AFM Hospitality Acquires Boutique Hotels & Resorts International ®

TORONTO, ON: AFM Hospitality Corporation (TSX:AFM) today announced that it has acquired substantially all of the assets of Boutique Hotels & Resorts International® based in Miami, Florida. The transaction closed on November 15, 2004. AFM completed the transaction primarily for cash and other consideration through two new U.S. subsidiaries, AFM BHRI (USA) Inc. and AFM IP Holdings Inc. Both will part of the new AFM Premier Alliances Group to be headed by Boutique founder Martin Buehler.

Boutique Hotels & Resorts International® is an alliance for branding distinctive, independent hotel and resort properties from around the world. The deal includes alliance and membership agreements for more than 50 member hotels and resorts from Palm Beach to Napa Valley, and Park City to New York City, along with many international capitals from Paris to Cape Town Boutique provides member properties with an exclusive international brand identity, a state-ofthe- art reservations system, marketing, sales and other services, and presents a genuine boutique lodging experience to discerning travelers worldwide.

Boutique Hotels & Resorts International will operate as part of a new Premier Alliances Division. According to Lawrence P. Horwitz, AFM’s Chairman & Chief Executive Officer, AFM has named Martin Buehler as President and CEO and John Sears as Executive Vice President and COO of the Premier Alliances Division of AFM Hospitality. Horwitz stated “Boutique is clearly complementary to AFM’s other hospitality franchising and management businesses. Boutique has earned an excellent reputation among the finest worldwide luxury and independent boutique hotels and resorts. We are pleased with the tremendous growth Boutique has achieved within the past two years. Martin Buehler and John Sears bring a lot of talent and decades of international hospitality and travel industry expertise to our company.”

Under the terms of the purchase, in exchange for all the assets of Boutique Hotels & Resorts International® and the related intellectual property from First Capital Hospitality Financial Group, the sellers have received cash, notes and other consideration of approximately CDN $2.5 million as well as the right to an earn-out participation in the success of the related business over the next seven years. Concurrent with this acquisition the Purchasers closed on a financing package with a private Canadian and American lending group to provide USD $450,000 of acquisition financing, working capital, and capital to cover related transaction costs. The financing provides for terms with a twenty four month maturity, deferred interest and the right to participate in operating profits of the acquired business for the first twenty four months.

About AFM Hospitality Corporation - AFM Hospitality Corporation operates or has open and/or executed franchise and management agreements with 300 hotels, restaurants and other nationally franchised service businesses throughout North America. The company’s focus is to increase the number of hotels franchised by the respective brands, franchise new brands, build the portfolio of hotel management agreements, provide valuable resources and hospitality experience to help hotel owners grow their business, and to acquire other hospitality and travel businesses. AFM Hospitality Corporation is a publicly traded company listed on the Toronto Stock Exchange (TSX: AFM) and may be reached at .

Forward Looking Information - This Press Release contains certain forward-looking statements and information from AFM Hospitality Corporation relating, but not limited to, the company’s operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan" or similar words suggesting future outcomes. The results or events predicted in these statements may differ materially from actual results or events. By its nature, AFM Hospitality - Corporation’s forward-looking information involves numerous assumptions, inherent risks and uncertainties, including but not limited to the following factors: changes in business strategies; general global economic and business conditions; the effects of competition and pricing pressures; hotel industry overcapacity; shifts in market demand; changes in laws and regulation; uncertainties of litigation; labor disputes; timing of completion of capital or maintenance projects by both franchised and managed hotels; currency and interest rate fluctuations; various events which disrupt operations; and technological changes. AFM Hospitality Corporation undertakes no obligation to update publicly or otherwise revise forward-looking information, whether as a result of new information, future events or otherwise.