AFC Enterprises Reaches Agreement to Settle Derivative Lawsuits

ATLANTA, June 13 /PRNewswire-FirstCall/ -- AFC Enterprises, Inc. today announced a joint settlement agreement with the plaintiffs in the derivative lawsuits relating to the restatement of its financial statements for fiscal years 2000, 2001 and the first three quarters of 2002. The settlement agreement announced today relates to the suit filed by plaintiffs on June 5, 2003 and August 7, 2003 claiming to be acting on behalf of AFC against certain current and former members of AFC's board of directors.

The agreement provides for the general terms of a settlement under which the litigation would be dismissed with prejudice and AFC would make modifications to certain of its corporate governance policies and practices, most of which have already been instituted, and pay approximately $517,000 in attorneys fees and expenses to the derivative plaintiffs' counsel. No damages will be paid by the officer or director defendants. The settlement does not reflect any admission of liability by AFC or its current or former officers or directors. The parties intend to enter into a further agreement to set forth more specific terms of the settlement. Any such agreement will be subject to court approval. AFC expects to record a charge for this matter in the second quarter of 2005 of approximately $517,000.

As previously announced on April 22, 2005, AFC also has entered into a settlement agreement, which is subject to court approval, with respect to the securities class actions filed against the Company. The derivative suits whose settlement was announced today represented the last remaining litigation seeking damages from the Company or its officers and directors arising out of the restatement of its financial statements.

"We are pleased to have entered into a settlement agreement with respect to the remaining litigation relating to the restatement. We look forward to completing this process as we continue to focus our attention on growing the Popeyes business," stated Frank Belatti, Chairman and CEO of AFC Enterprises.

Corporate Profile

AFC Enterprises, Inc. is the franchisor and operator of Popeyes(R) Chicken & Biscuits, the world's second-largest quick-service chicken concept based on number of units. As of April 17, 2005, Popeyes had 1,818 restaurants in the United States, Puerto Rico, Guam and 25 foreign countries. AFC has a primary objective to be the world's Franchisor of Choice(R) by offering investment opportunities in its Popeyes Chicken & Biscuits brand and providing exceptional franchisee support systems and services. AFC Enterprises can be found on the World Wide Web at http://www.afce.com/.

Forward looking statements: Certain statements in this release, and other written or oral statements made by or on behalf of AFC or its brands are "forward-looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, including statements regarding court approval of the settlement agreements are forward-looking statements within the meaning of these laws. These forward-looking statements are subject to a number of risks and uncertainties. You should not place undue reliance on any forward-looking statements, since those statements speak only as of the date they are made.