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The following is an excerpt from a 10-Q SEC Filing, filed by FIELDS MRS ORIGINAL COOKIES INC on 8/15/2000.
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MRS FIELDS ORIGINAL COOKIES INC - 10-Q - 20000815 - FINANCIAL_STATEMENTS

ITEM 1. Financial Statements

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands)

ASSETS

                                                                                         July 1,             January 1,
                                                                                          2000                  2000
                                                                                         -------             ----------

CURRENT ASSETS:
    Cash and cash equivalents                                                         $     1,775             $   4,919
    Accounts receivable, net of allowance for doubtful accounts of $230 and $111,
       respectively                                                                         3,823                 4,295
    Amounts due from franchisees and licensees, net of allowance for doubtful
       accounts of $700 and $821, respectively                                              3,838                 3,708
    Inventories                                                                             4,701                 4,977
    Prepaid rent and other                                                                  2,110                 1,336
    Deferred income tax assets, current portion                                             1,360                 1,360
                                                                                      -----------             ---------

                Total current assets                                                       17,607                20,595
                                                                                      -----------             ---------

PROPERTY AND EQUIPMENT, at cost:
    Leasehold improvements                                                                 29,018                26,698
    Equipment and fixtures                                                                 22,666                22,540
    Land                                                                                      240                   240
                                                                                      -----------             ---------
                                                                                           51,924                49,478
    Less accumulated depreciation and amortization                                        (26,171)              (20,813)
                                                                                      -----------             ---------

                Net property and equipment                                                 25,753                28,665
                                                                                      -----------             ---------

DEFERRED INCOME TAX ASSETS, net of current portion                                          2,154                 2,139
                                                                                      -----------             ---------

GOODWILL, net of accumulated amortization of $25,994 and $21,156,
    respectively                                                                          126,185               132,479
                                                                                      -----------             ---------

TRADEMARKS AND OTHER INTANGIBLES, net of accumulated
    amortization of $4,276 and $3,700, respectively                                        12,486                13,062
                                                                                      -----------             ---------

DEFERRED LOAN COSTS, net of accumulated amortization of $5,426 and
    $4,052, respectively                                                                    9,694                10,818
                                                                                      -----------             ---------

OTHER ASSETS                                                                                  688                   652
                                                                                      -----------             ---------

                                                                                      $   194,567             $ 208,410
                                                                                      ===========             =========

The accompanying notes to condensed consolidated financial statements are an integral part of these balance sheets.

3

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)(Continued)
(dollars in thousands, except share data)

LIABILITIES AND STOCKHOLDER'S EQUITY

                                                                                         July 1,             January 1,
                                                                                          2000                  2000
                                                                                         -------             ----------

CURRENT LIABILITIES:
    Current portion of long-term debt                                                 $       695             $     781
    Current portion of capital lease obligations                                              952                   842
    Line of credit                                                                          3,550                     -
    Accounts payable                                                                        8,369                10,514
    Accrued liabilities                                                                     2,112                 2,851
    Current portion of store closure reserve                                                3,016                 3,665
    Accrued salaries, wages and benefits                                                    3,107                 3,180
    Accrued interest payable                                                                1,181                 1,288
    Sales taxes payable                                                                       745                 1,128
    Deferred credits                                                                          112                   132
                                                                                      -----------             ---------

              Total current liabilities                                                    23,839                24,381

LONG-TERM DEBT, net of current portion                                                    141,469               141,755

STORE CLOSURE RESERVE, net of current portion                                               2,853                 3,529

CAPITAL LEASE OBLIGATIONS, net of current portion                                           2,729                 3,107
                                                                                      -----------             ---------

              Total liabilities                                                           170,890               172,772
                                                                                      -----------             ---------

MANDATORILY  REDEEMABLE  CUMULATIVE  PREFERRED
    STOCK of PTI (a wholly owned subsidiary), aggregate liquidation
    preference of $1,070 at January 1, 2000                                                     -                 1,070
                                                                                      -----------             ---------

MINORITY INTEREST                                                                             126                   111
                                                                                      -----------             ---------

STOCKHOLDER'S EQUITY:
    Common stock, $.01 par value; 1,000 shares authorized and 400 shares
       outstanding                                                                              -                     -
    Additional paid-in capital                                                             61,899                61,899
    Accumulated deficit                                                                   (38,273)              (27,442)
    Cumulative foreign currency translation adjustment                                        (75)                    -
                                                                                      -----------             ---------

              Total stockholder's equity                                                   23,551                34,457
                                                                                      -----------             ---------

                                                                                      $   194,567             $ 208,410
                                                                                      ===========             =========

The accompanying notes to condensed consolidated financial statements are an integral part of these balance sheets.

4

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)
(dollars in thousands)

                                                                             13 Weeks Ended         13 Weeks Ended
                                                                              July 1, 2000           July 3, 1999
                                                                              ------------           ------------

REVENUES:
    Net store and food sales                                                     $ 32,639                $ 34,786
    Franchising                                                                     6,097                   5,146
    Management fee                                                                  1,333                       -
    Licensing                                                                         201                     241
                                                                                 --------                --------

       Total revenues                                                              40,270                  40,173
                                                                                ---------                --------

OPERATING COSTS AND EXPENSES:
    Selling and store occupancy costs                                              18,387                  19,725
    Cost of sales                                                                  11,034                   9,925
    General and administrative                                                      6,339                   5,549
    Store closure benefit                                                            (200)                      -
    Depreciation and amortization                                                   6,331                   5,867
                                                                                 --------                --------

       Total operating costs and expenses                                          41,891                  41,066
                                                                                 --------                --------

          Loss from operations                                                     (1,621)                   (893)
                                                                                 --------                --------

OTHER INCOME (EXPENSE), net:
    Interest expense                                                               (4,528)                 (4,349)
    Interest income                                                                    22                      40
    Other, net                                                                         97                      (3)
                                                                                 --------                --------

       Total other expense, net                                                    (4,409)                 (4,312)
                                                                                 --------                --------

          Loss before provision for income taxes, preferred stock
             accretion and dividends of subsidiaries and minority
             interest                                                              (6,030)                 (5,205)

PROVISION FOR INCOME TAXES                                                             (7)                   (106)
                                                                                 --------                --------

          Loss before preferred stock accretion and dividends of
              subsidiaries and minority interest                                   (6,037)                 (5,311)

PREFERRED STOCK ACCRETION AND DIVIDENDS OF SUBSIDIARIES
                                                                                        -                    (111)

MINORITY INTEREST                                                                     (12)                     (3)
                                                                                 --------                --------

          Net loss                                                               $ (6,049)               $ (5,425)
                                                                                 ========                ========

COMPREHENSIVE LOSS:
    Net loss                                                                     $ (6,049)               $ (5,425)
    Foreign currency translation adjustments                                          (75)                      -
                                                                                 --------                --------
    Comprehensive loss                                                           $ (6,124)               $ (5,425)
                                                                                 ========                ========

The accompanying notes to condensed consolidated financial statements are an integral part of these balance sheets.

5

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(dollars in thousands)

                                                                             26 Weeks Ended         26 Weeks Ended
                                                                              July 1, 2000           July 3, 1999
                                                                              ------------           ------------

REVENUES:
    Net store and food sales                                                     $ 66,435                $ 71,915
    Franchising                                                                    12,043                  11,562
    Management fee                                                                  1,333                       -
    Licensing                                                                         361                     688
                                                                                 --------                --------

       Total revenues                                                              80,172                  84,165
                                                                                 --------                --------

OPERATING COSTS AND EXPENSES:
    Selling and store occupancy costs                                              36,707                  41,118
    Cost of sales                                                                  22,001                  21,856
    General and administrative                                                     11,460                  10,873
    Store closure benefit                                                            (200)                      -
    Depreciation and amortization                                                  11,989                  11,263
                                                                                 --------                --------

       Total operating costs and expenses                                          81,957                  85,110
                                                                                 --------                --------

          Loss from operations                                                     (1,785)                   (945)
                                                                                 --------                --------

OTHER INCOME (EXPENSE), net:
    Interest expense                                                               (9,126)                 (8,686)
    Interest income                                                                    45                      78
    Other, net                                                                         65                    (110)
                                                                                 --------                --------

       Total other expense, net                                                    (9,016)                 (8,718)
                                                                                 --------                --------

          Loss before provision for income taxes, preferred stock
             accretion and dividends of subsidiaries and minority
             interest                                                             (10,801)                 (9,663)

PROVISION FOR INCOME TAXES                                                            (15)                   (210)
                                                                                 --------                --------

          Loss before preferred stock accretion and dividends of
              subsidiaries and minority interest                                  (10,816)                 (9,873)

PREFERRED STOCK ACCRETION AND DIVIDENDS OF
    SUBSIDIARIES                                                                        -                    (222)

MINORITY INTEREST                                                                     (15)                     (4)
                                                                                 --------                --------

          Net loss                                                               $(10,831)               $(10,099)
                                                                                 ========                ========

COMPREHENSIVE LOSS:
    Net loss                                                                     $(10,831)               $(10,099)
    Foreign currency translation adjustments                                          (75)                      -
                                                                                 --------                --------
    Comprehensive loss                                                           $(10,906)               $(10,099)
                                                                                 ========                ========

The accompanying notes to condensed consolidated financial statements are an integral part of these balance sheets.

6

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(dollars in thousands)

                                                                                    26 Weeks Ended         26 Weeks Ended
                                                                                     July 1, 2000           July 3, 1999
                                                                                     ------------           ------------

Decrease in Cash and Cash Equivalents

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                             $(10,831)             $(10,099)
   Adjustments to reconcile net loss to net cash (used in) provided by
     operating activities:
         Depreciation and amortization                                                    11,989                11,263
         Amortization of deferred loan costs and accretion on loan discount                1,416                 1,021
         Loss on sale of assets                                                              511                   117
         Preferred stock accretion and dividends of subsidiaries                               -                   222
         Minority interest                                                                    15                     4
         Changes in assets and liabilities:
               Accounts receivable, net                                                      472                 1,638
               Amounts due from franchisees and licensees, net                              (130)                1,195
               Inventories                                                                   276                   590
               Prepaid rent and other                                                       (774)                  149
               Other assets                                                                  (36)                  918
               Accounts payable and accrued liabilities                                   (2,884)               (1,006)
               Bank overdraft                                                                  -                (1,231)
               Store closure reserve                                                      (1,325)               (1,311)
               Accrued salaries, wages and benefits                                          (73)                  (90)
               Accrued interest payable                                                     (107)                   38
               Sales taxes payable                                                          (383)                 (584)
               Deferred credits                                                              (35)                 (126)
                                                                                        --------              --------
                  Net cash (used in) provided by operating activities                     (1,899)                2,708
                                                                                        --------              --------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net cash paid for acquisition expenses                                                     -                  (100)
    Purchase of property and equipment                                                    (2,529)               (2,604)
                                                                                        --------              --------
                  Net cash used in investing activities                                   (2,529)               (2,704)
                                                                                        --------              --------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Reduction of long-term debt                                                             (414)               (5,340)
    Payment of debt financing costs                                                         (250)               (1,155)
    Borrowings under line of credit                                                        3,550                 7,000
    Principal payments on capital lease obligations                                         (457)                 (572)
    Reduction in preferred stock                                                          (1,070)                  (43)
                                                                                        --------              --------
                  Net cash provided by (used in) financing activities                      1,359                  (110)
                                                                                        --------              --------
    Effect of foreign exchange rates                                                         (75)                    -
                                                                                        --------              --------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                                 (3,144)                 (106)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD                                       4,919                 4,751
                                                                                        --------              --------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD                                          $  1,775              $  4,645
                                                                                        ========              ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid for interest                                                             $  7,817              $  7,588
                                                                                        ========              ========
     Cash paid for income taxes                                                         $    124              $    164
                                                                                        ========              ========

The accompanying notes to condensed consolidated financial statements are an integral part of these balance sheets.

7

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)

(Unaudited)

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Mrs. Fields' Original Cookies, Inc. and subsidiaries ("Mrs. Fields") in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q, and accordingly, do not include all of the information and footnotes required by accounting principles generally accepted in the United States. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, which consist only of normal recurring adjustments, necessary to present fairly the financial position of Mrs. Fields as of July 1, 2000 and January 1, 2000, and the results of its operations and its cash flows for the periods presented herein. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended January 1, 2000 contained in Mrs. Fields' Annual Report on Form 10-K.

The results of operations for the 13 and 26 weeks ended July 1, 2000 are not necessarily indicative of the results that may be expected for the remainder of the fiscal year ending December 30, 2000. Loss per share information is not presented as Mrs. Fields is wholly owned by Mrs. Fields' Holding Company, Inc. ("Mrs. Fields' Holding") and therefore, its shares are not publicly traded. All dollar amounts presented are stated in thousands.

(2) RECLASSIFICATIONS

Certain reclassifications have been made to the prior periods' condensed consolidated financial statements to conform with the current periods' presentation.

(3) STORE CLOSURE AND PROPERTY AND EQUIPMENT IMPAIRMENT RESERVES

Mrs. Fields' management reviews the historical and projected operating performance of its stores on a periodic basis to identify underperforming stores for impairment of net property investment or for targeted closing. Mrs. Fields' policy is to recognize a loss for that portion of the net property investment determined to be impaired. Additionally, when a store is identified for targeted closing, Mrs. Fields' accrues the costs of closing the store, which are predominantly estimated lease termination costs. Lease termination costs include both one-time settlement payments and continued contractual payments over time under the original lease agreements where no settlement can be reached with the landlord. As a result, although all stores under the current exit plans will be exited by at least the end of fiscal year 2000, a portion of the store closure reserve will remain until all cash payments have been made. No operating losses have been accrued. The classification of some stores to be closed or franchised may be changed and the store removed from the exit plan if that store's operations change positively, or if the Company is unable to negotiate a settlement with the landlord. If and when a reserve that was established as part of purchase accounting is not fully utilized, Mrs. Fields reduces the reserve to zero and goodwill is adjusted for the corresponding amount. Any excess reserve that was not established as part of purchase accounting is adjusted through the income statement.

8

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

(Unaudited)

The following table presents a summary of the activity in the store closure reserve during the 26 weeks ended July 1, 2000 and July 3, 1999:

                                 Mrs. Fields Inc. and
                                  Original  Cookie             H & M              Pretzel  Time               Great American
                                 --------------------   ----------------------- -----------------------  ---------------------------
                               Business     Company-     Business   Company -    Business     Company-      Business     Company-
                               Combination   Owned     Combination   Owned      Combination   Owned      Combination     Owned
                                 and        Stores        and       Stores         and        Stores        and         Stores
                               Subsequent Unrelated to Subsequent  Unrelated to Subsequent  Unrelated to  Subsequent   Unreleated to
                              Adjustments Acquisition  Adjustments Acquisition  Adjustments Acquisition   Adjustments  Acquisition
                              ----------- ------------ ----------- ------------ ----------- ------------  -----------  -------------



Balance, January 1, 2000        $1,614     $1,581         $536       $294         $109         $  86        $1,674         $545
Reversal during the 26
weeks ended July 1, 2000             -         -            -          -            -             -             -            -

Utilization for the 26
weeks ended July 1, 2000          (218)      (312)         (57)      (120)         (22)            -          (233)        (130)
                                ------     ------         ----       ----         ----         -----        ------         ----

Balance, July 1, 2000           $1,396     $1,269         $479       $174         $ 87         $  86        $1,441         $415
                                ======     ======         ====       ====         ====         =====        ======         ====

Balance, January 2, 1999        $3,728     $4,674         $981       $367         $493         $ 264        $3,399         $305

Utilization for the 26 weeks
ended July 3, 1999                (813)      (504)           -        (43)           -           (67)         (288)           -
                                ------     ------         ----       ----         ----         -----        ------         ----

Balance, July 3, 1999           $2,915     $4,170         $981       $324         $493         $197         $3,111         $305
                                ======     ======         ====       ====         ====         =====        ======         ====


MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

(Unaudited)

The following table presents a summary of the activity in the store closure reserve during the 26 weeks ended July 1, 2000 and July 3, 1999:

                                        Pretzelmaker                        Consolidated
                                   -----------------------  ------------------------------------------
                                                              Total        Total               Total
                                   Business     Company-      Business     Company-          Business
                                  Combination   Owned      Combination     Owned          Combinations
                                      and        Stores        and         Stores             and
                                   Subsequent  Unrelated to  Subsequent   Unreleated to     Company
                                   Adjustments Acquisition   Adjustments  Acquisition     Owned Stores
                                   ----------- ------------  -----------  -------------   -------------


Balance, January 1, 2000              $105       $650         $4,038       $3,156           $  7,194

Reversal during the 26
weeks ended July 1, 2000                 -       (200)             -         (200)               (200)

Utilization for the 26
weeks ended July 1, 2000               (16)       (17)          (546)        (579)            (1,125)
                                      ----       ----         ------       ------           --------

Balance, July 1, 2000                 $ 89       $433         $3,492       $2,377           $  5,869
                                      ====       ====         ======       ======           ========

Balance, January 2, 1999              $500       $  -         $9,101       $5,610           $ 14,711

Utilization for the 26 weeks
ended July 3, 1999                       -          -         (1,101)        (614)            (1,715)
                                      ----       ----         ------       ------           --------

Balance, July 3, 1999                 $500       $  -         $8,000       $4,996           $ 12,996
                                      ====       ====         ======       ======           ========

9

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

(Unaudited)

The following table presents a summary of activity for stores originally identified to be closed or franchised in connection with the applicable business combination for the 26 weeks ended July 1, 2000 and July 3, 1999. This table does not include a summary of activity for stores Mrs. Fields intends to close or franchise that were not originally identified in connection with a business combination.

                                             Mrs. Fields Inc.
                                                  and
                                            Original Cookie                H&M           Pretzel Time
                                            -------------------  -----------------   -----------------
                                             To Be      To Be     To Be     To Be    To Be     To Be
                                            Closed   Franchised  Closed  Franchised  Closed Franchised
                                            ------   ----------  ------  ----------  ------ ----------


Balance, January 1, 2000                       -         14          -         -        -          -

Stores closed, franchised or removed
for the 26 weeks ended July 1, 2000            -        (11)         -         -        -          -
                                             ---        ---         --        --       --         --

Balance, July 1, 2000                          -          3          -         -        -          -
                                             ===        ===         ==        ==       ==         ==

Balance, January 2, 1999                      23         36          6         7        3          -

Stores closed, franchised, or removed for
the 26 weeks ended July 3, 1999              (13)       (13)        (4)       (4)      (3)         -
                                             ---        ---         --        --       --         --

Balance, July 3, 1999                         10         23          2         3        -          -
                                             ===        ===         ==        ==       ==         ==


MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

(Unaudited)

The following table presents a summary of activity for stores originally identified to be closed or franchised in connection with the applicable business combination for the 26 weeks ended July 1, 2000 and July 3, 1999. This table does not include a summary of activity for stores Mrs. Fields intends to close or franchise that were not originally identified in connection with a business combination.

                                                              Great American         Pretzelmaker     Consolidated
                                                            ------------------- ------------------  ----------------
                                                             To Be     To Be     To Be    To Be     To Be    To Be
                                                            Closed   Franchised Closed  Franchised Closed Franchised
                                                            ------   ---------- ------- ---------- ------ ----------

Balance, January 1, 2000                                       6          1         -        -        6       15

Stores closed, franchised or removed
for the 26 weeks ended July 1, 2000                           (2)        (1)        -        -       (2)     (12)
                                                             ---         --        --       --      ---      ---

Balance, July 1, 2000                                          4          -         -        -        4        3
                                                             ===         ==        ==       ==      ===      ===

Balance, January 2, 1999                                      43         11         7        -       82       54

Stores closed, franchised, or removed for
the 26 weeks ended July 3, 1999                              (21)        (1)       (4)       -      (45)     (18)
                                                             ---         --        --       --      ---      ---

Balance, July 3, 1999                                         22         10         3        -       37       36
                                                             ===         ==        ==       ==      ===      ===

10

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

The following table presents a summary of activity for stores Mrs. Fields intends to close or franchise that were not originally identified to be closed or franchised in connection with a business combination for the 26 weeks ended July 1, 2000, and July 3, 1999:

                                             Mrs. Fields Inc.
                                                  and
                                            Original Cookie                H&M           Pretzel Time
                                            -------------------  -----------------   -----------------
                                             To Be      To Be     To Be     To Be    To Be     To Be
                                            Closed   Franchised  Closed  Franchised  Closed Franchised
                                            ------   ----------  ------  ----------  ------ ----------


Balance, January 1, 2000                       3          4          -         -        -          1

Stores closed, franchised or removed
for the 26 weeks ended July 1, 2000           (1)        (2)         -         -        -         (1)
                                             ---        ---         --        --       --         --

Balance, July 1, 2000                          2          2          -         -        -          -
                                             ===        ===         ==        ==       ==         ==

Balance, January 2, 1999                      20         10          2         1        2          3

Stores closed, franchised, or removed for
the 26 weeks ended July 3, 1999              (19)        (4)        (2)        -       (1)        (2)
                                             ---        ---         --        --       --         --

Balance, July 3, 1999                          1          6          -         1        1          1
                                             ===        ===         ==        ==       ==         ==


MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

The following table presents a summary of activity for stores Mrs. Fields intends to close or franchise that were not originally identified to be closed or franchised in connection with a business combination for the 26 weeks ended July 1, 2000, and July 3, 1999:

                                                              Great American       Consolidated
                                                            -------------------  ----------------
                                                             To Be     To Be     To Be    To Be
                                                            Closed   Franchised Closed Franchised
                                                            ------   ---------- ------ ----------

Balance, January 1, 2000                                       -          -        3        5

Stores closed, franchised or removed
for the 26 weeks ended July 1, 2000                            -          -       (1)      (3)
                                                             ---         --      ---      ---

Balance, July 1, 2000                                          -          -        2        2
                                                             ===         ==      ===      ===

Balance, January 2, 1999                                       5          -       29       14

Stores closed, franchised, or removed for
the 26 weeks ended July 3, 1999                               (1)         -      (23)      (6)
                                                             ---         --      ---      ---

Balance, July 3, 1999                                          4          -        6        8
                                                             ===         ==      ===      ===

11

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

(Unaudited)

The following table presents a summary of changes in the property and equipment impairment reserves that were established in connection with the applicable business combination for the 26 weeks ended July 1, 2000 and July 3, 1999 for stores to be closed and franchised:

                                                          Mrs. Fields,
                                                            Inc. and
                                                            Original                      Great
                                                           Cookie Co.       H&M         American     Pretzelmaker      Consolidated
                                                          ------------      ---         --------     ------------      ------------

Balance, January 1, 2000...........................          $  2,246     $  640        $  1,427         $   169          $ 4,482
Addition to impairment for the 26 weeks ended
   July 1, 2000 related to stores to be closed.....                42          -              89               -              131
Addition to impairment for the 26 weeks ended
   July 1, 2000 related to stores to be franchised.               129          5             251               -              385
Utilization for the 26 weeks ended July 1, 2000
   related to stores to be closed..................              (605)       (17)           (209)              -             (831)
Utilization for the 26 weeks ended July 1, 2000
   related to stores to be franchised..............               (40)       (85)              -               -             (125)
                                                             --------     ------        --------         -------          -------

Balance, July 1, 2000..............................          $  1,772     $  543        $  1,558         $   169          $ 4,042
                                                             ========     ======        ========         =======          =======

Balance, January 2, 1999...........................          $  3,844     $1,380        $  2,877         $   327          $ 8,428
Addition to impairment for the 26 weeks ended
   July 3, 1999 related to stores to be closed.....                25          -               -               -               25
Addition to impairment for the 26 weeks ended
   July 3, 1999 related to stores to be franchised.               362          -               -               -              362
Utilization for the 26 weeks ended July 3, 1999
   related to stores to be closed..................            (1,114)      (405)         (1,166)           (157)          (2,842)
Utilization for the 26 weeks ended July 3, 1999
   related to stores to be franchised..............              (665)      (335)             (5)              -           (1,005)
                                                             --------     ------        --------         -------          -------

Balance, July 3, 1999..............................          $  2,452     $  640        $  1,706         $   170          $ 4,968
                                                             ========     ======        ========         =======          =======

12

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

(4) TCBY MANAGEMENT AGREEMENT

On February 9, 2000, Capricorn Investors III, L.P., an affiliate of Capricorn Investors II, L.P., Mrs. Fields' Holding's majority shareholder, entered into an agreement to acquire TCBY Enterprises, Inc. ("TCBY"), a retail snack food company. This acquisition (the "TCBY Transaction") was completed on June 1, 2000.

In connection with the TCBY Transaction, on June 1, 2000, Mrs. Fields entered into a Management Agreement (the "TCBY Management Agreement") with TCBY Holding Company, Inc., the parent company of TCBY, and TCBY Systems, LLC, a wholly-owned subsidiary of TCBY, pursuant to which the corporate and administrative functions of TCBY were transferred to Mrs. Fields. Under the TCBY Management Agreement, Mrs. Fields has agreed to manage and operate TCBY's business, and pay specified operating and other costs of TCBY (including specified costs associated with the transfer of the management function from Little Rock, Arkansas to Salt Lake City, Utah), in exchange for a management fee that will be paid by TCBY semi-monthly. Revenue generated from the management fee is reported under the caption "Management fee revenue" on the income statement. Mrs. Fields does not separate the costs incurred under the management agreement from costs of operating Mrs. Fields, as most of Mrs. Fields' employees support both companies, therefore the activity for managing TCBY is not reported as a separate segment.

In accordance with the terms and conditions of the TCBY Management Agreement, Mrs. Fields and TCBY will share cost savings that may be obtained through the joint purchase of ingredients, supplies and services and Mrs. Fields will be eligible to receive a portion of the anticipated cost savings in connection with the expected outsourcing of TCBY's yogurt and ice cream manufacturing requirements. The TCBY Transaction will also provide the opportunity for Mrs. Fields and its eligible franchisees to become TCBY franchisees and for eligible TCBY franchisees to become franchisees of Mrs. Fields or its subsidiaries.

In connection with the TCBY Transaction, Mrs. Fields received a $300,000 acquisition advisory fee for its services rendered in connection with the acquisition and for partial reimbursement of out-of-pocket costs and expenses totaling approximately $725,000 incurred by Mrs. Fields in connection with its performance of acquisition advisory services. Mrs. Fields will receive a fee of up to $1.5 million from TCBY when TCBY is successful in selling its existing dairy processing plant for net proceeds sufficient to retire debt associated with the plant. Mrs. Fields' management expects that the revenues from the TCBY Management Fee and any fees earned in connection with a sale of the TCBY dairy processing plant will exceed any costs not fully reimbursed by the acquisition advisory fee and related reimbursement.

(5) REPORTABLE SEGMENTS

Management evaluates performance at Mrs. Fields using two reportable operating segments; namely, (1) company-owned stores and related activity and
(2) franchising and licensing activity. The segments are determined by revenue source; direct sales or royalties and license fees. The company-owned stores segment consists of both cookie and pretzel stores owned and operated by Mrs. Fields and sales of its mail order business. The franchising and licensing segment consists of cookie and pretzel stores, which are owned and operated by third parties who pay Mrs. Fields an initial franchise fee and monthly royalties based on a percentage of gross sales, sales of cookie dough manufactured by the Company to its franchisees and other licensing activity not related to cookie or pretzel stores. Sales and transfers between segments are eliminated in consolidation.

13

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Mrs. Fields evaluates performance of each segment based on contribution margin. Contribution margin is computed as the difference between the revenues generated by a reportable segment and the selling and store occupancy costs and cost of sales related to that reportable segment. It is used as a measure of the operating performance of an operating segment. Mrs. Fields does not allocate any revenue generated from the TCBY management fee, general and administrative expense, other income (expense), interest expense, depreciation and amortization of assets to its reportable operating segments. Segment revenue and contribution margin are presented in the following table (in thousands).

                                                               Company-
                                                             Owned Stores,      Franchising
                                                        including Mail Order    and Licensing          Total
                                                             ------------       -------------          -----


13 weeks ended July 1, 2000
---------------------------
Segment revenues                                                $32,639             $ 6,298           $38,937
Contribution margin                                               5,659               3,857             9,516

13 weeks ended July 3, 1999
---------------------------
Segment revenues                                                 34,786               5,387            40,173
Contribution margin                                               7,403               3,120            10,523

26 weeks ended July 1, 2000
---------------------------
Segment revenues                                                 66,435              12,404            78,839
Contribution margin                                              12,386               7,745            20,131

26 weeks ended July 3, 1999
---------------------------
Segment revenues                                                 71,915              12,250            84,165
Contribution margin                                              13,404               7,787            21,191

The reconciliation of contribution margin to net loss is as follows (in thousands):

                                         13 Weeks Ended     13 Weeks Ended     26 Weeks Ended     26 Weeks Ended
                                          July 1, 2000       July 3, 1999       July 1, 2000       July 3, 1999
                                         --------------     --------------     --------------     --------------


Contribution margin                          $  9,516            $  10,523         $ 20,131          $ 21,191
Management fee revenue                          1,333                    -            1,333                 -
General and
   administrative expense                      (6,339)              (5,549)         (11,460)          (10,873)
Store closure benefit                             200                    -              200                 -
Depreciation and amortization                  (6,331)              (5,867)         (11,989)          (11,263)
Interest expense                               (4,528)              (4,349)          (9,126)           (8,686)
Other income (expense), net                       100                 (183)              80              (468)
                                             --------            ---------         --------          --------

Net loss                                     $ (6,049)           $  (5,425)        $(10,831)         $(10,099)
                                             ========            =========         ========          ========

Geographic segment information is as follows (in thousands):

                                       Domestic          International           Domestic        International       Domestic
                                      Company-Owned      Company-Owned       Franchising and      Franchising    Management Fee
                                         Stores             Stores             Licensing        and Licensing       Revenue
                                      -------------      -------------       ---------------    --------------   --------------


Total revenues
--------------
13 weeks ended July 1, 2000             $32,639             $  -               $  6,242              $  56           $1,333
13 weeks ended July 3, 1999              34,786                -                  5,276                111                -

26 weeks ended July 1, 2000              66,435                -                 12,267                137            1,333
26 weeks ended July 3, 1999              71,894               21                 12,050                200                -

14

MRS. FIELDS' ORIGINAL COOKIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Revenues from international franchising and licensing are generated from Canada and Australia with no other countries having material representation. During the year ended January 1, 2000 all remaining international company-owned stores were closed.

There were no customers who accounted for more than 10 percent of Mrs. Fields' total revenues or either segment's revenues.

(6) SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Mrs. Fields' obligation related to its $140,000,000 aggregate principal amount of 10 1/8 percent Series A, B and C Senior Notes due 2004 is fully and unconditionally guaranteed (the "Guarantee") on a senior basis by four of Mrs. Fields' wholly owned subsidiaries. The Guarantee is a general unsecured obligation of The Mrs. Fields' Brand, Inc., Great American Cookies, Inc., Pretzel Time, Inc. and Pretzelmaker Holdings, Inc. (the "Guarantors"), ranks senior in right of payment to all subordinated indebtedness of the Guarantors and ranks equal in right of payment with all existing and future senior indebtedness of the Guarantors. There are no restrictions on Mrs. Fields' ability to obtain cash dividends or other distributions of funds from the Guarantors, except those imposed by applicable law. The following supplemental financial information sets forth, on a condensed consolidating basis, balance sheets, statements of operations and statements of cash flows for Mrs. Fields' Original Cookies, Inc. (the "Parent Company"), the Guarantor Subsidiaries and the Non-guarantor Subsidiaries (which include Mrs. Fields' Cookies Australia, Mrs. Fields' Cookies (Canada) Ltd., H & M Canada, and Fairfield Foods, Inc. and three partially owned subsidiaries). Mrs. Fields has not presented separate financial statements and other disclosures concerning the Guarantors because management has determined that such information is not material.

15

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
AS OF JULY 1, 2000
(Unaudited)

(dollars in thousands)

                                                    Parent       Guarantor         Non-Guarantor
                                                    Company      Subsidiaries      Subsidiaries      Eliminations    Consolidated
                                                    -------      ------------      --------------    ------------    ------------

ASSETS

    CURRENT ASSETS:
       Cash and cash equivalents                   $   1,387        $    (39)        $    427         $        -      $    1,775
       Accounts receivable, net                        3,515             295               13                  -           3,823
       Amounts due from franchisees and
          licensees, net                                 888           2,950                -                  -           3,838
       Inventories                                     3,529           1,169                3                  -           4,701
       Other current assets and amounts due
          from (to) affiliates, net                   13,958          (9,713)            (775)                 -
                                                   ---------        --------         --------         ----------      ----------

            Total current assets                      23,277          (5,338)            (332)                 -          17,607

    PROPERTY AND EQUIPMENT, net                       23,547           2,087              119                  -          25,753
    INTANGIBLES, net                                  70,950          77,201              214                  -         148,365
    INVESTMENT IN SUBSIDIARIES                        65,010               -                -            (65,010)              -
    OTHER ASSETS                                       2,658             184                -                  -           2,842
                                                   ---------        --------         --------         ----------      ----------

                                                   $ 185,442        $ 74,134         $      1         $  (65,010)     $  194,567
                                                   =========        ========         ========         ==========      ==========

LIABILITIES AND STOCKHOLDER'S
-----------------------------
  EQUITY (DEFICIT)
  ----------------

    CURRENT LIABILITIES:
       Current portion of long-term debt
         and capital lease obligations             $   1,647        $      -         $      -         $        -      $    1,647
       Current portion of store closure reserve        3,016               -                -                  -           3,016
       Accounts payable                                7,037           1,320               12                  -           8,369
       Accrued liabilities                             9,762           1,032               13                  -          10,807
                                                   ---------        --------         --------         ----------      ----------

            Total current liabilities                 21,462           2,352               25                  -          23,839

    LONG-TERM DEBT AND CAPITAL LEASE
      OBLIGATIONS, net of current portion            143,828             370                -                  -         144,198

    STORE CLOSURE RESERVE, net of
       current portion                                 2,853               -                -                  -           2,853
    MINORITY INTEREST                                      -               -                -                126             126
    STOCKHOLDER'S EQUITY (DEFICIT)                    17,299          71,412              (24)           (65,136)         23,551
                                                   ---------        --------         --------         ----------      ----------

                                                   $ 185,442        $ 74,134         $      1         $  (65,010)     $  194,567
                                                   =========        ========         ========         ==========      ==========

16

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE 13 WEEKS ENDED JULY 1, 2000
(Unaudited)

(dollars in thousands)

                                                Parent       Guarantor         Non-Guarantor
                                                Company      Subsidiaries      Subsidiaries      Eliminations    Consolidated
                                                -------      ------------      --------------    ------------    ------------


TOTAL REVENUES                                 $  35,221        $  6,165         $    110         $   (1,226)     $   40,270
                                               ---------        --------         --------         ----------      ----------

OPERATING COSTS AND EXPENSES:
   Selling and store occupancy costs              18,595               -               57               (265)         18,387
   Cost of sales                                   9,626           2,357               12               (961)         11,034
   General and administrative                      6,508            (188)              19                  -           6,339
   Store closure benefit                            (200)              -                -                  -            (200)
   Depreciation and amortization                   4,782           1,548                1                  -           6,331
                                               ---------        --------         --------         ----------      ----------

        Total operating costs and
           expenses                               39,311           3,717               89             (1,226)         41,891
                                               ---------        --------         --------         ----------      ----------

        Income (loss) from operations             (4,090)          2,448               21                  -          (1,621)

INTEREST EXPENSE AND
  OTHER, net                                      (4,305)           (104)               -                  -          (4,409)
                                               ---------        --------         --------         ----------      ----------

   (Loss) income before provision for
     income taxes and equity in net loss
     of consolidated subsidiaries                 (8,395)          2,344               21                  -          (6,030)

PROVISION FOR INCOME TAXES                            (7)              -                -                  -              (7)
                                               ---------        --------         --------         ----------      ----------

   (Loss) income before equity in net
     loss of consolidated subsidiaries            (8,402)          2,344               21                  -          (6,037)


EQUITY IN NET LOSS OF CONSOLIDATED
   SUBSIDIARIES                                        -               -                -                (12)            (12)
                                               ---------        --------         --------         ----------      ----------

NET (LOSS) INCOME                              $  (8,402)       $  2,344         $     21         $      (12)     $   (6,049)
                                               =========        ========         ========         ==========      ==========

17

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE 26 WEEKS ENDED JULY 1, 2000
(Unaudited)

(dollars in thousands)

                                                Parent       Guarantor         Non-Guarantor
                                                Company      Subsidiaries      Subsidiaries      Eliminations    Consolidated
                                                -------      ------------      --------------    ------------    ------------



TOTAL REVENUES                                 $  70,214        $ 12,280         $    278         $   (2,600)     $   80,172
                                               ---------        --------         --------         ----------      ----------

OPERATING COSTS AND EXPENSES:
   Selling and store occupancy costs              37,171               -              104               (568)         36,707
   Cost of sales                                  19,347           4,659               27             (2,032)         22,001
   General and administrative                     11,522            (130)              68                  -          11,460
   Store closure benefit                            (200)              -                -                  -            (200)
   Depreciation and amortization                   8,840           3,141                8                  -          11,989
                                               ---------        --------         --------         ----------      ----------

        Total operating costs and
           expenses                               76,680           7,670              207             (2,600)         81,957
                                               ---------        --------         --------         ----------      ----------

        Income (loss) from operations             (6,466)          4,610               71                  -          (1,785)

INTEREST EXPENSE AND
  OTHER, net                                      (8,771)           (245)               -                  -          (9,016)
                                               ---------        --------         --------         ----------      ----------

   (Loss) income before equity in net
     loss of consolidated subsidiaries           (15,237)          4,365               71                  -         (10,801)

PROVISION FOR INCOME TAXES                           (15)              -                -                  -             (15)
                                               ---------        --------         --------         ----------      ----------

   (Loss) income before preferred stock
     accretion and dividends of
     subsidiaries and equity in net loss
     of consolidated subsidiaries                (15,252)          4,365               71                  -         (10,816)


EQUITY IN NET LOSS OF CONSOLIDATED
   SUBSIDIARIES                                        -               -                -                (15)            (15)
                                               ---------        --------         --------         ----------      ----------

NET (LOSS) INCOME                              $ (15,252)       $  4,365         $     71         $      (15)     $  (10,831)
                                               =========        ========         ========         ==========      ==========

18

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE 26 WEEKS ENDED JULY 1, 2000
(Unaudited)

(dollars in thousands)

                                                Parent       Guarantor         Non-Guarantor
                                                Company      Subsidiaries      Subsidiaries      Eliminations    Consolidated
                                                -------      ------------      --------------    ------------    ------------




NET CASH PROVIDED BY (USED IN)  OPERATING
   ACTIVITIES                                  $  (2,706)       $    621         $    186         $        -      $   (1,899)
                                               ---------        --------         --------         ----------      ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchase of property and equipment,
        net                                       (2,303)           (226)               -                  -          (2,529)
                                               ---------        --------         --------         ----------      ----------

           Net cash used in investing
             activities                           (2,303)           (226)               -                  -          (2,529)
                                               ---------        --------         --------         ----------      ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Reduction of long-term debt and
        capital lease obligations                   (715)           (156)               -                  -            (871)
      Borrowings under line of credit              3,550               -                -                  -           3,550
      Payment of debt financing fees                (250)              -                -                  -            (250)
      Reduction in preferred stock                     -          (1,070)               -                  -          (1,070)
                                               ---------        --------         --------         ----------      ----------

            Net cash provided by (used in)
               financing activities                2,585          (1,226)               -                  -           1,359
                                               ---------        --------         --------         ----------      ----------

      Effect of foreign exchange rates               (75)              -                -                 -              (75)
                                               ---------        --------         --------         ----------      ----------

NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                    (2,499)           (831)             186                  -          (3,144)

CASH AND CASH EQUIVALENTS, beginning of
   the period                                      3,886             792              241                  -           4,919
                                               ---------        --------         --------         ----------      ----------

CASH AND CASH EQUIVALENTS, end of the
   period                                      $   1,387        $    (39)        $    427         $        -      $    1,775
                                               =========        ========         ========         ==========      ==========

19

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
AS OF JANUARY 1, 2000
(Unaudited)

(dollars in thousands)

                                                    Parent       Guarantor         Non-Guarantor
                                                    Company      Subsidiaries      Subsidiaries      Eliminations    Consolidated
                                                    -------      ------------      --------------    ------------    ------------



                    ASSETS
                    ------

    CURRENT ASSETS:
       Cash and cash equivalents                   $   3,886        $    792         $    241         $        -      $    4,919
       Accounts receivable, net                        2,151           2,131               13                  -           4,295
       Amounts due from franchisees and
          licensees, net                               1,314           2,394                -                  -           3,708
       Inventories                                     4,009             968                -                  -           4,977
       Other current assets and amounts due
          from (to) affiliates, net                   22,236         (18,898)            (642)                 -           2,696
                                                   ---------        --------         --------         ----------      ----------

            Total current assets                      33,596         (12,613)            (388)                 -          20,595

    PROPERTY AND EQUIPMENT, net                       26,481           2,033              151                  -          28,665
    INTANGIBLES, net                                  74,301          81,769              289                  -         156,359
    INVESTMENT IN SUBSIDIARIES                        65,468               -                -            (65,468)              -
    OTHER ASSETS                                       2,714             134              (57)                 -           2,791
                                                   ---------        --------         --------         ----------      ----------

                                                   $ 202,560        $ 71,323         $     (5)        $  (65,468)     $  208,410
                                                   =========        ========         ========         ==========      ==========


LIABILITIES AND STOCKHOLDER'S
-----------------------------
  EQUITY (DEFICIT)
  ----------------

CURRENT LIABILITIES:
    Current portion of long-term debt and
       capital lease obligations                   $   1,377        $    246         $      -         $        -      $    1,623
    Current portion of store closure reserve           3,665                                                               3,665
    Accounts payable                                   8,823           1,676               15                  -          10,514
    Accrued liabilities                                7,469           1,000              110                  -           8,579
                                                   ---------        --------         --------         ----------      ----------

            Total current liabilities                 21,334           2,922              125                  -          24,381

LONG-TERM DEBT AND CAPITAL LEASE
    OBLIGATIONS, net of current
    portion                                          144,582             280                -                  -         144,862

STORE CLOSURE RESERVE, net of
    current portion                                    3,529               -                -                  -           3,529
MANDATORILY REDEEMABLE CUMULATIVE PREFERRED
 STOCK                                                     -           1,070                -                  -           1,070
MINORITY INTEREST                                          -               -                -                111             111
STOCKHOLDER'S EQUITY (DEFICIT)                        33,115          67,051             (130)           (65,579)         34,457
                                                   ---------        --------         --------         ----------      ----------

                                                   $ 202,560        $ 71,323         $     (5)        $  (65,468)     $  208,410
                                                   =========        ========         ========         ==========      ==========


SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE 13 WEEKS ENDED JULY 3, 1999
(Unaudited)

(dollars in thousands)

                                                Parent       Guarantor         Non-Guarantor
                                                Company      Subsidiaries      Subsidiaries      Eliminations    Consolidated
                                                -------      ------------      --------------    ------------    ------------


NET REVENUES                                   $  36,108        $  6,129         $     45         $   (2,109)     $   40,173
                                               ---------        --------         --------         ----------      ----------

OPERATING COSTS AND EXPENSES:
   Selling and store occupancy costs              20,002               -               37               (314)         19,725
   Food cost of sales                             10,457           1,246               17             (1,795)          9,925
   General and administrative                      5,549               -                -                  -           5,549
   Depreciation and amortization                   4,222           1,645                -                  -           5,867
                                               ---------        --------         --------         ----------      ----------

        Total operating costs and
           expenses                               40,230           2,891               54             (2,109)         41,066
                                               ---------        --------         --------         ----------      ----------

        (Loss) income from operations             (4,122)          3,238               (9)                 -            (893)

INTEREST EXPENSE AND
  OTHER, net                                      (4,259)            (53)               -                  -          (4,312)
                                               ---------        --------         --------         ----------      ----------

   (Loss) income before provision for
     income taxes, preferred stock
     accretion, dividends of subsidiaries
     and equity in net loss
     of consolidated subsidiaries                 (8,381)          3,185               (9)                 -          (5,205)

PROVISION FOR INCOME TAXES                          (106)              -                -                  -            (106)
                                               ---------        --------         --------         ----------      ----------

   (Loss) income before preferred stock
     accretion and dividends of
     subsidiaries and equity in net loss
     of consolidated subsidiaries                 (8,487)          3,185               (9)                 -          (5,311)


PREFERRED STOCK ACCRETION AND DIVIDENDS
   OF SUBSIDIARIES                                     -            (111)               -                  -            (111)

EQUITY IN NET LOSS OF CONSOLIDATED
   SUBSIDIARIES                                    3,065               -                -             (3,068)             (3)
                                               ---------        --------         --------         ----------      ----------

NET (LOSS) INCOME                              $  (5,422)       $  3,074         $     (9)        $   (3,068)     $   (5,425)
                                               =========        ========         ========         ==========      ==========

20

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE 26 WEEKS ENDED JULY 3, 1999
(Unaudited)

(dollars in thousands)

                                                Parent       Guarantor         Non-Guarantor
                                                Company      Subsidiaries      Subsidiaries      Eliminations    Consolidated
                                                -------      ------------      --------------    ------------    ------------


NET REVENUES                                   $  74,365        $ 12,764         $    104         $   (3,068)     $   84,165
                                               ---------        --------         --------         ----------      ----------

OPERATING COSTS AND EXPENSES:
   Selling and store occupancy costs              41,634               -              120               (636)         41,118
   Food cost of sales                             19,787           4,463               38             (2,432)         21,856
   General and administrative                     10,819              54                -                  -          10,873
   Depreciation and amortization                   7,967           3,296                -                  -          11,263
                                               ---------        --------         --------         ----------      ----------

        Total operating costs and
           expenses                               80,207           7,813              158             (3,068)         85,110
                                               ---------        --------         --------         ----------      ----------

        (Loss) income from operations             (5,842)          4,951              (54)                 -            (945)

INTEREST EXPENSE AND
  OTHER, net                                      (8,638)            (80)               -                  -          (8,718)
                                               ---------        --------         --------         ----------      ----------

   (Loss) income before provision for
     income taxes, preferred stock
     accretion, dividends of subsidiaries
     and equity in net loss
     of consolidated subsidiaries                (14,480)          4,871              (54)                 -          (9,663)

PROVISION FOR INCOME TAXES                          (210)              -                -                  -            (210)
                                               ---------        --------         --------         ----------      ----------

   (Loss) income before preferred stock
     accretion and dividends of
     subsidiaries and equity in net loss
     of consolidated subsidiaries                (14,690)          4,871              (54)                 -          (9,873)


PREFERRED STOCK ACCRETION AND DIVIDENDS
   OF SUBSIDIARIES                                     -            (222)               -                  -            (222)

EQUITY IN NET LOSS OF CONSOLIDATED
   SUBSIDIARIES                                    4,595               -                -             (4,599)             (4)
                                               ---------        --------         --------         ----------      ----------

NET (LOSS) INCOME                              $ (10,095)       $  4,649         $    (54)        $   (4,599)     $  (10,099)
                                               =========        ========         ========         ==========      ==========

21

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE 26 WEEKS ENDED JULY 3, 1999
(Unaudited)

(dollars in thousands)

                                                Parent       Guarantor         Non-Guarantor
                                                Company      Subsidiaries      Subsidiaries      Eliminations    Consolidated
                                                -------      ------------      --------------    ------------    ------------




NET CASH PROVIDED BY
   OPERATING ACTIVITIES                        $   1,138        $  1,531         $     39         $        -      $    2,708
                                               ---------        --------         --------         ----------      ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Net cash paid for acquisitions                (100)              -                -                  -            (100)
      Purchase of property and
        equipment, net                            (2,520)            (84)               -                  -          (2,604)
                                               ---------        --------         --------         ----------      ----------

           Net cash used in investing
             activities                           (2,620)            (84)               -                  -          (2,704)
                                               ---------        --------         --------         ----------      ----------

CASH FLOWS FROM FINANCING ACTIVITIES:

      Proceeds from line of credit                 7,000               -                -                  -           7,000
      Payment of debt financing costs             (1,130)            (25)               -                  -          (1,155)
      Reduction of long-term debt and
        capital lease obligations                 (5,291)           (621)               -                  -          (5,912)
      Reduction in preferred stock                     -             (43)               -                  -             (43)
                                               ---------        --------         --------         ----------      ----------

            Net cash provided by (used
               in) financing activities              579            (689)               -                  -            (110)
                                               ---------        --------         --------         ----------      ----------

NET (DECREASE) INCREASE IN CASH AND CASH
   EQUIVALENTS
                                                    (903)            758               39                  -            (106)
CASH AND CASH EQUIVALENTS, beginning of
   the period                                      3,539           1,134               78                  -           4,751
                                               ---------        --------         --------         ----------      ----------

CASH AND CASH EQUIVALENTS, end of the
   period                                      $   2,636        $  1,892         $    117         $        -      $    4,645
                                               =========        ========         ========         ==========      ==========

22

BROKERAGE PARTNERS