Hot Stuff Foods Completes Management Buyout; Leading Foodservice Franchisor Preparing for Dynamic Growth

Under the new agreement, Allied Capital Corporation (NYSE:ALD)committed $164 million in the management-led recapitalization. HotStuff management re-invested a significant portion of its equityownership in the transaction.

"We are pleased to partner with the management of Hot Stuff Foodsin the recapitalization of their business," said Justin Maccarone,managing director of Allied Capital. "Hot Stuff Foods has deliveredconsistent growth as a market maker in its industry. The company'sstable business model and managements' focus on continued growth inits markets makes this investment a great fit for Allied Capital'slong term capital."

"We have built a rich tradition in changing the way the marketthinks about food and food franchising," said Des Hague, CEO of HotStuff Foods. "The completion of the management buyout will allow HotStuff to bring more innovation to the marketplace and help sustain ourleadership role as the market maker."

Hot Stuff management will continue to execute the day-to-dayoperations and strategically position the company for long-termsustainable growth.

"We now have in place the right team, the right structure and theright financial resources, through Allied Capital, to achieve ourgrowth objectives," said Hague.

Led by CEO Des Hague, the rest of the management team includesindustry veterans who have helped Hot Stuff Foods leverage its successin creating quality grab-and-go foods for busy consumers. It was underthis management team that the company was just recently named one ofthe top 50 quick-serve restaurant franchises in the country by QSRMagazine and was the first c-store concept ever to crack the covetedlist.

About Hot Stuff Foods

Hot Stuff Foods(TM) franchises and/or licenses its branded foodconcepts in over 1600 locations throughout the US, Canada, Europe andAsia. Hot Stuff Foods(TM) offers a number of individual and bundledbrands in various categories including Hot Stuff Pizza(R), Hot StuffFood On the Go(TM), Hot Stuff Food Xpress(TM), Smash Hit Subs(R),Summit Subs(R), C-Street Bakery(TM), Mean Gene's Burgers(R), MeanGene's Pizza(TM), Stone Willy's Pizza(R), Moose Bros.(R) Pizza, EddiePepper's(R), Asian Creations(R), Chix Chicken(R), Nap Hendrix'sSouthern Grill(TM) and Caffe Origins(TM) Coffee. Hot Stuff Foods(TM)can currently be found on the World Wide Web at www.hotstufffoods.com

About Allied Capital

Allied Capital Corporation is a leading business developmentcompany with total assets of more than $3 billion. Allied Capitalinvests in the entrepreneurial economy by providing private debt andequity capital to middle market companies seeking a long-termfinancial partner and access to managerial resources often unavailableto smaller companies. Since its IPO in 1960, Allied Capital hasprovided financing to thousands of middle market companies. TheCompany's private finance portfolio includes investments in over 100companies that generate aggregate revenues of more than $10 billionand employ more than 90,000 people. For more information, please visitwww.alliedcapital.com.