August 23, 2001

Wetzel's Pretzels and Muscle Beach Lemonade roll out new co-branded retail concept
Initial co-brand strategy focused on eastern seaboard

CARLSBAD and PASADENA, Calif. - Two of Southern California's most popular snack food, quick-service brands are rolling out a new co-branded retail concept. HDOS Enterprises, parent company of Hot Dog on a Stick and Muscle Beach Lemonade, and Wetzel's Pretzels announced today a joint venture agreement, combining Muscle Beach Lemonade and Wetzel's Pretzels into one co-branded concept. The new co-branded concept will offer customers each brand's celebrated products, including Wetzel's Pretzels '30 Minutes Fresh' soft pretzels and Muscle Beach Lemonade's fresh squeezed lemonade under one roof.

The joint venture agreement calls for immediate multi-unit expansions into new markets across the United States, including Atlanta, Boston, Baltimore/Washington D.C., New Jersey, New York and Pennsylvania as well as international markets across Asia, Central America and Europe. Company executives expect to open more than 350 stores over the next five years with development of both company-owned and multi-unit franchised operations targeting traditional mall locations as well as other retail venues, including airports, train stations, universities, stadiums, tourist areas, theaters and amusement parks.

Current expansion efforts are underway with a co-branded company-owned store set to debut this summer in a Wal-Mart Supercenter in Scottsdale, Ariz., followed by another company-owned store scheduled to open in International Plaza Mall in Tampa, Fla. this September. The new co-branded units are the first to feature a comprehensive store support program, including a new store design, new uniforms and co-branded signage. In addition, Wetzel's Pretzels and Muscle Beach Lemonade will integrate a 'Twist and Squeeze' signage element and logo throughout the store providing a fun way to marry the two concepts.

"Our challenge has been to uphold Muscle Beach Lemonade and Wetzel's Pretzels distinctive brand identities. It's important for the customer to see and understand each individual concept," said Fredrica Thode, president, HDOS Enterprises, parent company for Muscle Beach Lemonade. "In designing the new store, we paid particular attention to blending the 'fun, fresh, energetic' heritage and colors of each brand, while also creating a store that consistently delivers excellent quality pretzels and lemonade."

According to Wetzel's Pretzels President and Co-Founder Rick Wetzel, this latest co-brand move is taking off due, in part, to the overwhelming success of a test market store in Valley Fair Mall in Santa Clara, Calif., which opened last March. This first co-branded store has resulted in a 40 percent increase in sales and profitability as compared with either a stand-alone pretzel or lemonade store. "The co-branding concept was developed to improve unit economics," said Rick Wetzel. "We're able to keep labor costs under control by using one crew to offer two popular product options. More than 40 percent of our customers are buying both pretzels and lemonade, which has led to an increase in average tickets from $3.00 to over $4.25 and substantially improving the unit's overall profitability."

Featuring an exhibition-style cooking area with 'actors' rolling pretzels and throwing dough ropes in the air, as well as lemonade stompers pounding lemon halves into lemon juice, Wetzel's Pretzels and Muscle Beach Lemonade stores will provide an overall fun, fresh and energetic experience. The new co-branded concept can operate in as little as 600 square feet of space with a minimum of 16 feet of store frontage. Another convenient and cost-effective option is a freestanding kiosk with off-site storage.

The Wetzel's Pretzels and Muscle Beach Lemonade menu will feature up to eight freshly baked soft pretzel flavors including Original Butter and Salt, Sinful Cinnamon, Grateful Garlic, Almond Crunch and Cheese Meltdown, plus bite-sized Wetzel Bitz and Pretzel Dips. The drink component will offer Muscle Beach Lemonade's celebrated Fresh Squeezed Lemonade available in original, cherry, lime and sugar free. The final menu element, which will be placed in the center of the menu board, will combine offerings from both concepts including a Hot Dog on a Bun, Hot Dog on a Stick, Cheese on a Stick and the Wetzel Dog.

About Muscle Beach Lemonade:
Muscle Beach Lemonade is synonymous with California beaches. Founded in 1946 in Muscle Beach, Calif., its parent company HDOS Enterprises, has grown to 130 company-owned U.S. locations plus 16 franchised units in four Asian countries. The company posted system-wide sales of $42 million in 2000 and expects sales to reach $50 million by 2001. Muscle Beach Lemonade uses only the finest Sunkist lemons, filtered water and pure cane sugar to make its fresh squeezed lemonade. Freshness is the key as its lemonade is prepared throughout the day and is never over two hours old. For more information, please visit the Hot Dog on a Stick website at www.hotdogonastick.com.

About Wetzel's Pretzels:
Rick Wetzel brought his childhood taunts of "Hey Wetzel, you pretzel" to life when he and his partner Bill Phelps tied the entrepreneurial knot to form Wetzel's Pretzels in 1994. Wetzel's Pretzels has quickly 'risen' to the top since the opening of its first unit in Redondo Beach, Calif. and has become the model of a successful business. The Pasadena-based company is known best for its hand-rolled and freshly baked '30 Minutes Fresh' soft pretzels. The privately held company operates more than 125 units throughout the United States, Australia, Canada, Dominican Republic and Puerto Rico. For more information about Wetzel's Pretzels, please visit the company's website at www.wetzels.com.

Contacts:

Kristin Brocoff or Janice Callado
Morgan Marketing & Public Relations
949-261-2216