O'Charley's Inc. Adds Four New States to Franchising Program

O'Charley's Inc. (NASDAQ/NM: CHUX) announced it has significantly expanded its O'Charley's franchising program with the addition of Iowa and Nebraska as well as parts of Kansas and South Dakota. With these announcements, the Company has extended franchising to a total of seven states.

O'Charley's Inc. signed an exclusive multi-unit franchise development agreement with Four Star Restaurant Group, LLC to develop and operate O'Charley's restaurants in the states of Iowa and Nebraska, and in the Topeka, Kansas, and Sioux Falls, South Dakota, markets. The agreement specifies that over the next six years Four Star Restaurant Group, LLC will develop 10 new O'Charley's restaurants with the first O'Charley's restaurant projected to open in the second quarter of 2006.

Four Star Restaurant Group, LLC is led by president and chief operating officer Michael Johnson. Mr. Johnson has extensive experience in restaurant real estate brokerage and development including Outback Steakhouse, Brinker International, and Darden Restaurants. Mr. Johnson is a multi-unit franchisee of Thomas Kinkade Galleries and owns and operates two hotels, one of which is a franchisee of Choice Hotels International and the other of AmericInn International. Joining Johnson as the Director of Operations for Four Star will be a seasoned operator with 25 years of restaurant operations experience, including the past 10 years as a multi-unit supervisor for a national casual dining chain.

Zeb Hastings, vice president of franchising for the O'Charley's concept, stated, "We have been very selective in choosing our franchisees and joint venture franchisees with a focus on identifying experienced and well-capitalized casual dining operators and developers. In doing so, we believe we have secured a solid, long-term foundation for complementing the natural growth of the O'Charley's brand nationwide. Our franchising program to date has yielded three new store openings and future development of up to 42 additional locations in a total of seven states in the Southeast and Midwest. We expect to continue this early momentum with new franchising announcements during 2005."

Michael Johnson, president and chief operating officer of Four Star Restaurant Group, added, "We are very excited about the opportunity to work closely with O'Charley's and introduce such an exciting concept to Iowa, Nebraska, Kansas and South Dakota. O'Charley's franchising program offered us a more compelling opportunity when compared with other casual dining franchisors and enabled us to operate exclusively in key major markets in the Midwest. Throughout the process we became more and more sold on this concept and have a strong respect for its management team. We have begun our site selection process for Iowa and Nebraska and look forward to opening our first O'Charley's restaurant in the second quarter of 2006."

O'Charley's Inc. operates 224 company-owned O'Charley's restaurants in 16 states in the Southeast and Midwest, with two franchised O'Charley's restaurants in Michigan.


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