BAB, Inc. Reports Profit for Year-Ended 11/30/02.

Business Editors

CHICAGO--(BUSINESS WIRE)--Feb. 26, 2003

BAB, Inc. (OTCBB:BABB), the Chicago based operator and franchisor of Big Apple Bagels, My Favorite Muffin and Brewster's Coffee, today announced its financial results for the fiscal year-ended November 30, 2002, reporting net income of $326,300, or 0.04 per share.

For the year-ended November 30, 2002, BAB had revenues of $8,550,300 and net income of $326,300, or 0.04 per share, versus revenues of $10,516,900 and a net loss of ($1,089,600), or (0.12) per share last fiscal year, as adjusted for the 4-for-1 stock split effective January 20, 2003.

The decrease in revenues for the year ended November 30, 2002, as compared to the prior year, is primarily due to management's decision to convert company-owned stores to franchised units. Management's decision back in 2001 to focus on expanding the franchising network, along with strong emphasis on reducing costs, has resulted in increased profitability. Franchised operations went from 167 units at fiscal year-end 2001 to 176 at 2002. Operating costs for the year ended November 30, 2002, decreased $3,135,000, or 28%, from 2001 due to increased emphasis on cost control. "BAB's strength is it's ability to nurture and expand the franchise organization and we intend to continue in that direction. We also intend to continue reducing costs and improving efficiencies wherever possible," pointed out Michael W. Evans, the Company's President and Chief Executive Officer.

The company also improved its balance sheet by increasing cash by $612,500, or 121%, reducing accounts receivable by $227,200, or 37%, reducing accounts payable by $80,600, or 31% and reducing debt by $296,200, or 13%, since fiscal year-end 2001.

BAB, Inc. operates, franchises, and licenses Big Apple Bagels (R), My Favorite Muffin (R), Brewster's (R) Coffee and Jacob Bros. Bagels, a Chicago based bagel bakery chain. The Company's stock is traded on the OTCBB under the symbol BABB and its web site can be visited at www.babcorp.com.

Certain statements in this press release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "forecast," "estimate," "project," "intend," "expect," "should," "would," "believe" and similar expressions and all statements which are not historical facts are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the company's actual results, performance (financial or operating), or achievements to differ from the future results, performance (financial or operating), or achievements expressed or implied by such forward-looking statements. The above factors are more fully discussed in the company's SEC filings.

(TABLE FOLLOWS)

BAB, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS


                                      --------------------------------
                                      Fiscal Year
                                         Ended
                                           2002        2001  % Change
                                      --------------------------------

REVENUES

Net sales by company-owned stores     4,086,110   6,325,419     -35.4%
Royalty fees from franchised stores   2,748,761   2,759,420      -0.4%
Franchise and area development fee
 revenue                                570,380     329,600      73.1%
Licensing fees and other income       1,145,005   1,102,413       3.9%
                                      ----------------------
                                      8,550,256  10,516,852     -18.7%

OPERATING COSTS AND EXPENSES

Food, beverage and paper costs        1,291,070   2,193,420     -41.1%
Store payroll and other operating
 expenses                             3,171,856   4,635,535     -31.6%
Selling, general and administrative   2,983,639   3,621,779     -17.6%
Depreciation and amortization           716,436     847,244     -15.4%
                                      ----------------------
                                      8,163,001  11,297,978     -27.7%

Income (Loss) before interest, other
 and taxes                              387,255    (781,126)   -149.6%

Interest expense                        169,471     225,849     -25.0%
Interest income                          64,453      55,886      15.3%
Other income (expense)                   44,098      41,509       6.2%
Income taxes                                        180,000       N/M

                                      ----------------------
Net Income (Loss)                       326,335  (1,089,580)      N/M
                                      ======================

Earnings (Loss) per share - basic          0.04       (0.12)      N/M
Average number of shares outstanding  8,598,645   8,794,160       N/M

Earnings (Loss) per share - diluted        0.04       (0.12)      N/M
Average number of shares outstanding  8,695,715   8,794,160       N/M

EBITDA                                1,212,242     163,513       N/M