Boston Chicken Reports Fourth Quarter Store Sales and Margins; Plans to Take Special Charges.

GOLDEN, Colo.--(BUSINESS WIRE)--Feb. 9, 1998--Boston Chicken, Inc. (Nasdaq: BOST) today announced that fourth quarter net weekly per store average (WPSA) sales and store cash flow margins for the Boston Market(R) system improved over the third quarter of 1997.

The company also announced it will take special charges in the range of $250 million to $350 million in the fourth quarter, due primarily to a provision for potential loan losses and asset write-downs related to the company's previously announced strategic redirection and decision to become a company-owned system. These charges will result in net losses for both the fourth quarter and the fiscal year ended December 28, 1997.

Saad Nadhir, co-chairman and chief executive officer of Boston Chicken, said, "The Boston Market system averaged net WPSA sales of $18,904 in the fourth quarter and also realized better margin productivity, posting store cashflow margins of 14.2%. These fourth quarter results improved over the third quarter and bolster our commitment to the strategic redirection we are currently implementing."

The company's strategic redirection includes a change in marketing and product strategy for the Boston Market system, a renewed focus on the home meal replacement market and Boston Market's dinner-based brand equities and a significant reduction in the level of promotional and advertising spending. The plan also called for a pause in new store development to enable greater focus on productivity of the existing base of more than 1150 stores.

In October 1997, the company announced its intent to become a company-owned system and a recommendation by its board of directors that this could be best achieved by first acquiring BC Equity Funding, L.L.C. and Market Partners, L.L.C., funds which hold preferred equity interests in many of the company's 14 area developers. The company said that discussions between a special committee of Boston Chicken's board of directors and a committee elected to negotiate on behalf of the preferred holders are making good progress, but the parties have not yet reached an agreement. The company said it is hopeful the discussions will lead to an agreement, however, there can be no assurance that an agreement will be reached.

The company said the charges to be taken in the fourth quarter are primarily due to a provision for potential loan losses and asset write-downs associated with the company's strategic redirection and decision to become a company-owned system. The company said the provision for potential loan losses was established after determining that portions of its area developer loans may not be recoverable. The recoverability analysis is based upon facts and circumstances deemed relevant by management at the time the analysis is performed. Factors impacting the fourth quarter recoverability analysis include whether or not an agreement is reached regarding acquisition of the preferred funds and evaluations regarding the cost and availability of expansion capital, the value of the collateral securing the loans and the use of loan proceeds.

The special charges are expected to result in virtually no cash outlay and are not expected to have an impact on availability under the company's $85 million credit facility.

Charge amounts are preliminary and subject to final audit by the company's independent accountants. The company expects to report fourth quarter and fiscal 1997 results on February 18, 1998. As the company has said previously, Boston Chicken would expect to report a net loss in 1998 due primarily to significant depreciation charges associated with an increased company-store base and significant goodwill amortization charges which would result from the transition to a company-owned system.

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. As of December 28, 1997, the end of the company's fiscal year, there were 1166 Boston Market stores in 38 states and the District of Columbia, of which 307 were company-owned stores. Boston Chicken also owns a majority interest in Einstein/Noah Bagel Corp.

Certain statements in this release constitute "forward-looking statements" and involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of Boston Chicken, Inc., its subsidiaries, their area developers, franchisees, and licensees, and Boston Market stores, to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others: store performance; competition; success of operating initiatives; advertising and promotional efforts; adverse publicity; changes in business strategy; changes in development plans; availability and terms of capital; and other factors set forth in the company's filings with the Securities and Exchange Commission. All forward-looking statements relating to the proposed transition to a company-owned structure are subject to, among other things, various board, special committee and regulatory approvals, and negotiation of definitive agreements on acceptable terms. There can be no assurance that the transition to a company-owned structure will be achieved.

CONTACT: Boston Chicken, Inc., Golden

Analyst Contact: Melissa Marsden, 303-216-5652

Media Contact: Karen Rugen, 303-216-5076