Carrols Restaurant Group, Inc. and Carrols Corporation Report Financial Results for the Third Quarter of 2007

Highlights for the third quarter of 2007 versus the third quarter of 2006 include:

• Total revenues increased 7.3% to $203.5 million from $189.6 million, including a 7.8% increase for the Company's Hispanic Brands,

• Comparable restaurant sales were 7.8% at Burger King(R), 2.3% at Pollo Tropical(R), and 1.2% at Taco Cabana(R),

• Income from operations was $14.3 million (including a $1.7 million write-down for an underperforming restaurant which the Company closed in October, as well as higher expenses related to being a public company and stock-based compensation expense). This compared to $17.9 million in 2006 (which included $1.4 million of income from the reversal of reserves for certain closed restaurants),

• Net income was $4.9 million, or $0.23 per diluted share including the aforementioned impairment charge ($0.05 per diluted share, rounded) which compared to net income of $5.1 million, or $0.32 per diluted share last year. Net income for the third quarter of 2006 would have been $0.24 per diluted share after giving pro forma effect for the additional shares issued in the Company's initial public offering ('IPO') completed on December 20, 2006 and included a gain of $0.04 per diluted share for the reversal of closed restaurant reserves.

As of September 30, 2007, the Company operated a total of 555 restaurants, including 325 Burger King, 83 Pollo Tropical and 147 Taco Cabana restaurants.

Alan Vituli, Chairman and Chief Executive Officer of Carrols Restaurant Group, Inc. commented, 'In view of the current challenges affecting our industry, we were relatively pleased with our third quarter results as sales and earnings were generally in line with our overall expectations. We note particular strength at our Burger King restaurants, as the brand continues to rebuild market share. In addition to positive comparable sales at all three brands, top-line growth continues to be driven by new unit development at our Hispanic Brands with the opening of twenty-five new restaurants since the beginning of the third quarter of last year, including fourteen new units opened thus far in 2007. Excluding the non-recurring charges in both years, earnings growth was solid, but as expected, continued commodity cost pressures resulted in slightly lower operating margins.'

Third Quarter 2007 Results

Total revenues for the third quarter of 2007 increased 7.3% to $203.5 million from $189.6 million in the third quarter of 2006. During the third quarter of 2007, the Company opened three Pollo Tropical restaurants, five Taco Cabana restaurants and closed one Burger King restaurant.

Revenues from the Company's Hispanic restaurant brands increased 7.8% to $103.8 million in the third quarter of 2007 from $96.3 million in the same period last year. Pollo Tropical revenues increased 11.3% to $42.6 million during the third quarter of 2007 compared to $38.2 million in the third quarter of 2006. This was due primarily to the opening of thirteen new Pollo Tropical restaurants since the beginning of the same period in 2006. Comparable restaurant sales at Pollo Tropical increased 2.3% in the third quarter of 2007.

Taco Cabana revenues increased 5.5% to $61.3 million during the third quarter of 2007 compared to $58.1 million in the third quarter of 2006. This was due primarily to the opening of twelve new Taco Cabana restaurants since the beginning of the same period in 2006. Comparable restaurant sales at Taco Cabana increased 1.2% in the third quarter of 2007.

Burger King revenues increased 6.9% to $99.7 million during the third quarter of 2007 compared to $93.3 million in the third quarter of 2006, despite the closing of five Burger King restaurants since the beginning of the same period in 2006. Comparable restaurant sales at Burger King increased 7.8% in the third quarter of 2007.

General and administrative expenses were $12.3 million in the third quarter of 2007, or 6.1% of total revenues, compared to $11.8 million, or 6.2% of total revenues, in the third quarter of 2006.

During the third quarter of 2007, the Company incurred $1.7 million, or $0.05 per diluted share after-tax, in impairment charges related to a Pollo Tropical restaurant in Brooklyn, NY. The location was subsequently closed on October 21, 2007.

Income from operations was $14.3 million in the third quarter of 2007, or 7.1% of total revenues, compared to $17.9 million, or 9.5% of total revenues, in the third quarter of 2006.

Interest expense decreased $2.5 million to $7.7 million in the third quarter of 2007 from $10.2 million in the same period in the prior year, primarily reflecting lower average debt balances from the prepayments of borrowings under the Company's prior senior credit facility during 2006 including the repayment of $68.0 million in term loan borrowings from the IPO proceeds received by the Company in December 2006. In addition, the Company completed the refinancing of its senior credit facility in March 2007 which lowered the interest rate on its senior secured borrowings by approximately 1%.

The Company's effective income tax rate was 27.0% in the third quarter of 2007 compared to 33.5% in the third quarter of 2006 and was lower from the realization of tax benefits that had been previously reserved.

Net income for the third quarter of 2007 was $4.9 million, or $0.23 per diluted share (based upon 21.6 million weighted average diluted shares and which was $0.226 before rounding). This compared to net income of $5.1 million, or $0.32 per diluted share (based upon 15.9 million weighted average diluted shares) in the third quarter of 2006. Net income would have been $0.24 per share in the third quarter of 2006 after giving pro forma effect for the additional shares issued in the Company's IPO completed in the fourth quarter of 2006 (based upon 21.6 million average diluted shares). Net income included unusual items in both years: in 2007, an impairment charge of $0.05 per diluted share ($0.048 before rounding), and in 2006, a gain of $0.04 per diluted share from the reversal of closed restaurant reserves.

Nine Month Results

For the nine months ended September 30, 2007, total revenues increased 5.2% to $592.2 million from $562.7 million in the same period last year, including a 6.9% increase for the Company's Hispanic brands. Net income was $11.5 million, or $0.54 per diluted share, including an after-tax non-recurring charge related to the refinancing of the Company's senior credit facility of $0.04 per diluted share in the first quarter, as well as an after-tax impairment charge of $0.05 per diluted share in the third quarter. This compared to net income of $9.7 million, or $0.61 per diluted share for the nine months ended September 30, 2006. Net income for the first nine months of 2006 would have been $0.45 per diluted share after giving pro forma effect for the additional shares issued in the Company's IPO and included a gain from the reversal of closed restaurant reserves of $0.04 per diluted share.

Pro Forma

Pro forma calculations provide investors with an alternative measure to evaluate the Company's performance and provide meaningful supplemental information of the Company's operating results on a basis comparable with that of future periods. The pro forma calculations reflect the post IPO capital structure as if it had been in place for the full periods presented. Pro forma information is not, and should not be, considered a substitute for financial information prepared in accordance with generally accepted accounting principles.

Outlook

For the full year 2007, the Company is providing the following guidance:

• A total revenue increase of approximately 5% including comparable restaurant sales increases of 1.0%-2.0% for Pollo Tropical, 0%-1.0% for Taco Cabana and 3.0%-3.5% for its Burger King restaurants,

• Total new unit openings of eight to nine Pollo Tropical restaurants and eight Taco Cabana restaurants. The relocation of certain Burger King restaurants has been deferred to 2008. Restaurant closings for the full year include five Burger King restaurants, four Taco Cabana restaurants and one Pollo Tropical restaurant,

• Incremental expenses of $2.0 million to $2.1 million as a consequence of being a public company, as well as stock-based compensation expense of approximately $1.5 million related to stock option and restricted stock grants made in December 2006,

• Capital expenditures of between $61 million and $63 million, including $39 million to $40 million for new restaurants which has been lowered to reflect the timing of new units and relocations which are now expected to occur in early 2008,

• An estimated annual effective tax rate of 32.5%-33.0%,

• Diluted earnings per share ranging from $0.73 to $0.78 (before the non-recurring charges related to closing the Brooklyn, NY Pollo Tropical restaurant and refinancing the Company's senior credit facility described above). Diluted common shares outstanding are estimated to be approximately 21.6 million.

For the full year 2008, the Company intends to open a total of 22 to 27 new Hispanic Brand restaurants including 10 to 13 Pollo Tropical restaurants and 12 to 14 Taco Cabana restaurants. The Company is also likely to close one Taco Cabana restaurant and a net four to five Burger King restaurants in 2008, including the opening of five to seven new units, three or four of which will be relocations of existing units.

Mr. Vituli concluded, 'We believe that the opportunity for our Hispanic Brands is compelling and provides attractive returns on our invested capital. We therefore intend to devote the majority of our growth capital, including free cash flow generated from our Burger King restaurants, to realizing their market potential. In addition, our Burger King business is the healthiest it has been in years, and we are hopeful that the momentum we've experienced thus far is sustainable.'

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