Pizza Inn, Inc. President and Chief Executive Officer Taft Comments on Opportunities, Compensation

PIZZA INN, INC. Timothy P. Taft, President and Chief Executive Officer of Pizza Inn, Inc., commented today on the challenges and opportunities facing the 47 year old chain and the intent behind the structure of his employment agreement with the company. Emphasizing issues addressed at the company's annual meeting of shareholders in June, Taft said, "Our system shows its age in certain areas, but we have a time-tested, recognized brand that gives us a solid platform for the future. My plans to revive our brand can be put into four general categories: first, to strengthen franchise performance by providing disciplined innovation and leadership to the Pizza Inn system; second, to strengthen corporate restaurant operations so that Pizza Inn can demonstrate renewed standards and a vision for the future; third, to meld a viable economic model with the desired physical appearance and function that will represent the face of Pizza Inn moving forward; and fourth, to strengthen our distribution arm so that it will be the unquestioned choice of operators because of pricing, service, efficiency, and consistency. Mr. Taft continued, "From the outset of my employment, I told the franchisees that my litmus test for credibility is that I will never pursue a direction that benefits me over the Pizza Inn system. I will dedicate myself and my team to always do what's right for the system. These have been my principles from the very beginning of my negotiations with Pizza Inn's board of directors when I asked the board to put into place a compensation package that aligns my interests with those of Pizza Inn's shareholders, employees and franchisees, and sets my compensation accordingly. As a result, my employment agreement calls for a net salary of $1.00 in the first year, performance-based bonuses and a grant of 500,000 stock options, with only 50,000 vesting in the first year. In the end, we're all working toward the same goals."

A spokesperson for the company confirmed the terms of Taft's employment agreement as including, among other provisions, a term beginning March 31, 2005 and expiring March 31, 2007, and provisions for a base salary of $1.00 for the first 12 months and a minimum base salary of $300,000 for the second 12 months; benefits and bonuses in each year as determined by the board of directors, but the bonus shall not be less than $200,000 in the second year, conditioned on achieving certain performance goals; and severance payments based upon certain predetermined salary, benefit, and bonus amounts. The employment agreement also provides for an employment inducement grant of options to purchase 500,000 shares of Pizza Inn's common stock at a price per share equal to $2.50. The options are generally immediately exercisable as to 50,000 shares, and shall generally become exercisable as to an additional 100,000 shares on the first anniversary of the employment agreement, 150,000 shares on the second anniversary, and the remaining 200,000 shares on the third anniversary, provided that Mr. Taft continues to be employed on each such anniversary date and subject to certain termination, forfeiture and acceleration provisions. Following the second anniversary the agreement automatically renews for additional 12-month terms unless either party determines not to extend employment.

Pizza Inn, Inc. is headquartered in The Colony, Texas, along with its distribution division, Norco Restaurant Services Company. Pizza Inn franchises over 400 restaurants with annual chainwide sales of approximately $170 million.

   Pizza Inn, Inc.                    For more information contact:
   3551 Plano Parkway                 Tim Taft
   The Colony, TX  75056              President and Chief Executive Officer
                                      (469) 384-5000

        For more information about the company, visit Pizza Inn at
                         http://www.pizzainn.com/

SOURCE: Pizza Inn, Inc.