SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1
to

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2010

Commission File Number: 000-23278

Brazil Fast Food Corp.

(Exact name of Registrant as specified in its charter)

Delaware		13-3688737
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

Rua Voluntários da Pátria, 89-9° andar
Rio de Janeiro RJ, Brazil, CEP 22270-010
(Address of principal executive offices)

Registrant’s telephone number: 011 55 21 2536-7500

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ     No o

As of February 11, 2011 there were issued 8,472,927 shares of the Registrant’s Common Stock, par value $0.0001.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See definition of “larger accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o     No þ

 

 

EXPLANATORY NOTE

     This Amendment No. 1 on Form 10-Q/A amends the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2010, which the Registrant previously filed with the Securities and Exchange Commission (SEC) on November 12, 2010. The Registrant is filing this amendment for the purpose of responding to SEC comments.

ITEM 1. FINANCIAL STATEMENTS.

BRAZIL FAST FOOD CORP. AND SUBSIDIARIES

		September 30,				December 31,
		2010				2009
		(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		R$	15,058			R$	13,250
Inventories			2,723				3,762
Accounts receivable
Clients			7,792				6,301
Franchisees			9,069				5,255
Allowance for doubtful accounts			(3,181	)			(1,214	)
Prepaid expenses			5,276				3,132
Other current assets			3,922				3,323
TOTAL CURRENT ASSETS			40,659				33,809
Receivable from properties sale			10,458				—
Properties for sale			1,396				—
Other receivables and other assets			435				802
Judicial Deposits			12,461				10,146
Deferred tax asset, net			12,704				13,597
Goodwill			799				799
Property and equipment, net			28,507				35,003
Deferred charges, net			6,153				6,799
TOTAL ASSETS		R$	113,572			R$	100,955
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Notes payable		R$	14,469			R$	13,829
Accounts payable and accrued expenses			21,586				16,275
Payroll and related accruals			9,167				4,668
Taxes			5,222				3,643
Current portion of deferred income			2,154				2,837
Current portion of contingencies and reassessed taxes			1,450				1,676
Other current liabilities			76				260
TOTAL CURRENT LIABILITIES			54,124				43,188
DEFERRED INCOME TAX			2,341				—
DEFERRED INCOME, less current portion			3,045				4,076
NOTES PAYABLE, less current portion			3,505				8,604
CONTINGENCIES AND REASSESSED TAXES, less current portion (note 3)			20,334				18,803
TOTAL LIABILITIES			83,349				74,671
SHAREHOLDERS’ EQUITY:
Preferred stock, $.01 par value, 5,000 shares authorized; no shares issued			—				—
Common stock, $.0001 par value, 12,500,000 shares authorized; 8,472,927 and 8,472,927 shares issued; 8,137,762 and 8,137,762 shares outstanding			1				1
Additional paid-in capital			61,148				61,148
Treasury Stock (335,165 and 335,165 shares)			(1,946	)			(1,946	)
Accumulated Deficit			(29,179	)			(33,021	)
Accumulated comprehensive loss			(1,092	)			(1,077	)
TOTAL SHAREHOLDERS’ EQUITY			28,932				25,105
Non-Controlling Interest			1,291				1,179
TOTAL EQUITY			30,223				26,284
TOTAL LIABILITIES AND EQUITY		R$	113,572			R$	100,955

See Notes to Consolidated Financial Statements

BRAZIL FAST FOOD CORP. AND SUBSIDIARIES

		Nine Months Ended September 30,
		2010				2009
REVENUES
Net Revenues from Own-operated Restaurants		R$	112,388			R$	105,316
Net Revenues from Franchisees			19,748				17,148
Net Revenues from Trade Partners			14,535				6,887
Other Income			3,379				3,357
TOTAL REVENUES			150,050				132,708
OPERATING COST AND EXPENSES
Store Costs and Expenses			(106,649	)			(98,855	)
Franchise Costs and Expenses			(8,371	)			(6,405	)
Marketing Expenses			(3,364	)			(2,965	)
Administrative Expenses			(20,394	)			(15,434	)
Other Operating Expenses			(4,097	)			(2,370	)
Net result of assets sold and impairment of assets			5,955				122
TOTAL OPERATING COST AND EXPENSES			(136,920	)			(125,907	)
OPERATING INCOME			13,130				6,801
Interest Expense, net			(1,316	)			(3,184	)
NET INCOME BEFORE INCOME TAX			11,814				3,617
Income taxes			(4,395	)			337
NET INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST			7,419				3,954
Net (income) loss attributable to non-controlling interest			(3	)			(330	)
NET INCOME (LOSS) ATTRIBUTABLE TO BRAZIL FAST FOOD CORP.		R$	7,416			R$	3,624
NET INCOME PER COMMON SHARE
BASIC AND DILUTED		R$	0.91			R$	0.44
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING: BASIC AND DILUTED			8,137,762				8,157,272

     See Notes to Consolidated Financial Statements

BRAZIL FAST FOOD CORP. AND SUBSIDIARIES

		Three Months Ended September 30,
		2010				2009
REVENUES
Net Revenues from Own-operated Restaurants		R$	38,938			R$	36,986
Net Revenues from Franchisees			7,100				6,120
Net Revenues from Trade Partners			5,943				2,411
Other Income			573				1,050
TOTAL REVENUES			52,554				46,567
OPERATING COST AND EXPENSES
Store Costs and Expenses			(35,514	)			(33,594	)
Franchise Costs and Expenses			(2,721	)			(2,195	)
Marketing Expenses			(1,195	)			(1,037	)
Administrative Expenses			(8,447	)			(5,621	)
Other Operating Expenses			(1,190	)			(1,071	)
Net result of assets sold and impairment of assets			5,973				250
TOTAL OPERATING COST AND EXPENSES			(43,094	)			(43,268	)
OPERATING INCOME			9,460				3,299
Interest Expenses, net			(316	)			(1,077	)
NET INCOME BEFORE INCOME TAX			9,144				2,222
Income taxes			(3,732	)			1
NET INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST			5,412				2,223
Net (income) loss attributable to non-controlling interest			(130	)			(72	)
NET INCOME (LOSS) ATTRIBUTABLE TO BRAZIL FAST FOOD CORP.		R$	5,282			R$	2,151
NET INCOME PER COMMON SHARE
BASIC AND DILUTED		R$	0.65			R$	0.26
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING: BASIC AND DILUTED			8,137,762				8,142,061

See Notes to Consolidated Financial Statements

BRAZIL FAST FOOD CORP. AND SUBSIDIARIES

     Consolidated Statements of Comprehensive Income (Loss) — (Unaudited)
(amounts expressed in thousands of Brazilian Reais)

		Nine Months Ended September 30,								Three Months Ended September 30,
		2010				2009				2010				2009
NET INCOME		R$	7,416			R$	3,624			R$	5,282			R$	2,151
Other comprehensive income (loss):
Foreign currency translation adjustment			(15	)			(31	)			(33	)			6
COMPREHENSIVE INCOME		R$	7,401			R$	3,593			R$	5,249			R$	2,157

See Notes to Consolidated Financial Statements

BRAZIL FAST FOOD CORP. AND SUBSIDIARIES

										Additional												Accumulated				Total				Non-
		Common Stock								Paid-In				Treasury				Accumulated				Comprehensive				Shareholders’				Controlling				Total
		Shares				Par Value				Capital				Stock				(Deficit)				Loss				Equity				Interest				Equity
Balance, December 31, 2009			8,137,762			R$	1			R$	61,148			R$	(1,946	)		R$	(33,021	)		R$	(1,077	)		R$	25,105			R$	1,179			R$	26,284
Non Controling paid in capital																															109				109
Net Income			—				—				—				—				7,416				—				7,416				3				7,419
Dividend payable																			(3,574	)							(3,574	)							(3,574	)
Cummulative translation adjustment			—				—				—				—				—				(15	)			(15	)			—				(15	)
Balance, September 30, 2010			8,137,762			R$	1			R$	61,148			R$	(1,946	)		R$	(29,179	)		R$	(1,092	)		R$	28,932			R$	1,291			R$	30,223

See Notes to Consolidated Financial Statements

BRAZIL FAST FOOD CORP. AND SUBSIDIARIES

		Nine Months Ended September, 30
		2010				2009
CASH FLOW FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) ATTRIBUTABLE TO BRAZIL FAST FOOD CORP.		R$	7,416			R$	3,624
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation and amortization			4,860				3,664
(Gain) Loss on assets sold, net			(5,955	)			(122	)
Deferred income tax			2,341				—
Noncontroling interest			3				330
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable			(3,338	)			711
Inventories			1,039				126
Prepaid expenses and other current assets			(2,743	)			(2,853	)
Other assets			(1,055	)			(1,657	)
(Decrease) increase in:
Accounts payable and accrued expenses			5,311				(96	)
Payroll and related accruals			4,499				1,560
Taxes other than income taxes			1,579				245
Deferred income			(1,714	)			2,081
Contingencies and reassessed taxes			1,305				186
Other liabilities			(184	)			(50	)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES			13,364				7,749
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to property and equipment			(4,697	)			(8,511	)
Proceeds from porperty sale			1,080				—
Acquisition of Company’s own shares			—				(317	)
CASH FLOWS USED IN INVESTING ACTIVITIES			(3,617	)			(8,828	)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares of common stock			—				86
Non-contoling paid in capital			109				—
Paid Dividend			(3,574	)			—
Net Borrowings (Repayments) under lines of credit			(4,459	)			1,308
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES			(7,924	)			1,394
EFFECT OF FOREIGN EXCHANGE RATE			(15	)			(31	)
NET INCREASE IN CASH AND CASH EQUIVALENTS			1,808				284
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			13,250				10,424
CASH AND CASH EQUIVALENTS AT END OF PERIOD		R$	15,058			R$	10,708

See Notes to Consolidated Financial Statements

BRAZIL FAST FOOD CORP. AND SUBSIDIARIES

NOTE 1 — PRESENTATION OF FINANCIAL STATEMENTS

     The accompanying financial statements have been prepared by Brazil Fast Food Corp. (the “Company”) without having been audited. In the opinion of the management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. The results for the quarter ended September 30, 2010 do not necessarily indicate the results that may be expected for the full year. Unless otherwise specified, all references in these financial statements to (i ) “Reais” or “R$” are to the Brazilian Real (singular), or to Brazilian Reais (plural), the legal currency of Brazil, and (ii ) “U.S. Dollars” or “$” are to United States dollars.

     Certain information and footnote disclosures prepared in accordance with generally accepted accounting principles and normally included in the financial statements have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

NOTE 2 — BUSINESS AND OPERATIONS

     Brazil Fast Food Corp. (the “Company”) was incorporated in the state of Delaware on September 16, 1992.

     On December 2006, the Company established a holding company in Brazil called BFFC do Brasil Participações Ltda. (“BFFC do Brasil”, formerly 22N Participações Ltda.), to consolidate all its business in the country and allow the Company to pursue its multi-brand program, as discussed below:

     BOB’S TRADEMARK

     During 1996, the Company acquired 100.0% of the capital of Venbo Comercio de Alimentos Ltda. (“Venbo”), a Brazilian limited liability company which conducts business under the trade name “Bob’s”, and owns and operates, both directly and through franchisees, a chain of hamburger fast food restaurants in Brazil.

     KFC TRADEMARK

     During the first quarter of 2007, the Company reached an agreement with Yum! Brands, owner of the KFC brand. By this agreement, BFFC do Brasil, through its subsidiary CFK Comércio de Alimentos Ltda. (“CFK”, formerly Clematis Indústria e Comércio de Alimentos e Participações Ltda.), started to conduct the operations of four directly owned and operated KFC restaurants in the city of Rio de Janeiro as a Yum! Brands franchisee, and took over the management, development and expansion of the KFC chain in Brazil. CFK started its activities on April 1, 2007, and accordingly, the results of its operations are included in this report since that date.

     PIZZA HUT TRADEMARK

     During 2008, the Company reached an agreement with Restaurants Connection International Inc (“RCI”) to acquire, through its wholly-owned holding subsidiary, BFFC do Brasil, 60% of Internacional Restaurantes do Brasil (“IRB”), which operates Pizza Hut restaurants in the city of São Paulo as a Yum! Brands franchisee. The remaining 40% of IRB is held by another Brazilian company of which IRB’s current CEO is the main stockholder.

     IRB also operates a coffee concept brand called “In Bocca al Lupo Café”, which has four stores in the city of São Paulo.

     The results of IRB’s operations have being included in the consolidated financial statements since December, 2008.

     DOGGIS TRADEMARK

     During October 2008, the Company reached an agreement with G.E.D. Sociedad Anonima (“GED”), one of the fast food leaders in Chile, where it has 150 stores.

     By this agreement, BFFC do Brasil would establish a Master Franchise to manage, develop and expand the Doggis hot-dog chain in Brazil through own-operated restaurants and franchisees and GED would establish a Master Franchise to manage, develop and expand the Bob’s hamburger chain in Chile through own-operated restaurants and franchisees.

     The Master Franchise established in Brazil was named DGS Comercio de Alimento S.A. (“DGS”) and the Master Franchise established in Chile was named BBS S.A. (“BBS”). BFFC do Brasil has 20% of BBS and GED has 20% of DGS. Accordingly, BBS’s results were recorded through the equity method, representing BFFC’s share on such results.

     SUPRILOG

     In the second half of 2008, the Company began the operation of Suprilog Logística Ltda., which supports all the Company’s subsidiaries by providing maintenance for the restaurants and equipment, including warehouses for spare parts, engineering services and marketing materials. It may also be used for some particular re-sale activities of special products or raw materials used in the stores’ operations. Although its financial figures are currently not material, they are fully consolidated in the accompanying financial statements.

NOTE 3 — CONTINGENCIES AND REASSESSED TAXES

     Liabilities related to tax amnesty programs and litigation consist of the following:

R$ 000’		September 30, 2010 (unaudited)												December 31, 2009
										Long												Long
		Total				Current				Term				Total				Current				Term
		Liability				Liability				Liability				Liability				Liability				Liability
Reassessed taxes
Federal taxes (PAES)			12,814				1,450				11,364				13,011				1,676				11,335
Contingencies
ISS tax litigation			7,069				—				7,069				5,123				—				5,123
Labor litigation			1,595				—				1,595				2,137				—				2,137
Property leasing and other litigation			306				—				306				208								208
TOTAL			21,784				1,450				20,334				20,479				1,6				76 18,803

     Reassessed taxes

     The Company successfully applied to join two subsequent amnesty programs offered by the Brazilian federal government (REFIS in 1999 and PAES in 2003) to renegotiate Brazilian federal taxes not paid by Venbo in 1999, 2001 and at the beginning of 2002 in arrears. The second amnesty program (PAES) included the balance of the previous one (REFIS) and unpaid 2001 and 2002 federal taxes, as well as Social Security penalties.

     In February 2005, the Company compared its remaining debt regarding PAES with statements provided by the Brazilian Federal Government. Those statements reported that Company’s total debt would be greater than the figures in the Company’s balance sheet, in the amount of approximately R$3.2 million.

     During March, 2005, the Company filed a formal request with the Brazilian Federal Authorities, claiming to have its total debt reviewed. Such request, reconciled the amounts the Company had accrued at its accounting books to the amounts reported in the official statement at the same period. The Company believes that the amounts accrued at the balance sheet as of September 30, 2010, total of R$12.8 million (R$13.0 million in December 31, 2009) are correct, however, there is no assurance that the outcome of this situation will derive further liability to the Company. As of September 30, 2010, the difference between such debt at the statements provided by the Brazilian Federal Government and the statements reported by the Company’s was R$4.7 million (R$4.8 million in December 31, 2009).

     In 2008, the Brazilian federal government detected miscalculation of the interest accrued by most companies that had joined both amnesty programs. The Company’s total debt increased R$2.8 million accordingly.

     In accordance to the amnesty programs the Company has being paying monthly installments equivalent to 1.5% of its gross sales, with interest accruing at rates set by the Brazilian federal government, which are currently 6.0% per year (6.0% per year also in 2009).

     During the nine-month period ended September 30, 2010, the Company paid approximately R$1.1 million as part of the PAES program and no interest was charged on these payments. During the first nine month of 2009 the Company paid approximately R$1.4 million, including R$300,000 in interest. For the remaining period of 2010, we expect to pay approximately R$300,000 pursuant to PAES.

     During the third quarter of 2009, the Brazilian federal government launched a third amnesty program to consolidate balances from previous programs and other fiscal debts. The Company applied to join this program, but its rules, on debt consolidation and reduction in consequence to number of monthly installments chosen, have not yet been fully formalized by the Brazilian fiscal authorities. At the present moment, the Company cannot estimate if any material adjustment to its debt will be necessary when consolidated by the Brazilian federal government.

     Contingencies

•

ISS tax litigation

     None of the Company’s revenues were subject to municipal tax on services rendered (ISS) until 2003. Notwithstanding, at the beginning of 2004, a new legislation stated that royalties were to be considered liable for ISS tax payment. Although the Company is claiming in court that royalties should not be understood as payment for services rendered and therefore should not be taxed under ISS legislation, the Company is monthly depositing in court the amount claimed.

     As of September 30, 2010, the Company has totaled R$7.1 million (R$5.1 million in December 31, 2009) in deposits, which is considered by the Company’s management, based on the opinion of its legal advisors, sufficient to cover the Company’s current ISS tax contingencies.

     During the third quarter of 2009, the Company’s claim was partially settled in court. The decision was for Rio de Janeiro municipality to reimburse the Company approximately R$500,000 taxed before the ISS new legislation was enacted. The Company is studying how probable tax credits to be received from the municipality could be offset against tax to be paid to the municipality, since the Company is being depositing the amount due in court. Because of the uncertainty of realizing this tax credit, the Company did not recognize the related amount as a gain in its Consolidated Income Statements.

     The referred change in ISS tax legislation triggered much debate on whether marketing fund contribution and initial fees paid by franchisees should be considered services rendered and be liable for ISS tax payment. In response, the Company is working with its tax advisors to adopt all necessary measures to avoid ISS taxation on marketing fund contribution and initial fees.

•

Labor litigation

     During 2005, the Company was ordered to pay a former employee R$480,000. Although unusually high, the Company cannot guarantee it will not receive other labor complaint of similar magnitude.

     As of September 30, 2010 the Company accounted for labor related liabilities the amount of R$1.6 million (R$2.1 million in December 31, 2009), which is considered by the Company’s management, based on the opinion of its legal advisors, sufficient to cover the Company’s current labor contingencies.

•

Urban Property tax litigation

     The Rio de Janeiro municipality charged one Venbo’s property additional Urban Property tax (IPTU) because, located at a corner, it faces onto two streets. The Company agreed to pay R$736,000 regarding this claim and accordingly accounted it as other operating expenses during 2010.

     Other contingencies

     The other contingencies that in accordance with our legal advisors require no provision in the Company’s balance sheet are the following:

–

The Company purchased Venbo Comércio de Alimentos Ltda. (“Venbo”) from VENDEX in 1996. The Acquisition Purchase Agreement states that Venbo’s former owner (“VENDEX”) would be responsible for off-balance liabilities derived from Venbo’s transactions prior to the acquisition, limited to certain conditions. From 1997 to date, the Company has received several communications from the Brazilian fiscal authorities related to the period prior to the acquisition and has accordingly forwarded these to VENDEX and its attorneys.

			In 2005, Venbo was summoned by the fiscal authority of the State of Rio de Janeiro to pay a debt of approximately R$97,000 from the period prior to 1996. In order to have the right to appeal it was obliged to pledge one of its properties as collateral. VENDEX took over the defense of the case but did not offer another asset as collateral because of its weak current financial condition.
			The VENDEX attorneys are taking on the defense of all claims against Venbo. During the third quarter of 2007, the single relevant claim was judged favorable to VENDEX. All the other claims are immaterial; however, we cannot predict whether any other claim will be made that might be material.
	–		A franchisee of the Company’s became a permanent debtor of royalties and marketing contributions, and the Company, after failing in its attempts to improve his business, finally decided to terminate his franchise contract and close down his stores. After going to court, the Company managed to receive the past due amounts from the franchisee and to terminate the original franchise agreement.
			This same franchisee alleged in court that the Company had offered him a store to operate at a guaranteed profit, but that instead he had recorded operating losses. He put in a claim for indemnity of R$5.5 million. The court judged the claim in favor of the franchisee, but reduced the indemnity to R$1.2 million. The Company’s legal advisors understood his argument as contradicting franchise laws and the Company’s usual business practices and appealed against the ruling. In the appeal, the court again came down in favor of the franchisee, but again reduced the compensation, this time to R$450,000. The Company has again appealed against the ruling, but cannot predict the outcome.
	–		The owner of a property where the Company held a lease contract for operating one of its stores (closed in 2002) claimed unpaid monetary restatement on rent for a period of two and a half years, totaling R$1.0 million. The Company has reached an agreement to reduce the claim and paid R$700,000. The Company is not safeguarded against receiving other lease claims of similarly high amounts.
	–		Concerning inquires from the Brazilian Government General Attorney’s Office, the Company has the following issues:

	a)		obligation to hire handicapped personnel until they make up a minimum of 5% of the total workforce. Although the Company has managed to hire and train some handicapped staff, it is hard to attain the 5% level given the conditions in the stores and the limited labor supply. The Company is trying to reach an agreement with the General Attorney’s Office, but there is no guarantee that it will be successful and avoid paying fines.
	b)		questions related to the total taxes paid by Venbo during the Pan American and Para Pan American Games. Although the Company has proved that the taxes were collected according to a special tax regime offered by Rio de Janeiro state, we cannot predict the final outcome.

–

In February 2010, the Brazilian Federal Tax Authorities questioned the procedures that the Company has used in recent years to recover the IPI (a tax on manufactured goods) included in the cost of packaging products bought from different suppliers. The authorities agree that the Company has the right to this tax credit but understand that it should claim it back from the suppliers and not from the government. The Company has already filed its defense but there is no guarantee that it will be successful in avoiding paying around R$1.2 million to the government and charging the suppliers for a reimbursement.

     Based on an analysis of possible losses, taking into account the applicable litigation and settlement strategies of its legal advisors, the Company has sufficient resources to cover its current contingencies.

NOTE 4 — STOCK OPTION PLAN

     The Company’s Stock Option Plan terminated on September 17, 2002, ten years from the date of its adoption by the Board of Directors.

     During 2005, the Company’s Board of Directors and a majority of its shareholders decided that the Board would pay out compensation in cash and that no more stock options would be granted.

     The last transaction as part of the stock options plan was during the first quarter of 2009, when options to purchase an aggregate of 35,000 shares of common stock were exercised at an aggregate purchase price of $37,100, the equivalent of R$85,496. Since this transaction there have been no further outstanding stock options under the Company’s Stock Option Plan.

     The intrinsic value of stock options is defined as the difference between the current market value and the exercise price. The total intrinsic value of stock options exercised during the nine months ended September 30, 2009 was approximately $94,150.

NOTE 5 — TREASURY STOCK

     In the last quarter of 2004, the Company’s Board of Directors approved a stock repurchase plan involving the repurchase of as many as 200,000 shares of its own common stock. The plan’s goal is to optimize the cash generated in the United States, and the repurchase limit was increased by 200,000 shares on October 18, 2006.

     The Company did not repurchase any shares under the stock repurchase plan in the period of nine months ended September 30, 2010. In the same period of 2009, the Company repurchased 43,455 shares under this plan.

     Up to September 30, 2010, the Company repurchased a total of 335,165 shares and the accumulated stock purchases totaled R$1.9 million. Those transactions are accounted for as a deduction of paid-in capital in the Shareholders’ Equity section of the accompanying balance sheets.

NOTE 6 — SEGMENT INFORMATION

     Through the Company’s wholly-owned subsidiary, Venbo, which conducts business under the trade name “Bob’s”, the Company owns and operates, both directly and through franchisees, Brazil’s second largest fast food hamburger restaurant chain. Currently, the Company operates 49 points of sale under the Bob’s brand.

     Since April 2007, the Company has operated the KFC brand in Brazil through its wholly-owned subsidiary, CFK. Presently, the Company operates 9 stores in Rio de Janeiro under the trade name KFC.

     Since December 1, 2008, the Company has operated the Pizza Hut brand in São Paulo, Brazil, through its subsidiary IRB. It currently operates 17 stores under the Pizza Hut brand.

     Since September, 2008, the Company has operated the Doggis brand in Rio de Janeiro through its subsidiary, DGS. At present, the Company operates four stores under the Doggis trade name.

     Currently, most of the Company’s operations are concentrated in southeastern Brazil. Regarding the Bob’s brand, as of June 30, 2010, of all the 49 own-operated points of sale, 1 were located at the southeast, providing 98.3% of total net revenues from own-operated restaurants. In addition, of all the 663 franchise-operated points of sale, 341 were also in the same region, providing 55.8% of net revenues from franchisees.

     Outside Brazil, the Bob’s brand is also present through franchise operations in Angola, Africa (three stores) and, since the last quarter of 2009, in Chile, South America (four stores). These operations are not material to our overall results.

     The following table presents the Company’s revenues, costs/expenses and operating income by segment:

R$ 000’		Results from own-stores operations
		Nine months ended September 30,								Three months ended September 30,
		2010				2009				2010				2009
Net Restaurant Sales			112,388				105,316				38,938				36,986
Store Costs and Expenses			—				—				—				—
Food, Beverage and Packaging			(38,483	)			(37,388	)			(13,393	)			(12,813	)
Payroll & Related Benefits			(26,158	)			(24,874	)			(8,220	)			(8,562	)
Restaurant Occupancy			(13,160	)			(11,470	)			(4,479	)			(3,867	)
Contracted Services			(14,091	)			(12,567	)			(4,457	)			(4,048	)
Depreciation and Amortization			(4,388	)			(3,188	)			(1,602	)			(984	)
Royalties charged			(3,513	)			(2,515	)			(1,335	)			(1,150	)
Other Store Costs and Expenses			(6,856	)			(6,853	)			(2,028	)			(2,170	)
Total Store Costs and Expenses			(106,649	)			(98,855	)			(35,514	)			(33,594	)
Operating margin			5,739				6,461				3,424				3,392

R$ 000’		Results from franchise operations
		Nine months ended September 30,								Three months ended September 30,
		2010				2009				2010				2009
Net Franchise Revenues			19,748				17,148				7,100				6,120
Payroll & Related Benefits			(5,242	)			(4,099	)			(1,771	)			(1,346	)
Occupancy expenses			(695	)			(610	)			2				(264	)
Travel Expenses			(889	)			(545	)			(299	)			(194	)
Contracted Services			(546	)			(248	)			(361	)			(48	)
Other expenses			(999	)			(903	)			(292	)			(343	)
Total Franchise Costs and Expenses			(8,371	)			(6,405	)			(2,721	)			(2,195	)
Operating margin			11,377				10,743				4,379				3,925

     Own-stores operations conducted by the Company provided the following figures per brand:

		Results from Bob’s								Results from KFC’s								Results from Pizza Hut’s								Results from Doggis’
		brand operations								brand operations								brand operations								brand operations
		Nine months ended								Nine months ended								Nine months ended								Nine months ended				Nine months ended
		September 30,								September 30,								September 30,								September 30,				September 30,
R$ 000’		2010				2009				2010				2009				2010				2009				2010				2009 *
Revenues		R$	52,685			R$	57,259			R$	15,816			R$	12,785			R$	42,269			R$	35,120			R$	1,618			R$	152
Food, Beverage and Packaging			(19,382	)			(21,376	)			(5,765	)			(5,064	)			(12,465	)			(10,858	)			(871	)			(90	)
Payroll & Related Benefits			(12,903	)			(13,610	)			(4,239	)			(3,294	)			(8,417	)			(7,904	)			(599	)			(66	)
Occupancy expenses			(5,750	)			(6,450	)			(2,167	)			(1,775	)			(4,895	)			(3,210	)			(348	)			(35	)
Contracted Services			(6,238	)			(6,977	)			(2,338	)			(1,641	)			(5,282	)			(3,911	)			(233	)			(38	)
Depreciation and Amortization			(1,942	)			(2,068	)			(799	)			(611	)			(1,505	)			(495	)			(142	)			(14	)
Royalties charged			—				—				(693	)			(368	)			(2,820	)			(2,145	)			—				(2	)
Other Store Costs and Expenses			(4,161	)			(4,266	)			(791	)			(466	)			(1,793	)			(2,098	)			(111	)			(23	)
Total Own-stores cost and expenses			(50,376	)			(54,747	)			(16,792	)			(13,219	)			(37,177	)			(30,621	)			(2,304	)			(268	)
Operating margin		R$	2,309			R$	2,512			R$	(976	)		R$	(434	)		R$	5,092			R$	4,499			R$	(686	)		R$	(116	)

		Results from Bob’s								Results from KFC’s								Results from Pizza Hut’s								Results from Doggis’
		brand operations								brand operations								brand operations								brand operations
		Three months ended								Three months ended								Three months ended								Three months ended				Three months ended
		September 30,								September 30,								September 30,								September 30,				September 30,
R$ 000’		2010				2009				2010				2009				2010				2009				2010				2009 *
Revenues		R$	17,318			R$	19,066			R$	5,837			R$	5,040			R$	15,198			R$	12,728			R$	585			R$	152
Food, Beverage and Packaging			(6,565	)			(6,907	)			(2,136	)			(2,018	)			(4,420	)			(3,798	)			(272	)			(90	)
Payroll & Related Benefits			(3,731	)			(4,490	)			(1,418	)			(1,213	)			(2,895	)			(2,793	)			(176	)			(66	)
Occupancy expenses			(1,928	)			(2,044	)			(681	)			(654	)			(1,750	)			(1,134	)			(120	)			(35	)
Contracted Services			(1,759	)			(2,104	)			(662	)			(443	)			(1,980	)			(1,463	)			(56	)			(38	)
Depreciation and Amortization			(637	)			(696	)			(252	)			(264	)			(661	)			(10	)			(52	)			(14	)
Royalties charged			—				—				(325	)			(368	)			(1,010	)			(780	)			—				(2	)
Other Store Costs and Expenses			(1,133	)			(1,273	)			(438	)			(192	)			(417	)			(682	)			(40	)			(23	)
Total Own-stores cost and expenses			(15,753	)			(17,514	)			(5,912	)			(5,152	)			(13,133	)			(10,660	)			(716	)			(268	)
Operating margin		R$	1,565			R$	1,552			R$	(75	)		R$	(112	)		R$	2,065			R$	2,068			R$	(131	)		R$	(116	)

     Cost and expenses that are exclusively related to own-operated stores — even those incurred at the headquarters — are included in “Results from own-store operations”.

     Cost and expenses that are exclusively related to franchisee-operated stores — even those incurred at the headquarters — are included in “Results from franchise operations”.

     There are items that support both activities, such as (i) administrative expenses (the finance department collects receivables from franchises but also reviews daily own-store sales); (ii) selling expenses (marketing campaigns enhance the sales of own-operated stores as well as the sales of franchise stores); (iii) interest expenses (income); (iv) income tax (benefits); (v) exclusivity and other agreements with suppliers; and (vi) extraordinary items. These items were not included in any of the segment results disclosed in the table above because (a) their segregation would require a high level of complexity and (b) the chief operating decision-maker relies primarily on operating margins to assess segment performance.

     Currently, besides the accounts receivable from franchisees (franchise fees, royalties and marketing fund), the Company does not have any assets that are only used by the franchise business. Accordingly, except for these receivables, the assets presented in the consolidated balance sheets are used in the restaurant operating business.

NOTE 7 — DIVIDEND PAYABLE

     On June 29, 2010, the Company’s Board of Directors met and declared dividend in the amount of $0.25 per share. Accordingly, a total of R$3.6 million was paid on July 31, 2010.

     In order to fund the dividend distribution, BFFC Corporation obtained an intercompany loan with one of its subsidiaries and this transaction was subject to income tax charges, which were mostly offset by its income tax credits.

NOTE 8 — SALE OF FIXED ASSETS

     During the third quarter of 2010, the Company sold its eight real properties to Bigburger Ltda. and CCC Empreendimentos e Participações Ltda., entities respectively controlled by José Ricardo Bomeny and Rômulo Borges Fonseca, two main shareholders of the Company. José Ricardo Bomeny is the father of Ricardo Figueiredo Bomeny, the Company’s Chief Executive Officer and Acting Chief Financial Officer.

     The three own-operated stores and five other stores operated by franchisees had their business premises at the Company’s properties. All of them operate under the Bob’s brand. The sale transaction only included the buildings and improvements on it and did not include either the operating assets or the operation of the stores. Therefore, after the sale of the properties, the Company kept on operating its stores as usual, as did the franchisees.

     The table below lists each of the own-operated stores with their respective net revenues and operating income for the periods indicated.

Amounts expressed in R$’000

		Nine months ended								Twelve months ended December 31,
		September 30, 2010								2009								2008
						Operating								Operating								Operating
		Net Revenues				Result				Net Revenues				Result				Net Revenues				Result
Carioca store			3,213				649				3,967				533				4,056				752
Ipanema store			1,917				206				2,401				138				1,069				(50	)
Nova Iguacu store			1,578				170				2,071				244				2,074				251

     The Company has concluded that the properties sold are not discontinued operations. The decision to sell its properties was part of the Company’s strategic plan to focus on its core business. The Company had properties sold in exchange for cash plus receivables worth more than the assets’ book value.

     This transaction was conducted at market value, based on third party evaluations made by five different experts, and will result in total revenues of R$13.5 million from a total book value of R$6.4 million.

     By September 30, 2010, much of the transaction had already been concluded (six of the eight properties sold), for which reason the company accounted for a net gain of R$4.8 million (R$3.2 million, net of income taxes) in the accompanying operating results. Some minor legal issues have held up the sale of the two remaining properties, though this is expected to be concluded in the fourth quarter, bringing expected additional gains to be accounted for of approximately R$2.4 million (R$1.6 million, net of income taxes). The portion of assets which were not sold until September 30, 2010 were reclassified to the account Properties for sale considering their net cost value (R$1.4 million).

     The terms of the sale included a down-payment of approximately 20% of the total amount, with the balance to be paid in 24 monthly installments. The buyers also accepted certain conditions to protect the Company’s long-term interests, including the maintenance of existing rental agreements and loan guarantees.

     This transaction will enable the Company to reduce its debt and permit the management to focus its attention on the core restaurant operations.

     Also, during the nine months ended September 30, 2010, the Company sold the operating fixed assets of two Bob’s and one KFC’s stores to franchisees, resulting in another non-recurring gain of approximately R$1.2 million.

     During September 2010, the Company received approximately 20% of the total sale price and an additional 3% in each of the following months up to January 2011. The Company believes this transaction immediately achieves its strategic plan to focus on core business, creating a stronger organization that is well positioned to deliver long-term value to its shareholders and customers, and will not have collectability issue since transference of proprietorship depends on receipt of payment of all installments.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following MD&A is intended to help readers understand the results of the Company’s operations, its financial condition and cash flows. The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes to the financial statements.

Special Note about Forward-Looking Statements

     Certain statements in the Management’s Discussion and Analysis (“MD&A”) other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the company’s Annual Report on Form 10-K for the year ended December 31, 2009. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

OUR BUSINESS

     References to “we”, “us” or the “Company” are to Brazil Fast Food Corp.

     On December 2006, we established a holding company in Brazil called BFFC do Brasil Participações Ltda. (“BFFC do Brasil”, formerly 22N Participações Ltda.), to consolidate all our business in the country and allow us to pursue its multi-brand program. We, through BFFC do Brasil, are the second largest fast food restaurant chain in Brazil.

     During 1996, we acquired 100.0% of the capital of Venbo Comercio de Alimentos Ltda. (“Venbo”), a Brazilian limited liability company which conducts business under the trade name “Bob’s”, and owns and operates, both directly and through franchisees, a chain of hamburger fast food restaurants in Brazil.

     During the first quarter of 2007, we reached an agreement with Yum! Brands, owner of the KFC brand. By this agreement, BFFC do Brasil, through its subsidiary CFK Comércio de Alimentos Ltda. (“CFK”, formerly Clematis Indústria e Comércio de Alimentos e Participações Ltda.), started to conduct the operations of four directly owned and operated KFC restaurants in the city of Rio de Janeiro as a Yum! Brands franchisee, and took over the management, development and expansion of the KFC chain in Brazil.

     During 2008, we reached an agreement with Restaurants Connection International Inc (“RCI”) to acquire, through its wholly-owned holding subsidiary, BFFC do Brasil, 60% of Internacional Restaurantes do Brasil (“IRB”), which operates Pizza Hut restaurants in the city of São Paulo as a Yum! Brands franchisee. The remaining 40% of IRB is held by another Brazilian company of which IRB’s current CEO is the main stockholder. IRB also operates a coffee concept brand called “In Bocca al Lupo Café”, which is present as a “corner” operation, inside of four of Pizza Hut stores.

     During October 2008, we reached an agreement with G.E.D. Sociedad Anonima (“GED”), one of the fast food leaders in Chile, where it has 150 stores. By this agreement, BFFC do Brasil would establish a Master Franchise to manage, develop and expand the Doggis hot-dog chain in Brazil through own-operated restaurants and franchisees and GED would establish a Master Franchise to manage, develop and expand the Bob’s hamburger chain in Chile through own-operated restaurants and franchisees. The Master Franchise established in Brazil was named DGS Comercio de Alimento S.A. (“DGS”) and the Master Franchise established in Chile was named BBS S.A. (“BBS”). BFFC do Brasil has 20% of BBS and GED has 20% of DGS. Accordingly, BBS’s results were recorded through the equity method, representing BFFC ´s share on such results.

     We also own Suprilog Logística Ltda., which supports all the Company’s subsidiaries by providing maintenance for the restaurants and equipment, including warehouses for spare parts, engineering services and marketing materials. It may also be used for some particular re-sale activities of special products or raw materials used in the stores’ operations. These operations are not material to our overall results.

     Besides the Brazilian operations, the Company is also present, through Bob’s franchisees, in Angola, Africa, and Chile, South America. These operations are not material to our overall results.

     For the most part, revenues consist of sales by Company’s own-operated restaurants, income from agreements with trade partners and fees from restaurants operated by franchisees. These fees consist primarily of initial fees and royalties that are based on a percentage of sales.

RESULTS OF OPERATIONS — COMPARISON OF THREE- AND NINE—MONTH PERIODS ENDED SEPTEMBER 30, 2010 AND 2009
(Amount in thousand of Brazilian Reais)

     The following table sets forth the statement of operations for the three- and nine—month periods ended September 30, 2010 and 2009. All the operating figures are stated as a percentage of total net revenues. However, the details of store costs and expenses and franchise expenses also include these figures as a percentage of net revenues from own-operated restaurants and net franchise revenues, respectively.

		3 Months								3 Months								9 Months								9 Months
		Ended								Ended								Ended								Ended
R$ 000’		30-Sep-10				%				30-Sep-09				%				30-Sep-10				%				30-Sep-09				%
REVENUES
Net Revenues from Own-operated Restaurants		R$	38,938				74.1	%		R$	36,986				79.4	%		R$	112,388				74.9	%		R$	105,316				79.4	%
Net Revenues from Franchisees			7,100				13.5	%			6,120				13.1	%			19,748				13.2	%			17,148				12.9	%
Net Revenues from Trade Partners			5,943				11.3	%			2,411				5.2	%			14,535				9.7	%			6,887				5.2	%
Other Income			573				1.1	%			1,050				2.3	%			3,379				2.3	%			3,357				2.5	%
TOTAL REVENUES			52,554				100.0	%			46,567				100.0	%			150,050				100.0	%			132,708				100.0	%
OPERATING COST AND EXPENSES
Store Costs and Expenses			(35,514	)			-67.6	%			(33,594	)			-72.1	%			(106,649	)			-71.1	%			(98,855	)			-74.5	%
Franchise Costs and Expenses			(2,721	)			-5.2	%			(2,195	)			-4.7	%			(8,371	)			-5.6	%			(6,405	)			-4.8	%
Marketing Expenses			(1,195	)			-2.3	%			(1,037	)			-2.2	%			(3,364	)			-2.2	%			(2,965	)			-2.2	%
Administrative Expenses			(8,447	)			-16.1	%			(5,621	)			-12.1	%			(20,394	)			-13.6	%			(15,434	)			-11.6	%
Other Operating Expenses			(1,190	)			-2.3	%			(1,071	)			-2.3	%			(4,097	)			-2.7	%			(2,370	)			-1.8	%
Net result of assets sold and impairment of assets			5,973				11.4	%			250				0.5	%			5,955				4.0	%			122				0.1	%
TOTAL OPERATING COST AND EXPENSES			(43,094	)			-82.0	%			(43,268	)			-92.9	%			(136,920	)			-91.2	%			(125,907	)			-94.9	%
OPERATING INCOME			9,460				18.0	%			3,299				7.1	%			13,130				8.8	%			6,801				5.1	%
Interest Income (Expense)			(316	)			-0.6	%			(1,077	)			-2.3	%			(1,316	)			-0.9	%			(3,184	)			-2.4	%
NET INCOME BEFORE INCOME TAX			9,144				17.4	%			2,222				4.8	%			11,814				7.9	%			3,617				2.7	%
Income taxes			(3,732	)			-7.1	%			1				0.0	%			(4,395	)			-2.9	%			337				0.3	%
NET INCOME BEFORE NON-CONTROLLING INTEREST			5,412				10.3	%			2,223				4.8	%			7,419				4.9	%			3,954				3.0	%
Net loss attributable to non-controlling interest			(130	)			-0.2	%			(72	)			-0.2	%			(3	)			0.0	%			(330	)			-0.2	%
NET INCOMEATTRIBUTABLE TO BRAZIL FAST FOOD CORP.			5,282				10.1	%			2,151				4.6	%			7,416				4.9	%			3,624				2.7	%

Net Revenues from Own-Operated Restaurants

     Net restaurant sales from our company-owned retail outlets increased R$7.1 million, or 6,7%, to R$112.4 million for the nine months ended September 30, 2010 as compared to R$105.3 million for the nine months ended September 30, 2009.

     Net restaurant sales from our company-owned retail outlets increased R$1.9 million, or 5.1%, to R$38.9 million for the three months ended September 30, 2010 as compared to R$37.0 million for the three months ended September 30, 2009.

     Under the criterion of same store sales, which only includes stores that have been open for more than one year, net restaurant sales increased by approximately 3.23% for the Bob’s and 13.3% for Pizza Hut brand, while they decreased approximately 3.28% for the KFC brand for the nine months ended September 30, 2010 as compared to the nine months ended September 30, 2009.

     Overall restaurant sales increased due to a better economic environment in Brazil and to intensive marketing campaigns including some KFC products with higher gross margins impacted positively on restaurant sales.

     Restaurant revenues increase was partially offset by the decreased in number of points of sale from 85 (61 Bobs brand, 14 Pizza Hut, 1 Doggis and 12 KFC brand)) at September 30, 2009 to 79 (49 Bobs’ brand, 17 Pizza Hut, 4 Doggis and 9 KFC’s brand) at September 30, 2010. This reflects the company’s strategy to limit company direct operations to highly profitable outlets, and to focus on the growth of franchises.

Net Revenues from Franchisees

     Net franchise revenues are comprised of initial fees (due upon the signing of a new franchise contract) and royalty fees (a percentage on sales by stores operated by franchisees), as set forth below:

R$ 000’		Nine months ended September, 30
		2010				2009
Net Franchise Royalty Fees			17,430				15,852
Initial Fees			2,318				1,296
Net Franchise Revenues			19,748				17,148

     Net franchise revenues increased R$2.6 million (or 15.2%) to R$19.7 million for the nine months ended September 30, 2010 from R$17.1 million for the nine months ended September 30, 2009.

     Net franchise revenues increased R$1.0 million (or 16.0%) to R$7.1 million for the three months ended September 30, 2010 from R$6.1 million for the three months ended September 30, 2009.

     These increases are attributable to growth in the Company’s franchise business from 597 retail outlets as of September 30, 2009 to 663 as of September 30, 2010.

     Currently, the Bob’s brand accounts for most of the franchise activity.

     Alongside the royalty fees and initial fees, the Company receives marketing contributions from franchisees, which are designed to finance corporate marketing investments and are accounted for as discussed in Marketing Expenses.

Net Revenues from Trade Partners and Other Income

     The Company negotiates commercial agreements with leading suppliers to benefit all restaurants chains under its management.

     Other income is comprised of leases on the Company’s properties, administration fees on the marketing fund and nonrecurring gains

Store Costs and Expenses

     As a percentage of total revenues, store costs and expenses were (71.1%) and (74.5%) for the nine months ended September 30, 2010 and 2009, respectively.

     As a percentage of total revenues, store costs and expenses were (67.6%) and (72.1%) for the quarters ended September 30, 2010 and 2009, respectively.

     Analyzed as a segment (own-store operations), the respective store costs and expenses for own-operated restaurants as compared to net revenues can be seen below:

R$ 000’		3 Months								3 Months								9 Months								9 Months
		Ended								Ended								Ended								Ended
		30-Sep-10				%				30-Sep-09				%				30-Sep-10				%				30-Sep-09				%
STORE RESULTS
Net Revenues from Own-operated Restaurants			38,938				100.0	%			36,986				100.0	%			112,388				100.0	%			105,316				100.0	%
Store Costs and Expenses
Food, Beverage and Packaging			(13,393	)			-34.4	%			(12,813	)			-34.6	%			(38,483	)			-34.2	%			(37,388	)			-35.5	%
Payroll & Related Benefits			(8,220	)			-21.1	%			(8,562	)			-23.1	%			(26,158	)			-23.3	%			(24,874	)			-23.6	%
Restaurant Occupancy			(4,479	)			-11.5	%			(3,867	)			-10.5	%			(13,160	)			-11.7	%			(11,470	)			-10.9	%
Contracted Services			(4,457	)			-11.4	%			(4,048	)			-10.9	%			(14,091	)			-12.5	%			(12,567	)			-11.9	%
Depreciation and Amortization			(1,602	)			-4.1	%			(984	)			-2.7	%			(4,388	)			-3.9	%			(3,188	)			-3.0	%
Royalties charged			(1,335	)			-3.4	%			(1,150	)			-3.1	%			(3,513	)			-3.1	%			(2,515	)			-2.4	%
Other Store Costs and Expenses			(2,028	)			-5.2	%			(2,170	)			-5.9	%			(6,856	)			-6.1	%			(6,853	)			-6.5	%
Total Store Costs and Expenses			(35,514	)			-91.2	%			(33,594	)			-90.8	%			(106,649	)			-94.9	%			(98,855	)			-93.9	%
STORE OPERATING INCOME			3,424				8.8	%			3,392				9.2	%			5,739				5.1	%			6,461				6.1	%