PIZZA INN, INC. REPORTS RESULTS FOR THE
FOURTH QUARTER AND FISCAL YEAR 2005

THE COLONY, TEXAS -August 26, 2005- PIZZA INN, INC. (NASDAQ:PZZI) today reported
a net loss per share for its fourth quarter ended June 26, 2005 of ($0.01)
versus $0.06 earnings per share for the same quarter last year. The quarter
resulted in a net loss of ($112,000) versus net income of $564,000 for the same
quarter last year on revenues of $13.7 million and $15.4 million, respectively.
For fiscal year 2005, earnings per share were $0.02 versus $0.22 last year. Net
income for fiscal year 2005 was $204,000 versus $2,243,000 last year on revenues
of $55.3 million and $60.0 million, respectively.

FOURTH QUARTER FY 2005 VERSUS FOURTH QUARTER FY 2004 RESULTS
- ---------------------------------------------------------------------
- - Diluted EPS was ($0.01) versus $0.06 on a net loss of ($112,000) versus
net income of $564,000.

- - Revenues decreased approximately 11% or $1.7 million primarily due to
lower cheese prices ($596,000), decreased equipment sales ($519,000) and reduced
sale prices on certain key ingredients, including dough products and tomato
tidbits ($139,000) and the impact of lower retail sales on products other than
cheese, dough and tomato tidbits ($107,000).

- - Comparable chainwide retail sales were down 1.5%.

- - Financial results continue to be adversely impacted by product cost
inflation of approximately 2.7%, which was not passed through to franchisees.

- - Legal fees increased approximately $524,000 as a result of ongoing
litigation and related matters.

FY 2005 VERSUS FY 2004 RESULTS
- -----------------------------------
- - Diluted EPS was $0.02 versus $0.22 on net income of $204,000 versus
$2,243,000.

- - Revenues decreased approximately 8% or $4.7 million primarily due to
reduced sale prices on certain key ingredients, including dough products and
tomato tidbits ($997,000), the impact of lower retail sales on cheese products
($799,000), decreased equipment sales ($758,000) and the impact of lower retail
sales on products other than cheese, dough and tomato tidbits ($737,000).
Additionally, restaurant sales at our company stores were lower due to the
replacement of a larger Buffet unit with a smaller Delivery/Carryout unit
($570,000).

- - Comparable chainwide retail sales were down 1.5%.

- - Financial results continue to be adversely impacted by product cost
inflation of approximately 3.3%, which was not passed through to franchisees.

- - Legal fees increased approximately $1,454,000 as a result of ongoing
litigation and related matters.

Tim Taft, appointed as Pizza Inn's President and CEO in April of this year,
commented on the performance and direction of the company: "Our short and
long-term objectives are clear - we must reenergize the brand by focusing on the
fundamentals of customer satisfaction, growth and unit-level profitability. To
achieve these objectives we are currently working on a number of fronts. First,
we conducted consumer research, providing the company with an informed direction
and competitive position based on the needs and wants of our customers and
potential customers. Second, the company will soon put this new approach of
focusing on customer satisfaction to the test when it opens its new buffet
concept in Dallas and Houston, Texas this fall while existing franchisees are
signing up to do the same. Third, Pizza Inn is working with its franchisees
daily to build an economic model that delivers product consistency and quality
while improving overall profitability. Fourth, our new franchisee recruitment
model - dedicated to signing qualified multi-unit operators - will be
implemented before the end of the year. Due to these efforts and other
initiatives, we are optimistic that we will begin to improve operating results
by fiscal year end."

Certain statements in this press release, other than historical information, may
be considered forward-looking statements, within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995, and
are subject to various risks, uncertainties and assumptions. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may differ from those anticipated, estimated or
expected. Among the key factors that may have a direct bearing on Pizza Inn's
operating results, performance or financial condition are its ability to
implement its growth strategies, national, regional and local economic
conditions affecting the restaurant/entertainment industry, competition within
each of the restaurant and entertainment industries, store sales
cannibalization, success of its franchise operations, negative publicity,
fluctuations in quarterly results of operations, including seasonality,
government regulations, weather, commodity, insurance and labor costs.

Pizza Inn, Inc. is headquartered in The Colony, Texas, along with its
distribution division, Norco Restaurant Services Company. Pizza Inn franchises
approximately 400 restaurants and owns five restaurants with annual chainwide
sales of over $160 million.