``Warchalking'' To Mark Free Wireless Internet Access Via Schlotzsky's Deli ``Cool Cloud''; International Chalk Symbol Lets Customers and Community Know Where to Log On.

Business Editors

AUSTIN, Texas--(BUSINESS WIRE)--Nov. 8, 2002

Schlotzsky's(R) Deli restaurant patrons and pedestrians will be pondering the sidewalks, scratching their heads in puzzlement at the chalk marking at their feet. More than 80,000 college football fans at the UT/Baylor game in Royal-Memorial Stadium on Saturday, November 9th, will be gazing upward in wonder at a banner flying with the same mysterious symbol behind a small plane.

What does it all mean? It's the launch of Schlotzsky's Deli Cool Cloud(TM) network, and its symbol is the strangely evocative, almost reverse parentheses -- now appearing on sidewalks outside of 10 Schlotzsky's(R) Deli restaurants in Austin where the Wi-Fi (wireless fidelity) hotspots can be found and on one particular high-flying banner.

A pioneer in providing free Internet access to its customers, Schlotzsky's(R) Deli is taking that service one step further -- extending the Cool Deli(TM) Stations that already offer complimentary games and access to e-mail and major newspapers to children and adults who come in for fresh, quick delicious food and providing a wireless connection for laptop and palmtop users whose computers contain wireless networking cards (business travelers will really love it).

With nods to the hobo maps of old (when homes were marked as good for handouts or bad) and the new-millennium trend of war-chalking to mark free wireless Internet access sites, Schlotzsky's(R) Deli is using the international symbol to landmark its own non-encrypted wireless sites at Company-owned restaurants in Austin and in Houston. (See historical note on "warchalking" below.)

Even before Cool Cloud's official launch on November 9, usage is exceeding expectation, with the 12 dBi omni-directional wireless antenna atop the Guadalupe Street Schlotzsky's(R) Deli reaching hundreds of students at University of Texas at Austin, where wireless technology guru Ted Rappaport leads the new Wireless Networking and Communications Group of the College of Engineering and its multi-million-dollar wireless research program.

"Wireless is the future of connectivity," says UT's Rappaport, "and Schlotzsky's(R) Deli is a real hotbed of innovation in this area. Their Cool Cloud(TM) initiative is a great example of wireless networking technology coming into the mainstream."

Schlotzsky's, Inc. (Nasdaq:BUNZ) president and CEO John Wooley says, "We are a fun, innovative restaurant company yet again on the cutting edge of an exciting trend. Free Internet access just makes sense to us. More important, our customers are telling us they like it. Their response tells us that this is a good direction for us."

He continues: "Now that we have the signal in our restaurants, we'd like to share it with the neighborhood and communities where we operate. We're talking with schools, libraries and community leaders to find ways to bring free Internet access to people who aren't able to afford it on their own. A second goal is to help libraries and community centers continue to be vibrant, positive and education places."

Because Schlotzsky's(R) Deli Cool Cloud(TM) hotspots are 802.11b-compliant, any similarly compliant Mac or Windows computer with a wireless networking card should operate on the network. Full T1 Internet connections provided by local Texas.net with software designed especially for Schlotzsky's(R) Deli are being used so customers can experience the full potential of the Net. The 10 Austin-area Schlotzsky's(R) Deli restaurants with Cool Cloud(TM) wireless network hotspots are located as follows:

Its Flagship store on South Lamar Boulevard, just south of Town Lake;

In the Littlefield Building at Congress Avenue and Sixth Street;

On Guadalupe Street near The University of Texas;

In Sunset Valley on Brodie Lane at State Highway 290;

In Maconda Park at Loop 620 and Highway 183;

On Balcones Woods Drive at Highway 183;

Near Northcross Mall at Anderson Lane and Burnet Road;

At La Frontera at I-35 in Round Rock;

In Cedar Park on Highway 183; and

In the Brodie Oaks Shopping Center on South Lamar Boulevard.

The Schlotzsky's(R) Deli restaurant located in Houston on San Felipe Street is also a Cool Cloud(TM) hotspot.

History of "warchalking": The hottest sign of the times has a cool history.

Throughout the 1930's during America's Great Depression, a loose-knit community of hobos hitched train rides from town to town seeking the occasional odd job and handouts. Besides their transitory lifestyle, they had a "language" of their own. Using basic symbols, they used chalk marks to communicate with other hobos, indicating everything from unfriendly railroad police to a safe place to crash. The "free meal" symbol, two half moons, would be chalked on a storefront, diner or the gate of a home to surreptitiously advertise the presence of a generous person.

Fast forward to June 2002. London techie Matt Jones came up with a symbol that could be chalked on pavements and walls to identify a "hotspot" or place where wireless networks anyone could use to surf the Internet were accessible. Naming the process "warchalking" and posting the idea on his website, Jones soon discovered there were plenty of players ready to roam their cities, locate such spots with their laptops, and mark the places with two half moons. You'll now see the free access and other symbols appearing in a growing number of cities from Seattle and San Jose to Copenhagen. Chalk one up for the re-emergence of a good idea lost in time!

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Schlotzsky's, Inc., founded in Austin, Texas in 1971, is a franchisor and operator of fast casual restaurants featuring upscale made-to-order hot sandwiches served on distinctive sourdough bread, along with sourdough crust pizzas, salads and soups. As of June 30, 2002 there were 671 Schlotzsky's(R) Deli restaurants open and operating in 38 states, the District of Columbia and nine foreign countries. Visit www.schlotzskys.com or www.cooldeli.com for more information and e-coupons.

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This news release contains "forward-looking statements," as defined under the federal securities laws. Forward-looking statements include those regarding the business plans and prospects of Schlotzsky's, Inc. (the "Company"). Forward-looking statements reflect the Company's expectations based on current information. The Company undertakes no obligation to update any forward-looking statements. Shareholders and prospective investors are cautioned that actual future results may be materially different because of various risks and uncertainties, including but not limited to factors identified in the Company's Form 10-K under the heading "Risk Factors."