We aim to provide a very special level of service for each of our customers. We see simply satisfying customer needs as a service failure. Much more than need satisfaction is required, and as such, we work to develop personal relationships with our customers. By developing these relationships we are able to generate average customer frequency of 4.5 times per week. This compares to an industry average of 4.5 times per year. More importantly, over half of our business comes from regular customers who frequent DRUXY'S an average of 4 times per day. This loyalty is the direct result of the exceptional personal service that we offer our customers each and every time they visit our restaurant.

DRUXY'S vision for the future sees us growing by 6 - 12 locations per year over the next 5 years. DRUXY'S is currently undertaking an expansion program that will target key health care centres throughout the Province of Ontario. We are confident that our commitment to a fresh, healthy menu perfectly positions DRUXY'S to take advantage of the growing concern for health conscious eating. This concern is of paramount importance in a hospital setting. We find it interesting that the major fast food companies have followed in our footsteps by incorporating fresh salads and sandwiches into their menus. Our 30 years of experience has given us a foothold in the market, as we are the benchmark against which the competition is compared. Our extensive and ever expanding and evolving menu of 23 sandwiches, 30 salads and 32 soups and chili makes us a difficult and moving target. As a result, DRUXY'S is a welcome addition to any retail food service venue.

Steady growth of outlets and menu development continued through the balance of the 70's and 80's. Forays into alternate food and beverage formats (Coffee Grinder and Burger Express) were later abandoned and sold to concentrate efforts on the strength of the DRUXY'S concept - our 'Famous Deli Sandwiches'. Our experience with different food offerings enlightened us to the growing interest in healthy eating and the strength of the fresh food segment. By 1987, DRUXY'S had grown to 54 outlets spanning Metro Toronto, Ottawa, Peterborough, Hamilton and London.

The recession, which began in 1988, resulted in serious office tower vacancies in the Toronto area and an increase in fast food/sandwich competition. DRUXY'S determined that protective measures were required and closed 29 under performing restaurants as opportunities arose or leases ended. As these restaurants were closed new restaurants replaced them. A franchising program was established to put owner/operators in each restaurant. Promotional activities, marketing strategies, menu design and pricing were all strengthened to enhance our traditional strength of quality. A redesign and strengthening of our main product lines - sandwiches, salads, soups, bagels and coffee were undertaken. This focus on the mainstay of our business has borne the fruit of increased sales, more satisfied customers and expansion of the chain in recent years to where we once again have 54 restaurants and kiosks.

The main reason for this success has been the appreciation by our new customers that DRUXY'S, with its high quality, fresh and healthy food and warm and personal service was now available to them. Customers demonstrated their appreciation with their repeat visits. Our recent experiences at the four hospitals we currently serve have been most gratifying. DRUXY'S has had excellent success at all four locations. At Princess Margaret Hospital, for example, DRUXY'S replaced the existing cafeteria and coffee shop with a single restaurant and increased total food sales by 25% to $1,250,000 per year. Sales at our location in the Toronto General Hospital food court have grown to $550,000 per year, 30% ahead of our expectations and double the sales of the previous operator despite a huge increase in the number of tenants in the food court. Sales at Toronto Sunnybrook Regional Cancer Centre are nearly 3 times expectation which were already double those of the previous operator. Now, five years after opening, sales of this tiny kiosk have exceeded $450,000 per year and are up over 10% from last year. At Toronto Western Hospital, where we are one of 9 competitors in a food court, our sales grew 15% last year to over $340,000. We attribute these successes, to our ability to provide the consumer with choices that meet their specific needs. Our fresh, quality food, coupled with our excellent service, taking into consideration the time constraints involved in a hospital setting, meet this need head on.

In November 2004 we launched our latest advertising campaign, an aggressive program designed to increase DRUXYS awareness in the market place through frequent radio advertisements. These commercials feature one of the owners, Peter Druxerman, discussing DRUXY'S philosophy in the backdrop of the fast food industry and the personal interests of consumers. These advertisements have been running for 1 ½ years and have contributed to a continued same store growth in excess of 3% over that period. We plan to continue this program for the foreseeable future. We have received an unexpectedly large number of comments from customers saying that they have heard the ads. Surprisingly, their comments have included detailed recounts of the commercials. It is highly unusual for commercials to be recounted with such exacting detail. This speaks to the ability of these advertisements to cut through the advertising clutter to be heard, the ability of the advertisements to clearly communicate their message and the relevance of the message to listeners. We are communicating with over 1,000,000 listeners an average of 3 times per week on CFRB AM1010, and EZRockFM97.3.

This advertising has created an additional side benefit in that awareness of DRUXY'S has been increased among Landlords and prospective franchisees which is helping us expand our business.

Our Marketing goes beyond direct promotions and awareness advertising. We appreciate the long-term relationship that we have had with our customers. We believe that this loyalty must be returned. To this end, we help hundreds of charities each year that approach us for food donations. Over the past decade we have made a special effort to help Camp Awakening, a camp for physically challenged children. Most years we run a campaign to promote and raise funds for this organization. We plan to continue this and other promotions in the future and would incorporate these plans with the Women's College Hospital restaurant. We would also be willing to work with Women's College Hospital in joint fund raising efforts.

We also support Adult Alpine Racing through the DRUXY'S Masters Alpine Racing League and snowboard competitions. We believe that outdoor activities are a major part of healthy living. We feel that it is ideal to combine healthy eating with this healthy activity by promote skiing and snowboarding to our customers and DRUXY'S to skiers and snowboarders.

Over the past 30 years we have contributed over $1,100,000 in food and other donations to various community organizations.