RESULTS OF OPERATIONS - COMPARISON OF QUARTERS ENDED MARCH 31, 2008 AND 2007
(Amount in thousand of Brazilian Reais)
   The following table sets forth statement of operations for the quarters ended
March 31, 2008 and 2007. All the operating figures were stated as a percentage
of total revenues. However the specific discussions of store cost and expenses
and franchise expenses also include the evolution of such figures stated as a
percentage of the Net revenues from own-operated restaurants and Net Franchise
Revenues, respectively.

R$ 000'                                        3 Months                          3 Months
                                                 Ended                             Ended
                                               31-Mar-08            %            31-Mar-07            %
                REVENUES
Net Revenues from Own-operated
Restaurants                                   R$   20,628           70.1 %      R$   21,243           76.8 %
Net Revenues from Franchisees                       4,965           16.9 %            4,463           16.1 %
Revenues from Supply Agreements                     2,748            9.3 %            1,828            6.6 %
Other Income                                        1,087            3.7 %              127            0.5 %

             TOTAL REVENUES                        29,428          100.0 %           27,661          100.0 %
      OPERATING COST AND EXPENSES
Store Costs and Expenses                          (21,190 )        -72.0 %          (19,903 )        -72.0 %
Franchise Costs and Expenses                       (1,170 )         -4.0 %             (729 )         -2.6 %
Marketing Expenses                                   (536 )         -1.8 %              400            1.4 %
Administrative Expenses                            (3,870 )        -13.2 %           (3,095 )        -11.2 %
Other Operating Expenses                             (367 )         -1.2 %             (431 )         -1.6 %
Net result of assets sold and impairment
of assets                                             (17 )         -0.1 %                -            0.0 %

TOTAL OPERATING COST AND EXPENSES                 (27,150 )        -92.3 %          (23,758 )        -85.9 %


OPERATING INCOME                                    2,278            7.7 %            3,903           14.1 %

Interest Income (Expense)                             (96 )         -0.3 %             (151 )         -0.5 %

NET INCOME BEFORE INCOME TAX                        2,182            7.4 %            3,752           13.6 %

Income taxes                                         (153 )         -0.7 %              (60 )         -0.3 %

NET INCOME                                          2,029            9.8 %            3,692           17.4 %

Introduction
During the quarter ended March 31, 2008, the Company's operations were well-matched with a light overall increase of retail market activity in Brazil, which is heated due to wide credit facilities to consumers. However, such market is centered on the consumption of durable goods. The Company believes that this economic factor affected negatively its operations during the first quarter of 2008.
In addition, the concentration of Company's point of sales in the southeast of Brazil develop great correlation between high temperatures and selling products like ice-cream, sundaes, milkshake and soft drinks - which reach 45.0% of Company's mix of sales. During the first quarter of 2008 the southeast region suffered with low-standard temperature and several rainy days, resulting in the reduction of Company ´s sales.
The Company is working in order to reduce the influence of "high temperature" products in the mix of sales, while motivating the personnel training, accelerating stores remodeling, introducing new lay-out at its point of sales and purchasing new modern equipments.
Net Revenues from Own-Operated Restaurants Net restaurant sales for our company-owned retail outlets decreased R$ 0.6 million or 2.9%, to R$20.6 million for the three months ended March 31, 2008 as compared to R$21.2 million for the three months ended March 31, 2007.
Under the criteria of same store sales, which only includes stores that have been open for more than one year, net restaurant sales decreased approximately 6.2% for the three months ended March 31, 2008 as compared to the three months ended March 31, 2007.
Overall restaurant sales decreased due the issues discussed above and due to the reduced number of point of sales from 63 at March 31, 2007 to 58 at March 31, 2008. Such decrease was partially offset by the beginning of KFC brand operation on April, 2007, which brought 4 new points of sales with additional sales of approximately R$2.5 million.
Net Franchise Revenues
Net Franchise revenues are comprised of initial fees (amount due at the signing of a new franchise contract) and royalty fees (derived from a percentage on the sales of the stores operated by franchisees), as set forth below:

             R$ 000'                         3 months ended March 31,
                                              2008               2007
             Net Franchise Royalty Fees          4,471              3,896
             Initial Fee                           494                567

             Net Franchise Revenues              4,965              4,463

Net Franchise revenues increased R$0.5 million or 11.2%, to R$5.0 million for the three months ended March 31, 2008 as compared to R$4.5 million for the three months ended March 31, 2007.
This increase is attributable to the growth of Company's franchise business from 475 retail outlets as of March 31, 2007 to 532 as of March 31, 2008.
The decrease on initial fee in 2008 is mainly attributable to changes in the Franchise Agreements, which derived not only changes on agreement terms (from 10 to 5 years), but also on the average initial fees from R$90,000 to R$60,000.

In addition of royalty fees and initial fees, the Company receives from franchisees marketing contributions which represent franchise contributions to finance corporate marketing investments and are accounted for as discussed at Marketing (Expenses) Income
Revenue from Supply Agreements and Other Income The Company may obtain income from its suppliers when agreements are settled to exclusively use certain products from a supplier or when agreements are settled with performance bonus to be reached.
The income received from suppliers, related to performance bonus, is recognized when the suppliers agree that the contracted performance has been reached. In case the performance bonus is received in cash, it is recognized as Other Income; in case they are received in products, it is recognized as a cost reduction.
Other income is mainly comprised of lease of Company's properties, administration fees on marketing fund and nonrecurring gains. Store Costs and Expenses
As a percentage of Total revenues, Store costs and expenses were (72.0%) and (72.0%) for the quarters ended March 31, 2008 and 2007, respectively.
Analyzing as a segment (own-stores operations), Store cost and expenses had the following evolution towards Net revenues from own-operated restaurants:

R$ 000'                                          3 Months                          3 Months
                                                  Ended                             Ended
                                                3/31/2008            %            3/31/2007            %
              STORE RESULTS
Net Revenues from Own-operated Restaurants          20,628           100.0 %          21,243          100.0 %
Store Costs and Expenses
Food, Beverage and Packaging                        (7,888 )         -38.2 %          (7,720 )        -36.3 %
Payroll & Related Benefits                          (5,591 )         -27.1 %          (5,009 )        -23.6 %
Restaurant Occupancy                                (2,395 )         -11.6 %          (2,264 )        -10.7 %
Contracted Services                                 (2,721 )         -13.2 %          (2,639 )        -12.4 %
Depreciation and Amortization                         (641 )          -3.1 %            (576 )         -2.7 %
Other Store Costs and Expenses                      (1,954 )          -9.5 %          (1,695 )         -8.0 %
Total Store Costs and Expenses                     (21,190 )        -102.7 %         (19,903 )        -93.7 %

STORE OPERATING INCOME                                (562 )          -2.7 %           1,340            6.3 %

Food, Beverage and Packaging Costs
As a percentage of Net revenues from own-operated restaurants, food, beverage and packaging costs were (38.2%) and (36.3%) for the three months ended March 31, 2008 and 2007, respectively.
The percentage increase of cost of food, beverage and packaging was due to increases of the purchase price of all main products: bread, meat and chicken hamburger, French fries, ice cream and soft drinks.
The reduction of costs related to logistics and distribution of our main raw materials partially offset the cost increases.

Payroll & Related Benefits
As a percentage of Net revenues from own-operated restaurants, store payroll and related benefits increased from (23.6%) for the three months ended March 31, 2007 to (27.1%) for the same period ended March 31, 2008.
Payroll & Related Benefits had their nominal figures stabilized from 2007 to 2008. However, the decline of restaurant sales, joined with raises of Company's store personnel salaries of approximately 5.9% provided by union-driven agreements (which also derived higher social charges that are computed based on employees salaries) increased the 2008 percentage. Restaurant Occupancy Costs and Other Expenses Restaurant occupancy costs and other expenses expressed as a percentage of Net revenues from own-operated restaurants were approximately (11.6%) and (10.7%) for the three months ended March 31, 2008 and 2007, respectively.
Restaurant occupancy costs had their nominal figures almost stabilized from 2007 to 2008. However, the decline of restaurant sales, joined with higher condominium costs, increased the 2008 percentage.

Contracted Services
Expenses related to contracted services expressed as a percentage of Net revenues from own-operated restaurants were approximately (13.2%) and (12.4%) for the three months ended March 31, 2008 and 2007, respectively.
Besides the decline of restaurant sales, this increase is mainly attributable to the increase money collection costs, as well as increases of telecommunication, water and gas consumption costs.
This increase was partially offset by decreases in the costs of electricity and maintenance.
Depreciation and Amortization (Stores and Headquarters) As a percentage of Net revenues from own-operated restaurants, depreciation and amortization were approximately (3.1%) and (2.7%) for the three months ended March 31, 2008 and 2007, respectively.
The increase in Depreciation and amortization is attributable to store equipment modernization and to stores remodeling. Other Store Cost and Expenses
Other store cost and expenses expressed as a percentage of Net revenues from own-operated restaurants were approximately (9.5%) and (8.0%) for the three months ended March 31, 2008 and 2007, respectively.
Other store cost and expenses increase is mainly attributable to the increase of costs related to cleaning and consumption material. This increase was partially offset by lower expenses related to special events that the Company takes part.
Franchise Costs and Expenses
As a percentage of Total Revenues, Franchise costs and expenses were (4.0%) and (2.6%) for the quarters ended March 31, 2008 and 2007, respectively.
Analyzing as a segment (franchise operations), Franchise costs and expenses had the following evolution towards Net Franchise revenues:

      R$ 000'                          3 Months                   3 Months
                                        Ended                      Ended
                                      3/31/2008         %        3/31/2007         %
            FRANCHISE RESULTS

      Net Revenues from Franchisees        4,965       100.0 %        4,463       100.0 %
      Franchise Costs and Expenses        (1,170 )     -23.6 %         (729 )     -16.3 %

      FRANCHISE OPERATING INCOME           3,795        76.4 %        3,734        83.7 %

Franchise costs and expenses expressed as a percentage of net franchise revenues were approximately (23.6%) and (16.3%) for the three months ended March 31, 2008 and 2007, respectively.
This increase is attributable the growth of franchise business and the related necessity to spread its infra-structure. Accordingly, there were increases of franchise department personnel and their compensation, as well as increase on occupancy costs, consulting services and traveling expenses in 2008.

Marketing, General and Administrative (Expenses) Income Marketing (Expenses) Income
According to our franchise agreements, the marketing fund we have dedicated to advertising and promotion is comprised of financial contributions paid by the franchisees and also by the contributions due by the Company. The fund resources are administrated by the Company and must be used in the common interest of Bob ´s chain, through the best marketing department efforts, to increase its restaurant sales.
Therefore, the marketing contribution from franchisees, are recorded on accrual basis, in the assets as accounts receivables and cross entry in the liabilities as marketing fund. The contributions due by Venbo are recorded on accrual basis, as marketing expenses and cross entry in liabilities as marketing fund.
In general, franchisees monthly contribute with 4.0% of their monthly gross sales to the marketing fund, and since 2006, the Company is also committed to contribute with 4.0% of its own-operated restaurant monthly gross sales (sales derived from special events are not subject to such contribution). These contributions can be deducted by an amount previously agreed with the Company's franchisees, today of 10.0% of the total marketing fund contributions, to balance the Company's marketing department expenses. However, the total of marketing investments may be greater than 4.0% of combined sales, if there is any supplier additional contribution (joint marketing programs) or if the Company use additional own cash on marketing advertising and promotion.
The Company primarily invests the marketing fund resources on nationwide advertising programs (commercials or sponsorship on TV, radio and outdoors). The Company's franchisees may also directly invest in advertising and promotions for their own stores, upon previous consent from the Company, which freely decides whether the cost of such single advertisement or promotion could be deducted from the marketing contribution owed.
The marketing fund expenses on advertising and promotions is recognized as incurred and amounted R$ 4.7 million and R$5.2 million for the three months ended March 31, 2008 and 2007, respectively.
The marketing fund resources are not required to be invested during the same month or year that they were received, but they must be used in subsequent periods.
Periodically, the Company meets the Franchisee Council to demonstrate the marketing fund accounts, through a report similar to a statement of cash flows. This statement discloses the marketing contributions received and the marketing expenses, both in cash basis. To provide absolute transparency and comply with the Company's franchisees request, all accounts included in the Marketing Fund are revised by independent auditors.
The balances presented on March 31, 2008 in the caption Marketing Fund represent contributions made by Venbo and by the franchisees, but not used in campaigns yet, thus, these balances are, as agreed with the franchisees chain, an obligation of Venbo on that date.
As a percentage of total revenues, marketing expenses were approximately (1.8%) and 1.4% for the three months ended March 31, 2008 and 2007, respectively. In the Consolidated Statements of Operations (Unaudited), the marketing (expenses) income represents the cash flow of marketing contributions and expenses imbalances. In the three months ended March 31, 2007 marketing contributions were higher than marketing expenses. General and Administrative Expenses
As a percentage of total revenues, general and administrative expenses were approximately (13.2%) and (11.2%) for the three months ended March 31, 2008 and 2007, respectively.
This increase is attributable to increase in salaries, administrative personnel, information technology improvements, as well as new programs launched to motivate a differentiated service in Bob's chain stores, through several new operational processes. Also, the Company retained external consultants services and hired a third party company to verify the stores operations compliance, reviewing own-operated and franchised stores activities.

Other Operating Expenses
   Other operating expenses are mainly comprised of uncollectible receivables,
depreciation, preopening and non recurring expenses. The following table sets
forth the breakdown of Other Operating Expenses:

                                                        Three months ended
         R$ 000'                                             March 31,
                                                         2008          2007
         Uncollectable receivables                    R$    (116 )   R$  (104 )
         Reassessed tax and other tax adjustments              -           86
         Depreciation of Headquarters' fixed assets         (197 )       (188 )
         Preopening and other expenses                       (54 )       (225 )

                                                      R$    (367 )   R$  (431 )

Other operating expenses expressed as a percentage of Total revenues were (1.2%), for the three months ended March 31, 2008 and (1.6%) for the three months ended March 31, 2007.
Impairment of Assets and Net Result of Assets Sold The Company usually reviews its fixed assets in accordance with SFAS 144, which requires that long-lived assets being disposed of be measured at the lower of carrying amount or fair value less cost to sell.
During the quarter ended March 31, 2008, Company's review in accordance with SFAS 144, derived no charge to the income statement. Interest Expense
As a percentage of net restaurant sales, net interest expense were approximately (0.3)% and (0.5)% for the three months ended March 31, 2008 and 2007, respectively.
Interest Expense kept at the same level during 2007 and 2008. Income Taxes
As a percentage of net restaurant sales, income taxes were approximately
(0.7)% and (0.3)% for the three months ended March 31, 2008 and 2007, respectively. The reduction of income taxes in 2007 as compared to prior years is a result of the equity restructuring in Brazil, through which it was set up a new holding company, BFFC do Brasil (see note 1 of the consolidated financial statements), via the capital contribution of the equity interest it held in Venbo. This transaction generated credits to income taxes on the amount of approximately R$200,000 per month. After this restructuring, completed on December 31, 2006, all of the Company's businesses in Brazil is being consolidated through BFFC do Brasil. In January 2008, however, the computation of income taxes resulted in due amounts greater than the monthly tax credit, resulting in income tax payable.

Venbo has substantial tax loss carryforward derived from its past negative operating results. Usually, tax losses represent deferred tax assets. However, before the year 2006, the Company used to record a valuation allowance that offset its total deferred tax assets, due the uncertainty of Venbo's future positive results and, as a consequence, doubtful taxable income. As of December 31, 2006, Venbo's business forecasts indicated taxable income for the subsequent 10 years. Accordingly, the Company reduced its valuation allowance and this adjustment derived the recognition of such asset in the balance sheet and a positive impact on the income statement of the year 2006 in amount of R$4.5 million.
At year end, Company's fiscal 2007 improved compared than those predicted in the previous year and its business projections still indicates positive results for the next 10 years. Therefore, as of December 31, 2007, the Company reduced its valuation allowance for the second year in a row and increased the caption Deferred Income Tax Assets in the balance sheet. Such adjustment also derived another positive impact of R$4.3 million on the income statement of the year 2007.
LIQUIDITY AND CAPITAL RESOURCES (Amounts in thousand of Brazilian reais)
A) Introduction

Since March 1996, we have funded Company's cumulative operating losses of approximately R$33.3 million and made acquisitions of businesses and capital improvements (including remodeling of Company's stores) by using cash remaining at the closing of Company's acquisition of Venbo, by borrowing funds from various sources and from private placements of Company's securities. As of March 31, 2008, we had cash on hand of approximately R$9.7 million - which includes investments funds of R$4.9 million - and a positive working capital of approximately R$6.4 million.
Negative working capital has been shown in Company ´s financial statements for several years. In the past, debts denominated in other currency than Brazilian Reais have increased with maxi devaluation of the Brazilian Real in the beginning of 1999. A sequence of years with reduced sales, mainly due to a weak economic environment in Brazil, has worsened the situation and the Company was not able to pay some of its obligations, including taxes. In the following years those past due taxes were renegotiated with different levels of Brazilian Government and were parceled.
With the improvement of Brazilian economy since 2002, the Company ´s total revenues increased and, joined to a capital injection of R$9.0 million, the Company started to reduce its liabilities position. In 2003 the Company, reschedule a great portion of its debts to long term. Continued improvement of sales conducted the Company to (i) drastically reduce its debts with financial institutions during 2005; and (ii) extinguish those debts and reverse its financial position to present time deposits with financial institutions at the end of 2006. The enhancement of collection rate from Company ´s franchisees - commencing in 2005 - also strengthened Company current assets. During 2007 and 2008, the Company maintained this positive scenario and together with resources provided by the renewal of Coca-Cola exclusivity agreement during 2008, was able to end up computing a positive working capital.
For the quarter ended March 31, 2008, we had net cash provided by operating activities of R$4.1 million (R$1.5 million in 2007), net cash used in investing activities of R$0.6 million (R$1.1 million in 2007) and net cash provided by financing activities of R$1.4 million. Net cash used in investing activities was primarily the result of Company's investment in property and equipment to improve Company's retail operations, including new stores with KFC brand. Net cash used on financing activities was a result of Company's repayment of borrowings from financial institutions.
The Company has also invested in the financial market approximately R$4.9 million, re-purchasing 228,040 shares that, had considerably increased their value according to the over the counter market where they are negotiated.
On February 28, 2008, the Company's Board of Directors met and discussed the . . .