ADAMSON AWARDED NAACP 1996 CEO CORPORATE ACHIEVEMENT AWARD FLAGSTAR ANNOUNCES PLAN TO BROADEN DIVERSITY INITIATIVES.

SPARTANBURG, S.C.--(BUSINESS WIRE)--May 13, 1996--James B. Adamson, chairman and chief executive officer of Flagstar Corporation has been awarded the 1996 Corporate CEO Achievement Award by the National Association for the Advancement of Colored People (NAACP), and announced today that Flagstar will broaden and accelerate its diversity business development initiatives to all Flagstar subsidiaries.

Flagstar, with nearly 90,000 employees, is one of the largest restaurant companies in the United States, operating Denny's, Quincy's Family Steakhouse, El Pollo Loco and is the largest franchisee of Hardee's.

"Jim Adamson has consistently demonstrated his commitment to diversity throughout his career," said Kweisi Mfume, president and CEO of the NAACP, who presented the award at the NAACP's Ninth Annual Corporate Awards Luncheon on May 10 in New York. The NAACP, founded in 1909, and based in Baltimore, MD., is the nation's oldest and most respected civil rights organization.

"Jim has taken a leadership role in providing employment and business opportunities to women and minorities. His leadership in making workforce diversity a corporate priority serves as an example to all Fortune 500 companies operating in America today," Mfume said.

Adamson said, "Flagstar is taking this step because we are firmly and sincerely committed to having a truly multi-cultural work force at all levels of our organization that is reflective and respectful of the needs and expectations of our diverse customer base. To ensure all our restaurant chains reach that important goal, diversity education and training will be the cornerstone of our diversity initiatives."

All 50,000 Denny's employees, including management, will complete diversity training this year and are scheduled for additional training next year. This education and training program will be expanded to all Flagstar chains in the future, Adamson said.

For example, all officers and directors at Quincy's Family Steakhouse have already completed diversity training and all management personnel will complete diversity training by September. By 1997, diversity training will become a part of all the on-going training for all hourly employees at Quincy's. Diversity training sessions for management personnel at El Pollo Loco will begin in June. In addition, officers and senior leadership of Denny's, Quincy's, El Pollo Loco and Hardee's will complete diversity training this week. Diversity training is just one component of Flagstar' diversity development initiatives:

To ensure that all customers are treated with fairness and respect, all Flagstar restaurants will now have signs emphasizing its non-discriminatory policies along with its customer service number.

Random testing of the quality of customer service will be conducted by teams comprised of various racial and ethnic backgrounds.

All employees will be notified of their obligations under federal statutes not to discriminate and to oppose discrimination and will be required to sign a notice acknowledging these obligations.

Other recent highlights of Flagstar's diversity achievements include:

Flagstar's Board of Directors and senior management now include women and minorities.

Twenty-seven percent of Flagstar's management is now minority; 18 percent is African-American.

Flagstar purchasing with minority suppliers reached $57 million in 1995, more than a five-fold increase over 1993. The company will exceed its $65 million goal for 1996.

One-quarter of Denny's nearly 600 franchise restaurants are now minority owned. In 1993, Denny's had one African-American owned restaurant; today it has 27 units with plans to reach 65 by the close of 1997, compared to a goal of 53 restaurants.

El Pollo Loco, the only other Flagstar subsidiary that franchises, has over 54 percent of its units owned by minorities, with Hispanics being the single largest minority.

James B. Adamson, 48, is chairman, chief executive officer and president of Flagstar Companies, Inc. (NASDAQ:FLST), one of the nation's largest restaurant companies with 1995 revenues of $2.6 billion. He has overall responsibility for Flagstar and its four restaurant chains -- Denny's, Quincy's Family Steakhouse, El Pollo Loco and the largest franchise of Hardee's. Flagstar operates more than 2,500 company and franchise restaurants in the United States, four foreign countries and two U.S. territories.

Adamson came to Flagstar in February 1995 as president and chief executive officer from Burger King Corporation. In May 1995, he assumed the additional role of chairman for Flagstar.

While at Burger King, his leadership in simplifying the fast-food chain's menu and refocusing the business on burgers resulted in increases in sales and profits. As restaurant financial analyst Mike Mueller noted, "Basically, he turned around Burger King in a remarkably short time and did it with a single-minded focus on why it is that people go there."

Adamson joined Miami-based Burger King in 1991 as president of the U.S.A. Retail Division with responsibility for all Burger King company-owned restaurants. Prior to his promotion to chief executive officer in July 1993, Adamson was chief operating officer for Burger King's three worldwide operating business units in Europe/Middle East/Africa, Asia/Pacific and the Americas.

His restaurant and retail experience spans more than 21 years and includes leadership positions at The GAP from 1975 to 1984; B. Dalton Bookseller from 1984 to 1986; and Target Stores from 1986 to 1988. Adamson is credited with helping turn around the bankrupt retail drug store chain Revco, Inc., where he was executive vice president of marketing from 1988 to 1991. Revco, which had $2.8 billion in debt when Adamson joined the company, recently accepted a $1.8 billion takeover offer from rival Rite Aid.

Adamson serves on the board of directors of Kmart Corporation, New World Coffee, Inc., and Oxford Health. In December 1995, he was appointed by Gov. David Beasley to serve as a member of the South Carolina Commission on Racial Relations.

The son of a retired U.S. Army General, Adamson was born in Japan. He spent his early years in Europe and graduated from high school in Hawaii. He earned a bachelor's degree in business from Gonzaga University in Spokane, Wash. Adamson is married and has two children. -0-

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CONTACT: Flagstar Companies, Inc., Spartanburg

Karen Randall, 864/597-8440