Schlotzsky's, Inc. Announces Changes to Board of Directors; University of Texas Business Professor Gary M. Cadenhead, Ph.D. Appointed to Replace the late Azie Taylor Morton

Business Wire, May 18, 2004

Business Editors

AUSTIN, Texas--(BUSINESS WIRE)--May 18, 2004

Schlotzsky's, Inc. (Nasdaq:BUNZ) today announced the formal appointment of Gary M. Cadenhead, Ph.D. to the Board of Directors.

Dr. Cadenhead, a senior lecturer in entrepreneurship in the McCombs School of Business at the University of Texas at Austin, brings a wealth of experience and insight to the Schlotzsky's Board, where he will serve on the Audit and Compensation committees, according to Monica Landers, Schlotzsky's Vice President of Corporate Communications.

Dr. Cadenhead graduated Phi Beta Kappa from Southern Methodist University, earned his M.B.A. at Harvard University, and received his Ph.D. at Stanford University. He directs the University of Texas MOOT CORP(R) Competition, the intercollegiate new-venture contest known as the "Super Bowl of World Business Plans," and is Associate Director of the Herb Kelleher Center for Entrepreneurship.

Dr. Cadenhead has also held faculty posts at Stanford and UCLA, served as Chief Financial Officer of the Center for the Study of Democratic Institutions, consulted for emerging and minority-owned businesses, started and directed his own business ventures, and currently serves on the boards of several private companies. In addition, he has written numerous articles for professional and trade journals on management and accounting principles.

The Nominating and Corporate Governance Committee of the Board, chaired by Pike Powers, recommended Dr. Cadenhead's appointment to the full Board to fill the vacancy left by the late Azie Taylor Morton.

The Company also announced that Ray Rodriguez retired from its Board effective May 13, 2004. Rodriguez was also a franchisee and area developer in the Chicago area.

"We all want to thank Ray for his many years of dedicated service on our Board of Directors," said President and CEO John C. Wooley. "Ray joined us in 1994 before the Company was public. We enjoyed having Ray on the Board, and we will miss his good humor and steady advice."

The Company also announced that in keeping with emerging trends in corporate governance, it is establishing a policy of separateness for its board chairmanship and CEO positions.

Schlotzsky's, Inc., founded in Austin, Texas, in 1971, through its wholly-owned subsidiaries, is a franchisor and operator of restaurants in the fast casual sector. As of March 31, 2004, there were 537 Schlotzsky's(R) restaurants open and operating in 37 states, the District of Columbia and six foreign countries. Visit www.schlotzskys.com for more information.