BAB Holdings, Inc. to Implement E-Commerce on Internet; Further Expansion in Growing Non-Traditional Business.

CHICAGO--(BUSINESS WIRE)--Jan. 11, 1999--BAB Holdings, Inc. (Nasdaq:BAGL), the Chicago-based operator and franchisor of Big Apple Bagels, My Favoritre Muffin, and Brewster's Coffee concept stores, is preparing to expand its two-month old web site, located at www.babholdings.com, in order to join the steadily growing category of "E-Commerce."

The 1998 holiday season showed promising sales levels in its My Favorite Muffin gift basket line, which were stimulated by the opportunity for customers to browse the gift catalogue on-line and phone in orders to a toll-free hot line.

"Now that we've seen the business potential of Internet shopping, we recognize that now is the time to complete the experience for our customers by affording them the opportunity to place orders directly through our web site." said Michael W. Evans, President and Chief Executive Officer of BAB Holdings. "We expect this expanded scope will allow us to reach the important segment of customers who are now shopping via the Internet on a regular basis."

In addition to its muffin gift baskets, the site also offers Brewster's Coffee and will be adding a selection of its branded merchandise items. Implementation is planned to occur during the first quarter.

The expanded web site exemplifies BAB's commitment to its rapidly growing non-traditional business. As an additional illustration of this, BAB has reached an agreement with the Pepi Corporation, the Houston based operator of Alonti delicatessens, for Brewster's Coffee to be the exclusive supplier of drip coffee served in all twelve of their existing Chicago locations and any to open in the future.

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 of 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 occurence of unanticipated events.