Advantica Announces Exchange Offer For FRD Notes.

SPARTANBURG, S.C.--(BUSINESS WIRE)--Nov. 11, 1998--Advantica Restaurant Group, Inc. (Nasdaq: DINE) today announced that it is commencing an exchange offer (the "Offer") for all of the $156,897,000 outstanding 12 1/2% Senior Notes Due 2004 (the "FRD Notes") of FRD Acquisition Co. ("FRD"), its wholly-owned subsidiary operating the Coco's and Carrows restaurant chains. The Company is offering holders of FRD Notes, subject to certain limitations, the option of receiving cash or 11 1/4% Senior Notes Due 2008 (the "New Notes") of Advantica, or a combination thereof, in exchange for the FRD Notes.

The Offer is scheduled to expire at 5:00 p.m., Eastern Time, on December 11, 1998. Consummation of the Offer is conditioned on at least a majority of the outstanding principal amount of the FRD Notes having been validly tendered. The Offer is also subject to Advantica obtaining certain amendments to its bank credit agreement, the pay-off and termination of FRD's existing credit facility and certain customary conditions.

Since its formation, FRD has operated as a separately capitalized Unrestricted Subsidiary of Advantica. As a result, Advantica is currently prohibited from making further investments in FRD. Completion of the proposed Offer and related transactions would result in the separate capital structure of FRD being eliminated and Coco's and Carrows joining Denny's and El Pollo Loco as Restricted Subsidiaries, thereby permitting Advantica to make further investments in the Coco's and Carrows brands.

Commenting on the proposed transaction, Advantica Chairman and Chief Executive Officer James B. Adamson said, "The successful completion of this transaction will provide Coco's and Carrows with immediate access to investment capital to enhance the performance of those businesses. The Offer and the related transactions would also further reduce debt and improve the overall credit profile of our Company. Additionally, the simplification of Advantica's corporate structure through this transaction will eliminate the management distraction and administrative expense associated with operating two distinct capital structures.

"This year, we have achieved major improvements in our business portfolio, our capital structure and the operating performance of our largest concept, Denny's. We sold two underperforming businesses at attractive prices, resulting in a $270 million reduction in long-term debt and substantially improved financial flexibility. Completion of this transaction will further enable us to reinvest in our restaurant brands and realize their significant potential," concluded Adamson.

For each $1,000 principal amount of FRD Notes, Advantica is offering (a) $1,030 in cash or (b) $1,050 principal amount of New Notes, or a combination thereof, at the option of tendering FRD Note holders, with certain limitations. The New Notes will be identical, in all material respects, to Advantica's existing 11 1/4% Senior Notes Due 2008. The Company has set a Minimum Cash Tender amount of $60 million and a Maximum Cash Tender amount of $80 million. If cash tenders are less than the Minimum Cash Tender, a portion of the tenders for New Notes will be reallocated on a pro rata basis to cash tenders so that the Minimum Cash Tender provision is satisfied. If cash tenders exceed the Maximum Cash Tender, a portion of the cash tenders will be reallocated on a pro rata basis to New Notes so that the Maximum Cash Tender provision is satisfied.

Holders who tender FRD Notes will also be consenting to amendments to the Indenture for the FRD Notes, which eliminate substantially all of the protective covenants contained therein.

Donaldson, Lufkin & Jenrette Securities Corporation and Chase Securities Inc. are acting as financial advisors in connection with the Offer. U.S. Bank Trust National Association is acting as Exchange Agent.

Advantica Restaurant Group, Inc. is one of the largest restaurant companies in the United States, operating approximately 2,600 moderately-priced restaurants in the mid-scale and quick-service dining segments. Advantica owns and operates the Denny's, Carrows, Coco's and El Pollo Loco restaurant brands. Advantica news releases, links to SEC filings and other financial information are also available, at no charge, through Business Wire's Corporate News on the Net web site at: http://www.businesswire.com/cnn/dine.htm.

This announcement will not constitute an offer of any securities or commencement of the Offer described above. The Offer of New Notes will only be made by means of an Offering Memorandum and Solicitation Statement and related documents, which will be delivered to holders of the FRD Notes. The Offer of New Notes is only being made to holders of FRD Notes who are "accredited investors" (as defined under regulations adopted by the Securities and Exchange Commission) and up to 35 non-accredited holders (who meet certain requirements under such regulations) and otherwise pursuant to one or more available exemptions from the registration requirements of the Securities Act of 1933. The New Notes will not be registered under the Securities Act for purposes of the Offer and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

Certain matters discussed in this release constitute forward looking statements and involve risks, uncertainties, and other factors that may cause the actual performance of Advantica Restaurant Group, Inc., its subsidiaries and underlying concepts to be materially different from the performance indicated or implied by such statements. Such factors include, among others: the competitive pressures from within the restaurant industry; the level of success of the Company's operating initiatives and advertising and promotional efforts, including the initiatives and efforts specifically mentioned above; the ability of the Company to mitigate the impact of the year 2000 issue successfully; adverse publicity; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy, particularly at the retail level; and other factors from time to time set forth in the Company's SEC reports, including but not limited to the discussion in Management's Discussion and Analysis in the Company's Annual Report on Form 10-K for the year ended December 31, 1997 (and in the Company's subsequent quarterly reports on Form 10-Q).