Boston Chicken Acquires Majority Stake in Progressive Food Concepts Inc.; Taking Expanded Concept Test to Denver.

GOLDEN, Colo.--(BUSINESS WIRE)--Aug. 27, 1997--Boston Chicken, Inc. (Nasdaq-NMS: BOST) today announced it has acquired the majority equity interest in Progressive Food Concepts, Inc. (PFCI), formed in January 1997 to explore additional opportunities in home meal replacement.

With the acquisition, Boston Chicken, Inc. (BCI) owns approximately 85% of PFCI.

At the request of Boston Chicken, PFCI has been conducting a test of an expanded Boston Market concept in Charlotte, North Carolina that combines Boston Market's traditional homestyle hot foods with fresh, chilled prepared salads and meals, as well as an expanded line of desserts.

BCI said that because of the strong initial response to the Charlotte test, it will now expand the test to Boston Market stores in the Denver metropolitan area. To facilitate this next phase of the test, BCI is purchasing 16 Boston Market stores in Denver from BCE West, L.P., its area developer in the southwest U.S.

Scott Beck, chairman and chief executive officer of BCI, said, "Although still early, we're very excited by the initial results of the Charlotte test. Customers have reacted favorably to the new menu items, which include freshly prepared, grab-n-go chilled salads, sandwiches and desserts, as well as a unique chilled bar with salads that can be used as entrees or side dishes. More importantly, the expanded selection has also boosted sales of Boston Market's core menu items."

"PFCI has been hard at work exploring the additional potential of the home meal replacement segment. Based on extensive research and investigation, we believe that significant potential exists for Boston Market to provide more fresh, convenient meal solutions for today's time-crunched consumers, helping us to enhance the productivity of our existing stores," said Beck. "Because of that potential, and the expertise and technology of PFCI, we believe the greatest benefit for our shareholders is for BCI to own a majority stake in PFCI."

"While we recognize the significant long-term potential of our investment in PFCI, our primary focus continues to be on maximizing the performance of the existing store base. We're pleased with our greater focus on operations and we feel good about the direction of our new marketing strategy which celebrates the brand and all its attributes -- great-tasting, convenient, freshly-prepared food -- while taking us back to our home meal replacement roots," Beck added.

As earlier reported, Saad J. Nadhir, PFCI chairman and co-founder of Boston Chicken, will rejoin the BCI board of directors as co-chairman. Nadhir will become co-chairman and chief executive officer of Boston Chicken effective October 1, while Scott Beck will be co-chairman and retain his position as president of BCI.

"Saad and I have been partners for many years," Beck said. "In the spirit of this partnership, we felt it appropriate for Saad to now take on the title of ceo while I remain president."

"We have never been more confident about the potential of Boston Market. Research has shown that the domestic market for home meal replacement (HMR) could exceed $100 billion, several times larger than what we initially believed to be the market size when we first got involved with HMR about five years ago," said Nadhir. "While building a base of nearly 1200 stores since that time, Boston Market has emerged as the leader in HMR and we believe, as the only national brand that can credibly deliver fresh, convenient meals.

"We've been investigating ways to leverage our market leadership for over a year and a half, and I m pleased to be in a role at BCI where I can direct our efforts to fill the gap that exists between foodservice and supermarket offerings. These efforts will be led by the continuing focus on our existing store base and our core menu items."

"Scott and I have always been a team and I am excited to be working to help realize the full potential of the Boston Market brand," Nadhir added.

Additionally, the company announced it plans to convert its loan to Mayfair Partners, L.P. into a 75% equity interest in the area developer, which owns and operates Boston Market stores in the Baltimore, Maryland and Washington D.C. areas. The transaction increases BCI's company store base by 53 stores.

Together with BCI's purchase of the 16 Denver-area test stores from BCE West, its area developer in the Southwest U.S. region, the company will now have 296 company stores, approximately 25% of the Boston Market system. The company does not presently intend to purchase any of the minority interest in Mayfair.

Mark Stephens, vice chairman and chief financial officer, said, "The conversion of our loan to Mayfair is consistent with the systems' greater focus on store performance and the recent streamlining of the area developer organizations. By combining all our company store markets -- New York, Washington and Philadelphia -- into one contiguous region and under one management group, we can have greater control over the operational and financial aspects of the business."

Boston Chicken, Inc. franchises and operates retail food service stores under the Boston Market brand name that specialize in fresh, convenient meal solutions, featuring homestyle entrees, fresh vegetables, sandwiches, salads and side dishes.

Boston Market combines the freshness and quality of traditional home cooking with convenience and value. On July 13, 1997, the end of the company's second quarter, there were 1,208 Boston Market stores in 38 states and the District of Columbia. Boston Chicken also owns a majority interest in Einstein/Noah Bagel Corp.

Certain statements in this release constitute forward-looking statements and involve risks, uncertainties and other factors which may cause actual results and the performance of Boston Chicken, Inc., its area developers and franchisees, and its and their Boston Market stores to be materially different from the results, performance or achievements expressed or implied by such statements.

Such factors include, among others: availability and cost of capital; success of operating initiatives; development and operating costs; area developers' adherence to development schedules; advertising and promotional efforts; store performance; adverse publicity; changes in business strategy, including the possible integration of fresh, ready-to-heat prepared foods in the Boston Market concept; changes in development plans; availability, locations, and terms of sites for store development; and other factors set forth in the company's filings with the Securities and Exchange Commission.

CONTACT: Boston Chicken Inc., Golden

Analyst Contact: Melissa Marsden, 303/216-5652

Media Contact: Karen Rugen, 303/216-5076