SOURCE: Franchise Capital Corporation

October 22, 2007 08:30 ET

Franchise Capital Corporation Announces Letter of Intent to Acquire Dr. Gas, Inc., Manufacturer of Exhaust System Components

Dr. Gas Produces 90% of All Exhaust Systems Used in NASCAR, Nextel Cup Series, Busch Grand Nationals, and Craftsman Truck Series

MURRIETA, CA--(Marketwire - October 22, 2007) - Franchise Capital Corporation (PINKSHEETS: FCCN), which recently closed its acquisition of Aero Exhaust, Inc., a world leader in performance exhaust airflow technology and NASCAR Performance Partner, today announced that it has entered into a preliminary agreement in the form of a letter of intent to acquire 100% of the common stock of Dr. Gas, Inc., a producer of the finest racing performance exhaust systems for street and pro-race performance exhaust applications. Dr. Gas produces 90% of all exhaust systems used in NASCAR, Nextel Cup Series, Busch Grand Nationals, Craftsman Truck Series, and many more.

Once sufficient due diligence is completed by the parties, Franchise Capital and Dr. Gas, Inc. expect to enter into a definitive agreement related to the acquisition.

Dr. Gas Exhaust Systems produces performance exhaust Xscream® crossover, y-pipe, oval tubing performance exhaust, and h-pipe systems that have changed the performance exhaust sound of NASCAR, IROC, drag racing, and pro-street. Dr. Gas designed and patented the revolutionary Spin Tech racing mufflers. Many standard and custom sizes of mandrel bends and oval tubing are the absolute best for high performance exhaust and ground clearance applications. The company has performance exhaust parts for car, truck, RV, motorcycle, marine, aircraft and industrial applications.

At its first NASCAR race, Dr. Gas shocked the sport with its new performance exhaust sound and added power on Sterling Marlin's winning 1995 Daytona 500 racecar. Many of its patented NASCAR performance exhaust systems can be used in street rod performance exhaust applications.

The acquisition of Dr. Gas, Inc. is expected to provide the company with multiple benefits due to its significant synergies with the operations of Aero Exhaust. Once the planned acquisition is consummated, Dr. Gas will contribute to increased revenues and asset valuation for Aero. Possibly even more significant for the business of Aero itself is that Dr. Gas, Inc. is expected to contribute to the growth of Aero through the fabrication of components for Aero products, including recently launched full exhaust systems. Dr. Gas, Inc.'s fabricating capabilities are expected to increase the availability of Aero's new line of full turbo and cat-back systems diesel exhaust systems, referred to in marketing documents as "kits," which include all parts from the catalytic converter, turbo charger or muffler back to the tailpipe. Improved supply will help Aero to meet the demand for its products in the automotive supply market.

For more information on Dr. Gas, Inc., please visit http://www.drgas.com.

"We are extremely pleased to announce our initial agreement to acquire Dr. Gas, Inc.," stated Bryan Hunsaker, chief executive officer of Franchise Capital and Aero Exhaust. "While the demand for Aero's products has been high, distribution has been limited by the lack of sufficient inventory of piping for our full exhaust systems. The company's 2007 financial performance was hindered by a lack of supply of products for distribution, and the acquisition of Dr. Gas is expected to remedy this shortfall. Aero's distribution partners are anxious to have a larger supply of our full exhaust systems and we strongly believe that through the acquisition of Dr. Gas, Inc., Aero will be better able to supply our distributors and improve the company's revenue performance.

"Dr. Gas, Inc. is not only a highly respected name in racing circles, but it is also a mature company with significant revenues and the machinery and manpower in place to deliver the necessary components to accelerate the availability of Aero's products. We look forward to providing additional information related to Dr. Gas, Inc. in the near term, so that our shareholders begin to understand the tremendous upside potential of our latest strategic acquisition," added Mr. Hunsaker.

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About Aero Exhaust:

Aero Exhaust is a world leader in performance exhaust airflow technology, manufacturing and distributing the most technologically advanced muffler on the market. Its product lines are built to the highest industry standards and offer the consumer a lifetime warranty. Aero Exhaust has been issued U.S. and Australian patents on its innovations and development in the exhaust industry, and its mufflers are available worldwide through major retailers, mass merchant centers, automotive aftermarket supply stores and wholesalers. Aero Exhaust mufflers are an exclusive National Association for Stock Car Auto Racing (NASCAR) Performance product and carry the prestigious NASCAR brand on product, packaging and related media. NASCAR legend Rusty Wallace is the official spokesperson for Aero Exhaust products. Additional information on Aero Exhaust's products, race team, and motorsports ventures can be found on its corporate website, www.aeroexhaust.com.

Safe Harbor Statement: The statements in this release that relate to future plans, expectations, events, performance and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Actual results or events could differ materially from those described in the forward-looking statements due to a variety of factors, including the lack of funding, inability to complete required SEC filings, and others set forth in the Company's report on Form 10-K/A for fiscal year 2006 filed with the Securities and Exchange Commission.

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