Krystal Signs Largest Multi-unit Development Agreement In Company History

CHATTANOOGA, TENNESSEE (Thursday, June 08, 2000) - In March of 1999, The Krystal Company, based in Chattanooga, unveiled an aggressive multi-unit franchise plan that focused on doubling the company's business over the next five years. Just one year later, it is clear that plan is paying off.
Most recently, System Restaurant Group Holdings, Inc., signed a seven-year agreement for 60 new units in the Tampa, Florida, area. SRG Holdings also will purchase four company-owned restaurants, which include one in Tampa, one in Lakeland and two in Ocala. The agreement represents the largest franchise contract in Krystal's 67-year history. To date, The Krystal Company has sold development agreements to new and present franchise groups that represent more than 185 development locations across the Southeast.

While Krystal will continue to develop more company-owned restaurants, aggressive multi-unit franchising is expected to drive overall growth, doubling the size of the system over the next five years, according to Sanford, whose investment company, Port Royal Holdings, Inc., acquired The Krystal Company in 1997.

The company's unique brand continues to fuel growth in existing markets and generate interest in markets not built-out by the restaurant chain. By focusing its expansion in the Southeast, where brand awareness is high and the company's presence is strong, Krystal continues to offer one of the most solid franchise investment opportunities in the industry.

Within the last year, The Krystal Company has entered into several multi-unit development agreements in the Southeast. These include an agreement with T.B. of Starke, Inc., for seven new Krystal restaurants in the Lake City and Tallahassee, Fla., areas; an agreement with Chattanooga-based Cherokee Foods, Inc., for 10 new Krystals in the Tri-Cities market of Bristol, Va., and Johnson City and Kingsport, Tenn.; and an agreement with FFG, Inc., of Lexington, Ky., for 10 Krystal units in that area.

All new units will feature Krystal's latest restaurant design - the KP-2000. The first such unit opened in Chattanooga in September 1998 and represents the Krystal of the future. The exciting, more efficient design pays homage to the traditional Krystal look while showcasing the company's modern, new image. All existing company-owned restaurants have recently been remodeled, and now feature the new KP-2000 signage and exterior appeal.

Famous for its small, square, onion-flavored burgers, which have become synonymous with Southern fast food, The Krystal Company has emerged as one of the most successful quick service restaurants in the industry. Several new products have contributed to the chain's sales growth, including the Krystal Chik(R). This lightly breaded chicken breast filet, served on a steamed bun, enjoyed a successful launch in 1998 and complements the signature Krystal hamburger on the menu. Other recent menu additions include Sackfuls, enough of the small trademark hamburgers to satisfy any appetite, chicken wings and Southern Vidalia onion rings.

The Krystal Company owns and operates 257 restaurants in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, and Tennessee. Krystal franchisees operate 125 restaurants in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Virginia.

The Krystal Company, 423-757-1550

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