Back Yard Burgers Acquires New Markets for Growth.

Business Editors

MEMPHIS, Tenn.--(BUSINESS WIRE)--May 16, 2000

Back Yard Burgers, Inc. (Nasdaq SmallCap:BYBI) today announced the acquisition of three franchised stores.

The company purchased the operating businesses, including personal property, of Back Yard Burgers stores located in Jackson, Tennessee, Tupelo, Mississippi, and Jonesboro, Arkansas, from a franchisee, KEA Foods, effective May 7, 2000. The acquisition will be accounted for as an asset purchase, and the company will finance the purchase with a combination of existing cash on hand and a short-term note payable to the seller. No real property was purchased by the company. Lattimore Michael, CEO of Back Yard Burgers, stated, "I'm excited about the opportunity to add these locations within our core company markets of eastern Tennessee, Arkansas and northern Mississippi. It allows us to continue to expand our market presence without cannibalization of existing company units."

Michael also said he believes the addition of these high-volume, well-run restaurants should add immediate earnings to the company without additional G&A expenses while increasing the company's opportunity for continued expansion in these contiguous areas.

Also commenting on the acquisition, Michael Myers, Chief Operating Officer, said, "We are excited about the addition of these stores as company-operated units. These are high-volume units that are within the media coverage range for our Memphis market, further improving our economies of scale. Our goal is to build critical mass in our existing markets throughout the Southeast. This is a natural step in the process."

Back Yard Burgers operates and franchises quick-service restaurants in Memphis, Little Rock, Nashville and other markets across 16 states. The restaurants specialize in charbroiled, freshly prepared, great-tasting food. As its name implies, Back Yard Burgers strives to offer the same high-quality ingredients and special care typified by outdoor grilling in the backyard. Its menu features made-to-order gourmet hamburgers and chicken sandwiches - charbroiled over an open flame - fresh salads, chili and other special entrees, as well as hand-dipped milkshakes, fresh-made lemonade and fresh-baked cobblers.

This press release contains forward-looking statements within the meaning of the federal securities laws. There are certain important factors that could cause actual results to differ materially from those anticipated by the statements made herein. Among the factors that could cause actual results to differ from predicted or expected results are: delays in opening new stores because of weather, local permitting or other reasons; increased competition; cost increases or shortages in raw food products; and the possibility of unforeseen events affecting the industry generally. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.