BAB Holdings, Inc. Tests Signature Bread and Sandwich Program.

CHICAGO--(BUSINESS WIRE)--March 12, 1999--BAB Holdings, Inc. (Nasdaq: BAGL), the Chicago-based operator, franchisor, and licensor of Big Apple Bagels, My Favorite Muffin, and Brewster's Coffee, announced today that it will begin to test a new line of artisan breads and sandwiches at seven company-owned locations in greater Chicago and Milwaukee.

"We couldn't be more excited about our new bread program" states CEO Michael Evans. "The quality of this product is exceptional, and our proprietary technology will enable us to incorporate this program within all of our tri-branded locations quickly, consistently and cost-effectively. This new menu complements our strengths in bagels, muffins and coffee while broadening our appeal."

"To heighten the impact of these signature breads, we are introducing a new line of gourmet sandwiches" says Evans. "These traditional Italian sandwiches--`panini'-- are grilled quickly to bring out the extraordinary flavor of these breads. Panini provide a vibrant lunch alternative to our customers. By virtue of its terrific quality and enhanced breadth, we expect this new menu to increase customer traffic and raise the frequency of visits to Big Apple Bagels locations. It is consistent with our statement that `there's more in store than ever before.'"

From a traditional crusty Italian bread and honey wheat loaf to Swiss peppercorn and Athenian olive baguettes, the new menu will feature seven signature breads. Chief Operating Officer Tom Fletcher explains that "after more than a year in development, we are now capable of producing high quality artisan breads at any Big Apple Bagels location. Our unique formulas and proprietary method enables us to produce breads that rival the world's finest. We expect to move quickly from test to implementation."

BAB Holdings, Inc. operates, franchises, and licenses Big Apple Bagels, My Favorite Muffin, and Brewster's 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, Oberweis Dairy, Miami Subs Corporation, and Alonti Deli's. 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.