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JB'S RESTAURANTS TO SELL 23 JB'S RESTAURANTS IN OREGON AND WASHINGTON

JB'S RESTAURANTS TO SELL 23 JB'S RESTAURANTS IN OREGON AND WASHINGTON
 SALT LAKE CITY, July 22 /PRNewswire/ -- As part of its strategic plan to enhance future growth, JB's Restaurants Inc. (NASDAQ: JBBB), announced today the signing of a preliminary agreement for the sale of 23 JB's Restaurants in the state of Oregon and Western Washington to IHOP Corp. (NASDAQ: IHOP) for approximately $4.5 million. These stores represent the entire JB's Restaurant presence in these markets. While the sale will result in an estimated one-time loss of approximately $3.0 million pre-tax in the company's fourth fiscal quarter, the transaction generates cash which the company intends to reinvest into its HomeTown Buffet concept which has higher expected returns. The preliminary agreement is subject to certain customary conditions including board approval and the preparation of definitive documentation which the parties plan to finalize in 20 days. The transaction is expected to close within 60 days.
 "The sale of these stores is a critical component of our long-term growth plan," commented Fred P. Gonzales, president and chief executive officer. "JB's will now be the dominant family restaurant chain in all the markets in which it operates. Although we believe the Northwest has tremendous potential, the company's plans did not allow for sufficient capital to properly develop these markets. As previously reported, the company's expansion capital is targeted primarily for HomeTown Buffet restaurants, which is part of the fast growing mid-priced buffet segment of the industry. The freeing up of this cash will enable JB's to expand HomeTown Buffet restaurants at a faster pace."
 In conjunction with these plans, the company recently amended its exclusive area development agreement with HomeTown Buffet Inc. to incorporate four additional states. The company now has exclusive development rights for HomeTown Buffet in the states of New Mexico, Arizona, Colorado, Utah, Idaho, Nevada, Wyoming and Montana. The company has three HomeTown Buffet restaurants now open, each averaging annualized sales in excess of $2.0 million, plans to open one additional restaurant prior to the end of its fiscal year ended September 1992 and plans to open 10 additional restaurants in its fiscal 1993.
 "The strategic opportunity for JB's to divest of its Northwest stores, which have historically generated low profits for the company, for cash which can be redirected to the development of HomeTown Buffet restaurants enables us to accelerate our long-term strategic direction and enhance future profitability," commented David E. Pertl, vice president and chief financial officer. "The sale of these 23 JB's Restaurants will improve our margins and average unit volumes."
 After the completion of the transaction, JB's Restaurants will operate 109 JB's family-style restaurants, franchise four JB's family- style restaurants, operate 12 franchised Sbarro restaurants and operate three franchised HomeTown Buffet restaurants within 10 western states. In addition, the company owns an approximately one-fourth interest in Americana Entertainment Group Inc., the parent company of HomeTown Buffet which currently operates three HomeTown Buffet restaurants in California and Oregon.
 -0- 7/22/92
 /CONTACT: David E. Pertl of JB's Restaurants, 801-974-4300/
 (JBBB IHOP) CO: JB's Restaurants Inc.; IHOP Corp. ST: Utah, Washintgon, Idaho IN: FOD SU:


MC -- DV018 -- 2109 07/22/92 16:34 EDT
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Publication:PR Newswire
Date:Jul 22, 1992
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