Panera Bread Company yesterday reported that it has signed an agreement with its Dallas franchisee, Dallas-Ft. Worth Bakery, LP, to repurchase the development rights to the Dallas market. The agreement is expected to close on February 1, 2003. In addition to the development rights, the Company is purchasing one bakery-cafe and certain fixed assets for a total of approximately $1.5 million, and will sign an agreement to manage the other 3 existing bakery-cafes in the Dallas market. In conjunction with this transaction, the franchisee has closed 2 bakery-cafes in the market.

The company believes that Dallas represents an excellent growth market and expects to open its first new bakery-cafe in late 2003.