Famous Dave’s Submits ‘Stalking Horse’ bid for Franchisee North Country Barbeque Restaurants

Famous Dave’s of America, Inc. (NASDAQ: DAVE) announced that it has entered into a ‘stalking horse’ asset purchase agreement pursuant to which it has agreed to pay cash consideration of $5.0 million to acquire up to nine Famous Dave’s franchise restaurants owned by North Country BBQ Ventures, LLC.

The agreement does not require the Company to assume North Country’s liabilities. The asset purchase agreement constitutes a stalking horse bid in a sale process being conducted under Section 363 of Chapter 11 of the U.S. Bankruptcy Code. As such, the Company’s acquisition of the North Country restaurants remains subject to approval by United States Bankruptcy Court for the District of New Jersey and a subsequent auction process in which other interested buyers may submit competing bids for North Country’s assets. It is expected that the sale process will be completed during the first quarter of 2010 and the restaurants are expected to remain open throughout the process. Based in New Providence, New Jersey, North Country is one of the Company’s largest franchisees with restaurants located in New Jersey, New Hampshire and New York.

Christopher O’Donnell, chief executive officer of Famous Dave’s stated: ‘When these types of opportunities become available, we owe it to our shareholders to take a hard look at the ones that make sense.’ O’Donnell continued, ‘The operations at these restaurants are good, and they have a loyal base of guests that love our concept. We want Famous Dave’s to continue to thrive and grow in this region, and believe that if we are the successful bidder, our purchase of these assets, at an appropriate price would represent a terrific opportunity to perpetuate our brand and deliver shareholder value.’

‘During 2009, Famous Dave’s strengthened its balance sheet by retiring debt in excess of $10 million, and protected its profitability in order to position the Company for continued growth,’ said K. Jeffrey Dahlberg, chairman of the board of Famous Dave’s. ‘We continue to look for ways to generate value for our shareholders. The acquisition of these restaurants should allow us to do just that, potentially adding more than $20.0 million in top line sales for the nine restaurants, and more importantly, contributing to improved profitability.’