AMERICAN FAMILY RESTAURANTS REPORTS SECOND QUARTER RESULTS - Revenues Rise 19%; Denny's Same Store Sales Increase 5.9% -.

NORCROSS, Ga--(BUSINESS WIRE)--April 27, 1995--American Family Restaurants, Inc. (AMEX: FRI) today reported increased revenues for the fiscal 1995 second quarter and six months ended March 29, 1995.

Revenues for the quarter were $25.7 million, an increase of 19% over revenues of $21.5 million in the second quarter of fiscal 1994. Operating income for the fiscal 1995 second quarter increased to $536,000, compared to an operating loss of $60,000 in the fiscal 1994 second quarter. Net income for the second quarter of fiscal 1995 was $244,000, or $0.04 per share, compared with net income (after an $1.0 million, or $0.36 per share, non-recurring gain related to the renegotiation of certain capital leases to operating leases) of $725,000, or $0.26 per share. The weighted average number of shares outstanding for fiscal 1995 second quarter rose to 5,842,000, compared with 2,791,000 in the comparable quarter a year ago, as result of the Company's October 1994 initial public offering.

For the six months ended March 29, 1995, revenues were $50.7 million, a 17% improvement over revenues of $43.3 million a year ago. Operating income for the fiscal 1995 six months increased to $1.1 million, compared to operating income of $399,000 in the fiscal 1994 six months. Net income for the six months was $234,000, or $0.04 per share, compared to net income of $292,000, or $0.10 per share, in the prior year's period which included the $1.0 million, or $0.36 per share, one-time gain. Net income for the six months ended March 29, 1995 reflects the recording of a $138,000 loss on the early extinguishment of debt in connection with the Company's initial public offering. The weighted average number of shares outstanding for the first six months of fiscal 1995 were 5,442,000, compared with 2,791,000 in the comparable year-ago period.

Commenting on the Company's second quarter performance, Chief Executive Officer, Jeffrey D. Miller, stated: "Our second quarter results reflect the strong performance of our Denny's restaurants which achieved same store sales gains of 5.9% during the period and our continued progress in converting company stores to the Denny's format. Importantly, same store sales are continuing to show positive year-over-year comparisons so far in the third quarter and our conversion activities continue."

For same store sales comparisons, American Family Restaurants considers a Denny's store to be comparable after it has been open six full fiscal quarters.

American Family Restaurants, Inc. (AFR) headquartered in Norcross (Atlanta), Georgia, operates 134 family style restaurants, 78 of which are Denny's, in 12 states in the Midwest and Southeast. AFR has grown since its founding in 1986 through the purchase of existing Denny's and the conversion of other restaurants into the Denny's format. On April 21, 1995, AFR announced that it had entered into a letter of intent to merge with privately-held Denwest Restaurant Corp., an operator of 72 Denny's restaurants throughout the Midwest and West. -0-

                    American Family Restaurants, Inc.
                     Unaudited Financial Highlights
                (In thousands, except per share amounts)

                              Three Months Ended    Six Months Ended
                              3/29/95    3/30/94   3/29/95    3/30/94

Revenues                     $ 25,689   $ 21,499   $ 50,661   $ 43,252

Operating income (loss)      $    536   $    (60)  $  1,143   $    399

Income before extraordinary
 item - loss on extinguishment
 of debt                     $    224   $    725   $    372   $    292

Extraordinary item -
 loss on extinguishment
  of debt, net                     -          -        (138)        -

Net income                    $   224   $    725   $    234   $    292

Income per common and common
  equivalent share:

  Income before extraordinary
   item - loss on extinguishment
   of debt                    $  0.04   $   0.26   $   0.07   $   0.10

  Extraordinary item -
   loss on extinguishment
   of debt, net                   -          -        (0.03)       -

  Net income                  $  0.04   $   0.26   $   0.04   $   0.10

Weighted average common and
 common equivalent shares
 outstanding                    5,842      2,791      5,442      2,791
-0-

Summary Balance Sheet Information
                                   March 29, 1995   Sept. 28, 1994
Working capital (deficit)           $   (9,444)      $   (15,736)
Total assets                            40,657            40,836
Long-term debt, less current portion     8,341            11,438
Obligations under capital leases,
 less current obligations                1,316             3,362
Shareholders  equity                $   16,212       $     3,372
-0-

CONTACT: Edward C. Williams

Chief Financial Officer

404/729-1300

or

Joseph N. Jaffoni

David C. Collins

Jaffoni & Collins Incorporated

212/505-3015