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BACK YARD BURGERS SETTLES ONE OF FOUR FRANCHISEE LAWSUITS.

MEMPHIS, Tenn.--(BUSINESS WIRE)--Feb. 10, 1995--Back Yard Burgers, Inc. (Nasdaq Small Cap:BYBI; CHX:BYB) today announced that it has resolved one of four lawsuits filed by franchisees against the company in August 1994.

This suit was the only one that alleged sexual and racial discrimination against the Company, as well as sexual harassment by a Company employee. Under terms of the agreement, the Company will purchase this franchisee's sole unit in Austin, Texas, for $335,000 cash; no other compensation will be paid and all claims against and counterclaims by the Company will be dropped.

"Although we continue to believe all of these lawsuits are without merit, we are pleased to have found an acceptable business means to resolve one of them," commented Lattimore Michael, Chairman and Chief Executive Officer of Back Yard Burgers. Michael said the Company has signed a ground lease for the unit and will reopen it as a Company-owned store by April 1. The Company may expand its presence in the Austin area or, at a later time, it may consider using the site as the basis for a new franchise agreement in that market.

Three other franchisee lawsuits remain pending against the Company, relating to contractual disputes between the parties. "We remain confident of our position that these lawsuits are without merit, and believe that Back Yard Burgers will be vindicated," he continued. "We intend to defend the three remaining lawsuits vigorously and have filed counterclaims for amounts owed to the Company by the franchisees involved."

According to Michael, no trial dates have been set. Additionally, he noted that the Company is currently not engaged in settlement discussions with any of the other plaintiffs.

Back Yard Burgers operates and franchises quick-service restaurants in Memphis, Little Rock, Nashville and other markets across 14 states. The Company features gourmet hamburgers and chicken sandwiches, name-brand condiments and beverages as well as hand-dipped milkshakes, fresh-squeezed lemonade and fresh-baked cobblers.

CONTACT: Back Yard Burgers, Inc.

Stephen J. King, 901/367-0888
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Publication:Business Wire
Date:Feb 10, 1995
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