BAB Holdings, Inc. Unveils Aggressive "Back to Basics" Strategic Plan.

CHICAGO--(BUSINESS WIRE)--Nov. 17, 1999--

BAB Holdings, Inc. (Nasdaq: BAGLC), the Chicago-based operator, franchisor, and licensor of Big Apple Bagels(R), My Favorite Muffin(R), and Brewsters Coffee(R) today announced a dramatic and detailed strategic plan designed to return the company to profitability within six months.

"We're going to focus on what we do better than anyone else in the bakery/cafe business: selling franchises, supporting our franchisees, and licensing our brands" states CEO Michael Evans. "Like so many others in the bagel bakery niche, we allowed ourselves to focus on too many opportunities with too few resources. As a result, the inherent profitability of our core business--franchising and licensing--has been undermined by our efforts to build a broad base of company stores. This aggressive expansion of corporate locations has not paid off, and it is time that we recognized this."

The Company will franchise a majority of its corporate stores, reduce its corporate payroll by approximately 33%, and intensify its focus on franchising and licensing opportunities. Proceeds from the sale to franchisees will be used to reduce corporate debt. In January 2000, the Company will launch a state-of-the-art marketing initiative designed to aggressively build sales at the local store level.

"This is the single most important initiative in the history of BAB Holdings" continues Evans. "We are committed to building our core business--franchising tri-branded bagel bakery/cafes and securing appropriate licensing opportunities for our Big Apple Bagels(R), My Favorite Muffin(R) and Brewsters(R) Coffee brands. These businesses are highly profitable. The upside of continued growth in these areas is significant."

BAB Holdings, Inc. is the industry leader in the franchising of new bagel bakery/cafes, consistently outpacing competitors in growth through new franchises. New franchised locations will open in Egypt later this month. Master franchise agreements have been signed for expansion in South Korea and the United Arab Emirates. Growth in the number of franchised units enables the Company to leverage existing corporate overhead and is thus highly profitable.

Licensing the Big Apple Bagels(R), My Favorite Muffin(R) and Brewsters(R) Coffee brands generates significant revenues for the Company.

"The value of our company is determined by the strength of our brands and the profits that we earn" continues Evans. "Our `back to basics' approach--supporting and expanding our domestic and international franchise network, increasing royalties generated through current and future licensing opportunities--will result in significant profitability. While there are certain short-term costs associated with implementing this plan, the importance of these actions towards increasing shareholder value is undeniable. These efforts, coupled with a reduction in bank debt and the recent retirement of our Class A Preferred Stock, have set the stage for a dramatic resurgence."

The Company anticipates taking a onetime non-cash charge of approximately $2.5M in the fourth quarter in anticipation of the company's restructuring.

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 Alonti Deli. The Company's stock is traded on the Nasdaq Small-Cap market under the symbol "BAGLC" 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.