Austin Musicians Serenade a New Sandwich in Ads for Schlotzsky's Deli; From Zydeco to Hip-Hop, the Albuquerque Turkey Inspires New Music.

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AUSTIN, Texas--(BUSINESS WIRE)--March 4, 2002

Schlotzsky's Inc. (Nasdaq:BUNZ)

A great sandwich can cause the mouth to water. Now, it can cause the creative juices to flow.

In Schlotzsky's(R) Deli's new broadcast ad campaign featuring the Albuquerque Turkey sandwich, a series of Austin musicians serenade the sandwich with original new "mini-songs" in genres ranging from zydeco to hip-hop.

"These were great fun to create because the songwriters could get wildly original," said Karen Lee, vice president for brand management for Schlotzsky's Inc. (Nasdaq:BUNZ). "We call the campaign `Music for your Mouth' because the sandwich actually appears as the instrument -- as the piano, harmonica or LP record -- as well as the inspiration. And the animated performances are visually arresting."

The new spots will appear on national network TV, March 4-31, as well as on regional TV and radio:

-- A New Orleans zydeco-inspired piece written by Danny Levin, who once played
with Grammy Award-winning Asleep at the Wheel. The singer is Rayvon Foster, who
has played with B.B. King and Jimmy Vaughan. Levin plays the piano.

-- A Mississippi blues harmonica piece written and sung by Darin Murphy, a
popular Austin multi-genre musician who is rooted in southern blues and British
rock.

-- A turntable scratch DJ piece written and sung by Bryan Crowell, a
self-described "very productive slacker" who "scratches" the sandwich as if it
were vinyl.

-- Musician-cum-raconteur Ben McDonald of the band Real Heroes waxing poetic as
a Eurotrash rock and roll food critic.

"You just have to hear these spots. Schlotzsky's is a huge supporter of the music community, and you can hear it in the originality of the spots," said Wally Williams, co-owner with Levin of Tequila Mockingbird Studio, where the ads were recorded.

"What makes these ads even more special is that we found a visual animation technique that stimulates the mind and the appetite."

The musicians are animated using "rotoscoping," a technique originally used in such films as Disney's "Snow White and the Seven Dwarfs," now revived in the digital age and used more recently in "The Lord of the Rings." In the Schlotzsky's ads, rotoscoping "traces" over video images of the musician's performance to create realistic animation in black and white, while the sandwich appears in full color.

The national network TV spots are 15 seconds, while the regional TV buys include 30-second spots.

"Even with modest media buys, we think this campaign is going to get noticed," said Lee. "New artists, new sounds, a new sandwich -- its all fresh and unique."

And the sandwich itself? The Albuquerque Turkey, introduced last week in Albuquerque ("a city whose name is as difficult to spell as ours," said Lee) is a spicy new sandwich featuring a delicious combination of smoked turkey, fire-roasted vegetables, hot bacon, melted cheese and a savory chipotle sauce on the fresh-baked sourdough bread that is Schlotzsky's signature.

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Schlotzsky's Inc., founded in Austin, Texas, in 1971, is a franchisor and operator of quick-service restaurants featuring made-to-order hot sandwiches served on distinctive sourdough bread, along with sourdough crust pizzas, salads and soups. As of Sept. 30, 2001, there were 692 Schlotzsky's(R) Deli restaurants open and operating in 38 states, the District of Columbia and 10 foreign countries. Visit www.cooldeli.com or www.schlotzskys.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 the 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."

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