BAB Holdings, Inc. Signs Master Franchise Agreement for United Arab Emirates.

CHICAGO--(BUSINESS WIRE)--Oct. 7, 1999--

BAB Holdings, Inc. (Nasdaq: BAGL), the Chicago-based operator, franchisor, and licensor of Big Apple Bagels(R), My Favorite Muffin(R), and Brewster's Coffee(R) today announced that an agreement has been signed with the Al Shamsi Group of the United Arab Emirates. Under this agreement, the Al Shamsi Group will act as master franchisee of Big Apple Bagels(R) tri-branded bagel bakery/cafe's throughout the UAE.

Initial development is expected to start in Dubai, with an anticipated opening of a first location during the first quarter of 2000. Shortly thereafter, expansion is anticipated in Abu Dabi and other cities within the United Arab Emirates.

The Al Shamsi Group, headed by Yousuf Ahmed Al Shamsi, is a diversified conglomerate of manufacturing, trading, and service sector businesses. "We are excited to expand our presence in the Middle East," states BAB Holdings, Inc. Chief Executive Officer Michael W. Evans. "The Al Shamsi Group is an ideal partner. They bring vast knowledge and significant resources to their role as master franchisee. We look forward to continued growth in the Middle East and throughout the world."

BAB Holdings, Inc. operates, franchises, and licenses Big Apple Bagels(R), My Favorite Muffin(R), and Brewster's(R) Coffee and currently has units in 32 states, two Canadian provinces, and Peru. In February of this year it acquired the assets of Jacobs Bros., a Chicago based bagel bakery chain, including eight stores and a central commissary facility. The Company has licensing agreements with Host Marriott, Mrs. Fields Cookies, Beatrice Group, Inc., a division of ConAgra, Oberweis Dairy and and Alonti Deli. The Company's stock is traded on the Nasdaq Small-Cap market under the symbol "BAGL" and its web site can be visited at www.babholdings.com.

Certain statements contained in this press release, including statements regarding the development of the company's business, the markets for the company's products, anticipated capital expenditures, and the effects of completed and proposed acquisitions, and other statements contained herein regarding matters that are not historical facts, are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Certain risks and uncertainties are outside the control of the company and its management, including its ability to attract new franchisees; the continued success of current franchisees; the effects of competition on franchisee and company-owned store results; consumer acceptance of the company's products in new and existing markets; fluctuation in development and operating costs; brand awareness; availability and terms of capital; adverse publicity; acceptance of new product offerings; availability of locations and terms of sites for store development; food, labor and employee benefit costs; changes in government regulation (including increases in the minimum wage law); regional economic and weather conditions; the hiring, training, and retention of skilled corporate and restaurant management; and the integration and assimilation of acquired concepts. Some of these risks and uncertainties are wholly outside of the control of the company. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The company undertakes no obligation to publicly release the results of any revision to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.