Project Cheeseburger

Presentation to the Special Committee

February 16, 2006

Exhibit c.2

Proprietary and Confidential

Proprietary and Confidential

Confidential Material

The

following

pages

contain

material

provided

to

the

Special

Committee

of

Cheeseburger

Drive-In

Restaurants,

Inc.

(“Cheeseburger”

or

the

“Company”)

by

Citigroup

Global

Markets

Inc.

(“Citigroup”)

in

connection

with

the

proposed

merger

transaction

involving

the

Company

and

an

affiliate

of

Wellspring

Capital

Management

LLC

(“Wellspring”).

The

accompanying

material

was

compiled

or

prepared

on

a

confidential

basis

solely

for

the

use

of

the

Special

Committee

of

the

Company

and

not

with

a

view

toward

public

disclosure

under

any

securities

laws

or

otherwise.

The

information

contained

in

this

material

was

obtained

from

the

Company

and

other

sources.

Any

estimates

and

projections

contained

herein

have

been

prepared

or

adopted

by

the

management

of

the

Company,

obtained

from

public

sources,

or

are

based

upon

such

estimates

and

projections,

and

involve

numerous

and

significant

subjective

determinations,

and

there

is

no

assurance

that

such

estimates

and

projections

will

be

realized. 

Citigroup

does

not

take

responsibility

for

such

estimates

and

projections

or

the

basis

on

which

they

were

prepared.

No

representation

or

warranty,

express

or

implied,

is

made

as

to

the

accuracy

or

completeness

of

such

information

and

nothing

contained

herein

is,

or

shall

be

relied

upon

as,

a

representation,

whether

as

to

the

past,

the

present

or

the

future.

In

preparing

this

material,

Citigroup

assumed

and

relied,

without

assuming

any

responsibility

for

independent

verification,

upon

the

accuracy

and

completeness

of

all

financial

and

other

information

and

data

publicly

available

or

provided

to

or

otherwise

reviewed

by

or

discussed

with

Citigroup

and

upon

the

assurances

of

the

management

of

the

Company

that

it

is

not

aware

of

any

relevant

information

that

has

been

omitted

or

that

remains

undisclosed

to

Citigroup.

This

material

was

not

prepared

for

use

by

readers

not

as

familiar

with

the

Company

as

the

Special

Committee

of

the

Company

and,

accordingly,

neither

the

Company

nor

Citigroup

nor

their

respective

legal

or

financial

advisors

or

accountants

take

any

responsibility

for

the

accompanying

material

if

used

by

persons

other

than

the

Special

Committee

of

the

Company.

This

material

is

necessarily

based

upon

information

available

to

Citigroup,

and

financial,

stock

market

and

other

conditions

and

circumstances

existing

and

disclosed

to

Citigroup,

as

of

the

date

of

the

material.

Citigroup

does

not

have

any

obligation

to

update

or

otherwise

revise

the

accompanying

material.

1

Proprietary and Confidential

Table of Contents

1.

Transaction Overview

2.

Cheeseburger Trading and Financial Performance

3.

Financial Analysis

Appendix

A.

Public Market Comparables

B.

Precedent Transactions

C.

Discounted Cash Flow Analysis

D.

WACC Calculation

E.

LBO Analysis

F.

Historical Sales and Unit Growth

G.

Trading Overview

H.

Wellspring Capital Management and Guggenheim Partners Profiles

2

1. Transaction Overview

*

*

*

*

*

*

* * * *

Proprietary and Confidential

Process Summary

55 Potential Buyers Contacted:  (49 Financial Buyers / 6 Strategic Buyers)

31 Parties Received Offering Memorandum: (29 Financial Buyers / 2 Strategic Buyers)

3 Preliminary Indications:

(2 Financial Buyers, 1 Strategic Buyer)

2 Parties Attended Management Presentations

Management Revised Projections Downward

Party A Withdrew / Party B Lowered Price

Party B Lowered Price Again

Following Add’l Diligence;

Discussions

Ended

Management subsequently approached the Board about the opportunity to acquire the Company

On February 6, Management and their equity partner, Wellspring, provided the Special Committee with

a binding offer, marked contract and financing commitment letters

3

Proprietary and Confidential

Terms / Conditions

Selected Transaction Terms

(a)

All option holders will receive cash equal to the number of options owned multiplied by the excess of the purchase price over

the exercise price of such options.  Company must take all necessary action to terminate the Company’s Employee Stock

Purchase Plan prior to closing.

Treatment of Options

Merger may be terminated by either party if not consummated prior to six months from date of agreement

Other

[$7]

million

termination

fee

to

Wellspring

or

up

to

[$3]

million

of

expense

reimbursement;

[$x]

million

termination

fee

to

Cheeseburger

plus

up

to

[$3]

million

expense

reimbursement

[Termination fees are sole and exclusive remedy]

Termination Payments

[Non-solicitation

provisions,

subject

to

receipt

of

a

proposal

deemed

by

the

Company

to

be

a

Superior

Proposal

or

likely

to

lead

to

a

Superior

Proposal]

[Fiduciary out for Superior Proposal]

No-Shop

Wellspring has received financing commitment letters from Guggenheim Corporate Funding:

$20 million Revolving Credit Facility ($1 million available at close; $6 million revolving L/C) @ L+350 (0.8x 2005 EBITDA)

$95 million Term Loan A @ L+387.5 (4.0x 2005 EBITDA)

$35 million Term Loan B @ L+800 (1.5x 2005 EBITDA)

$10 million secured subordinated term loan @ L+1000 (0.4x 2005 EBITDA)

Lenders require that a minimum of $54.4 million of cash equity be invested in merger subsidiary (at least 2/3 must be funded by

Wellspring)

Financing

Wellspring receipt of financing contemplated by the commitment letters (or alternative financing reasonably satisfactory to

Wellspring)

Cheeseburger shareholder approval

HSR and other customary regulatory approvals

No material adverse change with respect to Cheeseburger

2005

Cheeseburger

audited

financials

must

reflect

2005

EBITDA

of

at

least

$23.7

million

[Aggregate number of dissenting shares of less than [10%] of total number of common shares outstanding]

Certain Closing Conditions

$15.00 per share in cash

Premium of 1% to current stock price (02/15/06)

Premium of 25% to closing stock price on the last trading day prior to public announcement of strategic alternatives review

(05/13/05)

Premium of 6% to 12-month average closing stock price

Merger Consideration

Comments

Note:

Leverage multiples based on 2005 EBITDA of $24.0 million per management forecast on February 4, 2005.

(a)

Selected transaction terms based on draft Agreement and Plan of Merger dated [February 13, 2006].  Terms remain subject to further negotiation.

4

Proprietary and Confidential

Transaction Matrix

Merger Consideration

(Dollars in millions, Except per Share Data)

$15.00

Market Prices

     Premium to:

    Pre-Announcement Price (05/13/05)

$12.00

25.0%

    Pre-Announcement 12-Month Average

12.21

22.9

    Current 12-Month Average

14.20

5.6

    Current (02/15/06)

14.90

0.7

    Average Since Terminating Discussions w/ Party B (12/12/05)

15.01

(0.1)

    52-Week High (1/05/2006)

15.88

(5.5)

    52-Week Low (4/15/2005)

11.55

29.9

Current Shares Outstanding

11.463

Shares from Options

2.682

Diluted Shares Outstanding

14.145

Gross Equity Value

$212

Less: Proceeds from Options

(21)

Net Equity Value

$192

Straight Debt

20

Less: Cash

(12)

Firm Value (a)

$199

EBITDA

     Firm Value / EBITDA

2005 (b)

$24.0

8.3x

2006 (c)

28.5

7.0

Earnings per Share (Diluted)

     Price / Earnings per Share

2006 Management Case (c)

$0.89

16.8x

2006 Wall Street Consensus

1.02

14.7

(a) Based on balance sheet data projected for fiscal year-end 2005 by Cheeseburger management.

(b) Projections based on management estimates received on February 4, 2006 (with respect to estimated 2005 year-end).

(c) Projections based on management estimates received on January 27, 2006 (with respect to fiscal years 2006 - 2010).

5

2. Cheeseburger Trading and Financial

Performance

*

*

*

*

*

*

* * *

Proprietary and Confidential

Stock Price Performance and Earnings /

Strategic Alternatives Disclosures

0.6%

12.5%

13.3%

(10.1%)

Stock Price Reaction

(1)

Announces 10-K

filing delay

03/22/05

Met / Exceeded

Expectations

“…over the last few

weeks, we’ve been

meeting with a number of

interested parties…I’ll tell

you that we’re very

pleased with the

progress.”

10/19/05

“…we are pleased to

report that over 25 parties

have expressed interest

relating to the sale of the

Company.”

07/28/05

“…retained

Citigroup as its

financial advisor and

Thelen Reid &

Priest as its legal

advisor to identify

and evaluate

strategic

alternatives…”

05/16/05

(2)

Deal / Other Discussion

Missed Expectations

Missed Expectations

Missed

Expectations

Actual vs. Consensus

1Q 2005

2Q 2005

3Q 2005

4Q 2004

Earnings Announcement:

6

1Q

2Q

3Q

Announces Strategic

Alternatives Review

4Q

Jan

2005

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

2006

Feb

12.0

12.5

13.0

13.5

14.0

14.5

15.0

15.5

Source: Public filings, press releases and Thomson Financial.

(1)

Represents

increase

/

(decrease)

from

Cheeseburger

closing

stock

price

on

the

trading

day

prior

to

earnings

release

to

Cheeseburger

closing

stock

price

on

the

10th

trading

day

following

the

earnings

release.

(2)

Represents date the Company announced its exploration of strategic alternatives.  The Company released 1Q 2005 earnings on May 5, 2005.

Proprietary and Confidential

Recent Wall Street Commentary

Analyst

$18.00

Buy

$17.50

Strong Buy

“We

consider

it

highly

likely

that

the

company

will

be

acquired

over

the

next

several

months,

and

this

remains

the

primary

basis

of

our

continued

BUY

recommendation.”

“The

company

has

engaged

a

law

firm

and

banker

to

‘explore

strategic

alternatives

to

enhance

shareholder

value,’

and

it

appears

that

the

only

option

being

pursued

is

the

sale

of

the

company.”

“At

least

25

interested

parties,

only

one

of

which

is

believed

to

have

been

a

strategic

buyer,

have

reviewed

the

book,

and

we

understand

that

a

round

of

meetings

was

held

with

more

than

half

of

these

in

September.

It

also

appears

that

additional

meetings

with

interested

parties

have

taken

place

over

the

past

several

weeks.

Although

the

company

was

unwilling

to

reveal

any

new

information

in

its

conference

call,

it

seems

likely

to

us

that

we

are

at

the

stage

where

bids

would

be

invited.”

“We

estimate

Enterprise

Value/EBITDA

to

be

7.5x

for

2005

and

6.4x

for

2006.”

“In

our

opinion,

there

is

a

strong

probability

that

Cheeseburger

will

be

acquired

by

a

financial

buyer

at

a

price

at

least

in

the

high

teens

over

the

next

several

months.

On

that

basis,

we

retain

our

BUY

recommendation

and

we

are

raising

our

price

target

to

$18.”

Anton Brenner

Roth Capital Partners

October 20, 2005

“Cheeseburger

recently

retained

Citigroup

Global

Markets

Inc.,

as

its

financial

advisor

to

evaluate

various

strategic

alternatives.

We

believe

these

could

include

selling

the

company

outright

or

buying

back

stock

more

aggressively

and,

as

a

less

likely

possibility,

making

an

acquisition

to

gain

scale.”

“Cheeseburger

shares

could

fetch

$18.00

in

a

buyout

based

on

peer

multiples.

We

note

that

a

strategic

buyer

could

pay

well

above

that

given

synergies

of

being

able

to

significantly

reduce

redundant

SG&A

costs.”

“Management

noted

on

its

conference

call

that

it

is

pleased

with

the

progress

it

is

making

on

this

front.”

Michael Gallo

CL King & Associates

October 20, 2005

Comments

Price Target

Note:

Represents research reports issued following Cheeseburger’s 3Q2005 earnings call.

7

Proprietary and Confidential

12

7

5

0

2

4

6

8

10

12

14

Original Budget

(Apr. 05)

Revised

(Nov. 05)

Actual

(Feb. 06)

5.5%

2.3%

2.5%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Original Budget

(Apr. 05)

Revised

(Nov. 05)

Actual

(Feb. 06)

$1.00

$0.80

$0.80

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

Original Budget

(Apr. 05)

Revised

(Nov. 05)

Actual

(Feb. 06)

$30.7

$25.3

$24.0

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

Original Budget

(Apr. 05)

Revised

(Nov. 05)

Actual

(Feb. 06)

2005 Comparison: Original Budget vs.

Actual

EBITDA

Company-Operated Same Store Sales Growth

Earnings Per Share

Company-Operated New Store Openings

(17.6%)

(20.4%)

(325 bps)

(41.7%)

Source: Original budget received from Cheeseburger management on April 7, 2005.  Revised 2005 budget received from Cheeseburger management on November 29, 2005. 

Actual 2005 numbers based on Cheeseburger management’s preliminary fourth quarter 2005 Income Statement received on February 4, 2006.

(4.9%)

(0.6%)

+29 bps

(28.6%)

8

Proprietary and Confidential

$15.8

$11.5

$9.9

$11.2

$13.8

$18.4

$23.2

$27.1

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

2003

2004

2005

2006

2007

2008

2009

2010

Historical and Projected Financials

Revenue

Net Income

EBITDA

Same Store Sales and Unit Growth

Source: 2006 –

2010 financials based on budget and five-year forecast received from Cheeseburger management on January 27, 2006.  2005 financials per

Cheeseburger management internal projected year-end estimates received on February 4, 2006.

$190.3

$194.2

$187.2

$202.5

$226.3

$246.0

$266.4

$287.7

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

2003

2004

2005

2006

2007

2008

2009

2010

$24.2

$27.4

$24.0

$28.5

$32.8

$38.3

$44.0

$50.1

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

2003

2004

2005

2006

2007

2008

2009

2010

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2003

2004

2005

2006

2007

2008

2009

2010

Company-Operated

Franchise

2005 –

2010 CAGR: 9.0%

2005 –

2010 CAGR: 15.9%

2005 –

2010 CAGR: 22.3%

Total Units:

784

788

804

862

917

977

1,042

1,112

% Growth:

0.0%

0.5%

2.0%

7.2%

6.4%

6.5%

6.7%

6.7%

9

3. Financial Analysis

*

*

*

*

*

*

* * * * * * *

Proprietary and Confidential

Management Five-Year Forecast

10

2005

Projected Calendar Year

(2)

2005 - 2010

Actual

(1)

2006

2007

2008

2009

2010

CAGR

Restaurant Sales

$168.9

$182.0

$203.5

$220.3

$237.7

$255.6

8.6%

Franchise Royalty Income

17.9

19.4

21.5

24.1

27.1

30.3

11.0%

Franchise Fees / Other Income

0.3

1.0

1.4

1.5

1.7

1.8

39.1%

Total Revenues

$187.2

$202.5

$226.3

$246.0

$266.4

$287.7

9.0%

Restaurant Food and Paper

54.4

57.5

64.3

69.6

74.9

80.5

--

Restaurant Labor Costs

49.2

53.3

59.4

64.1

68.9

73.9

--

Restaurant Occupancy Expense

10.7

11.7

13.5

14.5

15.6

16.6

--

Restaurant Depreciation

8.0

9.2

10.1

10.3

10.3

10.2

--

Other Restaurant Operating Expenses

21.9

22.8

25.4

27.3

29.5

31.4

--

General and Administrative

15.9

15.3

16.2

16.9

17.6

18.3

--

Advertising Expense

10.4

10.9

12.2

13.0

13.8

14.6

--

Non-Cash Compensation

0.8

2.0

2.0

2.0

2.0

2.0

--

Other Depreciation

0.9

0.7

0.7

0.7

0.7

0.7

--

Impairment of Long Lived Assets

0.4

0.0

0.0

0.0

0.0

0.0

--

Restaurant Retirement Costs

(0.9)

0.1

0.0

0.0

0.0

0.0

--

Loss / (Gain) on Market Sales of Fixed Assets

0.3

0.4

0.5

0.3

0.3

0.3

--

Total Costs and Expenses

$172.0

$183.9

$204.2

$218.6

$233.5

$248.5

--

Operating Income

$15.1

$18.6

$22.1

$27.3

$32.9

$39.2

21.0%

Interest Income

($1.3)

($1.4)

($1.5)

($2.6)

($4.8)

($4.7)

--

Interest Expense

2.1

1.8

1.3

0.3

0.2

0.2

--

Income Before Income Tax Expense

$14.4

$18.2

$22.3

$29.6

$37.5

$43.7

--

Income Tax Expense

4.5

7.0

8.5

11.3

14.2

16.6

--

Net Income

$9.9

$11.2

$13.8

$18.4

$23.2

$27.1

22.3%

EPS (3)

$0.80

$0.89

$1.10

$1.46

$1.85

$2.16

22.0%

EBITDA

$24.0

$28.5

$32.8

$38.3

$44.0

$50.1

15.9%

Gross Unit Openings

Company-Operated

5

21

12

12

12

12

--

Franchise

29

40

45

50

55

60

--

Total New Units

34

61

57

62

67

72

--

Company-Operated Same Store Sales Growth

2.5%

4.0%

3.0%

3.0%

3.0%

3.0%

--

Capital Expenditures

$13.2 (4)

$21.9

$18.7

$12.2

$12.2

$12.2

(1.6%)

(1) Per internal fourth quarter income statement received from Cheeseburger management on February 4, 2006.

(2) Per five-year forecast received from Cheeseburger management on January 27, 2006.

(3) Assumes 12.547 mm diluted shares for 2006 - 2010 per Cheseburger management forecast.

(4) Per latest budget received from Cheeseburger management on January 27, 2006.

Proprietary and Confidential

Sensitized Five-Year Forecast

Assumptions

Sensitized

forecast

assumes

the

Company

achieves

50%

of

management’s

projected

company-

operated

unit

growth

and

60%

of

management’s

projected

franchise

unit

growth

consistent

with

recent

Cheeseburger

performance

versus

budget

Annual

same

store

sales

growth

held

constant

at

historical

QSR

industry

average

of

2.3%,

versus

management’s

projection

of

4%

for

2006

and

3%

for

2007

-

2010

New

unit

Average

Unit

Volume

(AUV)

and

capital

investment

assumed

to

be

$870K

and

$920K,

respectively,

consistent

with

store

openings

since

2003.

Management

is

projecting

new

unit

AUV’s

of

$1

million

for

2006

–

2010

and

new

unit

capital

investment

of

$875K

in

2007

and

$833K

for

2008

-

2010

The

following

store-level

costs

as

a

percentage

of

restaurant

sales

are

held

constant

at

2005

levels:

Restaurant

Food

and

Paper:

32.2%

vs.

management’s

forecast

of

31.6%

in

2006

–

2008

and

31.5%

in

2009

–

2010

Restaurant

Labor

Costs:

29.2%

vs.

management’s

forecast

of

29.3%

in

2006

decreasing

by

10

bps

per

year

to

28.9%

in

2010

Other

Restaurant

Operating

Expenses:

13.0%

vs.

management

forecast

of

12.5%

in

2006

–

2007,

12.4%

in

2008

–

2009,

and

12.3%

in

2010

Advertising:

6.1%

vs.

management

forecast

of

6.0%

in

2006

and

2007

decreasing

by

10

bps

per

year

to

5.7%

in

2010

Includes

incremental

G&A

costs

of

$1

million

per

year

related

to

potential

personnel

and

other

expenses

required

for

store

growth

11

Proprietary and Confidential

Sensitized Five-Year Forecast

12

2005

Projected Calendar Year

(2)

2005 - 2010

Actual

(1)

2006

2007

2008

2009

2010

CAGR

Restaurant Sales

$168.9

$182.0

$191.8

$200.2

$208.8

$217.6

5.2%

Franchise Royalty Income

17.9

19.4

20.8

22.0

23.6

25.3

7.1%

Franchise Fees / Other Income

0.3

1.0

0.8

0.9

1.0

1.1

25.6%

Total Revenues

$187.2

$202.5

$213.4

$223.1

$233.4

$243.9

5.4%

Restaurant Food and Paper

54.4

58.7

61.8

64.5

67.3

70.1

--

Restaurant Labor Costs

49.2

53.1

55.9

58.4

60.9

63.4

--

Restaurant Occupancy Expense

10.7

11.7

13.0

13.7

14.3

14.9

--

Restaurant Depreciation

8.0

9.2

9.7

9.5

9.2

8.7

--

Other Restaurant Operating Expenses

21.9

23.6

24.8

25.9

27.0

28.2

--

General and Administrative

15.9

16.3

16.2

16.3

16.4

16.5

--

Advertising Expense

10.4

11.2

11.8

12.3

12.8

13.3

--

Non-Cash Compensation

0.8

2.0

2.0

2.0

2.0

2.0

--

Other Depreciation

0.9

0.7

0.7

0.7

0.7

0.7

--

Impairment of Long Lived Assets

0.4

0.0

0.0

0.0

0.0

0.0

--

Restaurant Retirement Costs

(0.9)

0.1

0.0

0.0

0.0

0.0

--

Loss / (Gain) on Market Sales of Fixed Assets

0.3

0.4

0.5

0.3

0.3

0.3

--

Total Costs and Expenses

$172.0

$186.8

$196.5

$203.5

$210.9

$218.2

--

Operating Income

$15.1

$15.6

$16.9

$19.6

$22.5

$25.8

11.2%

Interest Income

($1.3)

($1.4)

($1.5)

($2.6)

($4.8)

($4.7)

--

Interest Expense

2.1

1.8

1.3

0.3

0.2

0.2

--

Income Before Income Tax Expense

$14.4

$15.2

$17.1

$21.9

$27.1

$30.3

--

Income Tax Expense

4.5

5.8

6.5

8.3

10.3

11.5

--

Net Income

$9.9

$9.4

$10.6

$13.6

$16.8

$18.8

13.7%

EPS (3)

$0.80

$0.75

$0.84

$1.08

$1.34

$1.50

13.3%

EBITDA

$24.0

$25.5

$27.3

$29.8

$32.4

$35.2

7.9%

Gross Unit Openings

Company-Operated

5

11

6

6

6

6

--

Franchise

29

24

27

30

33

36

--

Total New Units

34

35

33

36

39

42

--

Company-Operated Same Store Sales Growth

2.5%

2.3%

2.3%

2.3%

2.3%

2.3%

--

Capital Expenditures

$13.2 (4)

$17.6

$13.7

$7.7

$7.7

$7.7

(10.2%)

(1) Per internal fourth quarter income statement received from Cheeseburger management on February 4, 2006.

(2) Per assumptions listed on page 11.

(3) Assumes 12.547 mm diluted shares for 2006 - 2010 per Cheseburger management forecast.

(4) Per latest budget received from Cheeseburger management on January 27, 2006.

Proprietary and Confidential

Valuation Methodologies

25% -

30% Rate of Return

6.0x –

7.0x EBITDA Exit

Guggenheim Corporate Funding debt

commitment

(5)

Cheeseburger Management Five-Year

Forecast

(3)

Sensitized Five-Year Forecast

(4)

6.0x –

7.0x Terminal EBITDA Multiple

Discount Rate of 9.7%-11.2%

Cheeseburger Management Five-Year

Forecast

(3)

Sensitized Five-Year Forecast

(4)

6.0x –

7.0x 2005E EBITDA

2005 EBITDA of $24.0 million

(2)

14.0x –

16.0x 2006E P/E

2006E EPS of $0.89

(1)

Reference Range

Metric

Comparable

Public Company

Precedent

Transactions

DCF

(1)

Per

Cheeseburger

management

forecast

received

on

January

27,

2006. 

(2)

Per

Cheeseburger

management

4Q2005

financials

received

on

February

4,

2006.

(3)

Assumes

4%

same

store

sales

growth

in

2006

and

3%

in

2007

-

2010.

(4)

See

sensitized

five-year

forecast

assumptions

on

page

11.

(5)

Per

Guggenheim

debt

commitment

letter

dated

February

6,

2006,

as

amended

February

13,

2006.

LBO

13

Proprietary and Confidential

$11.55

$9.84

$11.50

$13.75

$13.75

$17.75

$11.00

$12.50

$15.88

$14.79

$13.00

$14.25

$16.00

$13.00

$16.00

$21.00

$7.00

$10.00

$13.00

$16.00

$19.00

$22.00

$25.00

52-Week Range

52-Week Range - Pre Announcement

LBO Analysis - Sensitized Five-Year

Forecast (4)

LBO Analysis - Management

Five-Year Forecast (3)

DCF Analysis - Sensitized Five-Year

Forecast (4)

DCF Analysis - Management Five-

Year Forecast (3)

Precedent Transactions

Public Market Comparables

Implied Share Price for Cheeseburger

Pre-Announcement Price: $12.00

(1)

(1)

Pre-announcement

price

as

of

May

13,

2005,

the

last

trading

day

prior

to

announcement

by

the

Company

that

it

was

exploring

strategic

alternatives.

(2)

Current

price

as

of

February

15, 2006.

(3)

Based

on

revised

5-year

forecast

received

from

Cheeseburger

management

on

January

27,

2006.

(4)

See

page

11

for

sensitized

five-year

forecast

assumptions.

Merger Consideration: $15.00

Current Price: $14.90

(2)

14

Appendix

*

*

*

*

*

*

* * * * * *

A. Public Market Comparables

*

*

*

*

*

*

* * * * * *

Proprietary and Confidential

Closing Stock

FV / EBITDA

Price / EPS

Price

Market Cap.

Firm Value

CY2005

CY2006

CY2005

CY2006

$36.01

$45,321

$51,607

9.8x

9.0x

17.6x

16.4x

50.59

13,946

16,510

10.7

9.4

19.8

18.1

56.86

6,396

6,944

11.2

10.6

26.6

23.8

26.35

1,759

2,603

11.0

10.3

18.6

16.8

32.59

1,883

2,090

11.2

10.2

26.7

24.3

38.64

1,377

1,649

6.7

6.3

15.3

15.1

16.56

985

1,391

10.1

8.5

18.0

20.0

31.55

1,056

1,150

11.2

9.8

24.6

22.1

18.26

510

671

7.7

7.3

17.1

17.2

Mean

$8,137

$9,402

10.0x

9.0x

20.5x

19.3x

$14.90

$171

$198

8.2x

6.9x

18.6x

16.7x

Public Market Trading Multiples

Note:

Closing

stock

prices

as

of

February

15,

2006.

Forward

estimates

calendarized

to

December

31

fiscal

year-end.

Source:

ThomsonOne

Analytics,

Wall

Street

Research

and

public

filings,

except

for

Cheeseburger.

Cheeseburger

estimates

based

on

management

projections.

Cheeseburger

15

Proprietary and Confidential

0.0

5.0

10.0

15.0

20.0x

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

QSR

Cheeseburger

2.0

4.0

6.0

8.0

10.0

12.0x

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

QSR

Cheeseburger

Historical EPS and EBITDA Metrics

Price / Next Twelve Month Earnings Per Share

Firm Value / LTM EBITDA

Source:

FactSet

and

Company

filings.

Note:

QSR

Index

includes

MCD,

YUM,

WEN,

DPZ,

SONC,

JBX,

CKR,

PZZA,

and

SNS.

Average:

Cheeseburger:

12.2x

QSR Index:

15.6

Discount:

(21.8%)

Average:

Cheeseburger:

6.2x

QSR Index:

8.1

Discount:

(23.3%)

16

B. Precedent Transactions

*

*

*

*

*

*

* * * * * *

Proprietary and Confidential

Precedent Restaurant Transaction

Multiples

U.S Restaurant Transactions Since 2001 with Transaction Values of Less Than $250 million 

Date

Transaction

Transaction Value

Announced

Target

Acquiror

Value ($mm)

LTM / EBITDA

10/18/05

Garden Fresh Restaurant Corp.

Sun Capital Partners Inc.

$198.0

6.6x

09/19/05

Claim Jumper

Leonard Green & Partners

200.0

12.0

09/06/05

Perkins Family Restaurants

Castle Harlan

245.0

6.8

01/20/05

Charlie Browns Inc.

Trimaran Capital Partners LLC

140.0

NA

11/25/04

Captain D's Seafood

Charlesbank Capital / Grotech Capital

150.0

NA

06/15/04

Quality Dining, Inc.

Management

112.4

6.2

06/14/04

Mimi's Cafe Inc.

Bob Evans Farms Inc.

178.5

9.4

09/30/03

Garden Fresh Restaurant Corp.

Fairmont Capital Inc.

134.0

5.0

05/14/03

Prandium Inc.

Investor Group

57.4

4.2

01/21/03

Qdoba Restaurant Corp.

Jack in the Box Inc.

45.0

NA

10/28/02

Ninety Nine Restaurant & Pub

O'Charley's

160.0

6.2

05/21/02

Morton's Restaurant Group

Castle Harlan

71.0

9.1

11/19/01

Santa Barbara Restaurant Group

CKE Restaurants Inc.

60.2

8.0

07/31/01

Mexican Restaurants Inc. (CASA)

Wyndcrest Holdings LLC

25.7

6.1

06/08/01

McCormick & Schmick's (Avado)

Castle Harlan and Bruckmann Rosser

123.5

6.1

06/04/01

Einstein/Noah Bagel Corp.

New World Coffee

190.0

6.9

05/02/01

Il Fornaio Corp.

Bruckmann, Rosser, Sherrill

64.3

5.1

03/14/01

Taco Bueno (CKE Rest.)

Jacobson Partners

72.5

5.9

02/28/01

UNO Restaurant Corp.

Management

167.8

5.4

02/15/01

Vicorp Restaurants

Goldner Hawn & Banc Boston Capital

171.3

4.1

    Mean

$128.3

6.6x

Source: Public filings, press releases and Wall Street Research.

17

Proprietary and Confidential

Precedent Transaction EBITDA

Multiples

Firm Value / LTM EBITDA

Financial Buyers (Performing)

Avg:

9.7x

Financial Buyers (Underperforming)

Avg:

6.1x

Source: Public filings, press releases and Wall Street Research.

18

Size of

Deal ($B)

$1.5

$1.4

$2.4

$1.6

$5.2

$0.8

$0.7

$0.5

$1.1

$1.9

$1.4

$1.3

$7.3

$0.7

$1.2

$0.7

$1.5

7.4x

8.0x

13.0x

9.0x

10.6x

9.9x

10.6x

9.0x

3.6x

6.8x

6.1x

8.6x

9.2x

4.7x

5.7x

5.4x

4.9x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

C. Discounted Cash Flow Analysis

*

*

*

*

*

*

*

* * * * * *

Proprietary and Confidential

Discounted Cash Flow Analysis:

Management Five-Year Forecast

Projected Fiscal Year Ending December 31,

(Dollars in millions, Except per Share Data)

2006

2007

2008

2009

2010

EBIT

$16.3

$22.1

$27.3

$32.9

$39.2

Non-Cash Compensation

1.7

2.0

2.0

2.0

2.0

Loss / (Gain) on Sales of Fixed Assets

0.3

0.5

0.3

0.3

0.3

Taxes @ 38.0%

(7.1)

(9.3)

(11.2)

(13.4)

(15.7)

    Earnings Before Interest

$11.3

$15.2

$18.3

$21.8

$25.7

Depreciation and Amortization

8.7

10.8

11.0

11.1

10.9

Inc. / (Dec.) in Deferred Tax Assets

3.6

0.7

0.7

0.7

0.7

Change in Net Working Capital

0.4

0.4

0.4

0.4

0.5

Capital Expenditures

(19.1)

(18.7)

(12.2)

(12.2)

(12.2)

    Unlevered Free Cash Flow

$4.9

$8.4

$18.2

$21.8

$25.6

Terminal EBITDA

$50.1

Terminal Adjusted Free Cash Flow

$26.8

19

Terminal EBITDA Multiple Range

Terminal EBITDA Multiple Range

6.0x

6.3x

6.5x

6.8x

7.0x

6.0x

6.3x

6.5x

6.8x

7.0x

Terminal Value

Terminal Value

$301

$313

$326

$338

$351

$301

$313

$326

$338

$351

WACC

Firm Value as of 2/15/06

WACC

Equity Value as of 2/15/06 (a)

9.7%

$251

$259

$267

$275

$283

9.7%

$264

$272

$280

$288

$296

10.1%

247

255

263

271

278

10.1%

260

268

276

284

291

10.5%

244

251

259

267

274

10.5%

256

264

272

280

287

10.8%

240

248

255

263

270

10.8%

253

261

268

276

283

11.2%

237

244

252

259

267

11.2%

250

257

264

272

279

WACC

Implied Perpetuity Growth Rate

WACC

Equity Value per Share as of 2/15/06 (b)

9.7%

0.8%

1.1%

1.4%

1.7%

2.0%

9.7%

$18.64

$19.20

$19.77

$20.33

$20.89

10.1%

1.1

1.4

1.7

2.0

2.3

10.1%

18.38

18.94

19.49

20.05

20.60

10.5%

1.4

1.8

2.1

2.4

2.6

10.5%

18.13

18.68

19.22

19.77

20.31

10.8%

1.8

2.1

2.4

2.7

3.0

10.8%

17.89

18.42

18.96

19.50

20.03

11.2%

2.1

2.4

2.7

3.0

3.3

11.2%

17.64

18.17

18.70

19.23

19.76

Source: Projections per Cheeseburger management.

(a) Equity Value equals Firm Value less total straight debt of $20.2 million plus cash of $12.4 million and options proceeds of $20.7 million per Cheeseburger management estimates received on 01/27/06 with respect to fiscal year-end 2005.

(b) Equity Value per Share equals Equity Value divided by Diluted shares outstanding, before Treasury Stock Method share buy-back.

Proprietary and Confidential

Discounted Cash Flow Analysis: Sensitized

Five-Year Forecast

Projected Fiscal Year Ending December 31,

(Dollars in millions, Except per Share Data)

2006

2007

2008

2009

2010

EBIT

$13.7

$16.9

$19.6

$22.5

$25.8

Non-Cash Compensation

1.7

2.0

2.0

2.0

2.0

Loss / (Gain) on Sales of Fixed Assets

0.3

0.5

0.3

0.3

0.3

Taxes @ 38.0%

(6.1)

(7.4)

(8.3)

(9.4)

(10.6)

    Earnings Before Interest

$9.7

$12.0

$13.5

$15.3

$17.4

Depreciation and Amortization

8.7

10.4

10.2

9.9

9.4

Inc. / (Dec.) in Deferred Tax Assets

3.6

0.7

0.7

0.7

0.7

Change in Net Working Capital

0.4

0.4

0.4

0.4

0.4

Capital Expenditures

(15.4)

(13.7)

(7.7)

(7.7)

(7.7)

    Unlevered Free Cash Flow

$7.1

$9.8

$17.1

$18.7

$20.2

Terminal EBITDA

$35.2

Terminal Adjusted Free Cash Flow

$18.5

20

Terminal EBITDA Multiple Range

Terminal EBITDA Multiple Range

6.0x

6.3x

6.5x

6.8x

7.0x

6.0x

6.3x

6.5x

6.8x

7.0x

Terminal Value

Terminal Value

$211

$220

$229

$238

$246

$211

$220

$229

$238

$246

WACC

Firm Value as of 2/15/06

WACC

Equity Value as of 2/15/06 (a)

9.7%

$190

$196

$202

$207

$213

9.7%

$203

$209

$215

$220

$226

10.1%

188

193

199

204

210

10.1%

201

206

212

217

223

10.5%

185

191

196

201

207

10.5%

198

204

209

214

220

10.8%

183

188

193

199

204

10.8%

196

201

206

212

217

11.2%

180

185

191

196

201

11.2%

193

198

204

209

214

WACC

Implied Perpetuity Growth Rate

WACC

Equity Value per Share as of 2/15/06 (b)

9.7%

0.9%

1.2%

1.5%

1.8%

2.1%

9.7%

$14.38

$14.77

$15.17

$15.56

$15.96

10.1%

1.3

1.6

1.9

2.2

2.4

10.1%

14.19

14.58

14.97

15.36

15.75

10.5%

1.6

1.9

2.2

2.5

2.8

10.5%

14.01

14.39

14.77

15.15

15.54

10.8%

1.9

2.2

2.6

2.8

3.1

10.8%

13.83

14.20

14.58

14.96

15.33

11.2%

2.3

2.6

2.9

3.2

3.4

11.2%

13.65

14.02

14.39

14.76

15.13

Source: Based on projections per Cheeseburger management assuming adjustments per (page 11). 

(a) Equity Value equals Firm Value less total straight debt of $20.2 million plus cash of $12.4 million and options proceeds of $20.7 million per Cheeseburger management estimates received on 01/27/06 with respect to fiscal year-end 2005.

(b) Equity Value per Share equals Equity Value divided by Diluted shares outstanding, before Treasury Stock Method share buy-back.

D. WACC Calculation

*

*

*

*

*

*

*

* * * * * * * * * * * * * * *

Proprietary and Confidential

WACC Calculation

21

WACC Calculation

Asset Beta Calculation

Low

High

Cost of Equity

Adjusted

Market

U.S. Risk Free Rate (30 Year U.S. Treasury)

4.52%

4.52%

Equity Beta

Debt Beta

Leverage

Asset Beta

McDonald's Corporation (MCD)

0.88

0.00

15%

0.79

Equity Market Risk Premium

4.0%

6.0%

Yum! Brands, Inc. (YUM)

0.71

0.00

11%

0.66

Asset Beta

0.79 

0.79 

Wendy's (WEN)

0.78

0.00

9%

0.74

Relevered

Equity Beta

0.86 

0.86 

Domino's Pizza, Inc. (DPZ)

1.01

0.30

32%

0.85

Debt Beta

0.30 

0.30 

Sonic Corp. (SONC)

0.81

0.30

8%

0.79

Debt/Capitalization (Market)

15.2%

15.2%

Jack in the Box Inc. (JBX)

0.93

0.30

19%

0.83

Effective Marginal Tax Rate

19.2%

19.2%

Papa John's International Inc. (PZZA)

0.77

0.30

8%

0.74

Adjusted Equity Market Risk Premium

3.4%

5.1%

CKE Restaurants (CKR)

1.30

0.30

17%

1.16

Small Cap Risk Premium

2.5%

2.5%

Steak 'n Shake Company (SNS)

0.80

0.30

24%

0.72

Cost of Equity

10.4%

12.2%

Median

0.81

0.30

15%

0.79

Mean

0.89

0.20

16%

0.81

Cost of Debt

U.S. Risk Free Rate (10 Year U.S. Treasury)

4.55%

4.55%

Credit Spread

2.67%

2.67%

Cost of Debt (Pretax)

7.22%

7.22%

Cost of Debt (Aftertax)

5.83%

5.83%

WACC

9.7%

11.2%

E. LBO Analysis

*

*

*

*

*

*

* * * * * * * *

Proprietary and Confidential

LBO Analysis: Management Five-Year

Forecast

Sources and Uses

Pro Forma Leverage

Returns

Implied Purchase Price

Return

$13.75

$14.90

$16.00

6.0x

29.7%

23.9%

19.6%

6.5x

32.7%

26.8%

22.4%

7.0x

35.5%

29.5%

25.0%

22

Sources:

Amount

Percent

Uses:

Amount

Percent

Outside Equity

$75.7

33.8%

Purchase Cheeseburger Common Equity

$191.5

85.5%

Term Loan A

95.0

42.4

Refinance

Existing

Debt

(1)

19.7

8.8

Term Loan B

35.0

15.6

Transaction Costs

12.7

5.7

Senior Subordinated Debt

10.0

4.5

Existing Cash

(1)

8.2

3.7

Total

$223.9

100.0%

Total

$223.9

100.0%

(1) Balance sheet data as of Q1-2006.  Assumes minimum cash of $5 million.

Multiple of

Pro Forma Leverage:

2005 EBITDA

Rate (1)

Term Loan A

4.0x

8.6%

Term Loan B

1.5x

12.8

Senior Subordinated Debt

0.4x

14.8

Total

5.8x

(1)

Per

Guggenheim

debt

commitment

letter

dated

February

6,

2006,

as

amended

February

13,

2006.

(1)

Proprietary and Confidential

LBO Analysis: Sensitized Five-Year

Forecast

Pro Forma Leverage

Returns

Sources and Uses

Sources:

Amount

Percent

Uses:

Amount

Percent

Outside Equity

$75.7

33.8%

Purchase Cheeseburger Common Equity

$191.5

85.5%

Term Loan A

95.0

42.4

Refinance Existing Debt

(1)

19.7

8.8

Term Loan B

35.0

15.6

Transaction Costs

12.7

5.7

Senior Subordinated Debt

10.0

4.5

Existing Cash

(1)

8.2

3.7

Total

$223.9

100.0%

Total

$223.9

100.0%

(1) Balance sheet data as of Q1-2006.  Assumes minimum cash of $5 million.

Implied Purchase Price

Return

$11.50

$12.25

$13.00

6.0x

30.7%

23.6%

18.4%

6.5x

34.6%

27.3%

21.9%

7.0x

38.1%

30.7%

25.1%

23

Multiple of

Pro Forma Leverage:

2005 EBITDA

Rate (1)

Term Loan A

4.0x

8.6%

Term Loan B

1.5x

12.8

Senior Subordinated Debt

0.4x

14.8

Total

5.8x

(1) Per Guggenheim debt commitment letter dated February 6, 2006, as amended

February 13, 2006.

(1)

F. Historical Sales and Unit Growth

*

*

*

*

*

*

*

* * * *

Proprietary and Confidential

Historical Sales and Unit Growth

Historical Same Store Sales Growth

2005 Unit Growth: Actual vs. Budget

(6.0%)

(3.0%)

0.0%

3.0%

6.0%

9.0%

12.0%

15.0%

18.0%

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

QSR Average

Cheeseburger

2001

2002

2003

2004

2005

QSR Average: 2.3%

Source: 

Public filings, Wall Street research, and Technomic.

Note:

Same store sales growth is based on U.S. company-owned stores, except for McDonald’s, Domino's, Sonic, and Papa John's (systemwide). For companies with

fiscal year-ends different from calendar year-end, fiscal quarters have been aligned with closest comparable calendar quarters.

Company-Operated Unit Openings

Franchise

Net

Unit

Openings

(1)

42%

5

12

% Achieved

Actual

Budget

60%

18

30

% Achieved

Actual

Budget

(1) Defined as openings less closings.

Source:  Cheeseburger management.

24

G. Trading Overview

*

*

*

*

*

*

* * * * * * * *

Proprietary and Confidential

Recent Trading Activity

500

1,000

1,500

2,000

2,500

3,000

12.00-12.49

12.50-12.99

13.00-13.49

13.50-13.99

14.00-14.49

14.50-14.99

15.00-15.49

15.50-16.00

Weighted

Average

Volume Traded/

Shares Outstanding

14.49

77.14%

Cheeseburger Trading Data Since Strategic Alternatives Review Announcement:

$

$

Source: WebRover.

25

Total Vol.

% of Basic

Price Range:

(in

thousands)

Shares

$12.50 -

$13.00

40.6

0.4%

$13.00 -

$13.50

971.2

8.5

$13.50 -

$14.00

399.1

3.5

$14.00 -

$14.50

2,681.5

23.4

$14.50 -

$15.00

2,733.8

23.8

$15.00 -

$15.50

1,906.7

16.6

$15.50 -

$16.00

109.2

1.0

Total:

8,842.1

77.1%

H. Wellspring Capital Management and

Guggenheim Partners Profiles

* * * *

*

*

*

*

*

*

Proprietary and Confidential

Wellspring Capital Management Profile

Dave & Buster’s Inc. (Dec. 2005)

American Coin Merchandising, Inc. (Sept. 2001)

Public Company Acquisitions

Dave & Buster’s Inc. (Dec. 2005)

Susser Holdings LLC (Nov. 2005)

Home Décor (Oct. 2004)

Edwin Watts Golf (Dec. 2003)

Revenues: at least $50 million, Transaction Value: at least $75 million

All except telecommunications, high technology, real estate and commodity-based businesses

$1 billion

Seeks to invest in or acquire companies that are well positioned

to capitalize on change, including

underperforming or undermanaged companies that can benefit from Wellspring's operating and

financial expertise

Generally focuses on investments that arise from:

Management-led buyouts of private companies or divisions of larger companies

Recapitalizations of family-owned or closely held companies designed to achieve liquidity or

raise

equity without going public

Turnarounds of companies experiencing financial difficulty or liquidity constraints, including funding

Chapter 11 reorganization plans

Companies that are attempting to consolidate a fragmented industry by expansion through

acquisitions

Going-private transactions of undervalued public companies where management can better

execute its business plan as a private company

Believes that the keys to profit enhancement and growth are:

Investing in high quality business franchises

Partnering with strong management teams

Using moderate leverage in financing acquisitions

Supporting management in executing its growth strategy

Fund Size

Recent Deal Experience

“Stated”

Deal Size / Target

Industry Focus

Overview

Source: Public websites and SDC Platinum.

26

Proprietary and Confidential

Guggenheim Partners, LLC Profile

Provided debt financing for Stone Canyon Entertainment’s majority stake purchase of Vacation

Connections (January 26, 2005)

Acted as administrative agent for Quest Cherokee

LLC’s

$200 million secured credit facility

(November 2005), coinciding with their private placement of $184

million in stock

Structured and arranged senior debt financing for Clarion Capital Partners $70 million purchase of

Regions Financial Corporation (August 2005)

Acted as sole lead arranger for debt financing for MVC Capital’s acquisition of GE’s

Ohmeda

Brand

Suction and Oxygen Therapy business (July 2005)

Provided $50.0 million revolving credit facility and $27.9 million term loan to

Luby’s

Inc. (June 2004,

repaid in full April 2005)

Currently has approximately $9 billion of assets under management across various corporate credit

asset classes (investment-grade bonds, bank debt, high-yield bonds, private mezzanine, distressed

securities and DIP financing).

Formed as a diversified financial services firm to provide the Guggenheim family and other clients with

a sophisticated array of wealth and investment management services

Team of investment professionals with experience in the capital markets, portfolio and risk

management, investment advisory, and family office services

Operates in 3 sectors:

Wealth Management: Provides integrated financial service advisory to high net-worth clients

Investment Management: Identifies attractive investment opportunities for its clients in the

following areas:

–

Fixed income (corporate credit, mortgage-backed securities, insurance-linked securities,

government and agency securities

–

Real estate

–

Structured real estate

–

Hedge funds (recently sold majority stake to Bank of Ireland)

–

Aviation

Capital Markets: Focused primarily on trading of asset-backed, mortgage-backed and

collateralized debt securities.  Also involved in the placement of private equity, hedge funds and

real estate investment funds

Corporate Credit Asset Size

Recent Deal Experience

Overview

Source: Public websites.

27