form S-4 dated March 11, 1994 (SEC file No. 1-2207).
     10.12 -- Form of  Indemnification  Agreement,  between  Triarc and  certain
              officers,  directors, and employees of Triarc, incorporated herein
              by reference to Exhibit F to the 1994 Proxy (SEC file No. 1-2207).
     10.13 -- Amendment No. 1, dated December 7, 1994 to the Paliughi Employment
              Agreement, incorporated herein by reference to Exhibit 10.1 to
              Triarc's Current Report on Form 8-K dated March 29, 1995 (SEC file
              No. 1-2207).
     10.14 -- Settlement  Agreement,  dated as of January 9, 1995, among Triarc,
              Security  Management  Corp.,  Victor Posner Trust No. 6 and Victor
              Posner,  incorporated  herein  by  reference  to  Exhibit  99.1 to
              Triarc's  Current  Report on Form 8-K dated  January 11, 1995 (SEC
              file No. 1-2207).
     10.15 -- Employment  Agreement,  dated as June 29, 1994,  between  Brian L.
              Schorr and Triarc,  incorporated  herein by  reference  to Exhibit
              10.2 to Triarc's  Current  Report on Form 8-K dated March 29, 1995
              (SEC file No. 1-2207).
     10.16 -- Amendment No. 2, dated as of March 27, 1995, to the Paliughi
              Employment Agreement, incorporated herein by reference to Exhibit
              10.20 to Triarc's Annual Report on Form 10-K for the year ended
              December 31, 1995 (SEC file No.  1-2207).
     10.17 -- Letter  Agreement,  dated as of January 1, 1996 between Triarc and
              Leon Kalvaria incorporated herein by reference to Exhibit 10.21 to
              Triarc's  Annual  Report on Form 10-K for the year ended  December
              31, 1995 (SEC file No. 1-2207).
     10.18 -- Employment  and SAR  Agreement  dated as of August 9, 1995 between
              Mistic Brands, Inc. and Michael  Weinstein,.incorporated herein by
              reference to Exhibit 10.2 to Triarc's  Annual  Report on Form 10-K
              for the year ended December 31, 1995 (SEC file No. 1-2207).
     10.19 -- Employment  and SAR  Agreement  dated as of August 9, 1995 between
              Mistic Brands, Inc. and Ernest J. Cavallo,  incorporated herein by
              reference to Exhibit 10.23 to Triarc's  Annual Report on Form 10-K
              for the year ended December 31, 1995 (SEC file No. 1-2207).
     10.20 -- Amendment to Employment  Agreement of Ronald D. Paliughi  dated of
              June 10, 1996, incorporated herein by reference to Exhibit 10.7 to
              Partnership's  Current  Report on Form 8- K dated August 13, 1996.
              (SEC file No. 1-11867).
     10.21 -- Stock  Purchase  Agreement  dated  February  13, 1997 by and among
              Arby's Inc., Arby's  Restaurant  Development  Corporation,  Arby's
              Restaurant Holding Company,  Arby's Restaurant Operations Company,
              RTM Partners, Inc. and RTM, Inc., incorporated herein by reference
              to  Exhibit  10.1 to  RCAC's  Current  Report  on Form  8-K  dated
              February 20, 1997 (SEC file No. 0-20286).
     10.22 -- Purchase  Agreement  among the  Partnership,  Merrill Lynch & Co.,
              Merrill Lynch,  Pierce,  Fenner & Smith  Incorporated,  Donaldson,
              Lufkin & Jenrette Securities Corporation,  Janney Montgomery Scott
              Inc.,  Rauscher  Pierce  Refsnes,  Inc..and the  Robinson-Humphrey
              Company,  Inc.,  incorporated herein by reference to Exhibit1.1 to
              the Partnership's Current Report on Form 8-K dated August 13, 1996
              (SEC file No. 1-11867).
     10.23 -- Contribution and Assumption Agreement among the Partnership,
              National Propane, National Propane SGP, Inc. and National Sales &
              Service, Inc., incorporated herein by reference to Exhibit 10.4 to
              the Partnership's Current Report on Form 8-K dated August 13,
              1996 (SEC file No.  1-11867).
     10.24 -- Conveyance,   Contribution  and  Assumption  Agreement  among  the
              Partnership,  National  Propane and National  Propane  SGP,  Inc.,
              incorporated   herein  by   reference   to  Exhibit  10.3  to  the
              Partnership's  Current  Report on Form 8-K dated  August 13,  1996
              (SEC file No. 1- 11867).
     10.25 -- Purchase  Agreement dated November 7, 1996 between the Partnership
              and the buyer named therein (the "Buyer"),  incorporated herein by
              reference to Exhibit 10.1 to the  Partnership's  Current Report on
              Form 8-K dated November 14, 1996 (SEC file No. 1-11867).
     10.26 -- Registration   Agreement   dated  November  7,  1996  between  the
              Partnership  and the Buyer,  incorporated  herein by  reference to
              Exhibit 10.2 to the Partnership's Current Report on Form 8-K dated
              November 14, 1996 (SEC file No. 1-11867).
     10.27--  Supply  Agreement  dated as of March 31, 1996 by and  between
              Avondale Mills,  Inc. and C.H.  Patrick & Co.,  Inc. --
              Confidential  treatment has been granted for  portions of the
              Supply  Agreement -- is  incorporated  herein by reference to
              Exhibit 10 to Triarc's Current Report on Form 8-K/A dated June
              25, 1996 (SEC file No. 1-2207).
     10.28 -- Employment Agreement dated as of April 29, 1996 between Triarc and
              John L. Barnes,  Jr.,  incorporated herein by reference to Exhibit
              10.3 to Triarc's  Current  Report on Form 8-K dated March 31, 1997
              (SEC file No. 1-2207).
     21.1 --  Subsidiaries of the Registrant*
     23.1 --  Consent of Deloitte & Touche LLP*
     27.1 --  Financial  Data  Schedule  for the year ended  December  31, 1996,
              submitted to the Securities and Exchange  Commission in electronic
              format.*
     99.1 --  Order of the United States District Court for the Northern
              District of Ohio, dated February 7, 1995, incorporated herein by
              reference to Exhibit 99.1 to Triarc's Current Report on Form
              8-K dated March 29, 1995 (SEC file No. 1-2207).
- -----------------------
*    Filed herewith


(B) Reports on Form 8-K:

     Not applicable.



                        SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                           TRIARC COMPANIES, INC.
                           (Registrant)


                           NELSON PELTZ
                           NELSON PELTZ
                           CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Dated: March 31, 1997

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has been  signed  below on March 31,  1997 by the  following  persons on
behalf of the registrant in the capacities indicated.


SIGNATURE                                                TITLES
- -----------------                    -----------------------------------------

NELSON PELTZ                         Chairman and Chief Executive Officer
 ..................                   And Director (Principal Executive Officer)
  (NELSON PELTZ)

PETER W. MAY                        President and Chief Operating Officer, and
 .................                   Director (Principal Operating Officer)
  (PETER W. MAY)

JOHN L. BARNES, JR.                Senior Vice President and Chief Financial
 .................                  Officer (Principal Financial Officer)
  (JOHN L. BARNES, JR.)

FRED H. SCHAEFER                   Vice President and Chief Accounting Officer
 .................                  (Principal Accounting Officer)
  (FRED H.  SCHAEFER)

HUGH L. CAREY                      Director
 ......................
  (HUGH L. CAREY)

CLIVE CHAJET                       Director
 ............................
  (CLIVE CHAJET)

STANLEY R. JAFFE                   Director
 ..........................
  (STANLEY R. JAFFE)

JOSEPH A.  LEVATO                  Director
 .........................
  (JOSEPH A.  LEVATO)

M.L. LOWENKRON                     Director
 .........................
  (M. L. LOWENKRON)

DAVID E. SCHWAB II                Director
 ...........................
  (DAVID E. SCHWAB II)

RAYMOND S. TROUBH                 Director
 ............................
  (RAYMOND S. TROUBH)

GERALD TSAI, JR.                 Director
 ............................
  (GERALD TSAI, JR.)

                         INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
TRIARC COMPANIES, INC.:
New York, New York


     We have audited the consolidated  financial statements of Triarc Companies,
Inc. and subsidiaries  (the "Company") as of December 31, 1996 and 1995, and for
each of the three years in the period ended  December 31, 1996,  and have issued
our report  thereon dated March 31, 1997 (which report  includes an  explanatory
paragraph  as to a  change  in  the  method  of  accounting  for  impairment  of
long-lived   assets  and  for  long-lived   assets  to  be  disposed  of);  such
consolidated financial statements and report are included elsewhere in this Form
10-K. Our audits also included the consolidated financial statement schedules of
the Company,  listed in Item 14(A)2. These financial statement schedules are the
responsibility of the Company's management.  Our responsibility is to express an
opinion  based  on our  audits.  In our  opinion,  such  consolidated  financial
statement  schedules,  when  considered  in relation  to the basic  consolidated
financial  statements taken as a whole,  present fairly in all material respects
the information set forth therein.

DELOITTE & TOUCHE LLP

New York, New York
March 31, 1997










                                                                                             SCHEDULE I


                               TRIARC COMPANIES, INC. (PARENT COMPANY ONLY)
                                         CONDENSED BALANCE SHEETS


                                                                                    December 31,
                                                                                    ------------
                                                                                  1995         1996
                                                                                  ----         ----
                                                                                    (In thousands)
                                  ASSETS
                                                                                           
Current assets:
    Cash and cash equivalents ..................................................$  12,550  $ 123,535
    Restricted cash and cash equivalents........................................   23,385        376
    Short-term investments......................................................       18     51,629
    Due from subsidiaries ......................................................   29,763     32,148
    Other receivables, net......................................................    4,564        756
    Deferred income tax benefit.................................................    4,264      3,483
    Prepaid expenses and other current assets...................................      301      3,324
                                                                                ---------  ---------
       Total current assets.....................................................   74,845    215,251
                                                                                ---------  ---------
Note receivable from subsidiary ................................................   18,375     18,715
Investments in consolidated subsidiaries, at equity.............................  208,043        --
Properties, net.................................................................      186      4,558
Deferred income tax benefit.....................................................   15,964        --
Other assets ...................................................................    8,997      4,144
                                                                                ---------  ---------
                                                                                $ 326,410  $ 242,668
                                                                                =========  =========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Current portion of long-term debt...........................................$   5,274  $   3,000
    Accounts payable............................................................    1,456      2,598
    Due to subsidiaries.........................................................   14,515     15,596
    Accrued expenses............................................................   21,955     19,865
                                                                                ---------  ---------
       Total current liabilities................................................   43,200     41,059
                                                                                ---------  ---------
Notes payable to subsidiaries...................................................  229,300     72,350
9 1/2% promissory note payable .................................................   32,423        --
Accumulated reductions in stockholders' equity of subsidiaries in excess of
  investment (a)...............................................................       --      78,487
Deferred income taxes...........................................................      --      43,370
Other liabilities...............................................................      837        637
Commitments and contingencies
Stockholders' equity:
    Class A common stock, $.10 par value; authorized 100,000,000 shares, 
      issued 27,983,805 shares..................................................    2,798      2,798
    Class B common stock, $.10 par value; authorized 25,000,000 shares, 
      issued 5,997,622 shares...................................................      600        600
    Additional paid-in capital..................................................  162,020    161,170
    Accumulated deficit.........................................................  (97,923)  (111,824)
    Less Class A common stock held in treasury at cost; 4,067,380 and 
      4,097,606 shares.........................................................   (45,931)   (46,273)
    Other.......................................................................     (914)       294
                                                                                ---------  ---------
       Total stockholders' equity ..............................................   20,650      6,765
                                                                                ---------  ---------
                                                                                $ 326,410  $ 242,668
                                                                                =========  =========

- ----------------

(a) The  "Accumulated  reductions in  stockholders'  equity of  subsidiaries  in
    excess of  investment"  includes all of Triarc's  direct and indirect  owned
    subsidiaries.  The investment in  subsidiaries  has a negative  balance as a
    result of aggregate  distributions  from  subsidiaries  and  forgiveness  of
    Triarc debt to subsidiaries in excess of the investment in the subsidiaries.




                                                                                    SCHEDULE I (CONTINUED)

                               TRIARC COMPANIES, INC. (PARENT COMPANY ONLY)
                                    CONDENSED STATEMENTS OF OPERATIONS



                                                                           Year Ended December 31,
                                                                           -----------------------
                                                                          1994        1995     1996
                                                                          ----        ----     ----
                                                                    (In thousands except per share amounts)

                                                                                     
Income and (expenses):
    Equity in net income (losses) of continuing operations of
      subsidiaries ..................................................   $ 29,610   $(26,078)  $(50,190)
    Gain on sale of businesses, net..................................        --         --      81,500
    Interest income..................................................        707        797      6,028
    Interest expense ................................................    (28,807)   (15,794)    (8,235)
    Reduction in carrying value of long-lived assets impaired or 
      to be disposed of .............................................        --         --      (5,400)
    General and administrative expenses .............................     (6,660)    (2,072)    (4,449)
    Facilities relocation and corporate restructuring................     (8,800)    (2,700)    (1,000)
    Recovery of doubtful accounts from affiliates and former
      affiliates.....................................................        --       3,049        --
    Cost of a proposed acquisition not consummated...................     (5,480)       --         --
    Shareholder litigation and other expenses .......................       (500)       (24)       --
    Other income (expense) ..........................................       (199)     2,305        492
                                                                        --------   --------   --------
      Income (loss) from continuing operations before income taxes...    (20,129)   (40,517)    18,746
Benefit (provision) from income taxes ...............................     18,036      3,523    (27,231)
                                                                        --------   --------   --------
      Loss from continuing operations................................     (2,093)   (36,994)    (8,485)
Equity in losses of discontinued operations of subsidiaries .........     (3,900)       --         --
Extraordinary items..................................................        --         --       5,752
Equity in extraordinary charges of subsidiaries......................     (2,116)       --     (11,168)
                                                                        --------   --------   --------
      Net loss.......................................................     (8,109)   (36,994)   (13,901)
Preferred stock dividend requirements................................     (5,833)       --         --
                                                                        --------   --------   --------
      Net loss applicable to common stockholders ....................   $(13,942)  $(36,994)  $(13,901)
                                                                        ========   ========   ========
Loss per share:
    Continuing operations............................................   $   (.34)  $  (1.24)  $   (.28)
    Discontinued operations..........................................       (.17)       --         --
    Extraordinary charges............................................       (.09)       --        (.18)
                                                                        --------   --------   --------
      Net loss.......................................................   $   (.60)  $  (1.24)  $   (.46)
                                                                        ========   ========   ========






                                                                                                            SCHEDULE I (CONTINUED)

                                           TRIARC COMPANIES, INC. (PARENT COMPANY ONLY)
                                                CONDENSED STATEMENTS OF CASH FLOWS

                                                                              
                                                                                  Year Ended December 31,
                                                                                  -----------------------
                                                                                1994       1995          1996
                                                                                ----       ----          ----
                                                                                       (IN THOUSANDS)
                                                                                                   
Cash flows from operating activities:
    Net loss ...........................................................   $  (8,109)  $  (36,994)   $ (13,901)
    Adjustments to reconcile net loss to net cash provided by
       operating activities:
       Equity in net losses (income) of subsidiaries ...................     (23,594)      26,078       60,444
       Dividends from subsidiaries .....................................      40,000       22,721      126,059
       Gain on sale of businesses, net .................................        --           --        (81,500)
       Discount from principal on early extinguishment of debt .........        --           --         (9,237)
       Deferred income tax provision (benefit) .........................      (2,899)        (382)      36,558
       Change in due from/to subsidiaries and other affiliates including
         capitalized interest ($21,017 in 1994 and $9,569 in 1995) .....      33,034        1,332        2,203
       Other, net ......................................................       8,991        3,808       (1,576)
       Decrease (increase) in receivables ..............................        (649)      (4,715)         133
       Decrease (increase) in restricted cash ..........................        (498)        (166)         288
       Decrease (increase) in prepaid expenses and other current
         assets ........................................................       2,399         (214)         (23)
       Increase (decrease) in accounts payable and accrued
         expenses ......................................................     (18,249)       4,522       20,901
                                                                           ---------    ---------    ---------
            Net cash provided by operating activities ..................      30,426       15,990      140,349
                                                                           ---------    ---------    ---------

Cash flows from investing activities:
    Cost of short-term investments purchased ...........................        --           --        (61,381)
    Proceeds from short-term investments sold ..........................        --           --         11,244
    Loans to subsidiaries, net of repayments ...........................        --        (18,375)        (340)
    Business acquisitions ..............................................        --        (29,240)        --
    Capital expenditures ...............................................         (83)         (57)      (4,519)
    Investment in an affiliate .........................................        --         (5,340)        --
    Capital contributed to a subsidiary ................................        --         (8,865)        --
                                                                           ---------    ---------    ---------
            Net cash used in investing activities ......................         (83)     (61,877)     (54,996)
                                                                           ---------    ---------    ---------

Cash flows from financing activities:
    Repayments of long-term debt .......................................        --           --        (27,250)
    Borrowings from subsidiaries, net of repayments ....................        --         45,900       30,600
    Cash restricted for debt repayment paid by subsidiary in 1996.......        --        (22,721)      22,721
    Purchases of common shares in open market tranactions ..............        (344)      (1,170)        (496)
    Payment of preferred dividends .....................................      (5,833)        --           --
    Other ..............................................................        --            (56)          57
                                                                           ---------    ---------    ---------
             Net cash provided by (used in) financing activities .......      (6,177)      21,953       25,632
                                                                           ---------    ---------    ---------
Net increase (decrease) in cash and cash equivalents ...................      24,166      (23,934)     110,985
Cash and cash equivalents at beginning of period .......................      12,318       36,484       12,550
                                                                           ---------    ---------    ---------
Cash and cash equivalents at end of period .............................   $  36,484    $  12,550    $ 123,535
                                                                           =========    =========    =========




                                                                                                                       SCHEDULE II
                                              TRIARC COMPANIES, INC. AND SUBSIDIARIES
                                                 VALUATION AND QUALIFYING ACCOUNTS


                                                                       Additions
                                               Balance at   Charged to     Charged to        Deductions     Balance at
                                               Beginning    Costs and       Other               from          End of
             Description                       of Period     Expenses      Accounts           Reserves        Period
             -----------                       ---------     --------      --------           --------        ------
                                                                            (IN THOUSANDS)
                                                                                             
Year ended December 31, 1994:
   Receivables - allowance for doubtful
     accounts:
        Trade ...............................  $   6,969     $   1,021      $     111 (1)   $(2,711)(2)  $     5,390
                                               =========     =========      =========       =======      ===========
   Insurance loss reserves...................  $  13,511     $     --       $     --        $(2,684)(3)  $    10,827
                                               =========     =========      =========       =======      ===========

Year ended December 31, 1995:
   Receivables - allowance for doubtful
      accounts:
        Trade................................  $   5,390     $   3,267      $     327 (1)   $(2,840)(2)  $    6,144
        Affiliate............................        --          1,351            --            --            1,351
                                               ---------     ---------      ---------       -------      ----------
           Total.............................  $   5,390     $   4,618      $     327       $(2,840)     $    7,495
                                               =========     =========      =========       =======      ==========
   Insurance loss reserves...................  $  10,827     $     110      $     --        $(1,539)(3)  $    9,398
                                               =========     =========      =========       =======      ==========

Year ended December 31, 1996:
   Receivables - allowance for doubtful
      accounts:
        Trade ...............................  $   6,144     $   4,104      $     331 (1)   $ (5,933)(4)  $    4,646
        Affiliate............................      1,351         5,675            --          (4,475)(2)       2,551
                                               ---------     ---------      ---------       --------      ----------
           Total.............................  $   7,495     $   9,779      $     331       $(10,408)     $    7,197
                                               =========     =========      =========       ========      ==========
   Insurance loss reserves...................  $   9,398     $     763      $     --        $   (333)(3)  $    9,828
                                               =========     =========      =========       ========      ==========



(1)  Recoveries of accounts previously determined to be uncollectible.
(2)  Accounts determined to be uncollectible.
(3)  Payment of claims and/or reclassification to "Accounts payable".
(4)  Consists of  $4,125,000  attributable  to the sale of the Textile  Business
     (see Note 19 to the consolidated  financial  statements  included elsewhere
     herein) and $1,808,000 of accounts determined to be uncollectible.









                                                                                                                        SCHEDULE V
                                              TRIARC COMPANIES, INC. AND SUBSIDIARIES
                                       SUPPLEMENTAL INFORMATION CONCERNING PROPERTY-CASUALTY
                                                       INSURANCE OPERATIONS


                                                                        CLAIMS AND CLAIM
                                RESERVES                                   ADJUSTMENT             
                               FOR UNPAID                               EXPENSES INCURRED         PAID
                               CLAIMS AND                                   RELATED TO          CLAIMS AND
                                  CLAIM                     NET             ----------            CLAIM
                               ADJUSTMENT      EARNED    INVESTMENT    CURRENT       PRIOR      ADJUSTMENT    PREMIUMS
AFFILIATION WITH REGISTRANT    EXPENSES (1)   PREMIUMS    INCOME         YEAR        YEARS       EXPENSES      WRITTEN
- ---------------------------    ------------   --------    ------         ----        -----       --------      -------
                                                            (IN THOUSANDS)

Consolidated property-casualty
 entities:

                                                                                              
   Year ended
     December 31, 1994.........$  10,827    $    120    $     529     $     48     $     386    $   2,880    $     120
                               =========    ========    =========     ========     =========    =========    =========

   Year ended
     December 31, 1995.........$   9,398    $    --     $     486     $     34     $     530    $   1,540    $     --
                               =========    ========    =========     ========     =========    =========    =========

   Year ended
     December 31, 1996.........$   9,828    $    --     $     505     $     48     $     715    $     333    $     --
                               =========    ========    =========     ========     =========    =========    =========




(1) Does not include  claims losses of  $1,610,000,  $1,343,000  and $835,000 at
    December 31, 1994, 1995, and 1996  respectively,  which have been classified
    as "Accounts payable".





                                               EXHIBIT 21.1

         TRIARC COMPANIES, INC.  AND SUBSIDIARIES
              SUBSIDIARIES OF THE REGISTRANT
                      MARCH 31, 1997



     The subsidiaries of Triarc  Companies,  Inc.,  their  respective  states or
jurisdictions  of  organization  and the names under which such  subsidiaries do
business are as follows:

                                                          STATE OR JURISDICTION
                                                          UNDER WHICH ORGANIZED

National Propane Corporation*....................................       Delaware
    National Propane SGP, Inc....................................       Delaware
        National Propane Partners, L.P.**........................       Delaware
           National Propane, L.P.**..............................       Delaware
               National Sales & Service, Inc.....................       Delaware
               Carib Gas Corporation of St. Croix (formerly
                 LP Gas Corporation of St. Croix)................       Delaware
               Carib Gas Corporation of St. Thomas (formerly
                 LP Gas Corporation of St.Thomas)................       Delaware
NPC Leasing Corp.................................................       New York
Citrus Acquisition Corporation...................................       Florida
    Adams Packing Association, Inc. (formerly New
        Adams, Inc.).............................................       Delaware
    Groves Company, Inc. (formerly New Texsun, Inc.).............       Delaware
Home Furnishing Acquisition Corporation..........................       Delaware
    1725 Contra Costa Property, Inc. (formerly Couroc
        of Monterey, Inc.).......................................       Delaware
    Hoyne Industries, Inc. (formerly New Hoyne, Inc.)............       Delaware
    Hoyne Industries of Canada Limited...........................       Canada
    Hoyne International (U.K.), Inc..............................       Delaware
GS Holdings, Inc.................................................       Delaware
    GVT Holdings, Inc.***........................................       Delaware
        TXL Corp. ............................................... South Carolina
        TXL International Sales, Inc............................. South Carolina
        GTXL, Inc................................................       Delaware
        TXL Holdings, Inc........................................       Delaware
           C.H. Patrick & Co., Inc............................... South Carolina
    Southeastern Public Service Company..........................       Delaware
           Crystal Ice & Cold Storage, Inc.......................       Delaware
           Southeastern Gas Company..............................       Delaware
               Geotech Engineers, Inc............................  West Virginia
Triarc Holdings 1, Inc...........................................       Delaware
Triarc Holdings 2, Inc...........................................       Delaware
Triarc Development Corporation...................................       Delaware
Triarc Acquisition Corporation...................................       Delaware
Mistic Brands, Inc...............................................       Delaware








                           TRIARC COMPANIES, INC.  AND SUBSIDIARIES
                                SUBSIDIARIES OF THE REGISTRANT
                                        MARCH 31, 1997
 
                                                          STATE OR JURISDICTION
                                                          UNDER WHICH ORGANIZED


CFC Holdings Corp.****...........................................       Florida
    Chesapeake Insurance Company Limited*****....................       Bermuda
    RC/Arby's Corporation (formerly Royal Crown
    Corporation).................................................       Delaware
        RCAC Asset Management, Inc...............................       Delaware
        Arby's, Inc..............................................       Delaware
           Arby's Building and Construction Co...................       Georgia
           Arby's Canada Inc.....................................       Canada
           Daddy-O's Express, Inc................................       Georgia
           Arby's (Hong Kong) Limited............................      Hong Kong
           Arby's De Mexico S.A. de CV...........................       Mexico
               Arby's Immobiliara................................       Mexico
               Arby's Servicios..................................       Mexico
           TJ Holding Company, Inc...............................       Delaware
        Arby's Restaurants, Limited.............................. United Kingdom
        Arby's Limited........................................... United Kingdom
        Arby's Restaurant Construction Company...................       Delaware
        Arby's Restaurant Development Corporation................       Delaware
        Arby's Restaurant Holding Company........................       Delaware
        Arby's Restaurants, Inc..................................       Delaware
        Arby's Restaurant Operations Company.....................       Delaware
        RC-8, Inc. (formerly Tyndale, Inc.)......................       Indiana
        RC-11, Inc. (formerly National Picture &
          Frame Co.).............................................    Mississippi
        Promociones Corona Real, S.A. de C.V.....................       Mexico
        RC Leasing, Inc..........................................       Delaware
        Royal Crown Nederland B.V................................     Netherland
        RC Cola Canada Limited (formerly Nehi Canada
          Limited)...............................................       Canada
        Royal Crown Bottling Company of Texas (formerly
        Royal Crown Bottlers of Texas, Inc.).....................       Delaware
        Royal Crown Company, Inc. (formerly Royal Crown
          Cola Co.)..............................................       Delaware
           RC Services Limited******.............................       Ireland
           Retailer Concentrate Products, Inc....................       Florida
           TriBev Corporation....................................       Delaware

- -------------
  *    24.3% owned by Southeastern Public Service Company and 75.7% owned by
       Triarc Companies,  Inc.
 **    National Propane Corporation is the managing general partner
       of both partnerships and holds a combined 2%. unsubordinated general
       partner interest therein and a 38.7% subordinated general partner
       interest in National Propane Partners, L.P.  National Propane SGP, Inc.
       is the special general partner of both partnerships and holds a combined
       2% unsubordinated general partner interest therein.  The public owns a
       57.3% limited partner interest in National Propane Partners, L.P.
       National Propane Partners, L.P. is the sole limited partner of National
       Propane, L.P.
***    50% owned by GS Holdings, Inc. and 50% owned by Southeastern Public
       Service Company.
****   94.6% owned by Triarc Companies, Inc. and 5.4% owned by Southeastern
       Public Service Company.
*****  Common Stock 100% owned by CFC Holdings; Preferred Stock is owned 38.5%
       by RC/Arby's Corporation, 23% by Southeastern Public Service Company and
       38.5% by TXL Corp.
****** 99% owned by Royal Crown Company, Inc. and 1% owned by RC/Arby's
       Corporation.




                                  EXHIBIT 23.1




                   INDEPENDENT AUDITORS' CONSENT




      We consent to the incorporation by reference in Registration Statement No.
33-60551 of Triarc  Companies,  Inc. on Form S-8 of our reports  dated March 31,
1997 (which express an unqualified opinion and includes an explanatory paragraph
as to a change in the method of accounting for  impairment of long-lived  assets
and for long-lived assets to be disposed of), appearing in this Annual Report on
Form 10-K of Triarc Companies, Inc. for the year ended December 31, 1996.




DELOITTE & TOUCHE LLP


New York, New York
March 31, 1997

EX-27

 


<ARTICLE>                     5
<LEGEND>
     THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 
     CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE ACCOMPANYING
     FORM 10-K OF TRIARC COMPANIES, INC. FOR THE YEAR ENDED DECEMBER 31, 1996
     AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-K.

<CIK>                         0000030697
<NAME>                        TRIARC COMPANIES, INC.
<MULTIPLIER>                                   1,000
       
                             
<PERIOD-TYPE>                   12-Mos
<FISCAL-YEAR-END>                              DEC-31-1996
<PERIOD-START>                                 JAN-01-1996
<PERIOD-END>                                   DEC-31-1996
<CASH>                                         154,405
<SECURITIES>                                    51,711
<RECEIVABLES>                                   80,613
<ALLOWANCES>                                         0
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