BAB Holdings, Inc., the Chicago-based operator, franchisor and licensor of Big Apple Bagels®, My Favorite Muffin® and Brewster’s® Coffee, today announced that, under the terms of a licensing agreement previously signed between the two companies, Beatrice Group, Inc., a ConAgra Company, has commenced production of BAB’s proprietary varieties of packaged cream cheese. The agreement calls for BAB Holdings, Inc. to license its Big Apple Bagels® trademark to Beatrice for the worldwide manufacture and sale of BAB’s proprietary varieties of packaged cream cheese to the retail trade.

“This exciting new product line, with unique flavor profiles, extended shelf life and enhanced consistency, was developed in response to the needs of our franchise community” states Michael Evans, CEO of BAB Holdings, Inc. “That we have exceeded the expectations of our franchisees is evidenced by the fact that over 50% of our locations have committed to this program in its first week of availability.”

“The commencement of production of Big Apple Bagels® proprietary cream cheese by Beatrice is also an important step in the development of BAB’s growing non-traditional business,” adds Evans. ” We believe that the superior quality of our cream cheese products, coupled with Beatrice’s broad distribution network, marks our entry into national retail distribution of our brand to a mass audience. We believe the potential for revenue and increased brand awareness provided by Beatrice’s ability to bring this product to market will have a significant positive impact on the long-term value of our brand.”

Beatrice is a major manufacturer and marketer of cheese in the United States. Its various product lines are marketed to consumers under the County Line, Treasure Cave, Healthy Choice, Reddi-Wip, Eggbeaters, Blue Bonnet, Fleischmann, Promise and Touch of Butter brands. The product line is marketed to foodservice and industrial accounts under the Pauly, Dorman, Healthy Choice, Treasure Cave, European Legacy and Red Umbrella brands.

“Flavored cream cheese continues to be a rapidly growing category throughout all of Beatrice’s distribution channels,” states Dave Beck, Vice President of Beatrice Cheese. “This product line, with its strong brand recognition, represents an opportunity for Beatrice to leverage our strategic partnership with BAB in both the retail and foodservice segments of our business.”

BAB Holdings, Inc. operates, franchises and licenses Big Apple Bagels®, My Favorite Muffin® and Brewster’s® Coffee and currently has units in 32 states, Canada, Peru and Egypt. The Company has Licensing agreements with HMS Host, Mrs. Fields Cookies, Alonti Deli and Kohr Brother’s Frozen Custard. The Companies stock is traded on the Nasdaq Small-Cap market under the symbol “BAGL” and its web site can be visited at www.babholdings.com.

Certain statements contained in this press release, including statements regarding development of the company’s business, the markets for the company’s products, anticipated capital expenditures, and the effects of completed and proposed acquisitions, and other statements contained herein regarding matters that are not historical facts, are forward looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Certain risks and uncertainties are outside the control of the company and its management, including its ability to attract new franchisees; the continued success of current franchisees; the effects of competition on franchisees and company-owned store results; consumer acceptance of the company’s products in new and existing markets; fluctuations in development and operating costs; brand awareness; availability and terms of capital; adverse publicity; acceptance of new product offerings; availability of locations and terms of sites for store development; food, labor and employee benefit costs; changes in government regulation ( including increases in the minimum wage law; regional economic and weather conditions; the hiring, training and retention of skilled corporate and restaurant management; and the integration and assimilation of acquired concepts. Some of these risks and uncertainties are wholly outside the control of the company. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.