Contact:    Michael Murtaugh, VP and General Counsel
            BAB Holdings, Inc.
            8501 West Higgins Road, Suite 320
            Chicago, Illinois 60631
            773.380.6100/Fax: 773.380.6183

FOR IMMEDIATE RELEASE


NY BASED INTERNET INCUBATOR SIGNS LETTER OF INTENT TO MERGE WITH BAB HOLDINGS

Chicago, Illinois - April 10, 2000 - BAB Holdings, Inc. (Nasdaq : BAGL) today
announced that it has executed a letter of intent to merge with a leading New
York based Internet Incubator.  Full details of the merger and of the Internet
Incubator will be forthcoming within the next two weeks.

Upon completion of the merger, BAB's current business would be assigned to a
subsidiary, which would be operated by current BAB management.  The agreement
anticipates the subsidiary to be spun off in the future to current BAB
shareholders.  The existing shareholders would continue to own the same number
of shares, which would represent ten percent of the equity in the merged
company.  Thus, the parent company will become a pure play in the development
of internet businesses.  In addition, existing shareholders would continue to
own 100% of the current assets.

Furthermore, in a related agreement, an affilate of the New York Internet
Incubator would provide substitute long term financing for the current bank
debt obligation of the Company.

"We are going to be merging with a group of talented individuals who have an
excellent 7-year history of successfully incubating small, development-stage
companies.  This merger represents a transformation of BAB which we believe
will be very beneficial to our shareholders," stated BAB President and CEO
Michael W. Evans.

"Our current shareholders will maintain their ownership interest in the
existing business, both before and after the merger.  Additionally, they will
receive a 10% ownership interest in the Internet Incubator and internet related
businesses.  We believe that this is a significant enhancement to our
shareholder value and, coupled with the attractive financing provided by our
merger partner, greatly improves BAB's appeal in the financial marketplace."

The transaction is subject to completion and execution of the final merger
documents and shareholder approval.