Bab Holdings, Inc. Unveils Aggressive "Back To Basics" Strategic Plan

CHICAGO (Wednesday, November 17, 1999) - BAB Holdings, Inc., the Chicago-based operator, franchisor, and licensor of Big Apple Bagels(R), My Favorite Muffin(R), and Brewsters Coffee(R) today announced a dramatic and detailed strategic plan designed to return the company to profitability within six months.
"We're going to focus on what we do better than anyone else in the bakery/cafe business: selling franchises, supporting our franchisees, and licensing our brands" states CEO Michael Evans. "Like so many others in the bagel bakery niche, we allowed ourselves to focus on too many opportunities with too few resources. As a result, the inherent profitability of our core business--franchising and licensing--has been undermined by our efforts to build a broad base of company stores. This aggressive expansion of corporate locations has not paid off, and it is time that we recognized this."

The Company will franchise a majority of its corporate stores, reduce its corporate payroll by approximately 33%, and intensify its focus on franchising and licensing opportunities. Proceeds from the sale to franchisees will be used to reduce corporate debt. In January 2000, the Company will launch a state-of-the-art marketing initiative designed to aggressively build sales at the local store level.

"This is the single most important initiative in the history of BAB Holdings" continues Evans. "We are committed to building our core business--franchising tri-branded bagel bakery/cafes and securing appropriate licensing opportunities for our Big Apple Bagels(R), My Favorite Muffin(R) and Brewsters(R) Coffee brands. These businesses are highly profitable. The upside of continued growth in these areas is significant."

BAB Holdings, Inc. is the industry leader in the franchising of new bagel bakery/cafes, consistently outpacing competitors in growth through new franchises. New franchised locations will open in Egypt later this month. Master franchise agreements have been signed for expansion in South Korea and the United Arab Emirates. Growth in the number of franchised units enables the Company to leverage existing corporate overhead and is thus highly profitable.

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