ZOS KITCHEN CASE DISCUSSION 1. What has made Zos Kitchen successful so far? Briefly describe the key elements of Zos Kitchens business model that have contributed to its success.

2. From the point of view of Brentwood Associates, the PE firm that invested in Zos Kitchen, what are the main benefits of taking Zos Kitchen public? What are the main risks?

3. From the point of view Zos Kitchens management, what are the main benefits of taking Zos Kitchen public? What are the main risks? What, if anything, will management need to change if Zos Kitchen becomes a public company?

4. Please use the information and assumptions in the Zos Kitchen Exercise Excel file posted on Blackboard to estimate ranges for the potential payouts to Brentwood Associates under each of the following three exit scenarios: a. An IPO in early 2014 that values Zos Kitchen at a multiple of its 2013 Adjusted EBITDA. b. A sale to a strategic acquirer in early 2014 that values Zos Kitchen at a multiple of its 2013 Adjusted EBITDA. c. An IPO in early 2016 that values Zos Kitchen at a multiple of its projected 2015 Adjusted EBITDA. Please assume that Brentwood owns 100% of Zos Kitchens equity, and that Zos has no debt or excess cash at the time of exit.

5. In light of your prior answers, which of the following three options for Zos Kitchen should Brentwood pursue? Why? a. Brentwood should take Zos Kitchen public in 2014. b. Brentwood should sell Zos Kitchen to a strategic acquirer in 2014. c. Brentwood should continue to hold Zos Kitchen for at least two additional years, and reevaluate its exit options then. In order to compare options a (an IPO in 2014) and c (re-evaluate the exit options in 2016), you might find it helpful to compute the expected IRR for Brentwood of delaying the IPO from 2014 to 2016 based on the average payouts you have calculated in question 4; you can use the Zos Kitchen Exercise Excel file to do this In addition to considering the potential payouts to Brentwood calculated in question 4, please be sure to also take into account the risks associated with each of the exit options as well as any other factors you think are relevant to Brentwoods decision