Brazil Fast Food Reports First Quarter Results

System-wide sales for the Company's "Bob's" chain were R$109.5 million for the first quarter of 2006, up 33 percent from R$82.3 million for the first three months of 2005. Net restaurant sales for Brazil Fast Food Corp.'s company-owned retail outlets increased 29 percent for the first quarter of 2006 to R$23.4 million from R$18.1 million for the first quarter of 2005. Net franchise revenue was R$4.0 million for the three-month period ended Mar. 31, 2006 - up 48 percent from 2005's first-quarter net franchise revenue of R$2.7 million. The Company's net operating profit rose 21 percent to R$3.4 million for the first quarter of 2006 from R$2.8 million for the same period of 2005. Net income climbed 22 percent for the first quarter of 2006 to R$2.4 million, or R$.31 per share, basic and diluted, from R$2.0 million, or R$0.25 per share, basic and diluted, for the first quarter of 2005.

Ricardo Figueiredo Bomeny, Chief Executive Officer of Brazil Fast Food Corp., commented, "During the first quarter of 2006, we continued to reap the benefits of our multi-pronged growth strategy. As a result, the year-over-year first quarter improvements to our top-line results were generated by a number of factors. As the economic environment in Brazil continued to improve, we have increased both our physical and media presence in Brazil. In the first three months of 2006, we expanded our chain by nine net points of sale, we launched an intensive marketing campaign, and we set up outlets at such special events as Carnival in Rio de Janeiro and the U2 rock concert at the Morumbi Soccer Stadium in Sao Paulo. These efforts, in addition to the recent remodel of some of our key stores, have yielded demonstrable results, increasing both traffic and sales among our targeted demographics and strengthening the power of our brand.

"While we have been making considerable financial and operational progress - realizing meaningful top- and bottom-line growth, reducing debt, increasing our cash flow and expanding our margins - we continue to face challenges that are potentially threatening to our operation. We have been working diligently to resolve some longstanding issues over certain State and Federal Tax liabilities and Social Security payment obligations, and, pending the completion of a government review - which is being executed at our request - we await a final determination of the outstanding balance. In addition, during 2005, we were ordered to pay R$480,000 in response to a labor claim from a former employee. Although this amount is unusually high for such a claim, the Company cannot assure that it will not be required to pay similarly high amounts for labor claims received from other former employees. As of March 31, 2006 we had labor contingencies at the amount of R$1.2 million accounted for as liabilities in our balance sheet. We also accounted for another liability on our balance sheet in the amount of R$737,000 for an ICMS tax contingency (Brazil's value added state tax). This stems from our inability (for technical reasons) to meet a state requirement to file electronic forms for four years of monthly sales figures for two of our stores, for which we were fined R$737,000. Although we are appealing the amount - and we do expect it to be reduced - we cannot guarantee that this issue will not have more far-reaching and serious consequences for our Company. It is for all of the above reasons, as well as other contingencies discussed in detail in our most recent quarterly and annual S.E.C. filings, that we cannot assure our Company's ability to continue as a going concern.

"Despite this, however, we are continuing to work to secure a successful future for our Company. While we do not underestimate the potential for these contingencies to endanger that future, we believe that it is important to entertain all of the possibilities, including the one toward which we are working: the possibility that these factors will work out in our favor. It is with such hope and optimism that we are continuing to stay our course, in the belief that those factors that are under our control will be managed for the best possible outcome."

ABOUT BRAZIL FAST FOOD CORP.

Brazil Fast Food Corp. owns and operates, both directly and through franchisees, the second largest chain of hamburger fast-food restaurants in Brazil, through its wholly owned subsidiary, Venbo Comercio de Alimentos Ltda. Brazil Fast Food Corp. conducts business in Brazil under the trade name "Bob's." As of March 31, 2006, the Company had 460 points of sale, which includes traditional restaurants, kiosks and re-locatable trailers.


Logos, product and company names mentioned are the property of their respective owners.

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