Cosi's total revenues for the 2009 second quarter decreased 13.9% to $31,636,000 from $36,723,000 in the 2008 second quarter. Company-owned net restaurant sales, excluding discontinued operations, declined 14.3% in the quarter to $31,015,000, compared to $36,207,000 in the previous year's quarter. Franchise fees and royalty revenues for the quarter contributed $621,000 compared to $516,200 in the 2008 second quarter.

System-wide comparable restaurant sales for the second quarter as measured for restaurants in operation for more than 15 months recorded an aggregate decline of 12.2% as compared to the second quarter of 2008. The breakdown in comparable sales between Company-owned and franchise-operated restaurants is as follows:

                         For the 13 weeks ended                             June 29, 2009                         ---------------------- Company-owned                   (12.7%) Franchise-operated               (9.8%) Total System                    (12.2%) 

James Hyatt, Cosi's President and Chief Executive Officer, said, "The impact of the recession on consumer and business spending has created a difficult environment for Cosi, especially in our catering business given our high density of locations in major metropolitan business areas. We remain intensely focused on working collaboratively with our franchise partners to drive sales and improve operating margins, while remaining diligent about controlling administrative costs."

2009 Second Quarter Financial Performance Review

Contributing to Cosi's aforementioned 14.3% decrease in second quarter Company-owned net sales as compared to the second quarter last year was the decline in Company-owned comparable sales as well as the impact of closing five locations since the end of the 2008 second quarter. The Company-owned comparable sales decline of 12.7%, which was comprised of a 9.8% decrease in traffic and a 2.9% decrease in average check, was impacted by a 27.5% decrease in overall catering sales during the second quarter as compared to the 2008 second quarter.

For the second quarter, Cosi reported a 390 basis point increase in costs and expenses related to Company-owned restaurant operations as a percentage of restaurant net sales compared with the second quarter of 2008. The increase resulted from a 260 and 180 basis point increase, as a percentage of net sales, in labor and related benefits and occupancy and other restaurant operating expenses, respectively, due primarily to the impact of the comparable restaurant net sales decrease on the fixed portion of these costs during the period. The increase was partially offset by a 50 basis point improvement in the cost of food and beverage in the second quarter of 2009 as compared to the second quarter of 2008 as the Company saw commodity costs for wheat and dairy products decline year-over-year.

During the same period, the Company improved by 470 basis points its general and administrative expenses as a percentage of total revenues, to $3,731,000 or 11.8% from $6,069,000 or 16.5% in the 2008 second quarter.

Cosi reported that as of June 29, 2009 it had cash and cash equivalents of $5,184,000 and virtually no debt other than lease obligations.

Business Update

Cosi stated that despite the recession, it remains focused on improving the guest experience while continuing to provide fresh and innovative product offerings. James Hyatt said, "We are pleased with the continued improvement in our guest satisfaction ratings during the second quarter which validates our ongoing commitment to excellence in customer service."

In keeping with its heritage of developing unique product offerings, Cosi stated that it recently launched a steak gorgonzola sandwich and a steak salad as well as a limited time lobster salad sandwich and melt offering. Early indications are that these value-driven offerings are being well received by guests.

Cosi also announced that it was rated as the number one fast-casual family restaurant by Parents Magazine reinforcing its goal of providing a great dining experience for the entire family. Cosi also reported that it has retained a new advertising agency to broaden and enhance its initiatives to increase traffic and sales while continuing to expand awareness of the brand.

Development Performance

Cosi finished the 2009 second quarter with a total of 144 locations consisting of 98 Company-owned locations and 46 franchised locations. During the 2009 second quarter, one franchise location was opened in the District of Columbia and four franchise locations were closed during the quarter including one in Minnesota that was re-opened as a Company-owned location.

Investor Teleconference

As previously announced, Cosi has temporarily suspended its quarterly investor conference call. Management has continued to focus all of its efforts on creating shareholder value by driving revenue growth, improvements in operating margin and continued reductions in general and administrative expenses while also supporting the continued long-term growth of the franchise system.

About Cosi, Inc.

Cosi (http://www.getcosi.com) is a national premium convenience restaurant chain that has developed featured foods built around a secret, generations-old recipe for crackly crust flatbread. This artisan bread is freshly baked in front of customers throughout the day in open flame stone hearth ovens prominently located in each of the restaurants. Cosi's warm and urbane atmosphere is geared towards its sophisticated, upscale, urban and suburban guests. There are currently 98 Company-owned and 46 franchise restaurants operating in eighteen states, the District of Columbia and the United Arab Emirates. The Cosi vision is to become America's favorite premium convenience restaurant by providing customers authentic, innovative, savory food while remaining an affordable luxury.

The Cosi menu features Cosi sandwiches, freshly tossed salads, melts, soups, Cosi bagels, flatbread pizzas, S'mores, snacks and other desserts, and a wide range of coffee and coffee-based drinks and other specialty beverages. Cosi restaurants are designed to be welcoming and comfortable with an eclectic environment. Cosi's sights, sounds, and spaces create a tasteful, relaxed ambience that provides a fresh and new dining experience.

"Cosi," "Cosi (w/hearth design)," "Simply Good Taste" and related marks are registered trademarks of Cosi, Inc.

Copyright Copyright 2009 Cosi, Inc. All rights reserved.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This press release contains statements that constitute forward-looking statements under the federal securities laws. Forward-looking statements are statements about future events and expectations and not statements of historical fact.