SEATTLE, WA & TORONTO, ON - October 3, 2002 � AFM Hospitality Corporation (TSX:AFM) today announced a realignment of corporate structure and executive responsibilities,  following two years of dynamic growth in both its franchise and management divisions. The realignment is designed to assure effective integration of new operating units and further accelerate growth through continued acquisitions and internal operating expansion.

Formed in 1991 as the master Canadian franchisor of 12 Howard Johnson hotels, AFM is now Canada�s largest multi-brand lodging franchisor and one of North America�s leading hotel management companies, with more than 230 hotels representing an inventory of more than 22,000 guest rooms and estimated system wide sales exceeding CDN $325 million.

�In just the last two years AFM has added six major brands to its franchise division and expanded franchising activities to encompass the United States as well as Canada,� explained Lawrence P. Horwitz, AFM�s board Chairman.  � We also launched AFM/GSA International as a General Sales Agent for international hotels, created a management division through the establishment of Northwest Lodging International and saw that division grow from an original base of 14 properties to more than 70 today.  Our dramatic growth and diversity of integrated operations has dictated a realignment to assure continued focus on executing our future growth strategy as well as efficiently and effectively managing existing operations.�

Within the past 30 days, AFM announced non-binding letters of intent to acquire Trigild Services of San Diego, CA and Marshall Management, Inc. of Salisbury, MD.  After the completion of these acquisitions, AFM through its subsidiaries Northwest Lodging International (USA) Inc., Northwest Lodging International (Canada) Inc. and Marshall Management, Inc., will have 71 hotels under management contract, representing more than 7,000 rooms.

New Structure & Executive Responsibilities

Effective October 1st, Lawrence P. Horwitz, one of the founders of Northwest Lodging and Chairman of AFM Hospitality for the past two years, will take on added responsibilities as Chief Executive Officer.  Horwitz will continue to be based at the company�s US headquarters in Seattle, WA, and divide his time between Seattle and AFM�s Canadian headquarters in Toronto, ON and Western Canada office in Vancouver, BC.  Stephen H. Phillips, one of the original founders of AFM and an architect of the company�s recent expansion, will shift his responsibilities from a combination of day-to-day operations and seeking growth opportunities as CEO to one in which he concentrates on continued growth and future expansion as Vice Chairman & Managing Director/Business Development.  Phillips will continue to be based at the company�s Western Canada office in Vancouver.

The Horwitz & Phillips Team

Horwitz and Phillips have made a dynamic team both prior to and during their joint tenure at AFM.  Phillips took a hiatus from AFM in 1996 when he was named President & Chief Executive Officer of Howard Johnson International at the Cendant Corporation.  While there, he became closely associated with Horwitz, who at the time was President & Chief Executive Officer of Northwest Lodging, Cendant�s largest hotel franchisee on the West Coast.  When Phillips returned to Canada to retake the helm at AFM in 1998, one of his first objectives was to bring Horwitz and Northwest Lodging into the AFM family, which he accomplished in 2000.

�The new corporate executive structure reflects not only the evolution of AFM from a company standpoint, but also my desire to continue to place my focus where my personal strengths can best be utilized,� said Phillips. 

�That focus is on business development, encompassing mergers and acquisitions, strategic alliances and communications for the company to assure that ongoing organic and external growth takes place.  At the same time,� he continued, �with Larry Horwitz taking over day-to-day operational duties, it provides AFM, its employees and shareholders with the assurance of continuity in regard to AFM�s existing customer base and preferred alliance relationships.�

Areas of Responsibility

Under the new structure, as Chairman & CEO Horwitz will oversee AFM�s ongoing Management and Franchise Divisions, as well as operational, legal, financial and administrative activities. 

As Vice Chairman & Managing Director, Phillips will be in charge of the newly formed AFM Business Development division, AFM Preferred Alliance Group (one Canada�s largest and most reputable provider of purchasing services to the hospitality and lodging industry, representing the potential buying power of more than 2,900 properties and 300,000 guest rooms), and the newly formed AFM Communications Inc.  Phillips also will continue to serve on the Board of Directors and as a member of the Executive Committee.

�Both Stephen and I are truly excited about the direction and accomplishments of AFM Hospitality over the past two years,� stated Horwitz, �and we sincerely believe our new structure and personal responsibilities will provide the focus to continue our progress.  Without question, Stephen Phillips is the most qualified person possible to oversee AFM Business Development � from his knowledge of the brands and the individual properties to our customer base and strategic alliance partners.  Stephen and I have worked together in a variety of ways � we were both Howard Johnson franchisees, I was his customer, and we have now become close personal friends as well as business associates and shareholders � and I see our partnership as the leading force in the continued growth and profitability of AFM Hospitality.�

BIOGRAPHIES

Lawrence P. Horwitz, CHA

With nearly three decades years of proven success in the hospitality, leisure and travel industries for leading international companies, Lawrence P. Horwitz brings a wealth of entrepreneurial startup, hotel management, real estate development, franchise and travel industry experience to AFM Hospitality.

An MBA graduate of the University of California, Los Angeles, Horwitz has developed and demonstrated entrepreneurial skills in finance and accounting, acquisitions, sales and marketing, hospitality services, travel and tourism.  During his career, Horwitz started several companies and business units, beginning with a successful campus travel agency launched at UCLA during his college years in the late seventies. 

In 1978, Horwitz joined First Travel Corporation in Los Angeles.  The company was acquired by Carlson Companies and, in 1981, Horwitz was appointed Vice President/Corporate Planning for this $2 billion travel company.  By 1984, he had become Vice President/Leisure Travel Marketing and then President of Carlson�s
Cartan Tours division.

Horwitz joined Honolulu-based Aston Hotels & Resorts in 1987.  As Senior Vice President of Sales & Marketing, he directed all sales, marketing and reservation activities for 39 resorts and hotels, and was honored by both the State Senate and House of Representatives for his �exceptional contributions to and promotion of the State of Hawaii.�

In 1990, Horwitz co-founded Northwest Lodging, Inc., which was acquired by AFM Hospitality in late 2000.  With the acquisition, Horwitz was elected to the Board of Directors, and then elected Chairman of the Board.  Horwitz is an energetic, active member of the Executive Committee and the company�s leader in seeking and embracing new business development opportunities. 

He has received the highest designation of competence (Certified Hotel Administrator) conferred by the American Hotel & Lodging Association.

Stephen H. Phillips, CHA

A 35-year veteran of the hospitality industry in both Canada and the United States, Stephen H. Phillips was born in Australia and educated in England and South Africa.  Phillips started his hotel career with Westin International in 1965 and held senior management positions with Westin. Hyatt International and Delta Hotels,
where he was Vice President, Eastern Region. He was named President and CEO of Carlton International in 1988.

In 1990, Phillips became President of Howard Johnson in Canada and was co-founder of AFM Hospitality Corporation. He became President and CEO of Howard Johnson International in 1996, where he was instrumental in the resurgence of the brand worldwide.  He returned to Canada in 1998 as President & CEO and subsequently appointed Vice Chairman, CEO & Director of AFM Hospitality Corporation. 

Phillips has extended his energy into the community through the sponsorship of an annual fund raising event on behalf of the Children�s Wish Foundation and establishing the John Burt Scholarship Award at Cornell and Ryerson Universities for promising students seeking further education to develop a career in the hospitality industry.

Through its subsidiaries, AFM Hospitality Corporation, which also owns AFM Preferred Alliance Group (formerly HFS Purchasing Services Canada), AFM Asset Management Inc., Northwest Lodging International (USA) Inc. and Northwest Lodging International (Canada) Inc., is the exclusive Canadian Master Franchisor for ASTON�, Best Inns�, Hawthorn� Suites, Howard Johnson�, Knights Inn�, La Quinta� Inns, Park Plaza, Park Inn, Ramada�, Travellers Inn� and Villager� Lodge. 

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.