UFOC

Sample UFOC

WingStreet

FRANCHISOR: PIZZA HUT, INC.

INFORMATION FOR PROSPECTIVE FRANCHISEES

REQUIRED BY FEDERAL TRADE COMMISSION

To protect you, we have required your franchisor to give you this information. We have not checked it and do not know if it is correct. It should help you make up your mind. Study it carefully. While it includes some information about your contract, do not rely on it alone to understand your contract. Read all of your contract carefully. Buying a franchise is a complicated investment. Take your time to decide. If possible, show your contract and this information to an advisor, like a lawyer or an accountant. If you find anything you think may be wrong or anything important that has been left out, you should let us know about it. It may be against the law.

There may also be laws on franchising in your state. Ask your state agencies about them.

Federal Trade Commission Washington, D.C.

DATE OF ISSUANCE: March 30,2006

California Effective Date: Illinois Effective Date: Indiana Effective Date: Maryland Effective Date: Minnesota Effective Date: New York Effective Date: North Dakota Effective Date: Rhode Island Effective Date: South Dakota Effective Date: Virginia Effective Date: Washington Effective Date: Wisconsin Effective Date:

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FRANCHISE OFFERING CIRCULAR

Pizza Hut, Inc.

A California Corporation

14841 Dallas Parkway

Dallas, TX 75254

972-338-7700

www.yum.com

The franchisee will operate a quick-service restaurant, under the name "WingStreet," which offers a limited chicken wing menu and complementary items. WingStreet franchises are currently being offered only as co-brands with an existing or newly constructed Pizza Hut restaurant ("Restaurants") through the signing of an Addendum to the franchisee's Pizza Hut Franchise Agreement. This Offering Circular refers to these Restaurants as WS Co-Brand Outlets. The franchisee might also acquire one or more existing WS Co-Brand Outlets from Pizza Hut, Inc. ("PHI)", its subsidiaries or affiliates, in connection with an acquisition of Pizza Hut Restaurants that have already added WingStreet as a co-brand.

There is no initial franchise fee for any WS Co-Brand Outlet which you open by December 31, 2008. For each WS Co-Brand Outlet which you open on or after January 1, 2009, you must pay an initial franchise fee of $10,000 to PHI.

In addition, if the WS Co-Brand Outlet is newly-constructed or is acquired from PHI, you may owe PHI a Pizza Hut initial franchise fee of $15,000-$25,000, depending upon which Pizza Hut franchise agreement you fall under. See your PHI Franchise Offering Circular. If you enter into a development services agreement under which YUM Restaurant Services Group, Inc. provides certain site development and/or construction services, there is a development fee which varies depending on the number and type of services provided.

The estimated initial investment will vary depending upon whether the property is purchased or leased, the size and nature of the restaurant facility, and whether the WS Co-Brand Outlet is a conversion of an existing Pizza Hut restaurant or a newly built WS Co-Brand Outlet, as well as other factors, but it ranges from $65,400 to $589,200 for the conversion of an existing Pizza Hut dine in or delivery restaurant and from $281,400 to $2,953,200 for a newly built WS Co-Brand Outlet (these ranges are based on there currently being no WingStreet initial franchise fee and do not include the Pizza Hut initial franchise fee of $15,0O0-$25,00O which you may owe PHI if your WS Co-Brand Outlet is newly constructed or acquired from PHI (See Item 7). If you purchase one or more existing WS Co-Brand Outlets from PHI, the purchase price you pay for each such Restaurant will be a negotiated amount and will include the restaurant's equipment, signs, and inventory. The price of any leasehold or other real property interests will typically be an additional amount. You may be required to pay a non-refundable exclusivity fee ("Deposit") which will vary depending upon the size of the transaction. Deposits typically equal l%-2% of the price of the transaction. (See Item 5) The total initial investment to purchase a WS Co-Brand Outlet from PHI's, will range from $265,000 to $1,000,000 or more.

Risk Factors:

1. SINCE THE PIZZA HUT FRANCHISE AGREEMENT PERMITS THE FRANCHISEE TO SUE ONLY IN TEXAS, SO DOES THE WINGSTREET ADDENDUM TO THE PIZZA HUT FRANCHISE AGREEMENT. OUT OF STATE LITIGATION MAY FORCE YOU TO. ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO SUE IN TEXAS THAN IN YOUR HOME STATE. THE CHOICE OF FORUM SECTION OF THE FRANCHISE AGREEMENT MAY BE SUPERSEDED BY LOCAL LAW. PLEASE REFER TO ANY STATE SPECIFIC ADDENDUM THAT MAY BE ATTACHED TO THE OFFERING CIRCULAR FOR DETAILS.

2. SINCE YOUR PIZZA HUT FRANCHISE AGREEMENT STATES THAT EITHER TEXAS OR KANSAS LAW GOVERNS THE AGREEMENT (DEPENDING ON WHICH PIZZA HUT FRANCHISE AGREEMENT YOU HAVE SIGNED), THAT STATE'S LAW WILL ALSO GOVERN THE WINGSTREET ADDENDUM TO THE PIZZA HUT FRANCHISE AGREEMENT AND THIS

LAW MAY NOT PROVIDE THE SAME PROTECTION AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.

3. EVEN THOUGH THE PIZZA HUT FRANCHISE AGREEMENT AND THEREFORE THE WINGSTREET ADDENDUM TO THE PIZZA HUT FRANCHISE AGREEMENT PROVIDES THAT TEXAS OR KANSAS LAW APPLIES (DEPENDING ON WHICH PIZZA HUT FRANCHISE AGREEMENT YOU HAVE SIGNED), LOCAL LAW MAY SUPERSEDE IT IN YOUR STATE. PLEASE REFER TO ANY STATE SPECIFIC ADDENDUM THAT MAY BE ATTACHED TO THE OFFERING CIRCULAR FOR DETAILS.

4. AS NOTED IN THE FINANCIAL STATEMENTS IN RESPONSE'! TO ITEM 21 OF THIS OFFERING CIRCULAR, THE FRANCHISOR'S CORPORATE PARENT (YUM! Brands, Inc.) HAS A WORKING CAPITAL DEFICIENCY OF $768,000,000. AS OF THE END OF ITS FISCAL YEAR ON DECEMBER 31, 2005. PLEASE BEAR THIS IN MIND WHEN FORMING YOUR INVESTMENT DECISION.

5. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

Information comparing franchisors is available. Call the state regulatory authorities listed in Exhibit 1 or your public library for sources of information.

Registration of this franchise by a state does not mean that the state recommends it or has verified the information in this offering circular. If you learn that anything in the offering circular is untrue, contact the Federal Trade Commission and the state authority listed in Exhibit I.

ILLINOIS:

PURSUANT TO ILLINOIS COMPILED STATUTES 1992, CHAP. 815, SECTIONS 705/1 THROUGH 705/44, THIS STATEMENT SHALL NOT IN ANY WAY ABROGATE OR REDUCE ANY RIGHTS OF THE FRANCHISEE AS PROVIDED FOR IN THE ILLINOIS FRANCHISE DISCLOSURE ACT.

MINNESOTA:

MINN. STAT. SEC. 80C.21 AND MINN. RULE PART 2860.4400J PROHIBITS US FROM REQUIRING LITIGATION TO BE CONDUCTED OUTSIDE MINNESOTA. IN ADDITION, NOTHING IN THE OFFERING CIRCULAR OR AGREEMENT CAN ABROGATE OR REDUCE ANY OF YOUR RIGHTS AS PROVIDED FOR IN MINNESOTA STATUTES, CHAPTER 80C, OR YOUR RIGHTS TO ANY PROCEDURE, FORUM, OR REMEDIES PROVIDED FOR BY THE LAWS OF THE JURISDICTION.

THESE FRANCHISES HAVE BEEN REGISTERED UNDER THE MINNESOTA FRANCHISE ACT, REGISTRATION DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION, OR ENDORSEMENT BY THE COMMISSIONER OF COMMERCE OF MINNESOTA OR A FINDING BY THE COMMISSIONER THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE, AND NOT MISLEADING.

THE MINNESOTA FRANCHISE ACT MAKES IT UNLAWFUL TO OFFER OR 3ELL ANY FRANCHISE IN THIS STATE WHICH IS SUBJECT TO REGISTRATION WITHOUT FIRST PROVIDING TO THE FRANCHISEE, AT LEAST 7 DAYS PRIOR TO THE EXECUTION BY THE PROSPECTIVE FRANCHISEE OF ANY BINDING FRANCHISE OR OTHER AGREEMENT, OR AT LEAST 7 DAYS PRIOR TO THE PAYMENT OF ANY CONSIDERATION, BY THE FRANCHISEE, WHICHEVER OCCURS FIRST, A COPY OF THIS PUBLIC OFFERING STATEMENT, TOGETHER WITH A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE FRANCHISE. TH::S PUBLIC OFFERING STATEMENT CONTAINS A SUMMARY ONLY OF CERTAIN MATERIAL¹ PROVISIONS OF THE FRANCHISE AGREEMENT. THE CONTRACT OR AGREEMENT SHOULD I'iE REFERRED TO FOR AN UNDERSTANDING OF ALL RIGHTS AND OBLIGATIONS OF BOTH THE FRANCHISOR AND THE FRANCHISEE.

NEW YORK:

REGISTRATION OF THIS FRANCHISE BY NEW YORK STATE DOES NOT MEAN THAT NEW YORK STATE RECOMMENDS IT OR HAS VERIFIED THE INFORMATION IN THIS OFFERING CIRCULAR. IF YOU LEARN THAT ANYTHING IN THE OFFERING CIRCULAR IS UNTRUE, CONTACT THE FEDERAL TRADE COMMISSION AND NEW YORK STATE DEPARTMENT OF LAW BUREAU OF

INVESTOR PROTECTION AND SECURITIES 120 BROADWAY, 23RD FLOOR NEW YORK, N.Y. 10271.

THE FRANCHISOR MAY, IF IT CHOOSES, NEGOTIATE WITH YOU ABOUT ITEMS COVERED IN THE PROSPECTUS. HOWEVER, THE FRANCHISOR CANNOT USE THE NEGOTIATING PROCESS TO PREVAIL UPON A PROSPECTIVE FRANCHISEE TO ACCEPT TERMS WHICH ARE LESS FAVORABLE THAN THOSE IN THIS PROSPECTUS.

TABLE OF CONTENTS

ITEM NO. PAGE

1 THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES 1

2 BUSINESS EXPERIENCE 4

3 LITIGATION 6

4 BANKRUPTCY 7

5 INITIAL FRANCHISE FEE 8

6 OTHER FEES 9

7 YOUR ESTIMATED INITIAL INVESTMENT 12

8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES 16

9 FRANCHISEE'S OBLIGATIONS 18

10 FINANCING 23

11 FRANCHISOR'S OBLIGATIONS 24

12 TERRITORY 27

13 TRADEMARKS 30

14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION 32

15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OFTHE

FRANCHISE BUSINESS 32

16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL 32

17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION 33 (WINGSTREET ADDENDUM TO PIZZA HUT FRANCHISE AGREEMENT)

18 PUBLIC FIGURES 45

19 EARNINGS CLAIMS . 45

20 LIST OF OUTLETS 47

21 FINANCIAL STATEMENTS 50

22 CONTRACTS 50

23 RECEIPT 51

EXHIBITS

1. State Administrator List

2. Agents for Service of Process

3. WingStreet Addendum to Pizza Hut, Inc. Franchise Agreement with Exhibits and State-Required Addenda

4. Site Request Form

5. Asset Sale Agreement (With Fee Interest), With Exhibits

6. Development Services Agreement and Amendment

7. List of Franchisees

8. Credit Agreement

9. Financial Statements

ITEM1 THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES

The Franchisor

The franchisor is Pizza Hut, Inc., a California corporation. In this Offering Circular, the franchisor will be referred to as "PHI". The buyer of a franchise will be referred to as "you," even if you are a corporation, partnership, or other entity. If you are not an individual, many provisions of the franchise agreement will also apply to your owners; PHI will try to point out those provisions.

Disclosure laws require all offering circulars to be written in "plain English". The use of different words in this circular from the words used in the agreements themselves to describe the parties' rights and obligations is not intended to diminish or modify in any way the rights and obligations in the agreements themselves.

PHI does business only under the name "Pizza Hut," PHI's agents for service of process are listed on Exhibit 2 attached to this offering circular.

PHI is a wholly-owned subsidiary of YUM! Brands, Inc. ("YUM") f/k/a TRICON Global Restaurants, Inc. ('TRICON") On May 7, 2002, YUM acquired Yorkshire Global Restaurants, Inc., which owns Long John Silver's Restaurants and A&W All American Restaurants. YUM adopted its new name on May 17, 2002.

IMPORTANT NOTE: PHI is currently offering franchises for WingStreet restaurants only as part of a WS Co-Brand Outlet. You must have an existing Franchise Agreement with PHI or obtain a Franchise Agreement from PHI, because PHI will authorize you to operate one or more WS Co-Brand Outlets only under an Addendum to your Pizza Hut Franchise Agreement. Since you will be signing an Addendum to your Pizza Hut Franchise Agreement rather than a separate franchise agreement, the vast majority of the terms and conditions under which you operate your WS Co-Brand Outlet(s) will be those found in your Pizza Hut Franchise Agreement. This offering circular does not include or deal with the offer of a Pizza Hut franchise, nor does it include or deal with the obligations that you have under your Pizza Hut Franchise Agreement, including certain obligations that apply to your WS Co-Brand Outlets but are found only in the Pizza Hut Franchise Agreement. You should review your Pizza Hut Franchise Agreement or the PHI offering circular to understand your rights and obligations with respect to the operation of a Pizza Hut restaurant and a WS Co-Brand Outlet.

PHI's affiliate, WingStreet, LLC ("WS") has engaged PHI to manage, operate and administer the affairs of the WingStreet System in the continental United States (excluding Hawaii) and has licensed PHI to offer and sell WingStreet franchises in the continental United States (excluding Hawaii), under a license and management agreement (the "License Agreement") entered into between PHI and WS on October 3, 2005. WS will no longer offer WingStreet franchises. WS is a Delaware limited liability company formed in September 2003. WS's principal business and mailing address is 1441 Gardiner Lane, Louisville, Kentucky 40213. WS has licensed the operation of WingStreet Restaurants to PHI and its affiliates since June 2003. WS offered and sold WingStreet franchises as co-brands with an existing or newly constructed Pizza Hut restaurant between approximately May, 2004 and September 30, 2005. Future WingStreet franchises will be offered by PHI through September 30, 2011 (the "Exclusivity Period"). If PHI franchisees open 1,000 or more WS Co-Brand Outlets before the expiration of the Exclusivity Period (excluding WS Co-Brand Outlets that have been refranchised by PHI), then PHI and its franchisees will retain this exclusivity in perpetuity and "Exclusivity" will have been attained. If PHI franchisees open fewer than 1,000 WS Co-Brand Outlets before the expiration of the Exclusivity Period, then YUM may offer WingStreet opportunities to persons other than PHI franchisees including, for example, through other YUM networks and/or subsidiaries. See Item 12.

PHI was originally incorporated as "Pizza Hut of San Diego, Inc.," in 1967, and changed its name on September 25, 1997, in anticipation of acquiring the assets of Pizza Hut, Inc., a Delaware corporation ("old PHI"). PHI does not currently do business under any trade name other than "Pizza Hut." PHI's principal business address is 14841 Dallas Parkway, Dallas, Texas 75254.

PHI is the successor to old PHI, having acquired substantially all of its assets on September 30, 1997. Before that acquisition, old PHI was the corporate parent of PHI. In the rest of this offering circular, references to "PHI" on or

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before September 30, 1997 include old PHI unless the context clearly requires the contrary. PHI's agents for service of process are listed in Exhibit 2 to this offering circular.

PHI's Affiliates

The following are PHI's affiliates (that is, they control, are controlled by, or are under common control with, PHI) and either (a) offer franchises within the United States or (b) provide products or services to you if you are located in the United States. The number of restaurants that each affiliate operates or franchises, as described in the table below, include multibrand restaurants at which more than one brand is operated.

Name and Address	Business
Pizza Hut, Ltd. 14S41 Dallas Parkway Dallas, TX 75254	Provides certain services to PHI, its subsidiaries, affiliates, franchisees and licensees, including training, research and technology, and marketing services.
YUM! Brands, Inc. ("YUM") 1441 Gardiner Lane Louisville, KY 40213	PHI's parent company provides certain services io PHI and PHI's subsidiaries and affiliates on a consolidated basis.
Yum Restaurant Services Group, Inc. ("YRSG") 1441 Gardiner Lane Louisville, KY 40213	Incorporated November 18, 1996 to provide: and consolidate common services to YUM's restaurant companies and its subsidiaries, such as accounting, data processing, purchasing, restaurant and nontraditional development.
A&W Restaurants, Inc. 1441 Gardiner Lane Louisville, KY 40213	Together with its predecessors, have operated and franchised or licensed quick service restaurants ("A&W Restaurants".) under the names "A&W", "A&W Restaurants" and "A&W All American Food Restaurants" since 1925. A&W Restaurants offer A&W draft rcot beer and food products such as hamburgers, hot dogs and french fries. As of December 31, 2005 A&W Restaurants and its subsidiaries operated 306 restaurants and 518 franchisees operate 745 traditional restaurants and operate 26 express units in the United States. During the past 10 year period immediately preceding the date of this offering circulai, A&W has not offered franchises in any other line of business.
KFC Corporation (and subsidiaries) 1441 Gardiner Lane Louisville, KY 40213	Together with its predecessors, have operated and franchised or licensed "KFC" restaurants, which specialize in quick-service chicken with side dishes, since 1952. As of December 31, 2005, KFC Corporation, and its subsidiaries operated 1,152 KFC restaurants and 684 franchisees operated 4,215 additional restaurants and 48 licensees operated 71 licensed sites. H. Salt was formerly a wholly-owned subsidiary of KFC and had approximately 353 franchised H. Salt Shoppes in 1988 when sold by KFC. During the past 10 year period immediately preceding the date of this circular, KFC has not offered franchises in imy other line of business.
Long John Silver's, Inc. ("LJS") 1441 Gardiner Lane Louisville, KY 40213	Has operated and franchised or licensed quick-service seafood restaurants since 1969 under the name Long John Silver's. Long John Silver's restaurants feature a limited menu of fish, seafood, chicken and related items. As of December 31, 2005, LJS and its subsidiaries operated 758 restaurants and 244 Franchisees operated 725 traditional restaurants and 2 Express units in the United States. During the past 10 year period immediately preceding the date of this offering circular, LJS has not offered franchises in any other line of business.
Taco Bell Corp. (and subsidiaries) 17901 Von Karman Ave. Irvine. CA 92614	Has operated and franchised or licensed "Taco Hell" restaurants, offering inexpensively priced Mexican-style food for tike-out and on-premises seating, since 1964. As of December 31, 2005, Taco Bell Corp. and its subsidiaries operated 1,256 Taco Bell restaurants. 390 Franchisees operated a total of 4,221 traditional restaunints and 341 Licensees operated a total of 906 Express units. During-the past 10 year period immediately preceding the date of this offering circular, Taco Bell has not offered franchises in any other line of business.

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WingStreet, LLC ("WS") 1441 Gardiner Lane Louisville, KY 40213	Formerly franchised WingStreet restaurants, co-branded with Pizza Hut Restaurants between 2003 and 2005. As of December 31, 2005, WS had franchised 631 WS Co-Brand Outlets through affiliates of PHI, and 11 independent franchisees operated a total of 33 restaurants. As of the date of this Offering Circular, PHI franchises all WingStreet restaurants.
Pasta Bravo, LLC 1441 Gardiner Lane Louisville, KY 40213	A wholly-owned subsidiary of YRSG, Pasta Bravo, LLC ("Pasta Bravo") owns the marks and franchise rights to Pasta Bravo, a quick casual pasta concept. Pasta Bravo does not currently operate or franchise any Pasta Bravo restaurants but may test certain Pasta Bravo concepts in the future.

PHI has a number of additional affiliates that offer franchises, including "Pizza Hut" franchises, in foreign countries, and affiliates that provide certain products and services to franchisees who are located and do business in those foreign countries. Unless otherwise stated, the information in this offering circular does not concern PHJ's international operations or franchising.

YUM, and /or its affiliates, is also testing a different chicken wing concept known as "Wing Works."

The Franchisor's Business

PHI's primary business is the operation and franchising of pizza restaurants. PHI and its operating subsidiaries, and certain of PHI's franchisees, also operate WingStreet quick service restaurants as co-branded restaurants ("Restaurants") with Pizza Hut restaurants. This Offering Circular frequently refers to the Restaurants as "WS Co-Brand Outlets."

In addition to the License Agreement, WS entered into a Royalty Agreement with PHI whereby PHI and its affiliates are granted the right to operate Restaurants. PHI pays WS a royalty on WingStreet sales from such Restaurants. In addition, WS and PHI have entered into a Management Services agreement pursuant to which PHI provides significant management services to WS, including operational, financial, R&D, marketing and other support. In exchange for these services, WS pays PHI 3% of all WS system-wide sales.

The Franchised Business

This circular involves the offering of franchise rights for a WS Co-Brand Outlet that is a WingStreet restaurant that is to be operated in the same facility as a Pizza Hut restaurant. This offer, therefore, is made only to existing PHI franchisees and to persons who may become PHI franchisees as the result of an acquisition of existing Pizza Hut restaurants from PHI.

You will be offered the opportunity to sign the WingStreet Addendum to the PHI Franchise Agreement in Exhibit 3 to this Offering Circular (the "WingStreet Addendum"). The WingStreet Addendum will give you the right to construct and operate one or more WS Co-Brand Outlets using the WingStreet system, trade dress, trademarks and service marks. The WS Co-Brand Outlets which you will develop under the Addendum will be situated within some or all of your operational Pizza Hut restaurants and, if your existing PHI Franchise Agreement is a 'Territory Franchise Agreement" (giving you the right to develop and operate Pizza Hut restaurants within a specific "Territory"), then the rights granted under the Addendum also apply to the Pizza Hut restaurants that you may develop in the future. This offering circular only applies to the WingStreet portion of a WS Co-Brand Outlet.

You must notify PHI in writing in accordance with PHI's site registration policies by submitting a Site Request Form (Exhibit 4) each time you decide to develop and operate a WS Co-Brand Outlet. PHI will waive the $10,000 deposit that is normally payable upon submission of the Site Request Form.

If you are already operating under any agreement which relates to the WS Co-Brand Outlet(s) embraced by the Addendum, your execution of the WingStreet Addendum terminates the previous agreement.

Under the terms of the WingStreet Addendum, to qualify to develop a Restaurant, you must be a PHI franchisee in good standing and you must comply with the growth ready standards ("Growth Ready Standards") attached as Exhibit A to the WingStreet Addendum. If you desire to begin development of WS Co-

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Brand Outlets but do not satisfy the Growth Ready Standards, then PHI will notify you of this promptly and will work with you to cure any deficiencies and otherwise assist you in satisfying the Growth Ready Standards. The Growth Ready Standards set forth in Exhibit A to the WingStreet Addendum will remain in effect until January 1, 2011, and after that will only be amended following consultation with the International Pizza Hut Franchise Holders Association ("I.P.H.F.H.A."). PHI will hold itself to the same standards with regard to its qualification to begin development of WS Co-Brand Outlets.

Each WS Co-Brand Outlet you develop and operate under the WingStreet Addendum must operate under and be governed by the terms, provisions, requirements and restrictions of your PHI Franchise Agreement. It is important that you review your existing PHI Franchise Agreement or PHI's offering circular to understand your rights and obligations with respect to the operation of a WS Co-Brand Outlet.

WS Co-Brand Outlets offer a limited menu featuring chicken wings and related items. Dine-in service is also available in certain restaurants. WS Co-Brand Outlets are designed to serve food promptly and offer take-out and, in a significant number of Restaurants, delivery service. Your WS Co-Brand Outlet must be built or remodeled to PHI's specifications and operated in accordance with PHI's standards. The initial term and renewal terms under the WingStreet Addendum will run concurrently with the terms of your PHI Franchise Agreement covering the Restaurant.

The fast food restaurant business is highly competitive. By operating a WS Co-Brand Outlet, you will be competing with other local, regional or national restaurants offering similar wings products, as well as other restaurants offering other products with quick service. You may also be competing with other WS franchised and company-operated Restaurants, including operations in nontraditional locations. The market for WS products is well developed in some areas, but in other areas it is underdeveloped or not developed at all.

There are no governmental regulations that apply only to the quick service restaurant industry. However, you must comply with all local, state and federal laws that apply to your restaurant operations. Those laws include health, sanitation, no smoking, liquor regulation, EEOC, OSHA, FDA, employment and sexual harassment laws. The Americans with Disabilities Act of 1990 requires readily accessible accommodations for disabled people and therefore may affect your building construction, site elements, entrance ramps, doors, seating, parking, bathrooms, drinking facilities, etc. You must also obtain real estate permits and licenses and operational licenses. You should consult with your attorney concerning these and other local laws and ordinances that may affect your restaurant operations.

ITEM 2 BUSINESS EXPERIENCE

The following is a list of directors, principal officers, and other executives who have management responsibility relating to the franchise offered by this offering circular. The principal occupation and employment history for the past 5 years is shown. Unless otherwise noted, the offices of all individuals listed are in Dallas, Texas, at PHI's corporate headquarters.

Pizza Hut, Inc.

President, Director and Chief Concept Officer: Peter R. Hearl

In November 2002, Mr. Hearl was appointed President, Director and Chief Concepl Officer of PHI. Before this appointment, Mr. Hearl was the Executive Vice President and Chief People Officer for YUM from December 2001 to November 2002. Mr. Hearl also served as Executive Vice President, Yum Restaurants International ("YRI"), a division of YUM, from October 1998 to December 2001. From October 1997 to October 1998 Mr. Hearl was Senior Vice President, YRI for the Asia-Pacific market. From March 1996 to September 1997, he was Senior Vice President, PepsiCo Restaurants (KFC & Pizza Hut), for the South Pacific and South Africa markets. From September, 1993 to March 1996, he was Vice President, PepsiCo Restaurants (KFC), for the Europe and Africa markets.

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Vice President-Law and Assistant Secretary: John J. Murphy

On April 23, 1998, Mr. Murphy was appointed Assistant Secretary of PHI. On September 6, 1995, Mr. Murphy was appointed Vice President-Law of PHI. Prior to these appointments, Mr. Murphy was PHI's Assistant General Counsel from September 1994 to September 1995.

Vice President, Secretary, Director and General Counsel: Robert W. Millen

On April 23, 1998, Mr. Millen was appointed Vice President, Director and Secretary of PHI. On January 5, 1998, Mr. Millen was appointed General Counsel of PHI.

WingStreet, LLC

President: Charles Rawley

On October 9, 2003, Mr. Rawley was appointed president of WS. Mr. Rawley is also Chief Development Officer for YUM, a position he has held since January 2001. From 1998 to 2001, Mr. Rawley was President and Chief Operating Officer of KFC. From 1995 to 1998, Mr. Rawley was Chief Operating Officer of KFC. Mr. Rawley's office is located at 1441 Gardiner Lane, Louisville, Kentucky.

Vice President and Treasurer: Christopher Kreidler

On October 9, 2003, Mr. Kreidler was appointed Vice President and Treasurer of WS. Mr. Kreidler is also currently Senior Vice President of Mergers and Acquisitions and Treasurer for YUM, an office to which he was appointed in October 2003. From 1999 to October 2003, Mr. Kreidler was Vice President in the Mergers and Acquisitions area for YRI. Mr. Kreidler's office is at 1441 Gardiner Lane, Louisville, Kentucky.

Vice President: Terry Davenport

On October 9, 2003, Mr. Davenport was appointed Vice President of WS. Mr. Davenport is also currently Vice President of Concept and Design for YUM, a position he has had since 2002. From 1997 to 2002, Mr. Davenport was Chief Concept and Marketing Officer for KFC. Mr. Davenport's office is at 1441 Gardiner Lane, Louisville, Kentucky.

Vice President and Secretary: John J. Murphy

Mr. Murphy was appointed Vice President and Secretary of WS on October 9, 2003. Mr. Murphy is also currently Vice President - Law for PHI and a more detailed biography appears above.

Vice President: David W. Gibbs

On October 9, 2003, Mr. Gibbs was appointed Vice President of WS. Mr. Gibbs is also Chief Financial Officer for Pizza Hut, Ltd. and a more detailed biography appears below.

Pizza Hut, Ltd.

Chief Financial Officer: David W. Gibbs

On January 1, 2006, Mr. Gibbs assumed the position Chief Financial Officer for Pizza Hut, Ltd. On October 9, 2003, Mr. Gibbs was appointed Vice President of WS. From February 2001 to December 31, 2005, Mr. Gibbs was National Vice President, Field Development for YUM. Prior to that position, Mr. Gibbs was Vice President, Field Development for YUM, from July 15, 1996 to February 2001.

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Chief Operating Officer: Jarcd E. Buss

In August 2003, Mr. Buss was appointed Chief Operating Officer of Pizza Hut, Ltd_h Prior to this appointment, he was National Vice President/Head Coach from October 1999 to August 2003. From May 1995 to October 1999, he was the Division Vice President/Head Coach. Mr. Buss is expected to retire during 2006.

Chief Marketing Officer: William C. Ogle

In February, 2006, Mr. Ogle was appointed to the position of Chief Marketing Officer of Pizza Hut, Ltd. In September, 2005, Mr. Ogle was appointed Chief Concept Development Officer for Pizza Hut, Ltd. He served as Vice President, Concept and Asset Development for Pizza Hut, Ltd. from September, 2003 to September, 2005. For two years before that appointment, Mr. Ogle was Vice President of Coiicept Development. From 1999 until his appointment as Vice President of Concept Development, Mr. Ogle served as Vice President of Marketing for Pizza Hut United Kingdom.

YUM

Vice President, Franchise Sales and Emerging Concepts: Scott Haner

On October 1, 2003, Mr. Haner was appointed Vice President, Franchise Sales and Emerging Concepts for YUM. For the immediately preceding five years, Mr. Haner served as YUM's Vice President, Emerging Concepts. Mr. Haner has been.employed by YUM and its predecessors and affiliates in other capacities since 1989. Mr. Haner's office is at 1441 Gardiner Lane, Louisville, Kentucky.

ITEM 3 LITIGATION

Papa Gino's, Inc. v. Pizza Hut, Inc., (U.S. Dist. Ct., Mass. Case No. 99 CV 12558 RGS). This case arose out the sale (in 1997) of the stock in D'Angelo's Sandwich Shops, Inc., to Papa Gino's (D'Angelo's Sandwich Shops is the operator and franchisor of a chain of sandwich shops, located primarily in the New England area, that was formerly a subsidiary of PHI). According to the complaint, which was filed on November 17, 1999, PHI breached certain representations and warranties in the stock purchase agreement because of alleged inaccuracies in the financial statements of D'Angelo's Sandwich Shops, and these same inaccuracies are also alleged to constitute either fraudulent or negligent misrepresentation. PHI filed counter-claims arising out of the sale. On December 28, 2000, the parties reached a mutual settlement of the action pursuant to which PHI paid plaintiff $3,500,000. All claims and counterclaims were dismissed with prejudice on January 2, 2001.

Labor Cases

The following seven cases, all brought by current or former employees and seeking class action certification allege labor law violations and, strictly in that context and only tangentiatly, unfair business practices. All of them, with the exception of Valdez v. Pizza Hut, Inc., has been settled in principal, subject to court appeal. The Valdez case is in the pretrial stage and PHI intends to vigorously defend all claim:: in that action.

Aguilar v. Pizza Hut, Inc., (Superior Court for the State of California, County of Los Angeles, Case No. BC

323623, filed October 27, 2004).

Castillo v. Pizza Hut, Inc., et at., (Superior Court for the State of California, County of Los Angeles, Case No.

BC 318765, filed July 20, 2004).

Coldiron v. Pizza Hut, Inc., (U.S. District Court for the Central District of California, Case No. 03-5865 TJH,

filed August 18,2003).

Coldiron v. Pizza Hut, Inc., (Superior Court for the State of California, County of Los Angeles, Case No. BC

322723, filed October 8, 2004).

WSUFOC 2006.1

Coronel v. Pizza Hut, Inc.. (Superior Court for the State of California, County of Alameda, Case No. RG

05198177, filed February 14, 2005).

Fukuchi. v. Pizza Hut, Inc., (Superior Court for the State of California, County of Los Angeles, Case No. BC

302589, filed September 17,2003).

Valdez v. Pizza Hut, Inc., (Superior Court for the State of California, County of San Diego, Case No. GIC

860129, filed January 23, 2006).

Other than these lawsuits, PHI is not required to disclose any other litigation in this offering circular.

Neither PHI nor any person identified in Item 2 of this circular is subject to any currently effective order of any national securities association or national securities exchanges, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in such association or exchange.

New York:

Neither PHI, its affiliates nor any person named in Item 2 above has pending any administrative, criminal or material civil action (or a significant number of civil actions irrespective of materiality) alleging a violation of any franchise law, securities law, fraud, embezzlement, fraudulent conversion, restraint of trade, unfair or deceptive practices, misappropriation of property or comparable allegations.

Neither PHI, its affiliates nor any person named in Item 2 above has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the ten year period immediately preceding the application for registration, has been convicted of a misdemeanor or pleaded nolo contendere to a misdemeanor charge or been held liable in a civil action by final judgment or been the subject of a material complaint or other legal proceeding, if such misdemeanor conviction or charge or civil action, complaint or other legal proceeding involved violation of any franchise law, securities law, fraud, embezzlement, fraudulent conversion, restraint of trade, unfair or deceptive practices, misappropriation of property or comparable allegations.

Neither PHI, its affiliates, nor any person named in Item 2 above is subject to any currently effective injunctive or restrictive order or decree relating to franchises in general or the franchise offered under any federal, state or Canadian franchise, securities, antitrust, trade regulation or trade practice law as a result of a concluded or pending action or proceeding brought by a public agency,

ITEM 4 BANKRUPTCY

On June 1, 1998, Long John Silver's Restaurants, Inc. ("LJSR") and its affiliates (including LJS, its wholly-owned subsidiary) filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court, District of Delaware in re: Long John Silver's Restaurants, et al, Case No. 98-1164 to 1169 (PJW); the cases were jointly administered). On June 28, 1999, LJSR filed its Plan with the Bankruptcy Court and the Plan incorporated the acquisition of LJSR's stock by GRG, Inc. On August 16, 1999, LJSR entered into an Amendment to Amended and Restated Stock Purchase Agreement with Yorkshire Global Restaurants, Inc. ("Yorkshire"), successor to GRG, Inc. On August 18, 1999, the Bankruptcy court confirmed LJSR's plan of reorganization. As of September 10, 1999, Yorkshire consummated the purchase of LJSR's stock and LJSR and its affiliates were discharged from bankruptcy pursuant to the Confirmation Order. LJS is now PHI's affiliate.

Other than this single action, no person previously identified in Item 1 or officers identified in Item 2 of this offering circular have been involved as a debtor in proceedings under the U.S. Bankruptcy Code that PHI is required to disclose in this offering circular.

New York:

Except as disclosed above, neither PHI, its affiliates, its predecessors, nor its officers, during the 10-year period immediately before the date of the offering circular has: (a) filed as debtor (or had filed against it) a petition to

WSUFOC 2006.1

start an action under the U.S. Bankruptcy Code; (b) obtained a discharge of its debts under the bankruptcy code; or (c) was a principal officer of a company or a general partner in a partnership that either filed as a debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code or that obtained a discharge of its debts under the U.S. Bankruptcy Code during or within the 1 year after the officer of the franchisor held this position in the company.

ITEM 5 INITIAL FRANCHISE FEE

Initial Franchise Fees

There is no initial franchise fee for any WS Co-Brand Outlet which you open by December 31, 2008. For each WS Co-Brand Outlet which you open on or after January I, 2009, you must pay an initial franchise fee of $10,000 to PHI.

If the WS Co-Brand Outlet is newly-constructed, or if you acquire it from PHI. you may owe PHI a Pizza Hut initial franchise fee of $15,000-$25,000, depending upon which Pizza Hut agreement you fall under. See the PHI Franchise Offering Circular.

PHI expects to use the proceeds from WingStreet initial franchise fees received after January I, 2009 to defray a portion of its expenses in connection with the sale and establishment of franchises, such as: (1) costs related to developing and improving its services; (2) expenses of preparing and registering this Offering Circular; (3) legal fees; (4) accounting fees; (5) costs of obtaining and screening franchisees; a no (6) general administration expenses.

Fees Related to an Acquisition

If you are purchasing one or more existing WS Co-Branded Outlets from PHI,, the purchase price you will pay will be a negotiated amount, which is typically related to the historical cash flows from the Restaurant(s) sold. This negotiated amount is typically comprehensive, so it will include the value of the Restaurant's equipment, signs and inventory.

The price of any leasehold or other real property interests relating to the Restaurant will typically be an additional amount. In any acquisition where you open the Restaurant on or after January 1, 2005', the purchase price will also include a WingStreet initial franchise fee of $10,000. You will be required to pay a non-refundable exclusivity fee ("Deposit") which will vary in amount depending on the size o. the transaction, for the exclusive right to pursue the acquisition of the existing WS Co-Branded Outlets. Deposits typically represent 1-2% of the price of the transaction. The Deposit will be refunded if certain conditions stated in the Asset Sale Agreement ("ASA"), are not met and the transaction is terminated, at which point PHI, will be free to negotiate the sale of the WS Co-Branded Outlets with other parties. If you proceed with the acquisition, the Deposit will be applied dollar-for-dollar toward payment of the purchase price. In order to ace uire an existing WS Co-Branded Outlet you will be required to sign an ASA in substantially the form attached as Exhibit 5.

You should refer to the PHI Franchise offering circular to understand your rights anil obligations with respect to an acquisition of WS Co-Branded Outlets.

Typically, you will pay the purchase price before transfer and generally at the time you execute the franchise documents. The Restaurant equipment, inventory, and signs are generally sold in "AS IS" condition. The total purchase price you will pay in this type of transaction will vary depending on a number of factors, including the historical financial performance of the Restaurant, its age, and its location. Your payments in connection with this type of transaction are not refundable.

WSUFOC 2006.1

Prc-Opening Training

You will be required to pay for any training materials and supplies provided by PHI for pre-opening training and you will be required to reimburse PHI for its actual costs incurred in providing you with any additional pre-opening training. These costs vary under the circumstances (See Item 6 and Item 7).

YRSG Services

An affiliate of PHI, YRSG, offers various development services, including site feasibility, design permit expediting and construction management services. You are not required to use YRSG's services. YRSG and you may enter into a Development Services Agreement (See Exhibit 6) pursuant to which YRSG will provide, for a fee, any or all of the services listed below. The fee may vary greatly depending on the number and type of services selected. You must pay for all costs including, but not limited to, soil tests, survey costs, architect, civil engineer and consultant costs, utility and permit fees and deposits, etc. In addition to YRSG's expenses for postage and handling of documents, transportation in connection with out-of-town travel, long distance calls and taxes, filing and administration fees, data processing and photographic reproduction techniques and overtime (if authorized by you) work rates.

The services currently available through YRSG are the following:

1. Site Selection: YRSG will conduct a trade area analysis and source a site location within a specified trade area, negotiate a purchase contract or lease on your behalf, prepare a site submittal package and pursue YRSG's corporate approval of the site.

2. Feasibility: YRSG will coordinate a construction, zoning and on-site analysis of the property, recommend, order and endeavor to obtain approval of a site sketch, recommend a building type and equipment package and develop a project budget and schedule.

3. Design: YRSG will coordinate and review geo-technical and environmental soils testing, coordinate the completion and review of an ALTA survey, manage the architect, civil engineer and other consultants in preparing plans and specifications for the permitting and construction and prepare and monitor a project schedule for completion of the design activities.

4. Permitting: YRSG will coordinate utility company plan submittals, submit all applicable permit applications, arrange for representation at municipal/public hearings, manage consultant activities such as traffic engineers, attorneys and permit expediters, prepare and monitor the project schedule for completion of permit activities, resolve title, soil and survey issues and close transaction, including recordation and obtaining title insurance.

5. Construction Management: YRSG will recommend general contractors, conduct the bid process and recommend a winning bidder, secure a construction contract, communicate construction start date to applicable parties, supervise the construction for conformance, keep you informed of construction progress, construct periodic site inspections, review change orders and payment requests, coordinate delivery and equipment installation, prepare preliminary and final punch list process and assist in close out activities.

Additional services are available at an hourly rate.

ITEM 6 OTHER FEES

NAME OF FEE

AMOUNT

DUE DATE

REMARKS¹

Service Fees

Percentage of WingStreel Gross Sales that varies.²

Within 20 days after the end of each month or period, based on 13 equal periods per year.

See Note 2.

WSUFOC 2006.1

Required Advertising	Percentages of WingStreet Gross Sales that vary plus one time $1,000 advertising contribution per WS Co-Brand Outlet³	One-time contribution payable no later than ten days after the date the WS Co-Brand Outlet opens; periodic contributions same as Service Fee³	Sen Note 3.
Taxes	As levied by tax authorities	As incurred and upon demand	Includes all sales taxes, personal property taxes, excise taxes, value added taxes and similar taxes on account of services or goeds provided by PHI- Among other thit:gs, this includes taxes related to collection by PHI of Initial Franchise Fees, Monthly Service Fees, or other fees.
l.P.H.RH.A. Dues	2-3% of Gross Sales (set by franchisees)	Established by franchisees	You must belong to I.P.H.F.H.A. and pay the dues it assesses its members so long as the Advertising Committee Agreement is in effect. The amount of dues that you pay to I.P.H.F.H.A. during the term of the Advertising Committee Agreement will be creoited toward your National Advertising obliaation. The current dues rate is 2.5%.
Software Training Fee	$1,500 plus Travel and living expenses	As incurred	Training at your location will cost $1,500 for up to 4 days.
Software Maintenance/ Support Fee	Currently $1,600 per year per unit for all services listed in the far right column (PHI may increase this fee as needed)	Twelve Monthly Bills	For software support, ongoing menu maintenance, help desk, enhancements and research and development which we require or provide.
Training	Reasonable publication, preparation, and administrative fees (set by PHI).	As incurred	PHI provides one set of mandatory training materials per Restaurant, you musl pay for replacement copies, all optional training materials and other incidental costs.
Additional Materials	Reasonable publication, preparation and administrative fees (set by PHI)	As obtained	PHI provides one copy of the Manual per Restaurant free; you must pay PHI's uniform fee for extra copies.
Audit	Costs of audit	5 business days after billing	Costs must be reimbursed only if underpayment is 2% or more of amount due.
Compliance Costs	As needed	As required	You must pay those costs necessary to comply with the standards in the PHI Franchise Agreement.
Employee Piracy	Double the annual compensation of employee involved, plus costs and attorneys' fees	Upon hiring	AppKes to employees of PHI, you and other franchisees.
Late Charges	As set by PHI (currently 1.5% per month), but not in excess of maximum lawful rate	As incurred	Due if you do not pay PHI any amount you ewe within the time allowed.
Unauthorized Closure	Double the past year's monthly service fee	At the time a franchised restaurant is closed without PHI's consent
Transfer Fee	$2,500 plus an additional $250 per unit transferred	At time a request for transfer is made	Charged when there is a transfer of agreement or transfer of your ownership

1. None of the fees payable to PHI or its affiliates are refundable. On those costs that are not fixed. PHI does not expect your

payments to PHI or to third parties to increase beyond inflation unless PHI's or the third party's costs increase due to shoruges, catastrophes, strikes, Acts of God, or other causes beyond PHI's or the third party's control. You should lefer to Items 7, 8 and 9 of this offering circular, as well as the pertinent provisions of the PHI Franchise Agreement, for additional inform ition concerning your financial obligations.

WSUFOC 2006.1

2. "WingStreet Gross Sales" means revenues received or receivable in connection with your sale of any product which is; prepared in a WS Co-Brand Outlet; features a fried food item (for example, a WingStreet salad which features a WingStreet food item prepared in a fryer as a top dressing); and, is not pizza, pasta or any other Italian food item.

The Service Fee is as follows for your WS Co-Brand Outlets opened before January 1, 2009: 5.00% of WingStreet Gross Sales during the first two years following the opening of the WS Co-Brand Outlet; 5.50% of WingStreet Gross Sales during the third and fourth years following the opening of the WS Co-Brand Outlet; and, 5.75% of WingStreet Gross Sales through the balance of the term of the WingStreet Addendum. For your WS Co-Brand Outlets opened on or after January 1, 2009, the Service Fee wili be 5.75% of your WingStreet Gross Sales through the balance of the term of the WingStreet Addendum.

3. During the period that the Advertising Committee Agreement between PHI and l.P.H.F.H.A. is in force, you contribute all national advertising contributions to the l.P.H.F.H.A. for the national advertising fund administered by the Advertising Committee. After that, you contnbute all national advertising contributions to PHI.

For each WS Co-Brand Outlet you open on or after September 30, 2005 but on or before the earlier of December 31, 2008 or the date on which PHI franchisees collectively have developed and opened an aggregate of 1,000 WS Co-Brand Outlets within the continental United States (excluding Hawaii), you must: (a) make a one-time advertising contribution of $1,000 to national advertising for each WS Co-Brand Outlet you open, payable to the Advertising Committee no later than ten days after the date the WS Co-Brand Outlet opens, to be expended on Pizza Hut base brand advertising, and (b) contribute and expend, in the fashion indicated below, the following percentages of your previous period's WingStreet Gross Sales:

Contract Year	Total Percentage	Breakdown of Contributions and Expenditures
1 and 2	4.25%	0.25% contribution to national advertising for Pizza Hut base brand advertising 0.25% contribution to local advertising cooperative for Pizza Hut base brand advertising 0.50% contribution to PHI for WingStreet advertising production 3.25% required expenditure by you for local advertising devoted to WingStreet
3 and 4	4.50%	0.50% contribution to national advertising for Pizza Hut base brand advertising 0.25% contribution to local advertising cooperative for Pizza Hut base brand advertising 0.50% contribution to PHI for WingStreet advertising production 3.25% required expenditure by you for local advertising devoted to WingStreet
5 and later	4.25%	0.25% contribution to national advertising for Pizza Hut base brand advertising 0.25% contribution to local advertising cooperative for Pizza Hut base brand advertising 0.50% contribution to PHI for WingStreet advertising production 3.25% required expenditure by you for local advertising devoted to WingStreet

As used in this table, "Contract Year" means the period commencing on the date you open a WS Co-Branded Outlet and ending on the date that is the last day of the calendar month in which the first anniversary of the WS Co-Branded Outlet opening falls, and each consecutive period of twelve months after that.

For each WS Co-Brand Outlet you open on or after January 1, 2009, but before the date on which PHI franchisees collectively have developed and opened a total of 1,000 WS Co-Brand Outlets within the continental United States (excluding Hawaii), you must contribute and expend, in the fashion indicated, the percentage of your previous period's WingStreet Gross sales specified for "Contract Year 5 and later" in the table above.

Effective the first day of the month following the date on which PHI franchisees collectively have developed and opened a total of 1,000 WS Co-Brand Outlets within the continental United States (excluding Hawaii), the advertising contribution and expenditure schedules

WSUFOC 2006.1

stated above will no longer be effective. Instead, you must contribute, in the manner indicated, the following percentages of your previous period's WingStreet Gross Sales:

Total Percentage	Breakdown of Contributions
4.25%	2.5% contribution for national advertising, to be divided as follows:
	0.25% for Pizza Hut liase brand advertising
	0.50% for media production devoted to WingStreet (PHI to administer for the first two years, with reasonable advance consultation with and input from the Advertising Cornmitti e).
	1.75% for national media buys devoted to WingStreet (PHI to acminister for the first two years, with reasonable advance consultation with and input from the Advertising Committee.
	1.75% contribution to local adverting cooperative, to be divided as follows:
	0.25% for Pizza Hut tnse brand advertising
	1.50% for local media,buys devoted to WingStreet
	No obligation for you lo expend any sum directly on local media advertising devoted te WingStreet

Except as provided in the next sentence, PHI and its affiliates must, at a minimum, make adverti:ing contributions, payments and expenditures on the same basis as that set forth above for all WS Co-Brand Outlets owned and operateil by them, including the one time contribution of $1,000-00 to national advertising, payable to the Advertising Committee, for each WS Co-Brand Outlet opened on or after September 30, 2005 but before the earlier of (i) December 31, 2008, or (ii) the date on which PHI franchisees collectively have developed and opened an aggregate of 1,000 WS Co-Brand Outlets within the continental United States (excluding Hawaii), such contributions are to be spent on Pizza Hut base brand advertising. During contract years 3 and 4, PHl's contribution to natio.ial advertising for Pizza Hut base brand advertising will be .25%, rather than .5%.

All local and national advertising contributions related to PHl's, its affiliates' and franchisees' WingStreet sales contributed to l.P.H.F.H.A. and/or any local advertising cooperative, will be segregated from other funds administered by the Advertising Committee and/or the local advertising cooperative and will be utilized in the development, creation and/or purchase of broadcast advertising, either for broadcast nationally or locally.

All advertising cooperatives are organized on a one-store/one-vote basis, so PHI controls the vote in all cooperatives in which it owns a majority of the units. Nevertheless, the contribution level to each cooperative is fixed, and cannot be increased without the consent of an affected member

All of the above fees, except for l.P.H.F.H.A. Dues paid to l.P.H.F.H.A. and Cooperative Advertising paid to local co-ops, are payable to PHI or its affiliates and are all collected for the benefit of PHI.

ITEM 7 YOUR ESTIMATED INITIAL INVESTMENT

As noted above, you may convert an existing Pizza Hut restaurant to add WingStreet, you may build a new WS Co-Brand Outlet, or you may acquire an existing WS Co-Brand Outlet from PHI. If you build a new Restaurant, you may build a store that is designed for in-store dining, with or without delivery ("Dine In" or "RBD") or a Restaurant that is designed only for delivery and carry-out ("Delco"). Your estimated initial investment for each of these options is below.

WSUFOC 2006.1

Purchase of Existing Restaurant

Expenditure

Amount

Method'.-.. ' of Payment -

When Due;

.To Whom Paid

..Refundable

Equipment, Signs, and Inventory; any Leasehold or Other Real Property Interests

$265,000-$1,000,000 or more

Lump Sum

At Closing

PHl's

Subsidiaries or Affdiates

Total Purchase Price

$265,000 -

$1,000,000 or more

If PHI sells you one or more existing WS Co-Brand Outlets, the purchase price you pay for each Restaurant will be a negotiated amount and will include the Restaurant's equipment, signs and inventory. There is no WingStreet initial franchise fee for any WS Co-Brand Outlet which you purchase by December 31, 2008, but in any acquisition where you purchase the WS Co-Brand Outlet on or after January 1, 2009, the purchase price will include a WingStreet initial franchise fee of $10,000 (not included on the table above). The price of any leasehold or other real property interests will typically be an additional amount. You may be required to pay a non-refundable exclusivity fee ("Deposit'") which will vary depending on the size of the transaction. Past Deposits typically represent 1-2% of the price of the transaction. The Deposit will be refunded if certain conditions stated in the ASA are not met and the transaction is terminated, at which point PHI, will be free to negotiate the sale of the WS Co-Brand Outlets to other parties. If you proceed with the acquisition, the Deposit will be applied dollar-for-dollar toward payment of the purchase price. In order to acquire existing WS Co-Brand Outlets you will be required to sign an ASA in substantially the form attached as Exhibit 6.

You should refer to the PHI Franchise Offering Circular to understand your rights and obligations with respect to an acquisition of WS Co-Branded Outlets.

Construction of New Dine-In or "RBD" WS Co-Brand Outlet

^ Expenditures¹ _f	r Amount'	Method of Payment	.When Due ■	To Whom Paid	i Refundable
Development Services Fee²	Vanes.	Lump Sum	Within 30 days of receipt of invoice from YRSG	YRSG	No
Equipment	$60,000-$450,000	Lump Sum	When Acquired³	Vendor^J	No
Opening Inventory	$5,400-$10,200	Lump Sum	When Acquired³	Vendor³	No
Small wares	$20,000-$45,000	Lump Sum	When Acquired³	Vendor'	No
Land, Building, and Improvements	$330,000-$2,325,000⁴	Varies	Varies	Varies	No
Delivery Vehicles	See Note 5	See Note 5	See Note 5	See Note 5	No
Computers⁰	$21,000-$70,000	Lump Sum	When Acquired	PHI or Vendors	No
Additional Funds (3 months)'	$6,000- $27,000	As Incurred	As Incurred	Employees, Utilities, and Suppliers	No

WSUFOC 2006.1

Expenditures'

Amount

Method

Payment¹

< When Due

lb Whom

PaicI

Refundable

Start-up "Other"*

$11,000-$26,000

Incurred

As Incurred

Vendors and

Media Suppliers

Total"

$453,400-$2,953,200

Construction of New "Delco" WS Co-Brand Outlet

Expenditures¹ ;, ...■ "; .. t	Amount	Method; of Payment	■When Due; _;-	to Whom!	Refundable
Development Services Fee	Varies	Lump Sum	Within 30 days of receipt of invoice from YRSG	YRSG	No
Equipment	$60,000- $250,000	Lump Sum	When Acquired³	Vendor*	No
Opening Inventory	$5,400-$10,200	Lump Sum	When Acquired³	Vendor"³	No
Small wares	$12,000-$23,000	Lump Sum	When Acquired³	Vendor^J	No
Land, Building, and Improvements	$148,000^ $1,188,000 4	Varies	Varies	Varies	No
Delivery Vehicles	See Note 5	See Note 5	See Note 5	Sec No:e 5	No
Computers'¹	$21,000- $50,000	Lump Sum	When Acquired	PHI, or Vendors	No
Additional Funds (3 months)'	$6,000-$27,000	As Incurred	As Incurred	Employees, Utilities, and Suppliers	No
Advertising	$18,000-$25,000	As Incurred	First 18 Weeks	Media, Suppliers	No
Start-up "Other"⁸	$11,000-$26,000	As Incurred	As Incurred	Vendors and Meilia Suppliers	No
Total*	$281,400-$1,599,200

There is no WingStreet initial franchise fee for any WS Co-Brand Outlet which you open by December 21, 2008. For each WS Co-Brand Outlet which you open on or after January 1, 2009, you must pay an initial franchise fee of $10,000 to PHI. These post-January I, 2009 initial franchise fees are not shown on the charts above. Since these cost estimates are for a newly built WS Co-Brand Outlet, you will be responsible for a Pizza Hut initial franchise fee of $15,000 -$25,000, depending on the PHI Franchise Agreement. Please refer to the PHI Franchise Offering Circular.

² YRSG shall be paid a fee that varies depending on the number and type of services provided and includes any reimbursable fees, costs and other expenses as provided in the Development Services Agreement. These amounts are based on Yi^SG's current programs and the services provided under the Development Services Agreement. See Item 5.

³ Subject to credit requirements, some vendors may allow payment 30 days after the invoice date. These estimates of equipment, inventory and smallwares include the costs of such items for both the Pizza Hut and WingStreet portions of the store.

* Land, building, and improvement costs vary depending upon location and size of land and building, and en whether the land and building

WSUFOC 2006.1

are owned or leased. The average number of square feet required for a new Dine-in or RBD WS Co-Brand Outlet is 3,000 and 1,400 for a

new "Delco" WS Co-Brand Outlet.

⁵ WS Co-Brand Outlets are not required lo provide delivery vehicles (they may rely on employee-owned vehicles). If you acquire your

own vehicles, costs will vary depending upon the type of vehicle and whether it is owned or leased.

* Although the WingStreet Addendum does not include a requirement for a specific computer system, PHI assumes that you will have the

base brand's required system; in this case, the Pizza Hut system. The estimate provided is for the Pizza Hut computer system.

⁷ This is an estimate of your initial start-up expenses, taking into account that a WS Co-Brand Outlet is essentially a cash business. These funds consist of preopening expenses, including training, initial employee wages, insurance premiums, licenses, permit costs, recruitment, and other variable costs (such as initial utility bills, paper products, and cleaning and other supplies). These figures are estimates, and we cannot guarantee that you will not have additional expenses starting the business. Your actual costs will depend on many factors, such as; your management skill, experience, and business acumen; local economic conditions; local market conditions; prevailing wage rates in your community; competition; and the sales level reached in the period covered.

⁸ Start-up "Other" costs consist of new unit office supply package, banners, start-up marketing, forms, and uniforms.

⁹ On those costs that are not fixed, PHI does not expect your costs to increase beyond inflation in the relevant industry segment unless the supplier's costs increase due to shortages, catastrophes, strikes, Acts of God, or other causes beyond the supplier's control

Conversion of an existing Pizza Hut Dine-In, "RBD" or "Delco" Restaurant to a WS Co-Brand Outlet

Expenditures¹	Amount	Method of Pii\rnent	\\ hen Due	To \\ lioni Paid	Refund a hie
Equipment	$27,000-$150,000	Lump Sum	When Acquired²	Vendor²	No
Opening Inventory	$1,400- $2,200	Lump Sum	When Acquired²	Vendor²	No
Small wares	$2,000-$45,000	Lump Sum	When Acquired²	Vendor²	No
Land, Building, and Improvements	$25,000-$329,500	Varies	Varies	Varies	No
Delivery Vehicles	See Note 4	See Note 4	See Note 4	See Note 4	See Note 4
Computers	$1,000- $35,500	Lump Sum	When Acquired	PHI or Vendor	No
Additional Funds⁶ (3 months)	$1,000-$7,000	As Incurred	As Incurred	Employees, Utilities and Suppliers	No
Advertising and "Other"⁷	$8,000-$20,000	As Incurred	As Incurred	Vendors, and Media Suppliers	No
Total"	$65,400-$589,200

1 There is no WingStreet initial franchise fee for any WS Co-Brand Outlet which you open by December 31, 2008. For each WS Co-Brand Outlet which you open on or after January I, 2009, you must pay an initial franchise fee of S10,000 to PHI. These post-January 1, 2009 initial franchise fees are not shown on the chart above. Since these cost estimates are for a conversion, you will already have paid a Pizza Hut initial franchise fee to PHI and will not owe another initial franchise fee.

2 Subject to credit requirements, some vendors may allow payment 30 days after the invoice date. These estimates of equipment, inventory and smallwares include only the incremental costs of adding WingStreet to your existing Pizza Hut restaurant.

3 These costs represent an estimate of the total construction costs to modify your existing Pizza Hut restaurant to add WingStreet. Your costs will vary depending upon the size of your existing Pizza Hut restaurant and the need for structural changes to add the WingStreet equipment and signage. To qualify to add WingStreet to an existing Pizza Hut restaurant, you must re-image your base Pizza Hut restaurant in certain regards. The costs of this re-imaging are included in these estimates.

4 WS Co-Brand Outlets are not required to provide delivery vehicles (they may rely on employee-owned vehicles). If you acquire your own vehicles, costs will vary depending upon the type of vehicle and whether it is owned or leased.

5 This estimate assumes that your existing Pizza Hut restaurant already includes the computer components and systems required by your PHI Franchise Agreement. These costs are for incremental computer equipment only, which might range from the addition of a single printer to a much more elaborate systems upgrade.

6 This is an estimate of your initial start-up expenses, taking into account both (a) that a WS Co-Brand Outlet is essentially a cash business, and (b) that you are adding WingStreet to an existing Pizza Hut restaurant. These funds will consist of pre-opening expenses, including training, and incremental deposits, licenses, insurance, permitting, supplies and other variable costs. The estimate provided

WSUFOC 2006.1 15

assumes (hat you have an employee crew that is already fully trained in the operation of a Pizza Hut i estaurant and that you have already paid for insurance, utilities, permits, licenses and similar variable costs associated with the operation of your Pizza Hut. restaurant.

7 These costs consist of uniforms, marketing materials, and an initial advertising investment. The:e costs are in addition to required advertising contributions under both your PHI Franchise Agreement and the WingStreet Addendum.

8 On those costs that are not fixed, PHI does not expect your costs to increase beyond inflation jn the industry segment unless the supplier's costs increase due to shortages, catastrophes, strikes, Acts of God, or other causes beyond the supplier's control.

YOU SHOULD REVIEW THESE FIGURES CAREFULLY WITH A BUSINESS: ADVISOR BEFORE YOU DECIDE TO PURCHASE THE FRANCHISE. PHI DOES NOT OFFER FINANCING DIRECTLY OR INDIRECTLY FOR ANY PART OF THE INITIAL INVESTMENT. YOUR ABILITY TO OBTAIN FINANCING WILL DEPEND ON A NUMBER OF FACTORS, SUCH AS THE GENERAL AVAILABILITY OF FINANCING, YOUR CREDIT WORTHINESS, COLLATERAL YOU MAY HAVE, AND LENDING POLICIES OF INDIVIDUAL FINANCIAL INSTITUTIONS. THESE ESTIMATES DO NOT INCLUDE ANY FINANCE CHARGES, INTEREST, OR DEBT SERVICE PAYMENTS.

THE COST ESTIMATES ABOVE ARE BASED ON THE EXPERIENCE OF PHI AND ITS OPERATING SUBSIDIARIES, IN DEVELOPING NEW AND CONVERSION WS CO-BRAND OUTLETS SINCE JUNE 2003.

ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

Required Purchases

Since PHI does not directly sell to franchisees any food supplies, ingredients or equipment for use in the operation of WS Co-Brand Outlets, you will not be required to purchase any such items from PHI.

Other Products

You must buy all food supplies, ingredients, packaging, and equipment, as well as any other item used in the construction and operation of a WS Co-Brand Outlet, from suppliers approved by PHI. Many of the ingredients and food supplies used in the operation of a WS Co-Brand Outlet were developed specifically for PHI or WS and are proprietary and available only from PHI's approved suppliers. Although PHI generally tries to have more than one approved supplier for every item, that is not currently possible with respect to certain items. You may not use any item bearing the trademarks "PIZZA HUT" or "WingStreet" or any of PHI's or WS's other marks without the prior written approval of PHI. All supplies and suppliers must conform with PHI's standards as they exist at the particular time.

Approval/Disapproval of Suppliers

PHI has established procedures for the approval/disapproval of suppliers, and aliso publishes an approved brands list, which is regularly updated and distributed to all franchisees. You may ;ecommend new suppliers and additions to, or deletions from, the approved brands list. If you wish to use any unapproved supplier, or wish to purchase an approved supply from an unapproved supplier, you must first submit to PHI a written request for approval (or request the supplier itself to do so). PHI will consider all requests and will try to advise you of its decision in writing within 45 days after receipt of the fully documented request. PHI may request that its representatives be permitted to inspect the supplier's facilities and that: samples of the supply be delivered, at PHI's option, either to PHI or to an independent, certified laboratoiy designated by PHI for testing. PHI also may, at its option, reinspect the facilities and products of any approved supplier at any time, and may revoke approval upon the supplier's failure to continue to meet any of ^HI's criteria. PHI is not required to approve any supply or supplier. PHI has established quality standards and/or specifications for the food, paper goods, packaging, point-of-sale materials, signs, equipment, smallwares; fixtures and other goods and supplies which are used in the operation of the WS Co-Brand Outlets.

WSUFOC 2006.1

Approval/Disapproval of Distributors

PHI has established procedures for the approval of distributors, and also publishes a list of approved suppliers, distributors and brands. You may only purchase approved products from or through approved distributors. If you wish to purchase any approved items from or through an unapproved distributor, you must first submit to PHI a written request for approval of the distributor. PHI may request that its representatives be permitted to inspect the distributor's facilities. PHI also may reinspect the facilities of any approved distributor at any time, and may revoke approval upon the distributor's failure to continue to meet any of PHI's criteria. PHI is not required to approve any distributor.

McLane

PHI is party to an agreement with McLane, which authorizes McLane to be the sole distributor of certain items to PHI and its subsidiaries and affiliates through October 10, 2010. McLane is the principal distributor for the Pizza Hut system. When you purchase an existing WS Co-Brand Outlet from PHI, you may elect to purchase from McLane, by entering into a distribution agreement with McLane. Under such an agreement, you would purchase from McLane most of the proprietary and non-proprietary food and restaurant supplies needed for operation of a WS Co-Brand Outlet. During the term of PHI's agreement with McLane, Unified FoodService Purchasing Co-op, LLC, or "UFPC" (which is described in more detail below), negotiates the price and other purchase terms of most of the proprietary and non-proprietary food, equipment, supplies, smallwares, uniforms, beverages, promotional items, and point of purchase materials, which are distributed and sold by McLane.

Pepsi-Cola Company

PHI is also a party to an agreement with the Pepsi-Cola Company ("Pepsi"), under which PHI has agreed, subject to certain exceptions, to serve only soft drinks licensed by Pepsi and/or by the Pepsi/Lipton Tea Partnership ("Partnership") through December 31, 2011. When you purchase an existing WS Co-Brand Outlet from PHI, you must assume this obligation by entering into a Pepsi-Cola Beverage Supply and Marketing Agreement (See Exhibit D) to the ASA, which is attached as Exhibit 5. Under this agreement, you may sell only products licensed by Pepsi and/or the Partnership, subject to certain exceptions, from the WS Co-Brand Outlets you purchase. The terms of your contract with Pepsi will be on substantially the same terms as PHI's contract.

Benefits to PHI

PHI does not directly derive any revenue from approved suppliers as a result of sales to you. PHI does not receive lower prices or discounts from suppliers because of purchases by you. UFPC negotiates purchase arrangements with suppliers of most products periodically for the mutual benefit of PHI, its affiliates, and all licensees and franchisees who buy through UFPC (see below for more detail).

Your required purchases from PHI approved suppliers are estimated to be approximately 30% of the total expenses you will incur to establish and operate your WS Co-Brand Outlet.

Unified FoodService Purchasing Co-op

Purchasing activities for food, packaging and equipment used in the Pizza Hut system are conducted primarily through UFPC. The members of UFPC are the Pizza Hut National Purchasing Co-op, Inc. (the "Pizza Hut Coop", which is described in more detail below), and similar co-ops of PHI's sister companies and their franchisees (the A&W National Purchasing Co-op, Inc., KFC National Purchasing Co-op, Inc., Long John Silver's National Co-op, Inc., and the Taco Bell National Purchasing Co-op, Inc.) (collectively with the Pizza Hut Co-op, the "Concept Co-ops"). UFPC and the Concept Co-ops are organized to be taxed federal tax relating to entities operating on a cooperative basis. In accordance with those laws, each Concept Co-op has historically distributed substantially all of its net income not required for working capital or reserves to its members each year as a "patronage dividend." UFPC acts as a purchasing agent for its members and is the exclusive purchasing agent for the Pizza Hut corporate stores in the United States.

WS UFOC 2006.1

Depending on your PHI Franchise Agreement, you may be required to join the Pizza Hut Co-op. If so, you must buy from the Pizza Hut Co-op one share of "Membership Common Stock" (currently priced at $10), plus one share of "Store Common Stock" for each traditional and two non-traditional Pizza Hut restaurants that you own and operate (currently priced at $400 per share). If you later sell some or all of your WS Co-Brand Outlets or Pizza Hut restaurants (or otherwise become ineligible for membership) you may not sell or transfer your shares to third parties, although the Pizza Hut Co-op may redeem your shares at your original purchase price.

Your membership in the Pizza Hut Co-op makes you eligible to participate in UlT'C's purchasing programs. Under the By-laws of the Pizza Hut Co-op, while you are a member, you must purchase virtually all goods and equipment you use in your Restaurants through the purchasing programs of UFPC and the Pizza Hut Co-op. "Virtually all" means all goods and equipment except for those:

Where UFPC or the Pizza Hut Co-op agrees in advance in writing that you need not purchase the particular item or category through UFPC;

Where you determine in good faith, after giving written notice to UFPC (or if advance notice is impractical, by giving notice to UFPC as soon as possible), that UFPC cannot meet your required volume of supply of a specific item or category for particular Restaurant(s) or that UFPC cannot meet previously established quality standards for particular goods or equipment; or

Where you determine in good faith, after giving written notice to "JFPC (or if advance notice is impractical, by giving notice to UFPC as soon as possible), that UFPC's purchasing policies or procedures for the particular item or category present a material business risk to you (because of UFPC's volume, hedging or similar commitment;., arrangements or policies) which you are unwilling to assume.

The Pizza Hut Co-op was formed to allow PHI and its franchisees to conduct a purchasing program through UFPC. However, neither UFPC nor the Pizza Hut Co-op is affiliated with PHI, and both are organized and operate independently of PHI. PHI is a shareholder of the Pizza Hut Co-op, which is governed by an 8-member Board of Directors elected by PHI (2 Directors), and by those franchisees of PHI who have purchased stock in the Pizza Hut Co-op (6 Directors, chosen by region). In addition, the President of UFPC is a non-voting Director and the Board may provide for other non-voting directors. For additional information about UFPC and the Pizza Hut Co-op, contact Ron Burks, Vice President and General Manager, Pizza Hut Concept of the UFPC, 14841 Dallas Parkway, Dallas, Texas 75254 at 972/338-7700, and request a copy of the "Membership Information Packet" for the Pizza Hut Co-op.

Insurance

You must obtain and maintain at your own expense insurance policies with insurors satisfactory to PHI covering the items specified in your PHI Franchise Agreement, including workers compensation, general public liability (including products and injury) and property damage insurance. We c^:o not represent or warrant that these coverages are adequate. You should consult with your insurance advisors as to any additional types of coverages or higher limits they may recommend.

ITEM 9 FRANCHISEE'S OBLIGATIONS

THIS TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE WINGSTREET ADDENDUM TO THE PHI FRANCHISE AGREEMENT, WHICH MAY BE THE 2003 PHI LOCATION FRANCHISE AGREEMENT, THE 2003 PHI TERRITORY FRANCHISE AGREEMENT OR THE PHI "GOING FORWARD" LOCATION FRANCHISE AGREEMENT (COLLECTIVELY, THE "PHI FRANCHISE AGREEMENTS"), AND RELATED AGREEMENTS. IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR OBLIGATIONS IN THESE AGREEMENTS AND IN OTHER ITEMS OF THIS OFFERING CIRCULAR.

WSUFOC 2006.1

NOTE: MOST OF THE SUBJECTS COVERED BY THE FOLLOWING TABLE ARE DEALT WITH IN YOUR PHI FRANCHISE AGREEMENT. SEE YOUR PHI FRANCHISE OFFERING CIRCULAR, YOUR PHI FRANCHISE AGREEMENT FOR DETAILS OR YOUR DEVELOPMENT SERVICES AGREEMENT.

WINGSTREET ADDENDUM

V OBLIGATION	SECTION IN ADDENDUM	ITEM IN OFFERING CIRCULAR -
a. Site selection and acquisition/lease	Section 3 C, 6, Exhibit A, Site Request Form	Items 7, 11 & 12
b. Pre-opening purchases/ leases	None - governed by your PHI Franchise Agreement	Items 7, 8 & U
c. Site development and other prc-opening requirements	Section 9, Exhibit A	Items 1,7 & 11
d. Initial and ongoing training	None - governed by your PHI Franchise Agreement	Items 7 & 11
e. Opening	Section 9	Items 7 & 11
f. Fees	Sections 11-13	Items 5, 6 & 7
g. Compliance with standards and policies/ Manual	Section 9	Items 1,8, 11, 15 & 16
h. Trademarks and proprietary information	Section 14	Items 13 & 14
i. Restrictions on products/services offered	None - governed by your PHI Franchise Agreement	Items 8 & 16
j. Warranty and customer service requirements	None - governed by your PHI Franchise Agreement	Items 11 & 14
k. Territorial development and sales quotas	Sections 3-6	Item 12
1. Ongoing product/service purchases	None - governed by your PHI Franchise Agreement	Items 8, 11, & 16
m. Maintenance, appearance and remodeling requirements	None - governed by your PHI Franchise Agreement	Item 7
n. Insurance	None - governed by your PHI Franchise Agreement	Items 6, 8
o. Advertising	Section 13	Item 6
p. Indemnification	None - governed by your PHI Franchise Agreement	Item 6
q. Owner's participation/ management/staffing	None - governed by your PHI Franchise Agreement	Item 15
r. Records and reports	None - governed by your PHI Franchise Agreement	Item 11
s. Inspections and audits	None - governed by your PHI Franchise Agreement	Item 6
t. Transfer	None - governed by your PHI Franchise Agreement	Item 17
u. Renewal	None - governed by your PHI Franchise Agreement	Item 17
v. Post-termination covenants	None - governed by your PHI Franchise Agreement	Items 14, 16 & 17
w. Non-competition covenants	Section 16	Items 16 & 17

WSUFOC 2006.1 19

OBLIGATION	SECTION IN WINGSTREET ADDENDUM	ITEM IN OFFERING CIRCULAR
x. Dispute resolution	None - governed by your PHI Franchise Agreement	Item 11
y. Mutual Release of all Claims	Section 18	Item 17

NOTE: THERE ARE SEVERAL FORMS OF THE PHI FRANCHISE AGREEMENT WHICH MAY BE AMENDED BY THE WINGSTREET ADDENDUM. THE TABLES BELOW DESCRIBE THE 2003 PHI LOCATION FRANCHISE AGREEMENT. THE 2003 PHI TERRITORY FRANCHISE AGREEMENT AND THE PHI "GOING FORWARD" LOCATION FRANCHISE AGREEMENT. YOU MAY HAVE PREVIOUSLY SIGNED THE 2003 PHI TERRITORY FRANCHISE AGREEMENT OR THE 2003 PHI LOCATION FRANCHISE AGREEEMENT. BUT SUCH AGREEMENTS ARE NO LONGER BEING OFFERED.

"GOING FORWARD" LOCATION FRANCHISE AGREEMENT

Obligation ,	.iSectionfs) in¹Agreement' ,<	Itemfs) in Offering ; Circular .-,
(a) Site selection and acquisition/lease	FA- 10.2, 10 4, 10 6, 10 7 DSA-2.1	6, 7, 11
(b) Prc-opening purchases/leases	FA-6.I1,8.1,8.2	8, 11
(c) Site development and other pre-opening requirements	FA - 6.7, 10.2, 10.4, 10.6, 10.7 DSA-2, 3,5	6, 7, 11
(d) Initial and on going training	FA-4.1	11
(e) Opening	FA- 10.3	11
(0 Fees	FA -6.11, 7.1, 7.2, 7.4, :?.l, 9.2,9.3,9.4,9.5 DSA-2, 3.4	5,6,7,8
(g) Compliance with standards and policies/Operations Manual	FA - 5.1, 5.2, 5.5, 6.2, ij.4, 6.5,6.10	11, 14
(h) Trademarks and proprietary information	FA - 3.1, 3.2, 3.3, 3.4, y.3, 12, 15.2, 18.1, 19.4, 19.5, 21.4	8, 13, 14,17
(i) Restrictions on products/services offered	FA-6.10	16
(j) Warranty and customer service requirements	FA - 5.1, 5.2, 5.5, 6.2, (,.4, 6.5,6.10	11, 14
(k) Territorial development and sales quotas	FA-2.1, 2.3, 2.5,2.6	12
(1) On-going product/service purchases	FA-6.11,8.1,8.2	8
(m) Maintenance, appearance and remodeling requirements	FA-6.3, 10.5	1,8, 11
(n) Insurance	FA- 16	7
(o) Advertising	FA-7	6, 11
(p) Indemnification	FA- 16.4	None
(q) Owner's participation/management/ . staffing	FA-4.1, 13,15.2, 15.4,15.6	11,15, 17
(r) Records/report	FA-9.2, 11.1, 11.2 !	6
(s) Inspections/audits	FA-6.4, 11.3	6,11

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(t) Transfer	FA- 14, 15	17
(u) Renewal	None	17
(v) Post-termination obligations	FA - 6.11, 10.4, 10.7, 12.3, 12.4, 19	8, 17
(w) Non-competition covenants	FA-12, 19	17
(x) Dispute resolution	FA-20	17

2003 PHI TERRITORY FRANCHISE AGREEMENT (no longer being offered)

Obligation	Scctionls) in Agreement	Item(s) iiiu Offering. iCirciilar;
(a) Site selection and acquisition/lease	FA-II.A.,XV DSA2.1	6,7, 11
(b) Pre-opening purchases/leases	FA-II.A.,VIII,XV	8, 11
(c) Site development and other pre-opening requirements	FA-II.A.,III.C, V,IX.B., IX.C.3 DSA - 2, 3, 5	6,7, 11
(d) Initial and on going training	FA-II.B.,C, D.,E.	11
(e) Opening	FA-V.B.	11
(f) Fees	FA-I.D., VI.A.2., 3., 9., 10., IX DSA-2, 3, 4	5,6,7,8
(g) Compliance with standards and policies/Operations Manual	FA - III, IV	11, 14
(h) Trademarks and proprietary information	FA - VIII, XXIII, VII	8, 13, 14, 17
(i) Restrictions on products/services offered	FA -IV.A., VIII, XIII, XIV	16
(j) Warranty and customer service requirements	FA - III, IV	11, 14
(k) Territorial development and sales quotas	FA- I.D.2., IX	12
(1) On-going product/service purchases	FA-IV.3.,IV.5., IV.6.	8
(m) Maintenance, appearance and remodeling requirements	FA - III.C, XXII, Schedule B	11
(n)Insurance	FA - XXIV	7
(o) Advertising	FA-VI	6, 11
(p) Indemnification	FA - XXV	None
(q) Owner's participation/management/ staffing	FA-II.B.2., II.B.3., IV.A.9., IV.B.	11,15,17
(r) Records/report	FA-X	6
(s) Inspections/audits	FA-IV.CX.A.	6,11
(t) Transfer	FA-XVI,XVII.A., XVII.B.,XVII.C.,XV1I.D., XVIII	17
(u) Renewal	FA-XXI, Schedule B, Section E.	17
(v) Post-termination obligations	FA- XXII	8, 17

WSUFOC2006.I

(w) Non-competition covenants	FA-XI	17
(x) Dispute resolution	FA-IX.B., XXI.B.3.C, XXI.B.3.d.	17

2003 PHI LOCATION FRANCHISE AGREEMENT fno longer being offered)

Obligation	SectionCs) in Agreement	HerriCs) in Offering H ^!Circular..;.
\ix) Site selecnuii and acquisition/lease	FA- 10.2, 10.4, 10.6, 10.7 DSA-2.1	6, 7, 11
(b) Pre-opening purchases/leases	FA- 8.1,8.2, 102	8, 11
(c) Site development and other pre-opening requirements	FA - 6.7, 10.2, 10.4, 10.6, 10.7 DSA-2, 3,5	6, 7, 11
(d) Initial and on going training	FA-4.1	11
(e) Opening	FA - 10.3	11
(0 Fees	FA - 7.1, 7.2, 7.4, 9.1, 9.2, 9.3, 9.4, 9.5 DSA-2, 3,4	5, 6, 7, 8
(g) Compliance with standards and policies/Operations Manual	FA - 5.1, 5.2, 5.5, 6.2, 6.4, 6.5,6.10,6.3	11, 14
(h) Trademarks and proprietary information	FA - 3.1, 3.2, 3.3, 3.4, 7.3, 12, 15.2, 18.1, 19.4, 21.4	8, 13, 14, 17
(i) Restrictions on products/services offered	FA-6.10, 6.11	16
(j) Warranty and customer service requirements	FA - 5.1, 5.2, 5-5, 6.2, 6.4, 6.5,6.10	11, 14
(k) Territorial development and sales quotas	FA-2.1, 2.3, 2.5, 2.6, 6.:0	12
(1) On-going product/service purchases	FA - 6.11, 6.12, 6.14, 8.1, 8.2	8
(m) Maintenance, appearance and remodeling requirements	FA- 10.5,6.3	11
(n)Insurance	FA- 16	7
(o) Advertising	FA-7	6, 11
(p) Indemnification	FA-16.4	None
(q) Owner's participation/management/ staffing	FA-4.1, 13, 15.2, 15.4, 15.6	11,15, 17
(r) Records/report	FA-9.2,11.1, 11.2	6
(s) Inspections/audits	FA-6.4, 11.3	6, 11
(t) Transfer	FA-14, 15	17
(u) Renewal	FA- 2.8, 2.9	17
(v) Post-termination obligations	FA - 10.4, 10.7, 12.3, 12.4, 19	8, 17
(w) Non-competition covenants	FA- 12. 19	17
(x) Dispute resolution	FA-20	17

WSUFOC 2006.1

ITEM 10 FINANCING

PHI does not offer, directly or indirectly, any arrangements for financing your initial investment or the continuing operation of your PHI and/or WS Co-brand outlet business. PHI is unable to predict whether you will be able to obtain financing for any part or all of your investment and, if you are able to obtain financing, PHI cannot predict the terms of such financing. PHI does not guarantee your note, lease or obligation.

YUM! Capital LLC ("YUM Capital") is a special purpose limited liability company organized under Delaware law, the sole member of which is YUM Capital Funding Corp. ("YUM Funding"), a Delaware non-stock corporation. YUM Capital issues commercial paper secured by loans (or participations in loans) purchased from YUM Funding and made by YUM Funding to franchisees in YUM's restaurant brands. JPMorgan Chase Bank, National Association serves as administrator for YUM Capital and YUM Funding and as master servicer of the loan portfolio.

YUM Funding is directed by a Board of Directors that is elected by members who are franchisees or owners of franchisees, of KFCC, PHI, Taco Bell, A&W and LJS; and was formed, with the assistance of PHI and its affiliates, to offer a financing program to its members. All members of YUM Funding must be franchisees or owners of franchisees, of KFCC, Taco Bell, PHI, LJS or A&W. Among other purposes, the financing may be used for the development of new PHI restaurants, development of new multibrand restaurants, remodels of PHI restaurants and multibrand conversions of PHI restaurants. An affiliate of PHI provides indirect financial support to YUM Funding to facilitate this program, but neither PHI nor any of its affiliates guarantees or will guarantee individual loans (if any) made to you under this program.

The general terms of YUM Funding's financing program is summarized as follows:

Purpose:

Amount: Term:

APR:

Qualification Requirements:

Monthly Payment: Prepayment Penalty: Security Required:

Liability Upon Default:

To finance the construction of new (multi-brand or single brand) restaurants, conversion of single-brand into multibrand and single-brand remodels without conversion. (See Note I)

Not less than $65,000, but not greater than $5,000,000.

The program will provide for terms of up to 15 years and amortizations up to 15 years. (See Note 2)

(See Note 3).

You must have a minimum of 3 years operating experience as a YUM franchisee; you must own three or more restaurant locations; and you must be in good standing and not past due with royalties within the past year.

Level monthly payment reset each 12 months depending on the term and amount financed and funding costs of YUM Capital. (See Note 4)

Penalty of 1% of outstanding balance plus $250 processing fee during first 18 months, no penalty thereafter with proper notice. (See Note 1).

Varies depending on the type of loan, but may include real estate or leasehold mortgages, and/or security interests in furniture, fixtures and equipment. A personal guaranty will be required.

Acceleration of debt, payment of default interest, collection expenses, including attorneys' fees.

Loss of Legal Right on Default: Waive notice

WSUFOC2006.)

Note 1. Loans are funded by private placement of commercial paper which is issued by YUM Capital and is supported by a letter of credit and other credit enhancements. YUM has provided a limited guaranty of the reimbursement obligations of YUM Capital with respect to the letter of credit. Tfa: form of Credit Agreement used for the loans is attached as Exhibit 8 to this Offering Circular, and sets forth the terms of the loan.

Note 2. The term of leasehold, including options, will affect the maturity and amortization for loans depending on leasehold properties.

Note 3. The rate of the "YUM! Capital Commercial Paper Index" (which is the average rate at which YUM Capital is able to borrow money), plus 2.25% will be offered for fee simple term loans. The rate of the YUM! Capital Commercial Paper Index plus 3.0% will be offered for leasehold term Ibans rates for construction loans, during the 9 month construction period, will be 0.5% higher than the respective fee or leasehold loan rate. At the end of the construction period the loan converts to a term loan. As of February 1, 2006, the YUM! Capital Commercial Paper Index was 4.5%. The YUM! Capital Commercial Papor Index rate will fluctuate monthly.

Note 4. The monthly payment is set annually based on the then current interest rate.

Note 5. Each prepayment may only be made concurrently with and in addition to a regularly scheduled payment, on the 10th day of a calendar month.

If you are interested in obtaining financing from YUM Funding, contact YUM Funding for further information about the program at 1-888-216-0404.

PHI does not own or control YUM Capital or YUM Funding. YUM Capital has represented that they may sell, assign, or discount to third parties all or part of the financing arrangement.

Neither PHI nor its affiliates receives a fee from YUM Capital or YUM Funding for I he placement of financing for loans.

ITEM 11 FRANCHISOR'S OBLIGATIONS

Except as listed below, PHI need not provide any assistance to you.

Before you open each WS Co-Brand Outlet, PHI will

1. Make available to you its customary resources to assist you and other PHI franchisees in the expeditious development of the WS brand. (WingStreet Addendum, Section 10)

2. Grant you the right to develop and operate WS Co-Brand Outlets to be situi.ted within some or all of your Pizza Hut Restaurants (WingStreet Addendum, Section 3)

3. License the WS Marks to you. (WingStreet Addendum, Section 14)

4. Hold itself to the same Growth Ready Standards as franchisees with regard to its qualification to begin development of WS Co-Brand Outlets. (WingStreet Addendum, Section 6)

5. Provide you with plans and specifications for the construction of your WS Co-Brand Outlet(s)(WingStreet Addendum, Section 9)

■ 6. Loan to you one copy of the Manual and such additions and modifications tc the Manual as PHI may

issue from time to time. See below in this Item 11. (WingStreet Addendum, Section 9).

WSUFOC 2006.1

After you open each WS Co-Brand Outlet, PHI will

1. Continue to make available to you its customary resources to assist you and other PHI franchisees in the expeditious development of the WS brand. (WingStreet Addendum, Section 10)

2. Continue to license the WS Marks to you. (WingStreet Addendum, Section 14)

3. If the conditions described in Item 12 are met, grant you a right of first refusal. See Item 12. (WingStreet Addendum, Section 5)

4. Continue to loan to you one copy of the Manual and such additions and modifications to the Manual as PHI may issue from time to time. See below in this Item 11. (WingStreet Addendum, Section 9).

Advertising and Promotion

So long as the Advertising Committee Agreement is in effect, and provided exclusivity is attained, your "national" advertising contributions will be made to the national advertising fund managed by the I.P.H.F.H.A. If at any time the Advertising Committee Agreement between PHI and I.P.H.F.H.A. ceases to be in force, you must make your national advertising contributions to PHI. There will also be contributions to PHI for WS advertising. These contributions will not constitute an advertising fund. See Item 6.

As the PHI Franchise Offering Circular describes, the Pizza Hut System maintains local advertising cooperatives. The WingStreet Addendum provides that you will make contributions to a local advertising cooperative for Pizza Hut base brand advertising. See Item 6.

You will also be required to spend a percentage of your required advertising expenditures for local advertising devoted to WingStreet. See Item 6.

PHI and its affiliates must, at a minimum, make advertising contributions, payments and expenditures on the same basis as franchisees for all WS Co-Brand Outlets owned and operated by them.

All local and national advertising contributions related to PHI's, its affiliates' and franchisees' WingStreet sales contributed to I.P.H.F.H.A. and/or any local advertising cooperative will be segregated from other funds administered by the Advertising Committee or local advertising cooperative. These contributions must be utilized in the development, creation and/or purchase of broadcast advertising, either for broadcast nationally or locally. (WingStreet Addendum, Section 13)

You must submit proposed advertising to PHI for approval prior to use. All Advertising must comply with standards set by PHI. PHI must approve any proposed advertising in writing. PHI will try to respond within 30 days. The submitted item is considered unapproved until notification by PHI.

Electronic Cash Register/Computer Systems

Although the WingStreet Addendum does not include a requirement for a specific computer system, PHI requires you to have the Pizza Hut system under the terms of the PHI Franchise Agreement. See the PHI Franchise Offering Circular. PHI may require you to install or maintain a computer web-based cash register system, software and interfaces. There are no contractual limitations on the cost and frequency of the obligation to update or upgrade your computer hardware or software.

Site Selection and Opening

To qualify to develop a WS Co-Brand Outlet, you must be a Pizza Hut franchisee in good standing and you must comply with the Growth-Ready Standards attached as Exhibit A to the WingStreet Addendum. If you desire to begin development of WS Co-Brand Outlets, but do not satisfy the Growth Ready Standards, then PHI will notify you of this promptly and will work with you to cure any deficiencies and otherwise assist you in satisfying the Growth Ready Standards. The Growth Ready Standards set forth in Exhibit A to the

WSUFOC 2006.1

WingStreet Addendum will remain in effect until January 1, 2011, and after that will only be amended following consultation with I.P.H.FH.A. PHI will hold itself to the same standards with regard to its

qualification to begin development of WS Co-Brand Outlets. (WingStreet Addendum, Section 6)

You must notify PHI in writing in accordance with PHI's site registration policies by submitting a Site Request Form (Exhibit 4) each time you decide to develop and operate a WS Co-Brand Outlet. PHI will v/aive the $10,000 deposit that is normally payable upon submission of the Site Request Form.

If the WS Co-Brand Outlet will be newly constructed, PHI may consider the following factors in approving sites, depending on whether your PHI Franchise Agreement is a "Location Agreement" or a 'Territory Agreement": the market potential and estimated volume of your Restaurant; the general location and neighborhood and proximity to customers; store visibility; traffic patterns; co-tenant attractiveness; size of the space; age and condition of the building or shopping center in which the proposed location is situated; ingress and egress; the availability of locations and necessary zoning; the location of competitors, expected overhead and proximity of existing Pizza Hut restaurants. PHI will approve or disapprove your proposed site in writing. There is no time limit for PHI to approve or disapprove the site. If you are a "Location" franchisee and the WS Co-Brand Outlet will be newly constructed, you and PHI must agree on the site for a WS Co-Brand Outlet. If you and PHI cannot agree on a site, you cannot build or remodel a location.

You may not open any WS Co-Brand Outlet unless at the time of opening.you are current on all monetary obligations due to PHI or any of its affiliates; you and your affiliates have no ouislanding, uncured notice of default under any of the PHI Franchise Agreements or any other franchise agreement between you or any of your affiliates and PHI or any of its affiliates; and, you have certified to PHI that the WS Co-Brand Outlet was constructed in accordance with the plans and specifications that were furnished to you; thai: the equipment installed at the WS Co-Brand Outlet complies with the latest equipment specifications furnished to you; and, that the WS Co-Brand Outlet complies in all material respects with all federal, municipal, county and other applicable laws, rules and regulations. (WingStreet Addendum, Section 9)

Assuming you satisfy the Growth Ready Standards, the typical time period between site approval and opening of a WS Co-Brand Outlet will range from 30 to 180 days. Apart from the requirement that you satisfy the above requirements and the Growth Ready Standards, the factors that affect this time period include: the ability to obtain a lease, financing or permits, zoning and other ordinances, weather conditions, and the type of WS Co-Brand Outlet building to be constructed.

Manual

You will be provided the opportunity to review the Manual in its entirety before signing the WingStreet Addendum.

Training

1. Since your Restaurant will be part of a WS Co-Brand Outlet, the training required and offered by PHI will vary with the circumstances. For example, if you are converting an existing restaurant facility to a WS Co-Brand Outlet by adding WS and the existing restaurant has experienced and established management that will continue to operate the Restaurant within the co-brand facility, the management training required by PHI would be less comprehensive than that required by PHI if you were to open a Restaurant as part of a newly built WS Co-Brand Outlet.

2. PHI will conduct training at WingStreet restaurants and at meeting facilities such as hotels and/or convention centers at various locations throughout the United States. '

3. The instructors have generally completed the training program through their own development or have been certified to teach by attending a Train the Trainers class. We employ numerous instructors, who have from one to three years of experience in the subjects being taught. Currently PHI's initial training program falls under the jurisdiction of William C Ogle, whose relevant employment history is described in ) tern 2.

WSUFOC 2006.1 26

Training - Summary

The training programs currently conducted by PHI are described in the following table. There is no charge for training, but you must pay all of your employees' travel and living expenses to attend any of the training offered. The training program is mandatory. The training must be completed to PHI's satisfaction. In the future, PHI may offer additional training programs and/or refresher courses, but they will be optional.

PRE-OPENING TRAINING

Subject	Time Begun	Instructional Material	. Hours of. /*' Classroom . r -Training	Hours of . on;thejoth-; training	Instructor
Leadership Training¹	14-30 days before opening	Curriculum, videos, job aids, tests	6	0	Restaurant Training Leader
Concept Training²	14-30 days before opening	Curriculum, videos, job aids, tests	0	4	Readiness Coach
Proficiency Practice³	0-7 days before opening	job aids	0	.4-8	Restaurant General Manager & Training Team

1 This program trains employees to become Restaurant General Managers at your Restaurant. This training program must be completed before the restaurant opens.

2 This program trains employees at your Restaurant on the WS concept.

3 This program trains employees at your Restaurant to become proficient at preparing WS products.

ITEM 12 TERRITORY

Your PHI Franchise Agreement may be a "Location Franchise Agreement" or a "Territory Franchise Agreement." A Location Franchise Agreement grants you the right to operate one or more Pizza Hut Restaurants at one or more specified locations, A Territory Franchise Agreement grants you the right to develop, open and operate Pizza Hut Restaurants within a specifically denominated "Territory."

// the PHI Franchise Agreement Being Amended Is A Location Franchise Agreement: Subject to the conditions in the Addendum (such as the Growth Ready Standards described below and the requirement that you submit a Site Request Form), PHI will grant you the right to develop and operate WS Co-Brand Outlets within some or all of your Pizza Hut Restaurant locations, whether they exist now or which are in the future subject to a Location Franchise Agreement.

If the PHI Franchise Agreement Being Amended Is A Territory Franchise Agreement: Subject to the conditions in the Addendum (such as the Growth Ready Standards described below and the requirement that you submit a Site Request Form), PHI will grant you the right to develop and operate WS Co-Brand Outlets within some or all of your Pizza Hut Restaurants within the territory granted by your PHI Territory Franchise Agreement (the "Territory"), whether they exist now or you develop them in the future under the Territory Franchise Agreement.

Growth Ready Standards: To qualify to develop a Restaurant, you must be a Pizza Hut franchisee in good standing and you must comply with the Growth-Ready Standards attached as Exhibit A to the WingStreet Addendum. If you desire to begin development of WS Co-Brand Outlets but do not satisfy the Growth Ready Standards, then PHI will notify you of this promptly and will work with you to cure any deficiencies and otherwise assist you in satisfying the Growth Ready Standards. The Growth Ready Standards set forth in Exhibit A to the WingStreet Addendum will remain in effect until January 1, 2011, and after that will only be

WSUFOC 2006.1

amended following consultation with I.P.H.F.H.A. PHI will hold itself to the same standards with regard to its qualification to begin development of WS Co-Brand Outlets.

Site Request: You must notify PHI in writing in accordance with PHI's site registiation policies by submitting a Site Request Form each time you decide to develop and operate a WS Co-Brand Outlet. PHI will waive the deposit usually required with the Site Request Form.

Exclusivity for PHI and its Franchisees. Under the License Agreement between WS and PHI, PHI and its franchisees will have the exclusive right to develop, open and operate WS Co-Brand Outlets in the continental United States (excluding Hawaii) through September 30, 2011 (the "Exclusivity Period"). If PHI franchisees open 1,000 or more WS Co-Brand Outlets before the expiration of the Exclusivity Period (excluding WS Co-Brand Outlets that have been refranchised by PHI), then PHI and its franchisees will retain this exclusivity in perpetuity and "Exclusivity" will have been attained. If PHI franchisees open fewer than 1,000 WS Co-Brand Outlets before the expiration of the Exclusivity Period, then YUM may offer WS opportunities lo persons other than PHI franchisees (including, for example, through other YUM networks and/or subsidiaries). This Exclusivity Period will be extended if, and to the extent that, PHI franchisees collectively are materially delayed in their ability to develop WS Co-Brand Outlets due to circumstances reasonably beyond their control, including (for example) failure by PHI to perform its obligations to franchisees under the WingStreet Addendum; nonavailability of required signs, equipment or other fixtures; national emergencies or moratoria; or, material general restrictions of commercial property development. However, financial factors, such as the inability of PHI franchisees to obtain financing for WS Co-Brand Outlets development or the economic performance of existing WS Co-Brand Outlets, will not give rise to any extension ot the Exclusivity Period.

If the PHI Franchise Agreement Being Amended is a Territory Franchise Agreement: If PHI franchisees achieve Exclusivity by the conclusion of the Exclusivity Period as described above, then PHI and I.P.H.F.H.A. will develop standards addressing what constitutes adequate WingStreet trade area coverage ("Adequate WingStreet Trade Area Coverage") and the rights and obligations of, and the procedures to be followed by, the parties if it is determined that a franchisee is not providing Adequate WingStreet Trade Area Coverage. The agreement between PHI and I.P.H.F.H.A. will be binding on you and PHI. However, under these future standards, PHI's only remedy if you fail to provide "Adequate WingStreet Trade /oxa Coverage" will be for PHI to develop, open and operate freestanding WingStreet outlets within your Territory if, but only if, PHI first demonstrates, based upon one year's operation of the number of units set forth below in the applicable County group that these units can sustain themselves financially as free-standing WingStreet units:

"A" Counties - six units. "B" Counties - six units. "C" Counties - four units. "D" Counties - four units.

County groups are defined as follows:

"A" Counties - The classification of counties based on Census household counts and metropolitan proximity. "A" counties are highly urbanized areas and belong to the 21 largest Metropolitan Statistical Areas.

"B" Counties - The classification of counties based on Census household counts and metropolitan proximity. "B" counties are counties not defined as "A" counties that have more than 85,000 households.

"C" Counties - The classification of counties based on Census household counts and metropolitan proximity. "C" counties are counties not defined as "A" or "B" counties that have more than 20,000 households or are in Consolidated Metropolitan Statistical Areas or Metropolitan Statistical Areas with more than 20,000 households. .

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"D" Counties - The classification of counties based on Census household counts and metropolitan proximity. "D" counties are all counties not classified as "A", "B" or "C" counties. They are considered very rural.

The definition may change by mutual agreement between PHI and I.P.H.F.H.A.

PHI must demonstrate satisfaction of the WingStreet financial sustainability criteria referred to above on a county category basis, as set forth above. For example, if PHI can demonstrate the sustainability of freestanding WingStreet outlets in "A" Counties, but not in "B", "C" or "D" Counties, then PHI can develop freestanding WingStreet outlets in "A" Counties but in no others. PHI may request you to assist PHI in developing freestanding WingStreet units in "C" and "D" Counties at PHI's expense. If you agree to do so and then operate a "test" unit in a "C" or "D" County, then PHI will, on your request, refranchise the unit to you, in consideration for which you must reimburse PHI for its construction and other non-recouped costs of developing and operating the unit; pay on and after the transfer date the Service Fees and advertising expenditures required by the Addendum and described in Item 6. But you need not pay any initial franchise (or similar) fee.

If PHI franchisees achieve WingStreet Exclusivity, then in addition to its right to develop freestanding WingStreet units in certain circumstances, PHI will also have the right to develop WS Co-Brand Outlets: (a) if your PHI Franchise Agreement being amended is a Territory Franchise Agreement, within your Territory if you do not provide Adequate Delivery Service within your Territory, and, (b) if your PHI Franchise Agreement being amended is a Location Franchise Agreement and you do not provide Adequate Delivery Service, within your defined "Delivery Area", but only if the Outlet can be financially viable as Pizza Hut Delivery Restaurant, without WS as a co-brand.

Your Right Of First Refusal If PHI franchisees do not develop and open 1,000 or more WS Co-Brand Outlets within the Exclusivity Period, but within the Exclusivity Period you have opened WS Co-Brand Outlets representing an equivalent of 25% of your total Pizza Hut Restaurants, then you will have the right of first refusal to develop additional WS Co-Brand Outlets within your Territory, if the PHI Franchise Agreement being amended is a Territory Franchise Agreement, or if the PHI Franchise Agreement(s) being amended are Location Franchise Agreements and your Franchise Agreement provides for any "Right of First Development" within a Single Site Region. (Under some PHI Location Franchise Agreements, there is a "Single Site Region" within which the franchisee has certain rights, and some of those Franchise Agreements provide for a "Right of First Development" with certain further rights.)

You must exercise your right of first refusal as follows: PHI will give you written notice that, based upon its review of the applicable trade area, PHI has determined to open a WS Co-Brand Outlet within the Territory or Single Site Region, if any (as applicable) or, alternatively, that PHI has received a written indication of interest from a third party in which the third party commits to open a WS Co-Brand Outlet within the Territory or Single Site Region (as applicable). You will have three months from the date written notice from PHI is effective under the Franchise Agreement (the "Response Deadline") to commit in writing to develop the WS Co-Brand Outlet in question, and six months after that to open the WS Co-Brand Outlet. If you do not comply with these timing requirements, then PHI or WS may develop, open and operate the outlet or may offer the right to open and operate a WS Co-Brand Outlet within the Territory or Single Site Region, if any (as applicable) to any person, including persons other than PHI franchisees. However, if PHI, WS or a third party does not develop and open the WS Co-Brand Outlet within six months following your Response Deadline, then PHI's, WS's or the third party's right to develop and operate the WS Co-Brand Outlet will lapse, your right of first refusal will be automatically restored and, if PHI subsequently determines to open or license a WS Co-Brand Outlet within your Territory or Single Site Region, if any (as applicable), PHI must again follow the written notice procedure described above in order to permit you to exercise your restored right of first refusal. Furthermore, even if the WS Co-Brand Outlet opens, your right of first refusal will nevertheless remain for any succeeding opportunities to develop WS Co-Brand Outlets within, as applicable, your Territory or Single Site Region, if any.

WingStreet Development Rights Reserved to PHI and YUM- General. PHI, YUM and/or their affiliates or designees will at all times have the right to themselves develop, and/or license or franchise to others the right to develop, WingStreet outlets on an "express" basis at any or all of the following locations, and regardless of

WSUFOC 2006.1

whether any such location is situated within your Territory (if you operate C.nder a Territory Franchise Agreement) or immediately adjacent or proximate to your Location(s) (if you. operate under a Location Franchise Agreement): airports; zoos; stadiums; transportation terminals; college and university food courts; military bases; toll roads; and, amusement parks.

PHI, YUM or their affiliates or designees will also have the right at any time to establish and operate any WingStreet outlet, WingStreet Express or WS Co-Brand Outlet in any trade area, market or other geographic area occupied solely by PHI company-owned Restaurants or any other area not otherwise a franchisee Territory or Single Site Region (collectively the "PHI Trade Areas"). This reservation of WingStreet development rights to PHI, YUM and/or their affiliates or designees is in addition to and not in place of the rights reserved to them in the PHI Franchise Agreement.

WingStreet Development Rights Reserved to PHI and YUM- Target Departmem Stores. PHI, YUM and/or the affiliates or designees of either entity may develop WingStreet units on the premises of Target department stores ("Target/WingStreet Units") situated within any PHI Trade Area. Except a; described in the preceding sentence, PHI may not develop Target/WingStreet units until after December 31, 2008 and then only in accordance with the terms of a Letter Agreement dated September 30, 2005 between YUM, PHI and I.P.H.F.H.A. relating to the development of WingStreet/Target units (the "Target/WingStreet Agreement"), a copy of which is attached to the WingStreet Addendum in this Offering Circular. PHI and YUM will have the right to develop as many WingStreet/Target Units as it or they desire if PHI franchisees fail to achieve WingStreet "Exclusivity" as described above in this Item 12.

Other Concepts. A&W, KFC, LJS, Taco Bell and PHI (affiliates described further in Item 1) operate and grant licenses and franchises for restaurants of various concepts under different trademarks. These competing restaurant concepts may be located in your Territory or Single Site Regions, if &ny (as applicable). These affiliates share no common trademarks or proprietary menu items with us.

YUM may also test Pasta Bravo operations with outlets to be operated by YUM'; affiliates, including KFC, PHI and Taco Bell. These Pasta Bravo operations may compete with Restaurants :nd may be located in your Territory or Single Site Regions (as applicable). YUM, or its affiliates, may ilso operate, test or offer franchises for WingWorks, a different chicken wings concept, within your Territory or Single Site Regions (if any). There is no mechanism for resolving any conflicts between, on the one hand, WS, YUM and YUM's other affiliates and, on the other hand, WingStreet franchisees, regarding territory, customers or franchise support. Likewise, there is no mechanism for resolving conflicts between, on the one hand, WingStreet franchisees and, on the other hand, WingWorks franchisees, regarding territory, customers or franchise support.

ITEM 13 TRADEMARKS

MARK s	application/ 'registration NUMBER	FILING/ , REGISTRATION DATE
A THOUSAND DEGREES FROM THE ORDINARY	2,953,406	05/17/05
THE ADDRESS FOR GREAT WINGS	3,056,162	01/31/06
WINGSTREET	3,042,453	01/10/06
WingStreet Logo	2,916,738	01/04/05
2 WAYS TO WING IT	2,992,531	09/06/05

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2 WAYS TO WING IT! LOGO	2,992,534	09/06/05
3 WAYS TO WING IT	78/842,367	03/21/06
THREE WAYS TO WING IT!	78/842,352	03/21/06
THREE WAYS TO WING IT!	78/819,595	02/21/06

By not having a Principal Register federal registration for the seventh, eighth, and ninth marks listed above, PHI does not have certain presumptive legal rights granted by a registration.

You will have the right under the WingStreet Addendum to operate a WS Co-Brand Outlet under the name "WingStreet" and use the trademarks, service marks and trade names listed in the Manual ("Proprietary Marks" or "Marks"). If PHI requires you to modify or discontinue use of a Mark for any reason, PHI does not have to compensate you. You may use the Marks only as provided for in the Manual and the PHI Franchise Agreement. PHI may in the future adopt additional trademarks, service marks or trade names, and PHI may modify or delete any of the Marks.

WS has either caused the Marks to be registered with the United States Patent and Trademark Office ("USPTO") on the Principal Register or has filed an application for registration that is pending. WS has caused to be filed all affidavits necessary for registrations and applications. The list above indicates whether a Mark is registered or whether registration is pending and whether any registration has been renewed. All registered Marks are registered on the USPTO 's Principal Register. PHI has not obtained a registration for any Mark in any State.

WS has licensed PHI to offer and sell WingStreet franchises under the Marks in the continental United States (excluding Hawaii), under authority of the License Agreement entered into between PHI and WS on October 3, 2005.

You must promptly notify PHI of any claim based upon any attempt by another person to use the Marks or any imitation of the Marks. You must also notify PHI promptly if you become aware of any litigation relating to Marks and PHI will have the sole right and duty to defend the action. You must not contest or bring any action against any third party regarding the third party's use of any of the Marks. PHI will have the exclusive right to contest or bring the action and will exercise this right in its sole discretion. PHI is not required to indemnify you in a trademark action.

PHI has no knowledge of any infringing uses which could materially affect your use of the Proprietary Marks in this state or the state where the licensed business is to be located. There are no presently effective determinations of the USPTO, Trademark Trial and Appeal Board, the trademark administrator of this state or any court, nor are there any pending interference, opposition or cancellation proceedings or any pending material litigation involving the Proprietary Marks. PHI does not know of any pending interference, opposition, cancellation proceedings or any pending material litigation affecting or involving the Proprietary Marks or of any agreements which limit the rights of the PHI to use or license the use of the Proprietary Marks.

The Minnesota Department of Commerce requires that PHI indemnify Minnesota franchisees against liability to third parties resulting from claims by third parties that the franchisee's use of PHJ's trademark infringes on the trademark rights of the third party. PHI will provide this indemnity only if your use of PHI's trademarks is in accordance with the requirements of the franchisee. As a condition to indemnification, you must provide notice to PHI of any infringement claim within ten days of your receipt of such claim and tender the defense of the claim to PHI. If PHI accepts the tender of defense, PHI has the right to manage the defense of the claim including the right to compromise, settle, or otherwise resolve the claim, and to determine whether to appeal a final determination of the claim.

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ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

PHI and WS do not own any rights in any patents that are material to the WingStreei. franchise. You will receive certain trade secrets and proprietary information in the Manual and through other means. PHI and WS claim copyright protection for the Manual, certain training materials and other proprietary written materials. You must maintain the strict confidentiality of that information. The general subject matter 01 this proprietary information concerns recipes, equipment and product preparation. The License Agreement between PHI and WS includes the right for PHI to license WS's copyrights to PHI's franchisees.

There are no agreements currently in effect which significantly limit your right to use any of PHI's and WS's copyrights. Also, there are no currently effective determinations of the U.S. Palent and Trademark Office, Copyright Office (Library of Congress) or any court pertaining to or affecting any of PHI's copyrights. As of the date of this Offering Circular, PHI and WS are unaware of any infringing uses of or superior prior rights to any of these copyrights which could materially affect your use of them in this state or in the .state in which the franchised WS Co-Brand Outlet will be located. Your and PHI's obligations to protect your rig.its to use the copyrights are the same as the obligations for Marks described in Item 13 of this Offering Circular.

ITEM 15

OBLIGATION TO PARTICIPATE IN THE ACTUAL OPEF.ATION

OF THE FRANCHISE BUSINESS

You do not have to participate personally in the direct operation of your WS Co-Brand Outlet, but PHI strongly recommends direct personal participation. There are no restrictions on who you may hire to operate your WS Co-Brand Outlet and such a manager need not be an equity owner in you if you are a business entity. However, the manager of your WS Co-Brand Outlet must complete all training described in Item 11 and must maintain the confidentiality of the Manual.

ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY Sl'XL

You may sell only those food and beverage products that PHI designates in the Manual and meet the standards contained in the Manual. There are no limitations on PHI's right to modify the product standards and the approved menu. If you want to sell any food products or beverages not authorized in the Mar.ual, you must first request PHI's approval, which PHI may grant or deny in its sole discretion. You do not have the right to sell products or services under the WingStreet name anywhere except pursuant to the WingStreet Addendum. There are no restrictions on the customers which you or PHI may solicit.

PHI may, under certain limited circumstances, authorize the sale of approved menu products for special or short term programs or authorize the introductory sale of newly-approved menu products, either on a short term or permanent basis. PHI may deny your participation in these special, short term or introductory offers of menu items if you are not in good standing or if you do not agree to comply with the conditions of tb; program or offer.

If you purchase WS Co-Brand Outlets from PHI, you may be required to sell certain non-alcoholic beverage products in the Restaurant. Please see the PHI Franchise Offering Circular.

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ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

WingStreet Addendum Provisions

This table lists certain important provisions of the WingStreet Addendum pertaining to renewal, termination, transfer and dispute resolution. You should read these provisions in the agreements attached to this offering circular. HOWEVER, MOST OF THE SUBJECTS COVERED BY THIS TABLE ARE DEALT WITH IN THE PHI FRANCHISE AGREEMENT AND NOT IN THE WINGSTREET ADDENDUM. THERE ARE SEVERAL FORMS OF PHI FRANCHISE AGREEMENTS WHICH MAY BE AMENDED BY THE WINGSTREET ADDENDUM. THE TABLES INCLUDED BELOW DESCRIBE THE PHI "GOING FORWARD" LOCATION FRANCHISE AGREEMENT, THE 2003 PHI TERRITORY FRANCHISE AGREEMENT AND THE 2003 PHI LOCATION FRANCHISE AGREEMENT. YOU MAY HAVE PREVIOUSLY SIGNED THE 2003 PHI LOCATION FRANCHISE AGREEMENT OR THE 2003 PHI TERRITORY FRANCHISE AGREEMENT, BUT THEY ARE NO LONGER BEING OFFERED TO FRANCHISEES. SEE YOUR PHI FRANCHISE AGREEMENT OR OFFERING CIRCULAR FOR DETAILS.

WingStreet Addendum

	'Provision!	Section in WingStreet \t/ Addendum ,'	"Summary *'■' '■'■"'" ~.v-. -■■>; ■■
(a)	Length of term	Section 15	The term expires on the scheduled date of expiration of the PHI Franchise Agreement, except that if the PHI Franchise Agreement is terminated in accordance with its terms or you lose your right to Operate a Pizza Hut restaurant at the location of any WS Co-Brand Outlet, your right to operate the WS Co-Brand Outlet at that location terminates simultaneously.
(b)	Renewal or extension of the term	None	Extensions equivalent to those granted under your PHI Franchise Agreement.
(c)	Requirements for you to renew or extend	None	Governed by your PHI Franchise Agreement.
(d)	Termination by you	None	Governed by your PHI Franchise Agreement.
(e)	Termination by WS without "cause"	None	Governed by your PHI Franchise Agreement.
(0	Termination by WS with "cause"	None	Governed by your PHI Franchise Agreement.
(g)	"Cause" defined - curable defaults	None	Governed by your PHI Franchise Agreement.
(h)	"Cause" defined - defaults which cannot be cured	None	Governed by your PHI Franchise Agreement.
(i)	Your obligations on termination/non-renewal	None	Governed by your PHI Franchise Agreement.
(i)-	Assignment of Agreement by WS	None	Governed by your PHI Franchise Agreement.
(k)	"Transfer" by you - defined	None	Governed by your PHI Franchise Agreement.
0)	WS's approval of transfer by you	None	Governed by your PHI Franchise Agreement.
(m)	Conditions of WS's approval of transfer	None	Governed by your PHI Franchise Agreement.
(n)	WS's right of first refusal to acquire your business	None	Governed by your PHI Franchise Agreement.
(o)	WS's option to purchase your business	None	Governed by your PHI Franchise Agreement.
(p)	Your death or disability	None	Governed by your PHI Franchise Agreement.

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	Provision- "■ ' ■ " .'~ ■';"'	Section in VVingStreet Addendum ^	Summary-' '''.'
(q)	Non-competition covenants during the term of the license	Section 16	Governed by your FHl Franchise Agreement. The prohibited activities described in your PHI Franchise Agreement also include participation in any restaurant or delivery concept which features primarily the sate of fried chicken wings or primarily other products containing fried chicken wings.
(r)	Non-competition covenants after the license is terminated or expires	Section 16	Governed by your PHI Franchise Agreement. The prohibited activities described in your PHI Franchise Agreemenl also include participation in any restaurant or delivery concept which features primarily the sale of fried chicken wings or primarily other products containing fried chicken wings.
(s)	Modification of License Agreement	None	Governed by your PHI Franchise Agreement.
(0	Integration/merger clause	None	Governed by your PHI Franchise Agreement.
(u)	Dispute resolution by arbitration or mediation	None	Governed by your PH" Franchise Agreement.
(v)	Choice of forum¹	None	Governed by your PHI Franchise Agreement. The PHI Franchise Agree.Tient provides that you may sue only in Texas. Subject to state law. See Note 1.
(w)	Choice of law¹	None	Your PHI Franchise Agreement provides that Texas or Kansas law governs, depending on which PHI Franchise Agreement you have signed. The foregoing Choice of L;iw should not be considered a waiver of any right conferred upon the Franchisor or the Franchisee by the General Business Law of the State of New York, Aiticle 33. Subject to state law. See Note 1.

GOING FORWARD" LOCATION FRANCHISE AGREEMENT

Provision ': ; ^	Section in Lpcatrbn-Franchise. .Agreement: '...,$ '-,-,■	Summary : ' -0, '.(* - ■ " ,
a. Term of the franchise	Sections 1.23,2.1	Twenty years
b. Renewal or extension of the term	Section 1.23	No renewal is offered
c. Requirements for you to renew or extend	Section 1.23	No renewal is offered
d. Termination by you	None	You have no right to terminate
e. Termination by PHI without Cause	None	PHI can terminate only if you default
f. Termination by PHI with cause	Section 18	PHI can terminate only if you commit an incurable default, or you fail to timely cure a curable default

¹ These provisions are subject to the Illinois Franchise Disclosure Act where the franchise is located in Illinois. The Maryland Franchise Registration and Disclosure Law allows a franchisee to bring a lawsuit in Maryland for claims arising under this law. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be broughl within 3 years after the grant of the franchise.

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g. "Cause" defined -defaults which can be cured	Section 18.2	Any failure to timely pay monies owed to PHI or its affiliates, and any other breach of the franchise agreement that is not an incurable default
h. "Cause" defined defaults which cannot be cured	Section 18.1	Financial failure, improper transfer, failure to allow inspection, certain criminal convictions, disclosure of secrets, falsification of records, habitual default, public endangerment, material misrepresentation, unauthorized closure or loss of occupancy right
i. Your obligations on termination/non-renewal	Sections 5.3, 6.11, 12,19	Return of Manual, cease use of marks, deidentification, payment of amounts due, return of spice blends and trademarked items. assignment of telephone numbers (also see r, below), removal of System software
j. Assignment of contract by PHI	Section 14.1	No restriction on PHI's right to assign However, no assignment will be granted except to an assignee who in good faith and judgment of the franchisor is willing and able to assume the franchisor's obligations.
k. "Transfer" by you - definition	Sections 1.4, 1.8, 1.9, 1.12, 1.24, 14,15	Includes transfer of Location Franchise Agreement or assets, and changes in ownership
1. PHI's approval of transfer by you	Sections 14, 15	PHI has the right to approve all transfers
m. Conditions for PHI approval of transfer	Sections 14, 15	No defaults, both parties sign release, transferee meets PHI standards, transferee assumes your obligations, transfer fee paid; you acknowledge the post-term covenants; if corporation. 10% owners personally guaranty obligations, restricted stock, no publicly-traded stock
n. PHI's right of first refusal to acquire your business	Section 14.6	PHI can match any offer for your business
o, PHI's option to purchase your business	Sections 19.4, 19.5	PHI has no obligation to purchase your business at termination or nonrenewal except PHI will buy all spice blends and PHI has the right to buy alt trademarked items
p. Your death or disability	Section 14.5	Interest must be assigned to an approved transferee within six months after death or disability
q. Non-competition covenants during the term of the franchise	Section 12.2	No involvement by you, or your principals, in any other business that sells pizza, pasta or other Italian-style food items, and no letting of property you or your principals own to such a business
r. Non-competition covenants after the franchise is terminated or expires	Section 12.3	No involvement by you, or your principals, in any business that sells pizza, pasta or similar food items, within the same county as or within two miles of your System Restaurants, or within two miles of any other System Restaurant, for two years from transfer of interest, termination or expiration; no action ever that would impair the goodwill associated with the PHI Marks
s. Modification of the agreement	Sections 17,21.8	No modifications except by written agreement signed by PHI, or by PHI's modification of the Manual
t. Integration/ Merger clause	Section 21.8	The written Location Franchise Agreement is the entire agreement; other prior promises or agreements are not enforceable
u. Dispute resolution by arbitration or mediation	Section 20.3	All disputes (except system-wide disputes) must be mediated
v. Choice of forum*	Section 20.1	Litigation must be in Dallas County, Texas. Subject to state law.
w. Choice of law*	Section 20.1	Texas law applies. Subject to state law. The foregoing Choice of Law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by the General Business Law of the State of New York, Article 33.

WSUFOC 2006.1 35

2003 PHI TERRITORY FRANCHISE AGREEMENT (no loneer offered)

Provision	Section in Territory ;' *Franchise ' ?. ' S .. Agreement** ' v	Summary
a. Term of the franchise	Article I.A.I, Schedule B, Section E.	30 years , unless on the third anniversary Checkpoint Date, you failed to upgrade at least 90% of the Restaurants required to be upgraded (a "Reversionary Event"), in which¹ case the initial term will expire on March 1, 2010. See Note 2 for details.
b. Renewal or extension of the term	Article XXI, Schedule B, Section E.	20 years, or 15 years if a Reversionary Event occurs. See Note 2 for details.
c. Requirements for you to renew or extend	Article XXI, Schedule B, Section E.	You must give written notice to renew at least 2 months but not more than 9 months before cxpiiation; sign a general release; must not be then in default of, and have substantially complied, with ail agreements between you and PKl or its subsidiaries and affiliates during term of agreements; must have satisfied monetary obligations to PHI its subsidiaries and affiliates before renewal and timely throughout term of Agreement; must be in compliance with Manual and made required modernization, renovations, repairs arid maintenance (no extensive structural changes, major remodeling and renovation, or substantial modification to existing improvements will be required on renewal except for the upgrade requirements in Section III.C of Franchise Agreement See Note 2 for renewal consequences of not meeting upgrade schedule, including information on renewal franchise agreement. See Note 3 for information on renewal franchise agreement if you meet upgrade schedule. No later than 2 years before expiration, PHI will notify you in writing whether or not it appears that you meet the requirements for renewal at that time. If PHI advises you that you do not meet the requirements for renewal, it will specify the reasons. One year after that, PHI will provide a similar notice to you stating whether you have cured deficiencies described in the previous notice. (See Replacement Franchise Agreement.)
d. Termination by you	None	You have no right to terminate
e. Termination by PHI without Cause	None	PHI can terminate only if you default
f. Termination by PHI with cause	Article XIX.	PHI can terminate only if you commit an incurable default, or you fail to timely cure a curable default

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g. "Cause" defined -defaults which can be cured	Article XIX.C-E.	Your failure to timely pay monies owed to PHI or its affiliates or to submit required information; failure to maintain standards; failure to obtain PHI's advance written approval or consent; misuse or unauthorized use of Marks or other material impairment of the goodwill or PHI's rights in Marks; operating any business or marketing of any product under name or mark confusingly similar to Marks; default under any lease, sublease, etc. for Restaurant premises; failure to procure or maintain required insurance; ceasing to operate or abandoning a Restaurant without PHI's consent (except where circumstances give PHI grounds for immediate termination) or failure, if a Restaurant is destroyed to rebuild and resume operation within reasonable time, unless due to causes beyond your control; transfer which does not change control of franchisee or franchise. A termination for any of the above defaults will affect only those Restaurants as to which the default occurred if the default relates to one or more individual Restaurants, but will affect the entire Agreement if the default relates to your entire operation (including obligations not relating to specific restaurants). If you do not cure a curable default within the specified time, then instead of termination, PHI can redefine the Territory as it considers appropriate and/or refuse to allow you to establish any additional Restaurants under the Replacement Franchise Agreement. If PHI does so, PHI retains' its right to refuse to renew. PHI has the right to liquidated damages for unauthorized closures.-see Franchise Agreement
h- "Cause" defined -defaults which cannot be cured	Article XIX.A, B.	Automatic, without notice: Financial failure, improper transfer. Immediately upon notice: certain criminal convictions, disclosure of secrets, falsification of records, public endangerment. PHI gives you notice of a curable default 3 or more times in any 12 month period, or 5 or more times in any 36 month period, even if defaults cured and latest default curable. A termination on this ground will affect: (a) only the Restaurants as to which the defaults occurred, if they relate to individual Restaurants; (b) all your rights under this Agreement and all other franchise agreements with PHI if defaults relate to your entire operations (including defaults under obligations that do not relate to specific Restaurants); and (c) all your rights under this Agreement and all other franchise agreements with PHI if defaults relate to your individual Restaurants but are part of a common pattern or scheme.
i. Your obligations on termination/non-renewal	Article XX, Sections XIX. F.	You must immediately deidentify. Cease use of marks and System, deidentification, payment of amounts due, sale to PHI at your cost of trade secret items,, if PHI wishes, assignment of telephone numbers for Delivery and Delco Restaurants and any centralized order-taking facilities. See Agreement for further details. Obligations relating to termination apply only to specific Restaurant(s) terminated if PHI terminates fewer than all of your Restaurants. (If a Restaurant is permanently closed for business as a Restaurant for any reason you must immediately deidentify, whether or not franchise is terminated.)
j. Assignment of contract by PHI	None	No restriction on PHI's right to assign..
k. "Transfer" by you - definition	Articles XVI, XVII, and XVIII.	Includes transfer of Replacement Franchise Agreement or assets, and changes in ownership
1. PHI'S approval of transfer by you	Article XV1.B.	PHI has the right to approve all transfers.

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m. Conditions for PHI approval of transfer	Articles XVI, XVII and XVIII.	No defaults; transferor signs rele.isc; transferee meets PHI standards; transferee assumes your obligations; transferee; manager and responsible employees complete training; transfer fee paid; you acknowledge the post-term covenants; if corporation or partnership; 10% owners personally guarantee obligations, restricted stock. No publicly-traded stock unless ownership of at least 51% of each class of stock is restricted, non-registei ed, and non-public, and held by individuals that PHI has approved. See Article XVII. E. for further details concerning public owners!lip. You can borrow from a publicly-iraded financial institution or other lender; pledge the tangible assets of the franchised business(es) (but not an interest in the Agreement); or, create operate an employee stock ownership plan or the equivalent (all subject to other applicable requirements).
n. PHI's right of first refusal to acquire your business	Article XVI.G.	PHI can match any offer for your business
o. PHI's option to purchase your business	Article XX.G.	PHI has no obligation to purchase your business at termination or nonrenewal except PHI will buy all trade secret items at your cost.
p. Your death or disability	Article XVI.E.	Interest must be assigned to an approved transferee within six months after death or disability
q. Non-competition covenants during the term of the franchise	Article XI.B.I. and 2.	No involvement by you or your principals in any other business that sells pizza, pasta or other Italian-siyle food items similar to present or future System items, and no letting of property you or your principals own to such a business
r. Non-competition covenants after the franchise is terminated or expires	Article XI.B.3.	No involvement by you or your principals in any business that sells pizza, pasta or other Italian-style food items similar to present or future System items, within 25 m/les of your Restaurants, or within 10 miles of any other Restaurant, for 18 months from transfer of interest, termination or expiration.
s. Modification of the agreement	Article III and XXVII.	No modifications except by written agreement signed by PHI, or by PHI's modification of the Manual
t. Integration/ Merger clause	Article XXVII.E.	Except for documents referenced in Article XXVII.E., the written Replacement Franchise Agreement is the entire agreement; other prior promises or agreements are not enforceable
u. Dispute resolution by arbitration or mediation	Article XXI.B.3. Schedule B, Section C.	Disputes concerning renewal royalty rates will be arbitrated if PHI and I.P.H.F.H.A. cannot agree: Disputes concerning upgrade schedules will be arbitrated if you or PHI do not accept Upgrade Committee's decision.
v. Choice of forum	Article XXVII.	You consent to the jurisdiction of any state or federal court of general jurisdiction in either Dallas or Dallas County, Texas, or the county in which PHI has its principal place of business. Subject to state law.
w. Choice of law'	Article XXVII.	Kansas law applies. Subject to State law. The foregoing Choice of Law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by the General Business Law of the State of New York, Article 33.

WS UFOC 2006.1

2003 PHI LOCATION FRANCHISE AGREEMENT (no longer offered)

' Provision	Section in Franchise Agreement	Summary ']■:.'
a. Term of the franchise	Sections 1.29, 2.1, Appendix I, Section E	30 years, unless on any Checkpoint Date (see Item 8), you failed to upgrade at least 90% of the Dine-In Restaurants required to be upgraded, in which case the term reverts to 20 years. See Note 4 for details.
b- Renewal or exiension of the term	Sections 2.8 and 2.9, Appendix I, Section E	20 years, unless on any Checkpoint Date (see Item 8), you failed to upgrade at least 90% of the Dine-In Restaurants required to be upgraded, in which case you have no right to renew your Delivery or Delco Restaurants or the Dine-In Restaurants you failed to upgrade. See Note 4 for details.
c. Requirements for you to renew or extend	Section 2.8, Appendix 1, Section E	You must give written notice that you wish to renew at least 2 months but not more than 9 months before expiration; sign a general release; must not be then in default of, and have substantially complied, with all agreements between you and PHI or its subsidiaries and affiliates during term of agreements; must have satisfied monetary obligations to PHI, its subsidiaries and affiliates before renewal and timely throughout term of Agreement; must be in compliance with Manual. In addition, you must have satisfied required upgrading schedule (see part b. of this Item 17 above and Items 1 and 8). See Note 4 for renewal consequences of not meeting upgrade schedule, including information on renewing franchise agreements for those Restaurants where you did meet upgrade schedule. See Note 5 for information on renewal franchise agreement if you meet upgrade schedule. No later than 2 years before expiration, PHI will notify you in writing whether or not it appears that you meet the requirements for renewal at that time. If PHI advises you that you do not meet the requirements for renewal, it will specify the reasons. One year after that, PHI will provide a similar notice to you stating whether you have cured deficiencies described in the previous notice. (See Replacement Franchise Agreement.)
d. Termination by you	None	You have no right to terminate
e. Termination by PHI without Cause	None	PHI can terminate only if you default
f. Termination by PHI with cause	Section 18	PHI can terminate only if you commit an incurable default, or you fail to timely cure a curable default
g. "Cause" defined -defaults which can be cured	Section 18.2	Any failure to timely pay monies owed to PHI or its affiliates, and any other breach of the franchise agreement that is not an incurable default
h. "Cause" defined - defaults which cannot be cured	Section 18.1	Financial failure, improper transfer, failure to allow inspection, certain criminal convictions, disclosure of secrets, falsification of records, habitual default, public endangerment, material misrepresentation, unauthorized closure or loss of occupancy right. If you commit an incurable default or do not timely cure a curable default, PHI can instead of terminating the Replacement Franchise Agreement, refuse to allow you to relocate any existing Restaurants or to develop any additional Restaurants. PHI will give you written notice if PHI elects this option.
i. Your obligations on termination/non-renewal	Sections 5.3, 12, 19	Return of Manual, cease use of marks, deidentification, payment of amounts due, return of and trademarked items, assignment of telephone numbers (also see r, below), removal of System software

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j. Assignment of contract by PHI	Section 14.1	No restriction on PHI's right to Essign However, no assignment will be granted except to an assignee who in good faith and judgment of the franchisor is willing and able to assume the franchisor's obligations.
k. "Transfer" by you -definition	Sections 1.30	Includes transfer of Replacement Franchise Agreement or assets, and changes in ownership
1. PHI's approval of transfer by you	Sections 14, 15	PHI has the right to approve all transfers
m. Conditions for PHI approval of transfer	Sections 14, 15	No defaults, both parties sij;n release, transferee meets PHI standards, transferee assumes your obligations, transfer fee paid; you acknowledge the post-term covenants; if corporation or other legal entity, 10% owners personally guaranty obligations, restricted stock, no publicly-traded stock
n. PHI's right of first refusal to acquire your business	Section 14.6	PHI can match any offer for youi business
o. PHI's option to purchase your business	Sections 19-4, 19.5	PHI has no obligation to purchase your business at termination or nonrenewal except PHI will buy all spice blends and PHI has the right to buy all trademarked item;.
p. Your death or disability	Section 14.5	Interest must be assigned to an approved transferee within six months after death or disability
q. Non-competition covenants during the term of the franchise	Section 12.2	No involvement by you, or your principals, in any other business that sells pizza, pasta or other Italian-style food items, and no letting of property you or your principals own to such a business
r. Non-competition covenants after the franchise is terminated or expires	Section 12.3	No involvement by you, or your principals, in any business that sells pizza, pasta or similar food items, within the same county as or within 25 miles of your Restaurants, or within 10 miles of any other Restaurant, for two years from transfer of interest, termination or expiration; no action ever that would impair the goodwill associated with the PHI Marks
s. Modification of the agreement	Sections 17,21.8	No modifications except by written agreement signed by PHI, or by PHI's modification of the Manual
t. Integration/ Merger clause	Section 21.8	The written Replacement Franchise Agreement, with any Side Agreements, is the entire agreement; other prior promises or agreements are not enforceable
u. Dispute resolution by arbitration or mediation	Section 20.3	All disputes (except system-wide disputes) must be mediated
v. Choice of forum'	Section 20.1	You consent to the jurisdiction of ;iny state or federal court of general jurisdiction in either Dallas or Dallas County, Texas, or the county in which PHI has its principal place c-f business. Subject to state law.
w. Choice of law¹	Section 20.1	Texas law applies. Subject to state law. The foregoing Choice of Law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by the General Business Law of the State of New York, Article 33.

WSUFOC2006.I

Development Services Agreement

This table lists certain important provisions of the Development Services Agreement pertaining to renewal, termination, transfer and dispute resolution. You should read these provisions in the agreements attached to this offering circular.

Provision	Section in Development Services Agreement	Summary
(a) Term of the agreement	2 and 3	As needed for the conduct ot services for each phase
(b) Renewal or extension of the term	None	None
(c) Requirements for you to renew or extend	None	None
(d) Termination by you	7.1 and 7.3	You may terminate the agreement upon 7 days written notice if YRSG fails to perform its obligations through no fault of you or if the project is abandoned. You may terminate the agreement on any grounds available by law.
(e) Termination by YRSG without cause	None	None
(0 Termination by YRSG with cause	7.1, 7.3 and 7.4	YRSG may terminate the Agreement upon 7 days written notice if you fail to perform your obligations through no fault of YRSG or if you fail to make payments as required.
(g) "Cause" defined -defaults which can be cured	None	None
(h) "Cause" defined -defaults which cannot be cured	None	None
(i) Your obligations on lermination/nonrenewal	7.6	You are responsible to pay YRSG for all services performed prior to the date of termination.
(j) Assignment of contract by YRSG	8.2	Neither party may assign without the written consent of the other. However, no assignment will be granted except to an assignee who in good faith and judgment of YRSG, is willing and able to assume YRSG's obligation under the development agreement.
(k) "Transfer" by you	8.2	Neither party may assign without the written consent of the other.
(I) YRSG's approval of transfer by you	None	None
(m) Condition for YRSG's approval of transfer	None	None
(n) YRSG's right of first refusal to acquire your business	None	None
(o) YRSG's option to purchase your business	None	None
(p) Your death or disability	None	None
(q) Non-competition covenants during the term of the license	None	None
(r) Non-competition covenants after the license is terminated or expires	None	None
(s) Modification of the Agreement	8.3	May be amended only be written instrument signed by you and YRSG.
(t) Integration/merger clause	8.3	Only the terms of agreement are binding. The integration/merge clause does not disclaim the representations of this Offering Circular.
(u) Dispute resolution by arbitration or mediation	None	None

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Provision -'-'...

Sectioniii -Development

Services ' ' ' ■ Agreement* ..-

'Summary .>!;'■:

(v) Choice of forum¹

None

Subject to state law.

(w) Choice of law¹

8.1

Law of the place where the project is located applies. The foregoing Choice of Law should not be considered a waiver of any right conferred upon the Franchisor or the Franchisee by the General Business Law of the State of New York, Article 33. Subject to stale law.

NOTE TO ALL TABLES:

1. This Seciion is subject to the Illinois Franchise Disclosure Act where [he franchise is located in Illinois. The Maryland

Franchise Registration and Disclosure Law allows a franchisee to bring a lawsuit in Maryland for chims arising under this law. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought witiin 3 years after the grant of the franchise.

NOTES TO TABLE ON 2003 PHI TERRITORY FRANCHISE AGREEMENT (THE TERRITORY FRANCHISE AGREEMENT IS REFERRED TO AS THE "REPLACEMENT FRANCHISE AGREEMENT" BELOW):

2. If, on the third anniversary Checkpoint Date, you failed to upgrade at least 90% of the Line-In Restaurants required to be

upgraded, this failure will be called a "Reversionary Event." If PHI gives you notice of a Reversionary livent, the following consequences will apply. The Term of the Replacement Franchise Agreement will end on March I, 2010, with a right to renew for 15 years if you meet the following conditions for renewal; You must give written notice that you wish to renew at least 2 manths but not more than 9 months before expiration; sign a general release; must not be then in default of, and have substantially complied, with all agreements between you and PHI or its subsidiaries and affiliates during term of agreements; must have satisfied monetary obligations to PHI its subsidiaries and affiliates before renewal and timely throughout term of Agreement; and must be in compliance with Manual and have made required modernizations and renovations (however, PHI will not require extensive structural changes, majoi remodeling and renovation and substantial modification to existing improvements as a condition to renewal except for the upgrading requirements of the Replacement Franchise Agreement).

If a Reversionary Event has occurred, then during the renewal term of the Replacement Franchise Agreement, and while you are not in default, PHI will not develop, franchise or license another to operate a Dine-In Restaurant within a circle centered on the location of your existing Dine-In Restaurants that contain 15, 000 households, but this circle of protection will not have a radius of less than one mile or greater than 10 miles. However, this circle of protection will only apply to those Dine-In Restaurants which you have Rebuilt, Relocated or Remodeled in compliance with in Schedule B of the Replacement Franchise Agreement between January 1, 1998 and the date of the Reversionary Event.

If a Reversionary Event has occurred, then Schedule B will be deleted (except for the definitions of the terms "Rebuild", "Relocate", and "Remodel"), and PHI may require extensive structural changes, major remodeling and renovation and substantial modifications to existing improvements for your Restaurants to conform with PHI's then-current System image. However, PHI can impose these requirements only if PHI follows the same pretesting requirements as those for new or changed star,dards calling for expenditures by you which PHI considers to be substantial. PHI may not require any of this work at any of your Restaurants less than 7 years after the Restaurant in question opened, less than 7 years after the Restaurant was Rebuilt or Relocated, or less than 5 years after the Restaurant was Remodeled. If you receive notice from PHI to this work, you must fully implement the required changes to your Restaurants operating under the Replacement Franchise Agreement, but you need not implement the changes until the year following the date on which the changes have been implemented in a total of at least 30% of the PHI-owned Restaurants in the Urited States. Also, you need not implement the changes during any calendar year at a faster percentage rate than made to PHI-owned Resiaurants for the previous calendar year. However, PHI may require that all of your Restaurants be consistent with PHI's image and, no later than September 30, 2008, include only the new "Pizza Hut" logo and signage.

See Schedule B to your Franchise Agreement for further changes to your Replacement Franchise Agreement that a Reversionary Event will cause.

If a Reversionary Event has occurred and you satisfy all the conditions for renewal below, the renewal franchise agreement to be executed at renewal maybedifferenl from the terras of the Franchise Agreement. Under the renewal franchise agreement, you must pay the initial franchise fees, monthly service fees, and advertising payments PHI is then charging, which ;nay be higher than those in the Replacement Franchise Agreement and described in the Offering Circular you were given before you signed it. These fees and payments will apply to all of your Restaurants from then on. However, the service fee rate applicable to gross sale; at Dine-In Restaurants that you opened, Rebuilt, Relocated or Remodeled in accordance with PHI's specifications since January 1, 1998 'vill not be more than 4% during the renewal term (or 4.5% under (he certain circumstances). No initial franchise fee will be due upon renewal for any of your Restaurants that you already opened and for which you previously paid an initial franchise fee.

Instead of the upgrading requirements in Appendix I of the Replacement Franchise Agreement, the renewal franchise agreement will provide that PHI will not impose any new or modified standard that requires structural chinges, remodeling or renovation with a cost estimated by PHI to exceed $10,000 per Restaurant more often than once every 5 years. However, PHI can require that all your

WSUFOC 2006.1

Restaurants be maintained consistent with PHI's image and, by no later than September 30, 2008, include only the new "Pizza Hut" logo and signage."

Instead of the Monthly Service Fee provisions of your Franchise Agreement, the renewal franchise agreemenl will provide that the Monthly Service Fee rate applicable to gross sales at Dine-In Restaurants that you opened or Rebuilt, Relocated or Remodeled in accordance with PHI'S specifications after January 1, 1998, will be reduced to 4% from the date the Restaurant is opened (after Rebuild, Relocation or Remodel is completed) through the rest of the term of the renewal franchise agreement (unless the Dine-In Restaurant was Remodeled on or after July 1, 2006, in which case the continuing royalties (Monthly Service Fee) rate will be reduced to 5% from the date the Restaurant opened after the Remodel was completed through the balance of the term.

3. See Note 2 for the terms of the renewal franchise agreement after a Reversionary Event has occurred. If no Reversionary Event as described has occurred, the renewal franchise agreement may be different from the Replacement Franchise Agreement you signed to the extent that current business conditions warrant changes. No initial franchise fee will be due upon renewal for those of your Restaurants that are already open and for which you previously paid an initial franchise fee. The renewal form of franchise agreement will provide that the amount of the Service Fee for Restaurants (other than Delco Restaurants and Delivery Restaurants) will be the Restaurant Competitive Rate (defined below), and the Service Fee for Delco Restaurants and Delivery Restaurants will be the Delco/Delivery Competitive Rate (defined below).;The renewal franchise agreement will not include Schedule B of the Replacement Franchise Agreement (concerning upgrading obligations ) except for Section H and the definitions of Rebuild, Relocate, Remodel, and Reimage. All other obligations under Schedule B will be deleted on renewal.

The "Restaurant Competitive Rate" will not exceed the royalty rates being offered to new franchisees, for comparable services, as of one year before to the renewal date, by franchisors of national full-service sit-down restaurant chains which have average unit sales volumes and average unit net operating cash flows comparable to those of Pizza Hut restaurants. The "Delco/Delivery Competitive Rate" will not exceed the royalty rates being offered to new franchisees, for comparable services, as of one year before the renewal date, by franchisors of national pizza delivery chains which have average unit sales volumes and average unit net operating cash flows comparable to those of Delivery Restaurants and Delco Restaurants. However, neither the Restaurant Competitive Rate nor the Deico/Delivery Competitive Rate will be less than the applicable Service Fee rate described in Article IX.A.2 of the Replacement Franchise Agreement as of the renewal date.

PHI will offer you the Restaurant Competitive Rate and the Delco/Delivery Competitive Rate (the "Competitive Rates") at least 9 months before the expiration of the term of the Replacement Franchise Agreement.. Unless l.P.H.F.H.A. reasonably determines that either or both of the offered rates offered by PHI exceed the Competitive Rates, determined as described above and notifies PHI in writing, within 60 days of PHI's written notice of the offered rates, setting forth I.P.H.F.H.A.'s objections and reasons for them, then l.P.H.F.H.A. will be deemed to have accepted the rates offered by PHI as being reasonable and proper, and the offered rates will be binding on PHI and you as the Competitive Rates.

If l.P.H.F.H.A. objects to any of PHI's offered rates, then for the following 60 days, PHI and l.P.H.F.H.A. will meet and attempt to resolve their disagreement with respect to the disputed rates identified by l.P.H.F.H.A. as exceeding the applicable Competitive Rates determined as described above. If, following this 60-day period, l.P.H.F.H.A. still does not agree that one or both of PHI's offered rates comply with the criteria described above (the "Rates Criteria"), then l.P.H.F.H.A. may file a demand for arbitration (see Sections XXI.B. 3.c and 3.d of the Replacement Franchise Agreement for details).

NOTES TO 2003 PHI LOCATION FRANCHISE AGREEMENT

4. If, on any Checkpoint Date (see Item 8), you failed to upgrade at least 90% of the Dine-In Restaurants required to be upgraded, this failure will be called a "Reversionary Event." If PHI gives you notice of a Reversionary Event from PHI, the following consequences will apply. The Term of the Replacement Franchise Agreement becomes 20 years with no right of renewal for any of your Dine-In, Delivery or Delco Restaurants except that you may renew the Replacement Franchise Agreement for those Dine-In Restaurants that you Rebuilt, Relocated or Remodeled on time as described in Item 8 and as required by Appendix 1 of the Replacement Franchise Agreement, if you also meet the following conditions for renewal:

You must give written notice that you wish to renew at least 2 months but not more than 9 months before expiration; sign a general release; must not be then in default of, and have substantially complied, with all agreements between you and PHI or its subsidiaries and affiliates during term of agreements; must have satisfied monetary obligations to PHI, its subsidiaries and affiliates before renewal and timely throughout term of Agreement; and must be in compliance with Manual.

In addition, you must have completed an "approved investment" in the Dine-In Restaurant in question at the Restaurant location no more than 6 months before expiration of the term. An "approved investment" is construction of a new Dine-In Restaurant (at the original Restaurant location or at a substitute site approved by PHI) of the current prototype restaurant structure being utilized by PHI, or another significant capital investment in the Dine-In Restaurant (such as a major remodeling and renovation, extensive structural changes, or substantial modification of existing improvements) that has been approved by PHI as a condition to renewal. If you request in writing no more than 24 months before the end of the term, PHI will inspect the Dine-In Restaurant and inform you of the options for approved investment that will satisfy this condition for renewal.

WSUFOC 2006.1

If you do not meet all the conditions for renewal set forth above, then PHI can decline to'renew the franchise for the Dine-In Restaurant in question, may grant a new franchise on substantially different terms (including shorter duration and higher fees) even if not then generally being offered to new franchisees, or may impose other conditions.

If a Reversionary Event has occurred but you satisfy all the above conditions for renewing the Dine-In Restaurants you did upgrade on time, then you will be entitled to renewal for those Dine-In Restaurants on a form of franchise agreemeni substantially similar to the Replacement Franchise Agreement, but with changes believed necessary or advisable by PHI in light of changes in the law or similar developments. The renewal franchise agreement will not; (a) require any inilial or renewal fee for yoi'r then-existing Dine-In Restaurants being renewed; (b) impose continuing royalties (Monthly Service Fees) at a rate higher than 4%, unless the Dine-In Restaurant in question was Remodeled on or after July 1, 2006, in which case the continuing royalties (Monthly Service Fee) rate will not be higher than 5%; or (c) have a term of less than 15 years.

Instead of (he upgrading requirements in Appendix I of the Replacement Franchise Agreement, the renewal franchise agreement will provide that PHI will not impose any new or modified standard that requires structural changes, remodeling or renovation with a cost estimated by PHI to exceed $10,000 per Restaurant more often than once every 5 years. Ho'vever, PHI can require that all your Restaurants be maintained consistent with PHI's image and, by no later than September 30, 2008, include only the new "Pizza Hut" logo and signage."

5. See Note I above for the terms of the renewal franchise agreement for Dine-In Restaurants that you may renew (if you meet all

conditions) after a Reversionary Event has occurred. If no Reversionary Event as described in Note 1 lias occurred, the renewal franchise agreement may be different from the Franchise Agreement in this Offering Circular to the extent that current business conditions warrant changes. No initial franchise fee will be due upon renewal for those of your Restaurants that are already open and for which you previously paid an initial franchise fee. The renewal form of franchise agreement will provide that the amount of tl e Monthly Service Fee for Dine-in Restaurants will be the Restaurant Competitive Rate (defined below), and the Monthly Service Fee for Delco Restaurants and Delivery Restaurants will be the Delco/Delivery Competitive Rate (defined below).The renewal franchise agreement will not include Appendix I of the Replacement Franchise Agreement in this Offering Circular (concerning upgrading obligation';) except for Section H and the definitions of Rebuild, Relocate, Remodel, and Reimage. All other obligations under Appendix I will be deleted on renewal.

The "Restaurant Competitive Rate" will not exceed the royalty rates being offered to new fr; nchisees, for comparable services, as of one year before to the renewal date, by franchisors of national full-service sit-down restaurant chains which have average unit sales volumes and average unit net operating cash flows comparable to those of Dine-In Restaurants. The "Delco/Delivery Competitive Rate" will not exceed the royalty rates being offered to new franchisees, for comparable services, as of one year before the renewal date, by franchisors of national pizza delivery chains which have average unit sales volumes and average unit net operating cash flows comparable to those of Delivery Restaurants and Delco Restaurants.

PHI will offer you the Restaurant Competitive Rate and the Delco/Delivery Competitive Rate (the "Competitive Rates") at least 9 months before the expiration of the term of the Replacement Franchise Agreement.. Unless IPHFHA nasonably determines that either or both of the offered rates offered by PHI exceed the Competitive Rates, determined as described above ;nd notifies PHI in writing, within 60 days of PHI's written notice of the offered rates, setting forth IPHFHA's objections and reasons for them, then IPHFHA will be deemed to have accepted the rates offered by PHI as being reasonable and proper, and the offered rates will te binding on PHI and you as the Competitive Rates.

If IPHFHA objects to any of PHI's offered rates, then for the following 60 days, PHI and IPHFHA will meet and attempt to resolve their disagreement with respect to the disputed rates identified by IPHFHA as exceeding tie applicable Competitive Rates determined as described above. If, following this 60-day period, IPHFHA still does not agree that one or both of PHI's offered rates comply with the criteria described above (the "Rates Criteria"), then IPHFHA may file a demand for arbitration (see Section 2.8 .D of the Replacement Franchise Agreement for details).

These states have statutes which may supersede the WingStreet Addendum, your PHI Franchise Agreement and the Development Services Agreement in your relationship with PHI, including the area; of termination and renewal of your franchise:

ARKANSAS [Title 4, Chapter 72, Sections 4-72-20] through 4-72-210];

CALIFORNIA [Bus. & Prof. Code Section 20000-20043];

CONNECTICUT [Gen. Stat. Section 42-133e through 42-133h et. seq.];

DELAWARE [Title 6, Ch. 25, Sections 2551 through 2556];

HAWAII [Rev. Stat. Section 482E-1, Section 482E-6];

ILLINOIS [815 ILCS 705/10, 705/1-44];

INDIANA [Senate Bill 405 and Stat. Sections 23-2-2.5];

IOWA [Code Sections 523H. 1-523H. 17];

MICHIGAN [Stat. Section 445.1527 (M.S.A. 19.854(27))];

MINNESOTA [Stat. Section 80C.14];

MISSISSIPPI [Code Section 75-24-51 through 75-24-63];

MISSOURI [Stat. Section 407.400 through 407.410, 407.413 and 407.420];

NEBRASKA [Rev. Stat. Section 87-401];

WSUFOC 2006.1

)

NEW JERSEY [Stat. Section 56:10-1 through 56:10-12];

RHODE ISLAND [§19-28.1-14];

SOUTH DAKOTA [Codified Laws Section 37-5A-51];

VIRGINIA [Code 13.1-557-574];

WASHINGTON [Code Section 19.100.180];

WISCONSIN [Stat. Sections 135.01 through 135.07].

These and other states may have court decisions which may supersede the WingStreet Addendum, PHI Franchise Agreement and the Development Services Agreement in your relationship with us including the areas of termination and renewal of your franchise.

With respect to the franchises governed by Minnesota law, PHI will comply with Minnesota Statutes 80C.14 subdivisions 3, 4 and 5 which require, except in certain specific cases, that a franchisee be given 90 days of notice of termination (with 60 days to cure) and 180 days notice for non-renewal of the franchise agreement.

Pursuant to COMAR 02.02.08.16L, a provision in a franchise agreement which requires a franchisee to assent to a general release as a condition of renewal, sale, and/or assignment /transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.

A provision in the PHI Franchise Agreement which terminates the franchise upon the bankruptcy of the franchisee, may not be enforceable under Title II, United States Code Section 101, et seq.

ITEM 18 PUBLIC FIGURES

PHI does not use any public figure to promote its franchises.

ITEM 19 EARNINGS CLAIMS

This Item contains information concerning WingStreet sales at WS Co-Brand Outlets that PHI and its affiliates have developed since the WS concept was created. The data below includes results from former Pizza Hut Delco and RBD restaurants that PHI and its affiliates have converted to WS Co-Brand Outlets. We have only included results from such Restaurants that have been open a minimum of thirty days as of December 31, 2005 ("Included Restaurants")- We have included no data concerning any newly developed WS Co-Brand Outlets.

PHI will make substantiation of the data used in preparing the information in this Item 19 available to you on reasonable request.

The following statements of sales reflect the actual operations of the specific Included Restaurants, and should not be considered as the actual or probable sales that you or any other franchisee will realize. PHI does not represent, warrant or promise that you or any other franchisee can expect to attain these sales from adding WS to one of your existing Pizza Hut restaurants. Although these are the actual results achieved by PHI and its affiliates, there is no assurance you will do as well. If you rely on PHI's figures, you must accept the risk of not doing as well.

WARNING: When PHI and its affiliates added WingStreet to the Included Restaurants, PHI and its affiliates eliminated from the menu at the Included Restaurants the baked chicken wing product that had been offered under the Pizza Hut menu ("Pizza Hut Wings"). The sales lost as a result of the elimination of Pizza Hut Wings from the menu item is reflected below.

WSUFOC 2006.1

NUMBER OF INCLUDED RESTAURANTS

575

AVERAGE WEEKLY WS SALES AT INCLUDED RESTAURANTS $2,456

RANGE OF WEEKLY WS SALES AT INCLUDED RESTAURANTS S750-S5.585

NUMBER OF INCLUDED RESTAURANTS THAT EXCEEDED

AVERAGE WEEKLY WS SALES 244

AVERAGE WEEKLY PIZZA HUT WINGS SALES LOST FROM

INCLUDED RESTAURANTS FOLLOWING CONVERSION $1,000

RANGE OF WEEKLY PIZZA HUT WINGS SALES LOST FROM

INCLUDED RESTAURANTS FOLLOWING CONVERSION $12-$3,475

NUMBER OF INCLUDED RESTAURANTS THAT LOST

MORE IN PIZZA HUT WING SALES THAN THE AVERAGE 195

AVERAGE COST OF WS SALES 37.5%

AVERAGE WS LABOR COSTS ' 13.2%

1. ALL INCLUDED RESTAURANTS WERE OPEN FOR AT LEAST THIRTY DAYS AS

OF DECEMBER 31, 2005. RESULTS SHOWN ARE FROM THE DATES THAT EACH INCLUDED RESTAURANT WAS OPENED THROUGH DECMEBER 31, 2005.

2 THE AVERAGE WEEKLY SALES LOST, AND THE RANGE OF AVERAGE WEEKLY SALES

LOST, OF PIZZA HUT WINGS IS BASED ON PIZZA HUT WINGS SALES AT EACH OF THE INCLUDED RESTAURANTS FOR THE SAME PERIOD DURING THE PREVIOUS YEAR.

3. THE "AVERAGE WS LABOR COSTS" IS THE AVERAGE INCREMENTAL LABOR COSTS (WAGES, PAYROLL TAXES, BENEFITS, BONUSES, ETC.) RELATED TO WS OPERATIONS THAT PHI AND ITS AFFILIATES INCURRED WHEN WS WAS ADDED TO THE INCLUDED RESTAURANTS, EXPRESSED AS A PERCENTAGE OF AVERAGE WS SALES FROM THESE RESTAURANTS.

4. THE "AVERAGE COST OF WS SALES" IS THE AVERAGE PRODUCT COSTS (CHICKEN, SAUCE, PAPER PRODUCTS, SUPPLIES, ETC.) RELATED TO WS PRODUCTS THAT PHI AND ITS AFFILIATES INCURRED AT THE INCLUDED RESTAURANTS, EXPRESSED AS A PERCENTAGE OF AVERAGE WS SALES FROM THESE RESTAURANTS.

The data in this Item 19 is the only earnings claim data that PHI has authorized its employees and agents to provide. If, in connection with the offer of a WingStreet franchise, any employee or agent of PHI makes any idifferent or additional representation of fact concerning, actual or projected sales, revenues, profits, or other earnings claim data to you, please notify PHI management immediately.

(END OF ITEM 19)

WSUFOC 2006.1

ITEM 20 LIST OF RESTAURANTS

See Exhibit 7 for the names, addresses, telephone numbers and restaurants owned by all of our franchisees as of December 31, 2005. There are 33 franchised Restaurants operating as of December 31,2005.

FRANCHISED STORE STATUS SUMMARY

FOR YEARS 2005/2004/2003^l

		CAN-		REAC-
		CELLED		QUIRED	LEFT	TOTAL	FRANCHISES
		OR	NOT	BY	THE	FROM	OPERATING
		TERMI-	RE-	FRAN-	SYSTEM	LEFT	AT YEAR
STATE	TRANSFERS²	NATED	NEWED	CHISOR³	OTHER	COLUMNS⁴	END
GEORGIA	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	7/0/0

INDIANA	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	3/0/0
Kentucky	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	3/2/0
MICHIGAN	0/0/0	0/0/0	0/0/0	0/0/0	o/o/o	0/0/0	1/0/0
Minnesota	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	7/3/0
Nebraska	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	1/0/0
NEW MEXICO	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	2/0/0
Texas	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	6/3/0
WASHINGTON	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	3/1/0
TOTALS	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	0/0/0	33/9/0

NOTE: All numbers are as of fiscal year end for each year, as follows: December 26, 2005, December 20, 2004 and December 22, 2003.

Many of our franchisees have the right to close and/or relocate their Restaurants for various reasons, including lease expirations. Such

voluntary closures are not included in this list unless the franchisee has left the system.

Restaurants transferred between franchisees. These figures do not include a transfer with the beneficial ownership of the franchise does

noi change, or transfers from WS to a franchisee.

These stores were reacquired by PHI or its affiliates.

The numbers in the "TOTAL" column may exceed the number of restaurants affected because several events may have affected the same

store.

STATUS OF COMPANY OWNED RESTAURANTS FOR FISCAL YEARS 2005,2004, and 2003

STATE	RESTAURANTS CLOSED DURING YEAR ' ,	RESTAURANTS OPENED DURING *Yh\R*	1OTAL RES TAURAN1S OPERATING A'I FISCAL YF \R END
Arizona	u/0/u	1/45/2	4»/47 / 2
Arkansas	0/0/0	0/0/0	0/0/0
California	0/0/0	60/6/0	66/6/0
Colorado	0/0/0	32/10/0	42/10/0
Florida	1/0/0	77/5/0	81/5/0
Georgia	0/0/0	7/64/2	73/66/2
Illinois	0/0/0	23/9/0	32/9/0
Indiana	0/0/0	8/1/0	9/1/0
Iowa	0/0/0	0/0/0	0/0/0
Kansas	0/0/0	14/12/4	30/16/4
Kentucky	0/0/0	0/0/0	0/0/0
Louisiana	0/0/0	0/0/0	0/0/0

WSUFOC 2006.1

Maryland	0/0/0	0/0/0	0/0/0
Massachusetts	0/0/0	2/5/0	7/5/0
Michigan	0/0/0	4/0/0	4/0/0
Minnesota	0/0/0	0/0/0	0/0/0
Mississippi	0/0/0	0/0/0	0/0/0
Missouri	0/0/0	0/25/0	25/25/0
Nebraska	0/0/0	0/0/0	0/0/0
Nevada	0/0/0	1/1/0	2/1/0
New York	0/0/0	0/0/0	0/0/0
North Carolina	0/0/0	0/0/0	0/0/0
Ohio	2/0/0	4/27/1	30/28/27
Oklahoma	0/0/0	0/0/0	0/0/0
Pennsylvania	0/0/0	14/5/0	19/5/0
South Carolina	0/0/0	0/0/0	0/0/0
Tennessee	0/0/0	2/0/0	2/0/0
Texas	0/0/0	63 / 70 / 28	161/98/280
Virginia	0/0/0	0/0/0	0/0/0
West Virginia	0/0/0	0/0/0	0/0/0
Wisconsin	0/0/0	0/0/0	0/0/0
^TOTALS'- '; -	^!, ,^v 1 3/0/0; \ 'fr	- * ^312/59'/:63;W^	*1 r^ m 1^22;/;63&^ 'i

WSUFOC2006J

PROJECTED OPENINGS AS OFDECMEBER 31, 2005

STATE	FRANCHISE AGREEMENTS SIGNED AS Or 12/31/05 BUTRES'lAUUAM ■ NOTOPEN	PROJECTED NEW MtANCHlSED RESTU'RANISIN PERIOD I-ROM 1/1/06 l'O 12/30/06	PROJECTED NEW ■ COMPANY OWNED UESTAURANTSIN ; PERIOD> FROM 1/1/06TO _; 12/30/06^ -;X;:^' ?>viv-'\ .".5
^ALABAMA	0	0	0
, ARIZONA	0	5	0
.ARKANSAS >■ "	0	0	0
'CALIFORNIA	0	0	100
^COLORADO.	0	5	5
CONNECTICUT	0	0	0
FLORIDA	0	5	10
GEORGIA _t '	0	5	5
>IDAHO	0	0	0
« ILLINOIS	0	0	5
.INDIANA	0	25	5
:,IOWA	0	0	0
;KANSAS	0	25	5
'^KENTUCKY	0	0	0
LOUISIANA	0	0	0
^MARYLAND	0	0	0
■MASSACHUSETTS	0	0	5
■MICHIGAN	0	0	5
!. MINNESOTA	0	5	0
^MISSISSIPPI	0	5	0
^MISSOURI '"	0	5	5
^MONTANA	0	0	0
/NEBRASKA	0	5	0
.NEVADA	0	0	20
rNENVJERSEY \	0	0	0
;,NEW;MEXICO	0	0	0
.;NEW YORK	0	0	0
,NORTH CAROLINA	0	10	0
; NORTH DAKOTA	0	0	0
r-OHIO?	0	15	0
IOKLAHOMA -v " * *	0	5	0
^OREGON , .,, ■	0	0	0
^PENNSYLVANIA"'	0	5	5
SRHODE'ISLAND	0	0	0
''SOUTH CAROLINA	0	0	0
.1SOUTH DAKOTA	0	0	0
^TENNESSEE ,	0	5	5
tTEXAS	0	20	10
F;UTAH	0	0	0
.^VIRGINIA	0	0	0
^WASHINGTON	0	0	0
oWEST,VIRGINIA	0	0	0
^WISCONSIN	0	0	0
^DISTRICT OF , ^COLUMBIA	0	0	0
'TOTALS"	0	150	190

WSUFOC 2006.1 49

ITEM 21 FINANCIAL STATEMENTS

Attached to this offering circular as Exhibit 9 are the audited consolidated financial statements of YUM for the fiscal years ended December 31, 2005, December 27, 2004, and December 29, 2003, along with YUM's guaranty of performance. YUM absolutely and unconditionally guarantees to assume the duties and obligations of PHI under the WingStreet Addendum should PHI become unable to perform its duties and obligations under the WingStreet Addendum.

ITEM 22 CONTRACTS

The following agreements are included as an exhibit to this Offering Circular:

WingStreet Addendum to PHI Franchise Agreement and exhibits (with state-required addenda) - Exhibit 3

Site Request Form - Exhibit 4

Asset Sale Agreement (With Fee Interest) With Exhibits - Exhibit 5

Exhibit A - Form of Bill of Sale

Exhibit B - Form of Franchise Agreement

Exhibit C - Form of SUS/FMS License Support Agreement

Exhibit D- Form of Pepsi-Cola Beverage Supply and Marketing Agreement

Exhibit E - Form of Subscriber Agreement for 2-Way Satellite Services and Equipment Lease for YUM Franchisee

Exhibit F - Form of Franchisee Agreement and Mutual Indemnification For Participation in Online Ordering

Exhibit G - Form of Quik Order Agreement

Exhibit H - Form of VIP Program Agreement

Exhibit I - Form of Assignment and Assumption Agreement (Real Property Leases) & Blanket Guaranty

Exhibit J - Form of Assignment and Assumption Agreement (Equipment Leases & Contracts)

Exhibit K - Form of Access and Confidentiality Agreement

Exhibit L -Form of Special Warranty Deed

Exhibit M -Form of Franchise Agreement for Participation in Mapping of Restaurant Delivery Areas

Exhibit N - Form of Development Agreement

Exhibit O - Form of Pre-CIose Statement

Exhibit P - Form of Development Agreement

Exhibit Q ~ Form of WingStreet Addendum to Pizza Hut, Inc. Franchise Agreement Development Services Agreement - Exhibit 6 Credit Agreement - Exhibit 8

(END OF ITEM 22)

WSUFOC 2006.1 50

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