<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549



                                   FORM 10-Q


(Mark One)


[ x ]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934
       For the Quarterly Period Ended June 27, 1999.
                                    --------------


                                       or



[    ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934
        For the Transition Period from _____________________ to
     _____________________.

Commission file number 0-25721.


                                   BUCA, Inc.
                                   ----------
               (Exact name of registrant as specified in its Charter)


                 Minnesota                        41-180236
                 ---------                        ----------
     (State or other jurisdiction of           (I.R.S. Employer
      incorporation or organization)          Identification No.)

              1300 Nicollet Mall
            Minneapolis, Minnesota                  55403
            -----------------------                 -----
    (Address of principal executive offices)     (Zip Code)


                               (612) 288-2382
                               --------------
             (Registrant's telephone number, including area code)


   --------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes     X      No
                                        ---------    ---------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date Common Stock, $.01 par value
10,630,399 shares as of August 6, 1999.

                                       1
<PAGE>

                                     INDEX

                          BUCA, INC. AND SUBSIDIARIES
<TABLE>
                                                                                     Page
                                                                                     ----

<S>                                                                                  <C>
PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements


     Consolidated Balance Sheets - December 27, 1998 and June 27, 1999.............   3

     Consolidated Statements of Operations - Thirteen and Twenty-Six Weeks Ended
     June 28, 1998 and June 27, 1999...............................................   4

     Consolidated Statements of Cash Flows - Thirteen and Twenty-Six Weeks Ended
     June 28, 1998 and June 27, 1999...............................................   5

     Notes to Consolidated Financial Statements....................................   6

Item 2.   Management's Discussion and Analysis
          of Financial Condition and Results of Operations.........................   7

Item 3.  Quantitative and Qualitative Disclosures about Market Risk................  14

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.........................................................  14

Item 2.  Changes in Securities and Use of Proceeds.................................  15

Item 3.  Defaults upon Senior Securities..........................................   15

Item 4.  Submission of Matters to a Vote of Security Holders......................   15

Item 5.  Other Information........................................................   15

Item 6.  Exhibits and Reports on Form 8-K.........................................   16

SIGNATURES........................................................................   17
</TABLE>

                                       2
<PAGE>

PART 1. - FINANCIAL INFORMATION
Item 1. Financial Statements

                          BUCA, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                (in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                                                               (Unaudited)
                                                                                              December          June 27,
                                                                                              27, 1998            1999
                                                                                             ----------        ----------
<S>                                                                                         <C>               <C>
                     ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                                                  $    6,576        $    1,942
  Marketable securities                                                                                            17,762
  Accounts receivable                                                                             1,160             1,133
  Inventories                                                                                       935             1,434
  Prepaid expenses and other                                                                        585             1,701
                                                                                             ----------        ----------
     Total current assets                                                                         9,256            23,972

PROPERTY AND EQUIPMENT, net                                                                      27,697            42,075
OTHER ASSETS                                                                                        607               601
                                                                                             ----------        ----------
                                                                                               $ 37,560        $   66,648
                                                                                             ==========        ==========
      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                                                                               $2,638        $    3,834
  Accrued expenses                                                                                3,257             3,352
  Current maturities of long-term debt                                                              205                50
                                                                                             ----------        ----------
     Total current liabilities                                                                    6,100             7,236

LONG-TERM DEBT, less current maturities                                                           7,661             1,281
DEFERRED RENT                                                                                       239               309
OTHER LIABILITIES                                                                                   127               122
REDEEMABLE STOCK:
  Preferred stock, $.01 par value, cumulative, Series A convertible -
     2,396,800 and 0 shares authorized, respectively; 2,240,000 and 0 shares
     issued or outstanding, respectively                                                          9,665
  Preferred stock, $.01 par value, cumulative, Series B convertible -
     2,100,000 and 0 shares authorized, respectively; 1,922,222 and 0 shares
     issued or outstanding, respectively                                                          9,441
  Preferred stock, $.01 par value, cumulative, Series C convertible -
     3,679,053 and 0 shares authorized, respectively; 2,614,634 and 0 shares
     issued or outstanding, respectively                                                         13,154
  Common stock, $.01 par value; 601,929 shares issued and outstanding                             4,713
                                                                                             ----------
                                                                                                 36,973
SHAREHOLDERS' (DEFICIT) EQUITY:
  Undesignated stock, 617,147 and 5,000,000 shares authorized, respectively,
     none issued or outstanding
  Common stock, $.01 par value - 13,100,000 and 20,000,000 shares authorized,
     respectively; 1,918,056 and 10,606,459 shares issued and outstanding,
     respectively                                                                                    19               106
  Additional paid-in capital                                                                                       68,058
  Unrealized loss on marketable securities                                                                            (24)
  Accumulated deficit                                                                           (13,266)          (10,038)
                                                                                             ----------        ----------
                                                                                                (13,247)           58,102
  Notes receivable from shareholders                                                               (293)             (402)
                                                                                             ----------        ----------
     Total shareholders' (deficit) equity                                                       (13,540)           57,700
                                                                                             ----------        ----------
                                                                                             $   37,560        $   66,648
                                                                                             ==========        ==========

</TABLE>
                See notes to consolidated financial statements.

                                       3
<PAGE>

                          BUCA, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (in thousands, except share and per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                          Thirteen Weeks Ended               Twenty-Six Weeks Ended
                                                         ----------------------             ------------------------
                                                          June 26,     June 27,               June 26,      June 27,
                                                           1998         1999                   1998          1999
                                                       -----------   ----------             ----------    ----------
<S>                                                  <C>          <C>                     <C>          <C>
RESTAURANT SALES                                       $    8,610    $   15,834             $   15,675    $   30,007
RESTAURANT COSTS:
Product                                                     2,449         4,384                  4,476         8,305
Labor                                                       2,750         5,101                  4,992         9,612
Direct and occupancy                                        1,817         3,309                  3,356         6,179
Depreciation and amortization                                 369           661                    679         1,333
                                                       ----------    ----------             ----------    ----------
   Total restaurant costs                                   7,385        13,455                 13,503        25,429
                                                       ----------    ----------             ----------    ----------
GENERAL AND ADMINISTRATIVE EXPENSES                         1,564         1,438                  2,532         2,861
PREOPENING COSTS                                              338         1,231                    735         1,621
                                                       ----------    ----------             ----------    ----------
OPERATING (LOSS) INCOME                                      (677)         (290)                (1,095)           96
INTEREST EXPENSE (INCOME)                                     231          (121)                   405            92
SUBORDINATED DEBT CONVERSION COSTS                                          954                                  954
                                                       ----------    ----------             ----------    ----------
LOSS BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS             (908)       (1,123)                (1,500)         (950)
BENEFIT (PROVISION) FOR INCOME TAXES                           (4)            3                     (8)            8
                                                       ----------    ----------             ----------    ----------
LOSS BEFORE EXTRAORDINARY ITEMS                              (912)       (1,120)                (1,508)         (942)
EXTRAORDINARY LOSS ON EXTINGUISHMENT OF DEBT                                231                                1,545
                                                       ----------    ----------             ----------    ----------
NET LOSS                                               $     (912)   $   (1,351)            $   (1,508)   $   (2,487)
                                                       ==========    ==========             ==========    ==========
CUMULATIVE PREFERRED STOCK DIVIDENDS, ACCRETION
  OF PREFERRED STOCK TO REDEMPTION VALUE,
  AND CHANGE IN REDEEMABLE COMMON STOCK                      (506)         (155)                (1,026)         (708)
                                                       ----------    ----------             ----------    ----------
NET LOSS APPLICABLE TO COMMON STOCK                    $   (1,418)   $   (1,506)            $   (2,534)   $   (3,195)
                                                       ==========    ==========             ==========    ==========
NET LOSS PER COMMON SHARE - BASIC AND DILUTED          $    (0.57)   $    (0.18)            $    (1.01)   $    (0.58)
                                                       ==========    ==========             ==========    ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
 BASIC AND DILUTED                                      2,508,792     8,438,231              2,505,911     5,477,697
                                                       ==========    ==========             ==========    ==========

                                          See notes to consolidated financial statements.
</TABLE>

                                       4
<PAGE>

                          BUCA, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                     Thirteen Weeks Ended              Twenty-Six Weeks Ended
                                                                     ---------------------             ------------------------
                                                                     June 26,     June 27,               June 26,      June 27,
                                                                      1998         1999                   1998          1999
                                                                     --------    ---------             --------        --------
<S>                                                                <C>         <C>                   <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                           $   (912)   $  (1,351)            $ (1,508)       $ (2,487)
  Adjustments to reconcile net loss to net cash provided by
     (used in) operating activities:
     Depreciation and amortization                                        364          642                  676           1,295
     Deferred income taxes                                                                                                   33

     Loss on sale of property and equipment                                 7                                 7

     Loss on early extinguishment of debt                                            1,185                                2,498
     Amortization of debt discount                                         54                               108
     Change in assets and liabilities:
        Accounts receivable                                               137          (16)                (320)             27
        Inventories                                                       (59)        (463)                (137)           (499)
        Prepaid expenses and other                                       (101)        (416)                (400)         (1,117)
        Accounts payable                                                  506        1,577                  302           1,197
        Accrued expenses                                                  518          189                 (343)             94
        Other                                                             115           (8)                 217              83
                                                                     --------    ---------             --------        --------
          Net cash provided by (used in) operating activities             629        1,339               (1,398)          1,124

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of available for sale marketable securities                             (33,223)                             (33,223)
  Sale and maturity of available for sale marketable securites                      15,436                               15,436
  Purchase of property and equipment                                   (3,018)      (9,841)              (5,977)        (15,639)
  Proceeds from sale of property and equipment                          1,226                             1,226
  Increase in other assets                                               (139)        (143)                (146)           (281)
                                                                     --------    ---------             --------        --------
          Net cash used in investing activities                        (1,931)     (27,771)              (4,897)        (33,707)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from line of credit borrowings                                            2,000                                2,000
  Payment on line of credit                                                         (2,000)                              (2,000)
  Proceeds from issuance of long-term debt                              3,500                             3,500           7,330
  Principal payments on long-term debt                                     43       (7,013)                (178)        (13,618)
  Loan and lease acquisition costs                                       (156)         (23)                (182)           (224)
  Collection on notes receivable from shareholders                         22          (17)                  29              34
  Repurchase of common stock                                                                                                (31)
  Net proceeds from issuance of common stock                               20       34,995                   20          34,458
                                                                     --------    ---------             --------        --------
          Net cash provided by financing activities                     3,429       27,942                3,189          27,949

NET CHANGE IN CASH AND CASH EQUIVALENTS                                 2,127        1,510               (3,106)         (4,634)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                          866          432                6,099           6,576
                                                                     --------    ---------             --------        --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $  2,993    $   1,942             $  2,993        $  1,942
                                                                     ========    =========             ========        ========
</TABLE>
                See notes to consolidated financial statements.

                                       5
<PAGE>

                          BUCA, INC. AND SUBSIDIARIES
                         NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)


1. NATURE OF BUSINESS AND BASIS OF PRESENTATION



BUCA, Inc. and subsidiaries ("we", "us", or "our") develops and operates family-
style, immigrant Southern Italian restaurants located in Arizona, California,
District of Columbia, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky,
Minnesota, New York, Ohio, Washington, and Wisconsin under the name of BUCA di
BEPPO.


The accompanying financial statements have been prepared by us without audit and
reflect all adjustments, consisting of normal recurring adjustments, which are,
in the opinion of management, necessary for a fair statement of financial
position and the results of operations for the interim periods. The statements
have been prepared in accordance with generally accepted accounting principles
and with the regulations of the Securities and Exchange Commission ("SEC").
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting principles,
have been condensed or omitted pursuant to such SEC rules and regulations.
Operating results for the thirteen and twenty-six weeks ended June 27, 1999 are
not necessarily indicative of the results that may be expected for the year
ended December 26, 1999.

The balance sheet at December 27, 1998 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

Certain prior year amounts have been reclassified to conform to the current
year's presentation.

For further information, refer to the financial statements and notes for the
fiscal year ended December 27, 1998 included in our Registration Statement on
Form S-1, registration no. 333-72593.



2.  NET LOSS PER SHARE


Basic loss per share is computed by dividing net loss by the weighted average
number of common shares outstanding.  Diluted loss per share assumes conversion
of the convertible subordinated debentures and convertible preferred stock as of
the beginning of the year and exercise of stock options and warrants using the
treasury stock method, if dilutive.  Dilutive net loss per share for 1998 and
1999 are the same as basic net loss per share due to the antidilutive effect of
the assumed exercise of stock options, warrants, convertible subordinated
debentures, and convertible preferred stock securities.

Diluted loss per share excludes the following due to their antidilutive effect:

<TABLE>
<CAPTION>


                                                June 26, 1998               June 27, 1999
                                                -------------               -------------

                                                          Weighted
                                                          Average                    Average
                                           Number of     Price Per      Number of    Price Per
                                             Shares        Share         Shares       Share
                                       -------------     --------    ------------   ---------
<S>                                      <C>             <C>         <C>             <C>
Stock warrants                               331,196        $2.46         183,990       $ .01
Stock options                                608,840         5.44       1,043,155        7.12
Convertible preferred stock                2,774,808         6.14
Convertible subordinated debentures          439,506         4.05         140,921        4.61
                                           ---------        -----       ---------   ---------
                                           4,154,350        $5.53       1,368,066       $5.91
                                           =========        =====       =========   =========
</TABLE>

                                       6
<PAGE>

3.                            SUPPLEMENTAL CASH FLOW INFORMATION



The following is supplemental cash flow information for the period ended:

<TABLE>
<CAPTION>

                                                                  Thirteen Weeks Ended       Twenty Six Weeks Ended
                                                                ------------------------     ----------------------
                                                                   June 26,   June 27,    June 26,   June 27,
                                                                      1998       1999        1998       1999
                                                                    --------   ---------   --------   ---------
<S>                                                                 <C>        <C>         <C>        <C>

Cash paid (collected) during year for:
 Interest expense                                                    $ 110      $ 203       $ 376      $ 456
 Income taxes                                                            -         (3)          -         25
Non-cash investing and financing activities:
 Shareholder receivable from issuance of common stock                    -        180          60        180
 Accretion of redeemable preferred stock to redemption value            41         30         100        150
 Dividends accrued on redeemable preferred stock                       299        125         597        594
 Change in value of redeemable common stock                              -          -           -        (37)

</TABLE>
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

General

At June 27, 1999 we owned and operated 25 full service, dinner-only restaurants
that offer high quality, immigrant Southern Italian cuisine served family-style
in large portions in a fun and energetic atmosphere that parodies the decor and
ambiance of post-War Italian/American restaurants.  We intend to open 15 new
restaurants in fiscal 1999, of which eight have opened through July 1999 and the
remaining seven are under construction.

We believe that the sales growth pattern of our new restaurants in the two years
after they open differs from the typical sales growth pattern for new
restaurants in other casual dining concepts. Our restaurants typically
experience lower restaurant sales during the first few periods after opening,
with gradually increasing restaurant sales during the remainder of the
restaurant's first year of operation. In the second year of operation, our
restaurants experience significant comparable restaurant sales growth. In
calculating comparable restaurant sales, we include a restaurant in the
comparable base once it has been open for 12 full calendar months. We believe we
have this "discovery" growth pattern over the first two years of operations
because we rely primarily on word-of-mouth advertising and repeat business to
generate increased restaurant sales. This new restaurant-opening trend has
contributed to our high levels of comparable restaurant sales increases of 8.9%
in fiscal 1997, 13.3% in fiscal 1998, and 13.6% over the first twenty-six weeks
of fiscal 1999. After two years of operation, our restaurants typically
experience lower comparable restaurant sales increases than experienced in prior
periods.  We expect this sales growth trend for new restaurants to generally
continue in the future; however, we also anticipate that in some markets,
particularly as we continue to develop additional restaurants in existing
markets, this discovery growth pattern could compress.  In addition, as we
continue to grow, we expect that the impact of new restaurant openings on total
comparable restaurant sales will decrease as our mature restaurant base
continues to increase.

In the second quarter of fiscal 1999, we incurred special non-cash charges of
$1.2 million.  The charges in the second quarter primarily related to the $1.8
million of convertible subordinated debt that is convertible, at the option of
the holders, into common stock at a conversion price equal to 60% of the initial
public offering price.  As a consequence of this right, we recognized a special
non-cash charge of $954,000 in the second quarter of fiscal 1999.  In addition,
the $7.0 million term loan portion of our credit facility with U.S. Bank was
repaid, as required, in connection with the initial public offering.  This
resulted in an extraordinary charge of $231,000 in the second quarter for the
write-off of costs related to this loan.  Our initial public offering was
completed on April 20, 1999.

Our restaurant sales are comprised almost entirely of the sales of food and
beverages.  Product costs include the costs of food and beverages.  Labor costs
include direct hourly and management wages, bonuses, taxes and benefits for
restaurant employees.  Direct and occupancy costs include restaurant supplies,
marketing costs, rent, utilities, real estate taxes, repairs and maintenance and
other related costs.  Depreciation and amortization principally includes
depreciation on capital expenditures for restaurants.  General and
administrative expenses are composed of expenses associated with all corporate
and administrative functions that support existing operations, management and
staff salaries, employee benefits, travel, information systems and training and
market research. Preopening costs consist of direct costs related to hiring and
training the initial restaurant workforce and certain other direct costs

                                       7
<PAGE>

associated with opening new restaurants.  Interest expense includes the net cost
of interest expense on debt and interest income on invested assets.

Results of Operations


Thirteen Weeks Ended June 27, 1999 Compared to Thirteen Weeks Ended June 26,
1998


Restaurant Sales. Restaurant sales increased by $7.2 million, or 83.9%, to $15.8
million in the second quarter of fiscal 1999 from $8.6 million in the second
quarter of fiscal 1998. The total increase consisted of restaurant sales of
approximately $6 million at twelve new restaurants opened within the last 12
months and $1.2 million in comparable restaurant sales increases. Comparable
restaurant sales increased by 14.0% in the second quarter of fiscal 1999,
primarily as a result of an increase in guest visits.  We expect our comparable
restaurant sales percentage increases to moderate to the mid-single digits in
the third quarter of fiscal 1999.

Product. Product costs increased by $1.9 million to $4.4 million in the second
quarter of fiscal 1999 from $2.4 million in the second quarter of fiscal 1998.
Product costs as a percentage of restaurant sales decreased to 27.7% in the
second quarter of fiscal 1999 from 28.4% in the second quarter of fiscal 1998.
This reduction was a result of management's efforts to reduce product costs and
improve margins, particularly at new restaurants.  We also renegotiated our
agreement with a national food distributor during the first quarter of fiscal
1999, which contributed to our reduced product costs. We expect product costs as
a percentage of restaurant sales to remain near the current level for the third
and fourth quarters of fiscal 1999.

Labor. Labor costs increased by $2.4 million to $5.1 million in the second
quarter of fiscal 1999 from $2.8 million in the second quarter of fiscal 1998.
Labor costs increased as a percentage of restaurant sales to 32.2% in the second
quarter of fiscal 1999 from 31.9% in the second quarter of fiscal 1998. This
increase resulted from an increase in sales generated from restaurants open less
than one year.  During the second quarter of fiscal 1998, $3.4 million of our
sales were generated from restaurants that were open for less than one year.  In
the second quarter of fiscal 1999, approximately $6 million of our sales were
generated from restaurants that were open for less than one year.  Since our
restaurants are generally less efficient in their first year, the labor costs
are higher as a percentage of restaurant sales.  We expect labor to increase
slightly as a percentage of restaurant sales in the third quarter due to the
five new restaurants projected to open in the quarter.

Direct and Occupancy. Direct and occupancy costs increased by $1.5 million to
$3.3 million in the second quarter of fiscal 1999 from $1.8 million in the
second quarter of fiscal 1998.  Direct and occupancy costs decreased slightly as
a percentage of restaurant sales to 20.9% in the second quarter of fiscal 1999
from 21.1% in the second quarter of fiscal 1998. This decrease was a result of
the 14% increase in comparable restaurant sales, partially offset by the impact
of the five new restaurants opened during the quarter.  The increase in
comparable restaurant sales leveraged the fixed components of our direct and
occupancy costs.  The increased number of new restaurants, which have lower
annual volumes than mature restaurants, offset the gains against the fixed
components of our direct and occupancy costs.  We expect direct and occupancy
costs to decrease slightly as a percentage of sales in the third and fourth
quarters of fiscal 1999.

Depreciation and Amortization. Depreciation and amortization expenses increased
by $292,000 to $661,000 in the second quarter of fiscal 1999 from $369,000 in
the second quarter of fiscal 1998. This increase was the result of depreciation
recognized on capital expenditures for new restaurants.

General and Administrative Expenses. General and administrative expenses
decreased by $126,000 to $1,438,000 in the second quarter of fiscal 1999 from
$1,564,000 in the second quarter of fiscal 1998.  General and administrative
expenses decreased as a percentage of restaurant sales to 9.1% in the second
quarter of fiscal 1999 from 18.2% in the second quarter of fiscal 1998.  This
decrease in dollars was primarily the result of $350,000 in unusual legal
expenses incurred during the second quarter of fiscal 1998 versus the second
quarter of fiscal 1999. Excluding the impact of the unusual legal expenses,
general and administrative costs would have been $1,214,000, or 14.1% of
restaurant sales, for the second quarter of fiscal 1998.  We expect that general
and administrative expenses will continue to increase in dollar amount in the
future, but continue to decrease as a percentage of restaurant sales because our
expansion plans will require proportionately smaller incremental increases in
general and administrative expenses.

                                       8
<PAGE>

Preopening Costs. Preopening costs increased by  $893,000 to $1,231,000 in the
second quarter of fiscal 1999 from $338,000 in the second quarter of fiscal
1998.  Preopening costs increased as a percentage of restaurant sales to 7.8% in
the second quarter of fiscal 1999 from 3.9% in the second quarter of fiscal
1998.  The increase was primarily a result of opening five restaurants with an
additional seven in development during the second quarter of fiscal 1999
compared to one restaurant opened and five in development during the second
quarter of fiscal 1998.

Interest (Income) Expense. We generated $121,000 in interest income during the
second quarter of fiscal 1999 compared to $231,000 in interest expense in the
second quarter of fiscal 1998.  The interest income generated was due to the
investment of our initial public offering proceeds in April 1999 and the
repayment of $9.0 million in term loans and lines of credit we had borrowed from
our lender.  We expect that interest income will be generated in the third and
fourth quarters of 1999.

Provision / Benefit for Income Taxes. The benefit for income taxes for the
second quarter of fiscal 1999 and provision for income taxes for the second
quarter of fiscal 1998 represents certain minimum state taxes based on taxable
factors other than earnings. We did not record a tax benefit in the second
quarter of fiscal 1999 or 1998 for the losses generated in previous years as
utilization of these losses in future periods was deemed uncertain. At December
27, 1998, we had a net operating loss carry-forward of $3.5 million. The net
operating loss carry-forward begins to expire in fiscal 2003. The majority of
the expected income tax benefit derived by applying the statutory income tax
rate has been eliminated as a result of an increase in the deferred income tax
asset valuation allowance. We expect to begin using the net operating loss
carry-forward in future periods to offset taxable income.


Twenty Six Weeks Ended June 27, 1999 Compared to Twenty Six Weeks Ended June 26,
1998


Restaurant Sales. Restaurant sales increased by $14.3 million, or 91.4%, to
$30.0 million in the first half of fiscal 1999 from $15.7 million in the first
half of fiscal 1998. The increase was attributable to restaurant sales increases
of $12.2 million at new restaurants opened within the last 15 months and $2.1
million in comparable restaurant sales increases over the first half of fiscal
1998.  Comparable restaurant sales increased by 13.6% in the first half of
fiscal 1999, primarily as a result of an increase in guest visits.

Product. Product costs increased by $3.8 million to $8.3 million in the first
half of fiscal 1999 from $4.5 million in the first half of fiscal 1998. Product
costs as a percentage of restaurant sales decreased to 27.7% in the first half
of fiscal 1999 from 28.6% in the first half of fiscal 1998.  This reduction was
a result of management's efforts to reduce the cost of food products and improve
margins, particularly at our new restaurants. We also renegotiated our agreement
with a national food distributor during the first half of 1999, which
contributed to our reduced product costs in the first half of fiscal 1999.

Labor. Labor costs increased by $4.6 million to $9.6 million in the first half
of fiscal 1999 from $5.0 million in the first half of fiscal 1998. Labor costs
increased slightly as a percentage of restaurant sales to 32.0% in the first
half of fiscal 1999 from 31.8% in the first half of fiscal 1998. This increase
resulted from an increase in sales generated from restaurants open less than one
year. During the first half of fiscal 1998, approximately $7 million of our
sales were generated from restaurants that were open for less than one year. In
the first half of fiscal 1999, approximately $13 million of our sales were
generated from restaurants that were open for less than one year. Since our
restaurants are generally less efficient in their first year, the labor costs
are higher as a percentage of restaurant sales.

Direct and Occupancy. Direct and occupancy costs increased by $2.8 million to
$6.2 million in the first half of fiscal 1999 from $3.4 million in the first
half of fiscal 1998.  Direct and occupancy costs decreased as a percentage of
restaurant sales to 20.6% in the first half of fiscal 1999 from 21.4% in the
first half of fiscal 1998. This decrease was primarily the result of the 13.6%
increase in comparable restaurant sales.  The increase in comparable restaurant
sales leveraged the fixed components of our direct and occupancy costs.

Depreciation and Amortization. Depreciation and amortization expenses increased
by $654,000 to $1,333,000 in the first half of fiscal 1999 from $679,000 in the
first half of fiscal 1998. This increase was the result of depreciation
recognized on capital expenditures for new restaurants.

General and Administrative Expenses. General and administrative expenses
increased by $329,000 to $2,861,000 in the first half of fiscal 1999 from
$2,532,000 in the first half of fiscal 1998.  General and administrative
expenses decreased as a percentage of restaurant sales to 9.5% in the first half
of fiscal 1999 from 16.2% in the first half of

                                       9
<PAGE>

fiscal 1998.

Preopening Costs. Preopening costs increased by $886,000 to $1,621,000 in the
first half of 1999 from $735,000 in the first half of 1998.  Preopening costs
increased as a percentage of restaurant sales to 5.4% in the first half of
fiscal 1999 from 4.7% in the first half of fiscal 1998.  The increase was a
result of opening six restaurants with an additional seven in development during
the first half of fiscal 1999 compared to three restaurants opened and five in
development during the first half of fiscal 1998.

Interest (Income) Expense. Net interest expense decreased $313,000 to $92,000 in
the first half of 1999 from $405,000 in the first half of 1998.   The decrease
in interest expense is due to the repayment of $9.0 million in long-term debt
and line of credit borrowings with the proceeds from the initial public offering
that was completed in April 1999.  Interest expense is net of investment income
on the investment of the remaining initial public offering proceeds.

Provision / Benefit for Income Taxes. The provision for income taxes for the
first half of fiscal 1998 represents certain minimum state taxes based on
taxable factors other than earnings and a minor charge for federal taxes
primarily related to deferred income taxes. We did not record a tax benefit in
fiscal 1998 for the losses generated in previous years as utilization of these
losses in future periods was deemed uncertain.  For the first half of fiscal
1999, we recognized a small tax benefit due to the expectation that we will
begin to utilize our net operating loss carry-forward.  At December 27, 1998, we
had a net operating loss carry-forward of $3.5 million. The net operating loss
carry-forward begins to expire in fiscal 2003. The majority of the expected
income tax benefit derived by applying the statutory income tax rate has been
eliminated as a result of an increase in the deferred income tax asset valuation
allowance.

Liquidity and Capital Resources


Since we were formed, we have incurred significant net losses, primarily due to
restaurant development and the costs of hiring senior management to develop and
implement our expansion strategy.  We have generated income from our restaurant
operations, but have incurred aggregate net losses of  $10.0 million from
inception through June 27, 1999. We have funded our capital requirements through
sales of equity securities, debt financing, and sale-leaseback arrangements.
Net cash provided by operating activities was $1,124,000 for the first half of
fiscal 1999 versus net cash used by operating activities of $1,398,000 for the
first half of fiscal 1998.

We use cash primarily to fund the development and construction of new
restaurants.  Capital expenditures were $15.6 million for the first half of
fiscal 1999 versus $6.0 million for the first half of 1998.  We intend to open
15 restaurants in fiscal 1999, of which eight have opened through July 1999.
Total capital expenditures are expected to be approximately $25 million in
fiscal 1999.  Each new restaurant is expected to require, on average, a total
cash investment of between $1.0 million and $1.5 million, excluding preopening
costs expected to range from $175,000 to $210,000. To date, the majority of our
restaurants are renovations of existing facilities ranging in size from 4,500 to
10,200 square feet. We anticipate that future restaurants will typically range
in size from 7,000 to 9,000 square feet. In 1999, we will build at least six
restaurants based on our prototype designs. These designs are expected to
require between $1.5 million and $2.0 million in total cash investment per
restaurant. This investment represents an incremental $500,000 increase over the
historical cash investment for remodeled restaurants. We plan to refinance any
purchases of land or buildings through sale-leaseback transactions. We cannot
predict whether this financing will be available when needed or on terms
acceptable to us.

Net cash provided by financing activities was $27.9 million for the first half
of fiscal 1999 versus $3.2 million for the first half of fiscal 1998. Upon
completion of our initial public offering in April 1999, we obtained $35.5
million in net proceeds.  The funds obtained were used to repay our $7.0 million
term loan and $2.0 million in line of credit borrowings.  The remaining proceeds
are expected to be used to fund operations, additional restaurants, and other
corporate purposes.  Financing activities in the first half of fiscal 1998
consisted of the obtainment of long-term debt.

We intend to renegotiate our line of credit during the third quarter of fiscal
1999.  We believe that the lender will be willing to increase the amount of the
line of credit on terms and conditions which are comparable or better to those
contained in our existing line of credit, or that other financing will be
available in an amount and on terms and

                                       10
<PAGE>

conditions which are adequate to meet our currently planned working capital and
liquidity needs. However, we cannot predict whether our existing lender will
ultimately agree to any increase or whether any alternative financing will be
available.

Our capital requirements, including development costs related to the opening of
additional restaurants, have been and will continue to be significant. We will
need substantial capital to finance our expansion plans, which require funds for
capital expenditures, preopening costs and initial operating losses related to
new restaurant openings. The adequacy of available funds and our future capital
requirements will depend on many factors, including the pace of expansion, the
costs and capital expenditures for new restaurant development and the nature of
contributions, loans and other arrangements negotiated with landlords. Although
we can make no assurance, we believe that cash flow from operations together
with the net proceeds from our initial public offering and available borrowings
will be sufficient to fund our capital requirements through at least the first
quarter of the year 2000. To fund future operations, we will need to raise
additional capital through public or private equity or debt financing to
continue our growth.  In addition, we may from time to time consider acquiring
the operations of other restaurants.  We may obtain additional equity or debt
financing to fund such acquisitions.  The sale of additional equity or debt
securities could result in additional dilution to our shareholders.  We cannot
predict whether additional capital will be available on favorable terms, if at
all.

Inflation


The primary inflationary factors affecting our operations are food and labor
costs. A large number of our restaurant personnel are paid at rates based on the
applicable minimum wage, and increases in the minimum wage directly affect our
labor costs. To date, inflation has not had a material impact on our operating
results.

Year 2000 Issue

The "year 2000 issue" is a term used to describe the inability of some computer
hardware and software to operate properly as the date January 1, 2000
approaches, and beyond.  Year 2000 issues can arise in unexpected areas.
Traditional computer hardware and software and information technology ("IT") is
not the only technology at risk. For example, things such as employee time
clocks, cash registers, and food ordering systems, as well as many other
technologies sometimes referred to as non-IT systems ("non-IT"), could be
impacted.  Unless stated to the contrary, for purposes of this year 2000 update,
the term "system(s)" shall be interpreted as broadly as possible to include
every IT and non-IT system, including computer, hardware, software, process,
system, application or technology that has the potential of being adversely
affected by the year 2000 issue.

The year 2000 issue is centered on whether systems will properly recognize date-
sensitive information. Many systems are coded to accept only two digit date
data.  As the year 2000 nears, systems processing date information will need to
accept four digit entries to distinguish years beginning with "19" from those
beginning with "20." The inability to recognize or properly treat dates may
cause systems to be unable to process financial, operational, and other
information, or may generate inaccurate results.   Because of the peculiarities
of individual systems, the year 2000 issue may have an effect both before and
after January 1, 2000. A system may be impacted on other dates including, for
example, leap year day and others.

Significant negative changes in consumer buying patterns due to the year 2000
issue could materially adversely affect our business and financial results,
whether related to the year 2000 issue or otherwise.  Conversely, if consumers
choose to dine away from home more frequently as a consequence of the year 2000
issue or otherwise, our business could be enhanced.  It is presently impossible
to assess how, and when, the public will respond to the year 2000 issue or the
extent, if any, that consumer reactions will impact our business.

We have taken, and will continue to take, actions intended to minimize the
impact of the year 2000 issue, although it is impossible to eliminate these
risks entirely. Unfortunately, there is no single test that can be used to
conclusively determine whether systems are immune to the year 2000 issue. Also
complicating testing are new year 2000 risks that are still being identified.
Another factor impeding year 2000 testing is the high degree of integration
between various systems and the impracticality or impossibility of conducting
full-scale live testing. Consequently, interrelated systems believed secure in a
test environment could conceivably fail when operating together under realistic
workloads.

                                       11
<PAGE>

Preexisting System Upgrades

Our corporate information systems have been largely upgraded or replaced in the
ordinary course of business over the past two years. We upgraded the majority of
our corporate office hardware following a fire in December 1998.

Over the past two years, an upgrade program has been undertaken to improve the
processing speed and information available at both the corporate and restaurant
location levels. This program entailed the replacement of the point-of-sale
system, restaurant level computer system, central computer system and accounting
software package. These upgrades have been conducted in the ordinary course of
business and have not been included in the costs discussed below. However, the
improvements had the incidental benefit of assisting with year 2000 readiness.

Year 2000 Review

Our review of the year 2000 issue involves inventory checks, readiness
assessments, remediation testing, and contingency planning.  We have completed
our inventory checks and expect to complete the remainder of our review by
October 1999.

During the course of remediation testing, we have manipulated and entered new
data for both the restaurant level and corporate office systems. The remediation
testing program will test many non-IT systems including restaurant point-of-sale
systems, time clocks, credit card equipment, environmental controls, security
systems, shipping, and telephone systems. Due to the number of identical
systems, it is presently anticipated that at least three restaurants will be
utilized in the user test in a simulated setting. Although we believe that the
simulation will yield sufficient information to gauge year 2000 readiness, full
load testing in a real environment (which is presently deemed impractical
without materially disrupting or degrading current operations) could reveal
unexpected problems.

Since unanticipated expenses may arise during our review, we are unable to
project with accuracy the total expected costs to achieve year 2000 readiness.
However, we do not allocate the value of time expended by corporate office
personnel when considering year 2000 project costs, and no special account has
been established to track year 2000 project costs. The costs of our year 2000
project are being funded with cash flows from our existing cash balances. We
have incurred approximately $150,000 in year 2000 project costs and expect to
incur an additional $50,000 in year 2000 project costs through the remainder of
1999.



Internal Year 2000 Risks

Risks of systems failure at the restaurant level include, but are not limited
to, the following examples. The failure of automated environmental controls at
one of our restaurants could result in inhospitable conditions requiring
temporary closure. The failure of cash register systems or credit card
processing terminals would force reversion to manual sales tracking methods that
could slow both the throughput of guests, and in the instance of credit cards,
the recognition of income. The failure of personal computers in a restaurant
could prevent the daily polling of restaurant financial information by the
corporate office to account for restaurant results, cash deposits, accounts
payable, and payroll information. Since these computers are also used to order
food from suppliers and analyze food and labor costs, restaurant management
could be forced to revert to manual methods that are less effective or efficient
and which could increase the cost of food and labor. Telecommunication failures
could result in loss of sales due to customer inability to reach the
restaurants, as well as make the communication of restaurant results impossible.


Risks of systems failure at the corporate level include, but are not limited to,
the following examples. There may be temporary inability to conduct normal
accounting and financial functions due to incomplete or inaccurate data.  The
absence of data normally utilized by management in the supervision of our
restaurants could make such oversight difficult and less effective, increasing
costs until the data is restored. Telecommunications risks would parallel those
at the restaurant level. A coordinated computer, software and telecommunication
system is used to sweep cash from local depositories into central accounts. The
failure of any element of this system could cause interruptions in the
availability of cash to meet our liabilities. Similar risks exist with respect
to an integrated payroll system consolidating restaurant and corporate data and
passing it on to a third party payroll administrator.

External Year 2000 Risks

We rely on vendors to supply the key items necessary to run our restaurants.
Unfortunately, we have little control

                                       12
<PAGE>

over many of these external parties and it is unlikely that we will be able to
obtain adequate levels of assurance that they have prepared sufficiently to be
ready for the year 2000 issue.

For a restaurant to be able to generate revenue, it must be open for business
during its normal operating hours, staffed, lit, heated, and supplied with
product and other supplies necessary to serve its guests. Examples of external
factors that could prevent these things from occurring include the inability to
open due to lack of power or utilities, lack of food and other supplies due to
service interruptions involving suppliers or distributors, and the inability to
access the restaurants due to malfunctioning security systems controlled by
others or other facilities related impediments.

At a corporate level, third parties are relied upon for certain services,
particularly in the payroll and information services departments.  For example,
a failure of the payroll vendor to supply payroll checks would interrupt the
flow of compensation to employees that could jeopardize staffing throughout the
organization.  Our payroll processor has asserted that they are compliant.

Common external risks to both our corporate and restaurant operations include
interruptions in utilities to our facilities, whether related to electrical,
natural gas, water, sewer, waste removal, or telephone or data transmission
services.

We have sent 446 surveys to vendors of IT services, food and material vendors,
and utilities, among others, in an attempt to obtain certifications of their
readiness with respect to the year 2000 issue. To date, 191 of the surveys, or
42.8%, have been returned.  All of the vendors who responded to our inquiry
stated that they are or plan to be compliant by the end of 1999, dependent upon
the reliability of their third parties' year 2000 compliance statements.  The
utility and telecommunication firms have been conditional in their expressions
of year 2000 readiness, typically linking their readiness to the preparedness of
unrelated parties (for example, other contributors to the national power grid).
Our primary food distributor, SYSCO, has asserted that it will be year 2000
compliant by the end of 1999.

While we will continue to seek vendor readiness certifications relative to the
year 2000 issue, we expect that many companies will fail to provide such
documentation, whether due to liability concerns or otherwise.  Consequently, we
are taking this factor into account, wherever possible, when formulating our
contingency plans.

Magnitude of the Year 2000 Problem

Any individual risk listed above, if experienced on a broad enough scale and of
lengthy duration, could have a material adverse effect on our results of
operations, liquidity, and financial condition. We anticipate that the worst
case year 2000 issue scenario would involve the closure for a material period of
time of most or all our restaurants due to national utility interruptions,
coupled with adverse changes in customer spending patterns. The most likely risk
scenario may instead be more localized closures of individual restaurants, or
groups of restaurants in a particular city, due to utility interruption or
failure to receive necessary food and other supplies.  We believe that as long
as the restaurants can be kept open to the public in the manner they are
accustomed, the failure of administrative and corporate office functions should
have modest effects on revenue producing activities.

Contingency Plans

We are also developing contingency plans for the year 2000 issue.  These plans
are being developed for each of our departments and address both internal and
external year 2000 risks.  For example, the plan has procedures for manually
recording and reporting sales transactions, it addresses supply shortages from
key distributors, and delineates various other contingency items.  It is
anticipated that the contingency plans will be completed by October 1999.

Our risk assessment of the year 2000 issue is based on our current knowledge,
and could in hindsight prove incomplete and possibly overstate or understate the
actual risks.  The ability to address the year 2000 issue in the manner and
within the cost estimates described above could be adversely affected by
negative findings arising during the course of testing systems and implementing
solutions or contingency plans.

                                      13
<PAGE>
Disclosure Regarding Forward-Looking Statements

This Form 10-Q for the second quarter ended June 27, 1999 contains forward-
looking statements within the meaning of the safe harbor provisions of Section
21E of the Securities Exchange Act of 1934.  These forward-looking statements
are based on the beliefs of our management as well as on assumptions made by and
information currently available to us at the time the statements were made.
When used in this Form 10-Q, the words "anticipate", "believe", "estimate",
"expect", "intend" and similar expressions, as they relate to us, are intended
to identify the forward-looking statements.  Although we believe that these
statements are reasonable, you should be aware that actual results could differ
materially from those projected by the forward-looking statements.  Because
actual results may differ, readers are cautioned not to place undue reliance on
forward-looking statements.  Our comparable store sales percentage increases
could moderate as a result of competition, general economic conditions, or
changes in consumer preferences or discretionary consumer spending.  Product
costs could be adversely affected by increased distribution prices by SYSCO
Corporation or a failure to perform by SYSCO, as well as adverse weather
conditions, governmental regulation and general economic conditions.  Labor
costs could increase due to increases in the minimum wage as well as competition
for qualified employees and the need to pay higher wages to attract sufficient
employees. Direct and occupancy costs could be adversely affected by an
inability to negotiate favorable lease terms as well as general economic
conditions. General and administrative expenses could increase due to
competition for qualified employees and the need to pay higher wages to attract
sufficient employees as well as general economic conditions. Additional factors
that could cause actual results to differ include: risks associated with future
growth; inability to achieve and manage planned expansion; fluctuations in
operating results; the need for additional capital; risks associated with our
discretionary consumer spending; inability to compete with larger, more
established competitors; potential labor shortages; our dependence on
governmental licenses; complaints or litigation from guests; and risks
associated with year 2000 issues. Certain of these risk factors are more fully
discussed in our Quarterly Report on Form 10-Q for the period ended March 28,
1999. We caution you, however, that the list of factors above may not be
exhaustive and that those or other factors, many of which are outside of our
control, could have a material adverse effect on us and our results of
operations. All forward-looking statements attributable to persons acting on our
behalf or us are expressly qualified in their entirety by the cautionary
statements set forth here. We assume no obligation to publicly release the
results of any revision or updates to these forward-looking statements to
reflect future events or unanticipated occurrences.

Item 3.   Quantitative and Qualitative Disclosures about Market Risk


We are exposed to market risk from changes in interest rates on borrowings under
our revolving line of credit that bears interest from time to time at the
lending bank's reference rate plus 0.75% to 1.25%. Because we do not believe
that the maximum available borrowings under the revolving line of credit are
material, we do not believe this risk will be material.

We have no derivative financial instruments or derivative commodity instruments
in our cash and cash equivalents and marketable securities. We invest our cash
and cash equivalents and marketable securities in investment grade, highly
liquid investments, consisting of money market instruments, bank certificates of
deposit, overnight investments in commercial paper, and short term government
and corporate bonds. We have invested the net proceeds from our public offering
in similar investment grade and highly liquid investments.

Many of the food products purchased by us are affected by commodity pricing and
are, therefore, subject to price volatility caused by weather, production
problems, delivery difficulties and other factors which are outside our control.
To control this risk in part, we have fixed price purchase commitments with
terms of one year or less for food and supplies from vendors who supply our
national food distributor. In addition, we believe that substantially all of our
food and supplies are available from several sources, which helps to control
food commodity risks. We believe we have the ability to increase menu prices, or
vary the menu items offered, if needed in response to a food product price
increases.  To compensate for a hypothetical price increase of 10% for food and
supplies, we would need to increase menu prices by an average of 3%, which is
consistent with our average price increase of 3% in fiscal 1998 and 2% in fiscal
1997.  Accordingly, we believe that a hypothetical 10% increase in food product
costs would not have a material effect on our operating results.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

We are currently subject to various legal actions arising in the normal course
of business, none of which are expected to have a material effect on our results
of operations, financial condition or cash flows.

                                       14
<PAGE>

Item 2.  Changes in Securities and Use of Proceeds

Since March 29, 1999, we have sold the following securities pursuant to
exemption from registration under the Securities Act.  All of the sales were
made in reliance upon the exemptions from registration provided under Section
4(2) of the Securities Act for transactions not involving a public offering.
All shares were issued directly by us, no underwriters were involved and no
discount, commission or other transaction-related remuneration was paid.

1. On April 21, 1999, we issued 8,152 shares of our common stock for $81.52, or
$.01 per share, to an outside investor upon exercise of a warrant previously
issued to the investor.

2. On April 23, 1999, we issued 1,926 shares of our common stock for $19.26, or
$.01 per share, to an outside investor upon exercise of a warrant previously
issued to the investor.

3. On April 26, 1999, we issued 156,936 shares of our common stock for
$1,130,000 or $7.20 per share, to outside investors upon conversion of certain
subordinated debentures in aggregate principal amount of $1,130,000 held by the
investors.

4. On May 5, 1999, we issued 1,926 shares of our common stock for $19.26, or
$.01 per share, to an outside investor upon exercise of a warrant previously
issued to the investor.

5. On May 18, 1999 we issued 71,843 shares of our common stock to U.S. Bancorp
Piper Jaffray, Inc. and Michael Bochert upon conversion and surrender of 104,532
warrants previously issued to them.

6. On May 18, 1999 we issued 20,824 shares of our common stock to U.S. Bancorp
Piper Jaffray, Inc. upon conversion and surrender of 33,333 warrants previously
issued to it.

Item 3.  Defaults upon Senior Securities

   None

Item 4.  Submission of Matters to a Vote of Security Holders

   None

Item 5.      Other Information
   None


                                       15
<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

<TABLE>
<CAPTION>
Exhibit No.                                         Description                                   Method of Filing
--------------------   ---------------------------------------------------------------------   ----------------------
<S>                    <C>                                                                     <C>
                 3.1   Amended and Restated Articles of Incorporation of the Company (1)       Incorporated By
                                                                                               Reference
                 3.2   Amended and Restated Bylaws of the Company (2)                          Incorporated By
                                                                                               Reference
                 4.1   Specimen Common Stock Certificate (3)                                   Incorporated By
                                                                                               Reference
                 4.2   Securities Purchase Agreement dated as of October 13, 1998 between      Incorporated By
                       the Company and the Purchasers (4)                                      Reference
                 4.3   Non-Statutory Stock Option Agreement between the Company and 1204       Incorporated By
                       Harmon Partnership dated as of June 1, 1998 (5)                         Reference
                 4.4   Form of stock purchase warrant dated as of October 31, 1997 (6)         Incorporated By
                                                                                               Reference
                 4.5   Form of stock purchase warrant dated as of May 19, 1998 (7)             Incorporated By
                                                                                               Reference
                27.1   Financial Data Schedule for the quarter ended June 27, 1999             Electronic
                                                                                               transmission
</TABLE>

     (1) Incorporated by reference to Exhibit 3.4 to the Company's Registration
         Statement on Form S-1 (Registration No. 333-72593).
     (2) Incorporated by reference to Exhibit 3.5 to the Company's Registration
         Statement on Form S-1 (Registration No. 333-72593).
     (3) Incorporated by reference to the same numbered Exhibit to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (4) Incorporated by reference to Exhibit 10.17 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (5) Incorporated by reference to Exhibit 10.15 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (6) Incorporated by reference to Exhibit 10.12 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (7) Incorporated by reference to Exhibit 10.14 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
(b)  Valuation and Qualifying Accounts:


        None

(c)   Reports on Form 8-K

        No reports on Form 8-K were filed during the fiscal quarter ended June
     27, 1999.

                                       16
<PAGE>

                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                BUCA, Inc.
                                ----------

                                (Registrant)

Date:  August 6, 1999           By:  /s/ Joseph P. Micatrotto
                                     ------------------------
                                   Joseph P. Micatrotto,
                                   Chairman, President and Chief Executive
                                   Officer
                                   (Principal Executive Officer)


Date:  August 6, 1999           By:  /s/ Greg A. Gadel
                                     -----------------
                                   Greg A. Gadel
                                   Chief Financial Officer

                                       17
<PAGE>

                                 Exhibit Index

<TABLE>
<CAPTION>
Exhibit No.                                         Description                                   Method of Filing
--------------------   ---------------------------------------------------------------------   ----------------------
<S>                    <C>                                                                     <C>
                 3.2   Restated Certificate of Incorporation of the Company (1)                Incorporated By
                                                                                               Reference
                 3.4   Restated Bylaws of the Company (2)                                      Incorporated By
                                                                                               Reference
                 4.1   Specimen Common Stock Certificate (3)                                   Incorporated By
                                                                                               Reference
                 4.2   Securities Purchase Agreement dated as of October 13, 1998 between      Incorporated By
                       the Company and the Purchasers (4)                                      Reference
                 4.3   Non-Statutory Stock Option Agreement between the Company and 1204       Incorporated By
                       Harmon Partnership dated as of June 1, 1998 (5)                         Reference
                 4.4   Form of stock purchase warrant dated as of October 31, 1997 (6)         Incorporated By
                                                                                               Reference
                 4.5   Form of stock purchase warrant dated as of May 19, 1998 (7)             Incorporated By
                                                                                               Reference
                27.1   Financial Data Schedule for the quarter ended June 27, 1999             Electronic
                                                                                               Transmission
</TABLE>
     (1) Incorporated by reference to Exhibit 3.4 to the Company's Registration
         Statement on Form S-1 (Registration No. 333-72593).
     (2) Incorporated by reference to Exhibit 3.5 to the Company's Registration
         Statement on Form S-1 (Registration No. 333-72593).
     (3) Incorporated by reference to the same numbered Exhibit to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (4) Incorporated by reference to Exhibit 10.17 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (5) Incorporated by reference to Exhibit 10.15 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (6) Incorporated by reference to Exhibit 10.12 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (7) Incorporated by reference to Exhibit 10.14 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
[{"type": "10-Q", "sequence": "1", "description": "FORM 10-Q", "secsgml_size_bytes": 75270}]
{"company-data": {"conformed-name": "BUCA INC /MN", "cik": "0001046501", "assigned-sic": "5812", "irs-number": "411802364", "state-of-incorporation": "MN", "fiscal-year-end": "1227"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-25721", "film-number": "99679914"}, "business-address": {"street1": "1300 NICOLLET MALL", "street2": "SUITE 3043", "city": "MINNEAPOLIS", "state": "MN", "zip": "55403", "phone": "6122882382"}, "mail-address": {"street1": "1300 NICOLLET MALL", "street2": "SUITE 3043", "city": "MINNEAPOLIS", "state": "MN", "zip": "55403"}}
SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-Q

(Mark One)

[ x ]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934
       For the Quarterly Period Ended June 27, 1999.
                                    --------------

                                       or

[    ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934
        For the Transition Period from _____________________ to
     _____________________.

Commission file number 0-25721.

                                   BUCA, Inc.
                                   ----------
               (Exact name of registrant as specified in its Charter)

                 Minnesota                        41-180236
                 ---------                        ----------
     (State or other jurisdiction of           (I.R.S. Employer
      incorporation or organization)          Identification No.)

              1300 Nicollet Mall
            Minneapolis, Minnesota                  55403
            -----------------------                 -----
    (Address of principal executive offices)     (Zip Code)

                               (612) 288-2382
                               --------------
             (Registrant's telephone number, including area code)

   --------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes     X      No
                                        ---------    ---------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date Common Stock, $.01 par value
10,630,399 shares as of August 6, 1999.

                                       1
INDEX

                          BUCA, INC. AND SUBSIDIARIES

                                                                                     Page
                                                                                     ----
PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements

     Consolidated Balance Sheets - December 27, 1998 and June 27, 1999.............   3

     Consolidated Statements of Operations - Thirteen and Twenty-Six Weeks Ended
     June 28, 1998 and June 27, 1999...............................................   4

     Consolidated Statements of Cash Flows - Thirteen and Twenty-Six Weeks Ended
     June 28, 1998 and June 27, 1999...............................................   5

     Notes to Consolidated Financial Statements....................................   6

Item 2.   Management's Discussion and Analysis
          of Financial Condition and Results of Operations.........................   7

Item 3.  Quantitative and Qualitative Disclosures about Market Risk................  14

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.........................................................  14

Item 2.  Changes in Securities and Use of Proceeds.................................  15

Item 3.  Defaults upon Senior Securities..........................................   15

Item 4.  Submission of Matters to a Vote of Security Holders......................   15

Item 5.  Other Information........................................................   15

Item 6.  Exhibits and Reports on Form 8-K.........................................   16

SIGNATURES........................................................................   17
2
PART 1. - FINANCIAL INFORMATION
Item 1. Financial Statements

                          BUCA, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                (in thousands, except share and per share data)
(Unaudited)
                                                                                              December          June 27,
                                                                                              27, 1998            1999
                                                                                             ----------        ----------
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                                                  $    6,576        $    1,942
  Marketable securities                                                                                            17,762
  Accounts receivable                                                                             1,160             1,133
  Inventories                                                                                       935             1,434
  Prepaid expenses and other                                                                        585             1,701
                                                                                             ----------        ----------
     Total current assets                                                                         9,256            23,972

PROPERTY AND EQUIPMENT, net                                                                      27,697            42,075
OTHER ASSETS                                                                                        607               601
                                                                                             ----------        ----------
                                                                                               $ 37,560        $   66,648
                                                                                             ==========        ==========
      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                                                                               $2,638        $    3,834
  Accrued expenses                                                                                3,257             3,352
  Current maturities of long-term debt                                                              205                50
                                                                                             ----------        ----------
     Total current liabilities                                                                    6,100             7,236

LONG-TERM DEBT, less current maturities                                                           7,661             1,281
DEFERRED RENT                                                                                       239               309
OTHER LIABILITIES                                                                                   127               122
REDEEMABLE STOCK:
  Preferred stock, $.01 par value, cumulative, Series A convertible -
     2,396,800 and 0 shares authorized, respectively; 2,240,000 and 0 shares
     issued or outstanding, respectively                                                          9,665
  Preferred stock, $.01 par value, cumulative, Series B convertible -
     2,100,000 and 0 shares authorized, respectively; 1,922,222 and 0 shares
     issued or outstanding, respectively                                                          9,441
  Preferred stock, $.01 par value, cumulative, Series C convertible -
     3,679,053 and 0 shares authorized, respectively; 2,614,634 and 0 shares
     issued or outstanding, respectively                                                         13,154
  Common stock, $.01 par value; 601,929 shares issued and outstanding                             4,713
                                                                                             ----------
                                                                                                 36,973
SHAREHOLDERS' (DEFICIT) EQUITY:
  Undesignated stock, 617,147 and 5,000,000 shares authorized, respectively,
     none issued or outstanding
  Common stock, $.01 par value - 13,100,000 and 20,000,000 shares authorized,
     respectively; 1,918,056 and 10,606,459 shares issued and outstanding,
     respectively                                                                                    19               106
  Additional paid-in capital                                                                                       68,058
  Unrealized loss on marketable securities                                                                            (24)
  Accumulated deficit                                                                           (13,266)          (10,038)
                                                                                             ----------        ----------
                                                                                                (13,247)           58,102
  Notes receivable from shareholders                                                               (293)             (402)
                                                                                             ----------        ----------
     Total shareholders' (deficit) equity                                                       (13,540)           57,700
                                                                                             ----------        ----------
                                                                                             $   37,560        $   66,648
                                                                                             ==========        ==========
See notes to consolidated financial statements.

                                       3
BUCA, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (in thousands, except share and per share data)
                                  (Unaudited)
Thirteen Weeks Ended               Twenty-Six Weeks Ended
                                                         ----------------------             ------------------------
                                                          June 26,     June 27,               June 26,      June 27,
                                                           1998         1999                   1998          1999
                                                       -----------   ----------             ----------    ----------
RESTAURANT SALES                                       $    8,610    $   15,834             $   15,675    $   30,007
RESTAURANT COSTS:
Product                                                     2,449         4,384                  4,476         8,305
Labor                                                       2,750         5,101                  4,992         9,612
Direct and occupancy                                        1,817         3,309                  3,356         6,179
Depreciation and amortization                                 369           661                    679         1,333
                                                       ----------    ----------             ----------    ----------
   Total restaurant costs                                   7,385        13,455                 13,503        25,429
                                                       ----------    ----------             ----------    ----------
GENERAL AND ADMINISTRATIVE EXPENSES                         1,564         1,438                  2,532         2,861
PREOPENING COSTS                                              338         1,231                    735         1,621
                                                       ----------    ----------             ----------    ----------
OPERATING (LOSS) INCOME                                      (677)         (290)                (1,095)           96
INTEREST EXPENSE (INCOME)                                     231          (121)                   405            92
SUBORDINATED DEBT CONVERSION COSTS                                          954                                  954
                                                       ----------    ----------             ----------    ----------
LOSS BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS             (908)       (1,123)                (1,500)         (950)
BENEFIT (PROVISION) FOR INCOME TAXES                           (4)            3                     (8)            8
                                                       ----------    ----------             ----------    ----------
LOSS BEFORE EXTRAORDINARY ITEMS                              (912)       (1,120)                (1,508)         (942)
EXTRAORDINARY LOSS ON EXTINGUISHMENT OF DEBT                                231                                1,545
                                                       ----------    ----------             ----------    ----------
NET LOSS                                               $     (912)   $   (1,351)            $   (1,508)   $   (2,487)
                                                       ==========    ==========             ==========    ==========
CUMULATIVE PREFERRED STOCK DIVIDENDS, ACCRETION
  OF PREFERRED STOCK TO REDEMPTION VALUE,
  AND CHANGE IN REDEEMABLE COMMON STOCK                      (506)         (155)                (1,026)         (708)
                                                       ----------    ----------             ----------    ----------
NET LOSS APPLICABLE TO COMMON STOCK                    $   (1,418)   $   (1,506)            $   (2,534)   $   (3,195)
                                                       ==========    ==========             ==========    ==========
NET LOSS PER COMMON SHARE - BASIC AND DILUTED          $    (0.57)   $    (0.18)            $    (1.01)   $    (0.58)
                                                       ==========    ==========             ==========    ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
 BASIC AND DILUTED                                      2,508,792     8,438,231              2,505,911     5,477,697
                                                       ==========    ==========             ==========    ==========

                                          See notes to consolidated financial statements.
4
BUCA, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
Thirteen Weeks Ended              Twenty-Six Weeks Ended
                                                                     ---------------------             ------------------------
                                                                     June 26,     June 27,               June 26,      June 27,
                                                                      1998         1999                   1998          1999
                                                                     --------    ---------             --------        --------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                           $   (912)   $  (1,351)            $ (1,508)       $ (2,487)
  Adjustments to reconcile net loss to net cash provided by
     (used in) operating activities:
     Depreciation and amortization                                        364          642                  676           1,295
     Deferred income taxes                                                                                                   33

     Loss on sale of property and equipment                                 7                                 7

     Loss on early extinguishment of debt                                            1,185                                2,498
     Amortization of debt discount                                         54                               108
     Change in assets and liabilities:
        Accounts receivable                                               137          (16)                (320)             27
        Inventories                                                       (59)        (463)                (137)           (499)
        Prepaid expenses and other                                       (101)        (416)                (400)         (1,117)
        Accounts payable                                                  506        1,577                  302           1,197
        Accrued expenses                                                  518          189                 (343)             94
        Other                                                             115           (8)                 217              83
                                                                     --------    ---------             --------        --------
          Net cash provided by (used in) operating activities             629        1,339               (1,398)          1,124

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of available for sale marketable securities                             (33,223)                             (33,223)
  Sale and maturity of available for sale marketable securites                      15,436                               15,436
  Purchase of property and equipment                                   (3,018)      (9,841)              (5,977)        (15,639)
  Proceeds from sale of property and equipment                          1,226                             1,226
  Increase in other assets                                               (139)        (143)                (146)           (281)
                                                                     --------    ---------             --------        --------
          Net cash used in investing activities                        (1,931)     (27,771)              (4,897)        (33,707)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from line of credit borrowings                                            2,000                                2,000
  Payment on line of credit                                                         (2,000)                              (2,000)
  Proceeds from issuance of long-term debt                              3,500                             3,500           7,330
  Principal payments on long-term debt                                     43       (7,013)                (178)        (13,618)
  Loan and lease acquisition costs                                       (156)         (23)                (182)           (224)
  Collection on notes receivable from shareholders                         22          (17)                  29              34
  Repurchase of common stock                                                                                                (31)
  Net proceeds from issuance of common stock                               20       34,995                   20          34,458
                                                                     --------    ---------             --------        --------
          Net cash provided by financing activities                     3,429       27,942                3,189          27,949

NET CHANGE IN CASH AND CASH EQUIVALENTS                                 2,127        1,510               (3,106)         (4,634)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                          866          432                6,099           6,576
                                                                     --------    ---------             --------        --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $  2,993    $   1,942             $  2,993        $  1,942
                                                                     ========    =========             ========        ========
See notes to consolidated financial statements.

                                       5
BUCA, INC. AND SUBSIDIARIES
                         NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

BUCA, Inc. and subsidiaries ("we", "us", or "our") develops and operates family-
style, immigrant Southern Italian restaurants located in Arizona, California,
District of Columbia, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky,
Minnesota, New York, Ohio, Washington, and Wisconsin under the name of BUCA di
BEPPO.

The accompanying financial statements have been prepared by us without audit and
reflect all adjustments, consisting of normal recurring adjustments, which are,
in the opinion of management, necessary for a fair statement of financial
position and the results of operations for the interim periods. The statements
have been prepared in accordance with generally accepted accounting principles
and with the regulations of the Securities and Exchange Commission ("SEC").
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting principles,
have been condensed or omitted pursuant to such SEC rules and regulations.
Operating results for the thirteen and twenty-six weeks ended June 27, 1999 are
not necessarily indicative of the results that may be expected for the year
ended December 26, 1999.

The balance sheet at December 27, 1998 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

Certain prior year amounts have been reclassified to conform to the current
year's presentation.

For further information, refer to the financial statements and notes for the
fiscal year ended December 27, 1998 included in our Registration Statement on
Form S-1, registration no. 333-72593.

2.  NET LOSS PER SHARE

Basic loss per share is computed by dividing net loss by the weighted average
number of common shares outstanding.  Diluted loss per share assumes conversion
of the convertible subordinated debentures and convertible preferred stock as of
the beginning of the year and exercise of stock options and warrants using the
treasury stock method, if dilutive.  Dilutive net loss per share for 1998 and
1999 are the same as basic net loss per share due to the antidilutive effect of
the assumed exercise of stock options, warrants, convertible subordinated
debentures, and convertible preferred stock securities.

Diluted loss per share excludes the following due to their antidilutive effect:
June 26, 1998               June 27, 1999
                                                -------------               -------------

                                                          Weighted
                                                          Average                    Average
                                           Number of     Price Per      Number of    Price Per
                                             Shares        Share         Shares       Share
                                       -------------     --------    ------------   ---------
Stock warrants                               331,196        $2.46         183,990       $ .01
Stock options                                608,840         5.44       1,043,155        7.12
Convertible preferred stock                2,774,808         6.14
Convertible subordinated debentures          439,506         4.05         140,921        4.61
                                           ---------        -----       ---------   ---------
                                           4,154,350        $5.53       1,368,066       $5.91
                                           =========        =====       =========   =========
6
3.                            SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information for the period ended:
Thirteen Weeks Ended       Twenty Six Weeks Ended
                                                                ------------------------     ----------------------
                                                                   June 26,   June 27,    June 26,   June 27,
                                                                      1998       1999        1998       1999
                                                                    --------   ---------   --------   ---------
Cash paid (collected) during year for:
 Interest expense                                                    $ 110      $ 203       $ 376      $ 456
 Income taxes                                                            -         (3)          -         25
Non-cash investing and financing activities:
 Shareholder receivable from issuance of common stock                    -        180          60        180
 Accretion of redeemable preferred stock to redemption value            41         30         100        150
 Dividends accrued on redeemable preferred stock                       299        125         597        594
 Change in value of redeemable common stock                              -          -           -        (37)
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

General

At June 27, 1999 we owned and operated 25 full service, dinner-only restaurants
that offer high quality, immigrant Southern Italian cuisine served family-style
in large portions in a fun and energetic atmosphere that parodies the decor and
ambiance of post-War Italian/American restaurants.  We intend to open 15 new
restaurants in fiscal 1999, of which eight have opened through July 1999 and the
remaining seven are under construction.

We believe that the sales growth pattern of our new restaurants in the two years
after they open differs from the typical sales growth pattern for new
restaurants in other casual dining concepts. Our restaurants typically
experience lower restaurant sales during the first few periods after opening,
with gradually increasing restaurant sales during the remainder of the
restaurant's first year of operation. In the second year of operation, our
restaurants experience significant comparable restaurant sales growth. In
calculating comparable restaurant sales, we include a restaurant in the
comparable base once it has been open for 12 full calendar months. We believe we
have this "discovery" growth pattern over the first two years of operations
because we rely primarily on word-of-mouth advertising and repeat business to
generate increased restaurant sales. This new restaurant-opening trend has
contributed to our high levels of comparable restaurant sales increases of 8.9%
in fiscal 1997, 13.3% in fiscal 1998, and 13.6% over the first twenty-six weeks
of fiscal 1999. After two years of operation, our restaurants typically
experience lower comparable restaurant sales increases than experienced in prior
periods.  We expect this sales growth trend for new restaurants to generally
continue in the future; however, we also anticipate that in some markets,
particularly as we continue to develop additional restaurants in existing
markets, this discovery growth pattern could compress.  In addition, as we
continue to grow, we expect that the impact of new restaurant openings on total
comparable restaurant sales will decrease as our mature restaurant base
continues to increase.

In the second quarter of fiscal 1999, we incurred special non-cash charges of
$1.2 million.  The charges in the second quarter primarily related to the $1.8
million of convertible subordinated debt that is convertible, at the option of
the holders, into common stock at a conversion price equal to 60% of the initial
public offering price.  As a consequence of this right, we recognized a special
non-cash charge of $954,000 in the second quarter of fiscal 1999.  In addition,
the $7.0 million term loan portion of our credit facility with U.S. Bank was
repaid, as required, in connection with the initial public offering.  This
resulted in an extraordinary charge of $231,000 in the second quarter for the
write-off of costs related to this loan.  Our initial public offering was
completed on April 20, 1999.

Our restaurant sales are comprised almost entirely of the sales of food and
beverages.  Product costs include the costs of food and beverages.  Labor costs
include direct hourly and management wages, bonuses, taxes and benefits for
restaurant employees.  Direct and occupancy costs include restaurant supplies,
marketing costs, rent, utilities, real estate taxes, repairs and maintenance and
other related costs.  Depreciation and amortization principally includes
depreciation on capital expenditures for restaurants.  General and
administrative expenses are composed of expenses associated with all corporate
and administrative functions that support existing operations, management and
staff salaries, employee benefits, travel, information systems and training and
market research. Preopening costs consist of direct costs related to hiring and
training the initial restaurant workforce and certain other direct costs

                                       7
associated with opening new restaurants.  Interest expense includes the net cost
of interest expense on debt and interest income on invested assets.

Results of Operations

Thirteen Weeks Ended June 27, 1999 Compared to Thirteen Weeks Ended June 26,
1998

Restaurant Sales. Restaurant sales increased by $7.2 million, or 83.9%, to $15.8
million in the second quarter of fiscal 1999 from $8.6 million in the second
quarter of fiscal 1998. The total increase consisted of restaurant sales of
approximately $6 million at twelve new restaurants opened within the last 12
months and $1.2 million in comparable restaurant sales increases. Comparable
restaurant sales increased by 14.0% in the second quarter of fiscal 1999,
primarily as a result of an increase in guest visits.  We expect our comparable
restaurant sales percentage increases to moderate to the mid-single digits in
the third quarter of fiscal 1999.

Product. Product costs increased by $1.9 million to $4.4 million in the second
quarter of fiscal 1999 from $2.4 million in the second quarter of fiscal 1998.
Product costs as a percentage of restaurant sales decreased to 27.7% in the
second quarter of fiscal 1999 from 28.4% in the second quarter of fiscal 1998.
This reduction was a result of management's efforts to reduce product costs and
improve margins, particularly at new restaurants.  We also renegotiated our
agreement with a national food distributor during the first quarter of fiscal
1999, which contributed to our reduced product costs. We expect product costs as
a percentage of restaurant sales to remain near the current level for the third
and fourth quarters of fiscal 1999.

Labor. Labor costs increased by $2.4 million to $5.1 million in the second
quarter of fiscal 1999 from $2.8 million in the second quarter of fiscal 1998.
Labor costs increased as a percentage of restaurant sales to 32.2% in the second
quarter of fiscal 1999 from 31.9% in the second quarter of fiscal 1998. This
increase resulted from an increase in sales generated from restaurants open less
than one year.  During the second quarter of fiscal 1998, $3.4 million of our
sales were generated from restaurants that were open for less than one year.  In
the second quarter of fiscal 1999, approximately $6 million of our sales were
generated from restaurants that were open for less than one year.  Since our
restaurants are generally less efficient in their first year, the labor costs
are higher as a percentage of restaurant sales.  We expect labor to increase
slightly as a percentage of restaurant sales in the third quarter due to the
five new restaurants projected to open in the quarter.

Direct and Occupancy. Direct and occupancy costs increased by $1.5 million to
$3.3 million in the second quarter of fiscal 1999 from $1.8 million in the
second quarter of fiscal 1998.  Direct and occupancy costs decreased slightly as
a percentage of restaurant sales to 20.9% in the second quarter of fiscal 1999
from 21.1% in the second quarter of fiscal 1998. This decrease was a result of
the 14% increase in comparable restaurant sales, partially offset by the impact
of the five new restaurants opened during the quarter.  The increase in
comparable restaurant sales leveraged the fixed components of our direct and
occupancy costs.  The increased number of new restaurants, which have lower
annual volumes than mature restaurants, offset the gains against the fixed
components of our direct and occupancy costs.  We expect direct and occupancy
costs to decrease slightly as a percentage of sales in the third and fourth
quarters of fiscal 1999.

Depreciation and Amortization. Depreciation and amortization expenses increased
by $292,000 to $661,000 in the second quarter of fiscal 1999 from $369,000 in
the second quarter of fiscal 1998. This increase was the result of depreciation
recognized on capital expenditures for new restaurants.

General and Administrative Expenses. General and administrative expenses
decreased by $126,000 to $1,438,000 in the second quarter of fiscal 1999 from
$1,564,000 in the second quarter of fiscal 1998.  General and administrative
expenses decreased as a percentage of restaurant sales to 9.1% in the second
quarter of fiscal 1999 from 18.2% in the second quarter of fiscal 1998.  This
decrease in dollars was primarily the result of $350,000 in unusual legal
expenses incurred during the second quarter of fiscal 1998 versus the second
quarter of fiscal 1999. Excluding the impact of the unusual legal expenses,
general and administrative costs would have been $1,214,000, or 14.1% of
restaurant sales, for the second quarter of fiscal 1998.  We expect that general
and administrative expenses will continue to increase in dollar amount in the
future, but continue to decrease as a percentage of restaurant sales because our
expansion plans will require proportionately smaller incremental increases in
general and administrative expenses.

                                       8
Preopening Costs. Preopening costs increased by  $893,000 to $1,231,000 in the
second quarter of fiscal 1999 from $338,000 in the second quarter of fiscal
1998.  Preopening costs increased as a percentage of restaurant sales to 7.8% in
the second quarter of fiscal 1999 from 3.9% in the second quarter of fiscal
1998.  The increase was primarily a result of opening five restaurants with an
additional seven in development during the second quarter of fiscal 1999
compared to one restaurant opened and five in development during the second
quarter of fiscal 1998.

Interest (Income) Expense. We generated $121,000 in interest income during the
second quarter of fiscal 1999 compared to $231,000 in interest expense in the
second quarter of fiscal 1998.  The interest income generated was due to the
investment of our initial public offering proceeds in April 1999 and the
repayment of $9.0 million in term loans and lines of credit we had borrowed from
our lender.  We expect that interest income will be generated in the third and
fourth quarters of 1999.

Provision / Benefit for Income Taxes. The benefit for income taxes for the
second quarter of fiscal 1999 and provision for income taxes for the second
quarter of fiscal 1998 represents certain minimum state taxes based on taxable
factors other than earnings. We did not record a tax benefit in the second
quarter of fiscal 1999 or 1998 for the losses generated in previous years as
utilization of these losses in future periods was deemed uncertain. At December
27, 1998, we had a net operating loss carry-forward of $3.5 million. The net
operating loss carry-forward begins to expire in fiscal 2003. The majority of
the expected income tax benefit derived by applying the statutory income tax
rate has been eliminated as a result of an increase in the deferred income tax
asset valuation allowance. We expect to begin using the net operating loss
carry-forward in future periods to offset taxable income.

Twenty Six Weeks Ended June 27, 1999 Compared to Twenty Six Weeks Ended June 26,
1998

Restaurant Sales. Restaurant sales increased by $14.3 million, or 91.4%, to
$30.0 million in the first half of fiscal 1999 from $15.7 million in the first
half of fiscal 1998. The increase was attributable to restaurant sales increases
of $12.2 million at new restaurants opened within the last 15 months and $2.1
million in comparable restaurant sales increases over the first half of fiscal
1998.  Comparable restaurant sales increased by 13.6% in the first half of
fiscal 1999, primarily as a result of an increase in guest visits.

Product. Product costs increased by $3.8 million to $8.3 million in the first
half of fiscal 1999 from $4.5 million in the first half of fiscal 1998. Product
costs as a percentage of restaurant sales decreased to 27.7% in the first half
of fiscal 1999 from 28.6% in the first half of fiscal 1998.  This reduction was
a result of management's efforts to reduce the cost of food products and improve
margins, particularly at our new restaurants. We also renegotiated our agreement
with a national food distributor during the first half of 1999, which
contributed to our reduced product costs in the first half of fiscal 1999.

Labor. Labor costs increased by $4.6 million to $9.6 million in the first half
of fiscal 1999 from $5.0 million in the first half of fiscal 1998. Labor costs
increased slightly as a percentage of restaurant sales to 32.0% in the first
half of fiscal 1999 from 31.8% in the first half of fiscal 1998. This increase
resulted from an increase in sales generated from restaurants open less than one
year. During the first half of fiscal 1998, approximately $7 million of our
sales were generated from restaurants that were open for less than one year. In
the first half of fiscal 1999, approximately $13 million of our sales were
generated from restaurants that were open for less than one year. Since our
restaurants are generally less efficient in their first year, the labor costs
are higher as a percentage of restaurant sales.

Direct and Occupancy. Direct and occupancy costs increased by $2.8 million to
$6.2 million in the first half of fiscal 1999 from $3.4 million in the first
half of fiscal 1998.  Direct and occupancy costs decreased as a percentage of
restaurant sales to 20.6% in the first half of fiscal 1999 from 21.4% in the
first half of fiscal 1998. This decrease was primarily the result of the 13.6%
increase in comparable restaurant sales.  The increase in comparable restaurant
sales leveraged the fixed components of our direct and occupancy costs.

Depreciation and Amortization. Depreciation and amortization expenses increased
by $654,000 to $1,333,000 in the first half of fiscal 1999 from $679,000 in the
first half of fiscal 1998. This increase was the result of depreciation
recognized on capital expenditures for new restaurants.

General and Administrative Expenses. General and administrative expenses
increased by $329,000 to $2,861,000 in the first half of fiscal 1999 from
$2,532,000 in the first half of fiscal 1998.  General and administrative
expenses decreased as a percentage of restaurant sales to 9.5% in the first half
of fiscal 1999 from 16.2% in the first half of

                                       9
fiscal 1998.

Preopening Costs. Preopening costs increased by $886,000 to $1,621,000 in the
first half of 1999 from $735,000 in the first half of 1998.  Preopening costs
increased as a percentage of restaurant sales to 5.4% in the first half of
fiscal 1999 from 4.7% in the first half of fiscal 1998.  The increase was a
result of opening six restaurants with an additional seven in development during
the first half of fiscal 1999 compared to three restaurants opened and five in
development during the first half of fiscal 1998.

Interest (Income) Expense. Net interest expense decreased $313,000 to $92,000 in
the first half of 1999 from $405,000 in the first half of 1998.   The decrease
in interest expense is due to the repayment of $9.0 million in long-term debt
and line of credit borrowings with the proceeds from the initial public offering
that was completed in April 1999.  Interest expense is net of investment income
on the investment of the remaining initial public offering proceeds.

Provision / Benefit for Income Taxes. The provision for income taxes for the
first half of fiscal 1998 represents certain minimum state taxes based on
taxable factors other than earnings and a minor charge for federal taxes
primarily related to deferred income taxes. We did not record a tax benefit in
fiscal 1998 for the losses generated in previous years as utilization of these
losses in future periods was deemed uncertain.  For the first half of fiscal
1999, we recognized a small tax benefit due to the expectation that we will
begin to utilize our net operating loss carry-forward.  At December 27, 1998, we
had a net operating loss carry-forward of $3.5 million. The net operating loss
carry-forward begins to expire in fiscal 2003. The majority of the expected
income tax benefit derived by applying the statutory income tax rate has been
eliminated as a result of an increase in the deferred income tax asset valuation
allowance.

Liquidity and Capital Resources

Since we were formed, we have incurred significant net losses, primarily due to
restaurant development and the costs of hiring senior management to develop and
implement our expansion strategy.  We have generated income from our restaurant
operations, but have incurred aggregate net losses of  $10.0 million from
inception through June 27, 1999. We have funded our capital requirements through
sales of equity securities, debt financing, and sale-leaseback arrangements.
Net cash provided by operating activities was $1,124,000 for the first half of
fiscal 1999 versus net cash used by operating activities of $1,398,000 for the
first half of fiscal 1998.

We use cash primarily to fund the development and construction of new
restaurants.  Capital expenditures were $15.6 million for the first half of
fiscal 1999 versus $6.0 million for the first half of 1998.  We intend to open
15 restaurants in fiscal 1999, of which eight have opened through July 1999.
Total capital expenditures are expected to be approximately $25 million in
fiscal 1999.  Each new restaurant is expected to require, on average, a total
cash investment of between $1.0 million and $1.5 million, excluding preopening
costs expected to range from $175,000 to $210,000. To date, the majority of our
restaurants are renovations of existing facilities ranging in size from 4,500 to
10,200 square feet. We anticipate that future restaurants will typically range
in size from 7,000 to 9,000 square feet. In 1999, we will build at least six
restaurants based on our prototype designs. These designs are expected to
require between $1.5 million and $2.0 million in total cash investment per
restaurant. This investment represents an incremental $500,000 increase over the
historical cash investment for remodeled restaurants. We plan to refinance any
purchases of land or buildings through sale-leaseback transactions. We cannot
predict whether this financing will be available when needed or on terms
acceptable to us.

Net cash provided by financing activities was $27.9 million for the first half
of fiscal 1999 versus $3.2 million for the first half of fiscal 1998. Upon
completion of our initial public offering in April 1999, we obtained $35.5
million in net proceeds.  The funds obtained were used to repay our $7.0 million
term loan and $2.0 million in line of credit borrowings.  The remaining proceeds
are expected to be used to fund operations, additional restaurants, and other
corporate purposes.  Financing activities in the first half of fiscal 1998
consisted of the obtainment of long-term debt.

We intend to renegotiate our line of credit during the third quarter of fiscal
1999.  We believe that the lender will be willing to increase the amount of the
line of credit on terms and conditions which are comparable or better to those
contained in our existing line of credit, or that other financing will be
available in an amount and on terms and

                                       10
conditions which are adequate to meet our currently planned working capital and
liquidity needs. However, we cannot predict whether our existing lender will
ultimately agree to any increase or whether any alternative financing will be
available.

Our capital requirements, including development costs related to the opening of
additional restaurants, have been and will continue to be significant. We will
need substantial capital to finance our expansion plans, which require funds for
capital expenditures, preopening costs and initial operating losses related to
new restaurant openings. The adequacy of available funds and our future capital
requirements will depend on many factors, including the pace of expansion, the
costs and capital expenditures for new restaurant development and the nature of
contributions, loans and other arrangements negotiated with landlords. Although
we can make no assurance, we believe that cash flow from operations together
with the net proceeds from our initial public offering and available borrowings
will be sufficient to fund our capital requirements through at least the first
quarter of the year 2000. To fund future operations, we will need to raise
additional capital through public or private equity or debt financing to
continue our growth.  In addition, we may from time to time consider acquiring
the operations of other restaurants.  We may obtain additional equity or debt
financing to fund such acquisitions.  The sale of additional equity or debt
securities could result in additional dilution to our shareholders.  We cannot
predict whether additional capital will be available on favorable terms, if at
all.

Inflation

The primary inflationary factors affecting our operations are food and labor
costs. A large number of our restaurant personnel are paid at rates based on the
applicable minimum wage, and increases in the minimum wage directly affect our
labor costs. To date, inflation has not had a material impact on our operating
results.

Year 2000 Issue

The "year 2000 issue" is a term used to describe the inability of some computer
hardware and software to operate properly as the date January 1, 2000
approaches, and beyond.  Year 2000 issues can arise in unexpected areas.
Traditional computer hardware and software and information technology ("IT") is
not the only technology at risk. For example, things such as employee time
clocks, cash registers, and food ordering systems, as well as many other
technologies sometimes referred to as non-IT systems ("non-IT"), could be
impacted.  Unless stated to the contrary, for purposes of this year 2000 update,
the term "system(s)" shall be interpreted as broadly as possible to include
every IT and non-IT system, including computer, hardware, software, process,
system, application or technology that has the potential of being adversely
affected by the year 2000 issue.

The year 2000 issue is centered on whether systems will properly recognize date-
sensitive information. Many systems are coded to accept only two digit date
data.  As the year 2000 nears, systems processing date information will need to
accept four digit entries to distinguish years beginning with "19" from those
beginning with "20." The inability to recognize or properly treat dates may
cause systems to be unable to process financial, operational, and other
information, or may generate inaccurate results.   Because of the peculiarities
of individual systems, the year 2000 issue may have an effect both before and
after January 1, 2000. A system may be impacted on other dates including, for
example, leap year day and others.

Significant negative changes in consumer buying patterns due to the year 2000
issue could materially adversely affect our business and financial results,
whether related to the year 2000 issue or otherwise.  Conversely, if consumers
choose to dine away from home more frequently as a consequence of the year 2000
issue or otherwise, our business could be enhanced.  It is presently impossible
to assess how, and when, the public will respond to the year 2000 issue or the
extent, if any, that consumer reactions will impact our business.

We have taken, and will continue to take, actions intended to minimize the
impact of the year 2000 issue, although it is impossible to eliminate these
risks entirely. Unfortunately, there is no single test that can be used to
conclusively determine whether systems are immune to the year 2000 issue. Also
complicating testing are new year 2000 risks that are still being identified.
Another factor impeding year 2000 testing is the high degree of integration
between various systems and the impracticality or impossibility of conducting
full-scale live testing. Consequently, interrelated systems believed secure in a
test environment could conceivably fail when operating together under realistic
workloads.

                                       11
Preexisting System Upgrades

Our corporate information systems have been largely upgraded or replaced in the
ordinary course of business over the past two years. We upgraded the majority of
our corporate office hardware following a fire in December 1998.

Over the past two years, an upgrade program has been undertaken to improve the
processing speed and information available at both the corporate and restaurant
location levels. This program entailed the replacement of the point-of-sale
system, restaurant level computer system, central computer system and accounting
software package. These upgrades have been conducted in the ordinary course of
business and have not been included in the costs discussed below. However, the
improvements had the incidental benefit of assisting with year 2000 readiness.

Year 2000 Review

Our review of the year 2000 issue involves inventory checks, readiness
assessments, remediation testing, and contingency planning.  We have completed
our inventory checks and expect to complete the remainder of our review by
October 1999.

During the course of remediation testing, we have manipulated and entered new
data for both the restaurant level and corporate office systems. The remediation
testing program will test many non-IT systems including restaurant point-of-sale
systems, time clocks, credit card equipment, environmental controls, security
systems, shipping, and telephone systems. Due to the number of identical
systems, it is presently anticipated that at least three restaurants will be
utilized in the user test in a simulated setting. Although we believe that the
simulation will yield sufficient information to gauge year 2000 readiness, full
load testing in a real environment (which is presently deemed impractical
without materially disrupting or degrading current operations) could reveal
unexpected problems.

Since unanticipated expenses may arise during our review, we are unable to
project with accuracy the total expected costs to achieve year 2000 readiness.
However, we do not allocate the value of time expended by corporate office
personnel when considering year 2000 project costs, and no special account has
been established to track year 2000 project costs. The costs of our year 2000
project are being funded with cash flows from our existing cash balances. We
have incurred approximately $150,000 in year 2000 project costs and expect to
incur an additional $50,000 in year 2000 project costs through the remainder of
1999.

Internal Year 2000 Risks

Risks of systems failure at the restaurant level include, but are not limited
to, the following examples. The failure of automated environmental controls at
one of our restaurants could result in inhospitable conditions requiring
temporary closure. The failure of cash register systems or credit card
processing terminals would force reversion to manual sales tracking methods that
could slow both the throughput of guests, and in the instance of credit cards,
the recognition of income. The failure of personal computers in a restaurant
could prevent the daily polling of restaurant financial information by the
corporate office to account for restaurant results, cash deposits, accounts
payable, and payroll information. Since these computers are also used to order
food from suppliers and analyze food and labor costs, restaurant management
could be forced to revert to manual methods that are less effective or efficient
and which could increase the cost of food and labor. Telecommunication failures
could result in loss of sales due to customer inability to reach the
restaurants, as well as make the communication of restaurant results impossible.

Risks of systems failure at the corporate level include, but are not limited to,
the following examples. There may be temporary inability to conduct normal
accounting and financial functions due to incomplete or inaccurate data.  The
absence of data normally utilized by management in the supervision of our
restaurants could make such oversight difficult and less effective, increasing
costs until the data is restored. Telecommunications risks would parallel those
at the restaurant level. A coordinated computer, software and telecommunication
system is used to sweep cash from local depositories into central accounts. The
failure of any element of this system could cause interruptions in the
availability of cash to meet our liabilities. Similar risks exist with respect
to an integrated payroll system consolidating restaurant and corporate data and
passing it on to a third party payroll administrator.

External Year 2000 Risks

We rely on vendors to supply the key items necessary to run our restaurants.
Unfortunately, we have little control

                                       12
over many of these external parties and it is unlikely that we will be able to
obtain adequate levels of assurance that they have prepared sufficiently to be
ready for the year 2000 issue.

For a restaurant to be able to generate revenue, it must be open for business
during its normal operating hours, staffed, lit, heated, and supplied with
product and other supplies necessary to serve its guests. Examples of external
factors that could prevent these things from occurring include the inability to
open due to lack of power or utilities, lack of food and other supplies due to
service interruptions involving suppliers or distributors, and the inability to
access the restaurants due to malfunctioning security systems controlled by
others or other facilities related impediments.

At a corporate level, third parties are relied upon for certain services,
particularly in the payroll and information services departments.  For example,
a failure of the payroll vendor to supply payroll checks would interrupt the
flow of compensation to employees that could jeopardize staffing throughout the
organization.  Our payroll processor has asserted that they are compliant.

Common external risks to both our corporate and restaurant operations include
interruptions in utilities to our facilities, whether related to electrical,
natural gas, water, sewer, waste removal, or telephone or data transmission
services.

We have sent 446 surveys to vendors of IT services, food and material vendors,
and utilities, among others, in an attempt to obtain certifications of their
readiness with respect to the year 2000 issue. To date, 191 of the surveys, or
42.8%, have been returned.  All of the vendors who responded to our inquiry
stated that they are or plan to be compliant by the end of 1999, dependent upon
the reliability of their third parties' year 2000 compliance statements.  The
utility and telecommunication firms have been conditional in their expressions
of year 2000 readiness, typically linking their readiness to the preparedness of
unrelated parties (for example, other contributors to the national power grid).
Our primary food distributor, SYSCO, has asserted that it will be year 2000
compliant by the end of 1999.

While we will continue to seek vendor readiness certifications relative to the
year 2000 issue, we expect that many companies will fail to provide such
documentation, whether due to liability concerns or otherwise.  Consequently, we
are taking this factor into account, wherever possible, when formulating our
contingency plans.

Magnitude of the Year 2000 Problem

Any individual risk listed above, if experienced on a broad enough scale and of
lengthy duration, could have a material adverse effect on our results of
operations, liquidity, and financial condition. We anticipate that the worst
case year 2000 issue scenario would involve the closure for a material period of
time of most or all our restaurants due to national utility interruptions,
coupled with adverse changes in customer spending patterns. The most likely risk
scenario may instead be more localized closures of individual restaurants, or
groups of restaurants in a particular city, due to utility interruption or
failure to receive necessary food and other supplies.  We believe that as long
as the restaurants can be kept open to the public in the manner they are
accustomed, the failure of administrative and corporate office functions should
have modest effects on revenue producing activities.

Contingency Plans

We are also developing contingency plans for the year 2000 issue.  These plans
are being developed for each of our departments and address both internal and
external year 2000 risks.  For example, the plan has procedures for manually
recording and reporting sales transactions, it addresses supply shortages from
key distributors, and delineates various other contingency items.  It is
anticipated that the contingency plans will be completed by October 1999.

Our risk assessment of the year 2000 issue is based on our current knowledge,
and could in hindsight prove incomplete and possibly overstate or understate the
actual risks.  The ability to address the year 2000 issue in the manner and
within the cost estimates described above could be adversely affected by
negative findings arising during the course of testing systems and implementing
solutions or contingency plans.

                                      13
Disclosure Regarding Forward-Looking Statements

This Form 10-Q for the second quarter ended June 27, 1999 contains forward-
looking statements within the meaning of the safe harbor provisions of Section
21E of the Securities Exchange Act of 1934.  These forward-looking statements
are based on the beliefs of our management as well as on assumptions made by and
information currently available to us at the time the statements were made.
When used in this Form 10-Q, the words "anticipate", "believe", "estimate",
"expect", "intend" and similar expressions, as they relate to us, are intended
to identify the forward-looking statements.  Although we believe that these
statements are reasonable, you should be aware that actual results could differ
materially from those projected by the forward-looking statements.  Because
actual results may differ, readers are cautioned not to place undue reliance on
forward-looking statements.  Our comparable store sales percentage increases
could moderate as a result of competition, general economic conditions, or
changes in consumer preferences or discretionary consumer spending.  Product
costs could be adversely affected by increased distribution prices by SYSCO
Corporation or a failure to perform by SYSCO, as well as adverse weather
conditions, governmental regulation and general economic conditions.  Labor
costs could increase due to increases in the minimum wage as well as competition
for qualified employees and the need to pay higher wages to attract sufficient
employees. Direct and occupancy costs could be adversely affected by an
inability to negotiate favorable lease terms as well as general economic
conditions. General and administrative expenses could increase due to
competition for qualified employees and the need to pay higher wages to attract
sufficient employees as well as general economic conditions. Additional factors
that could cause actual results to differ include: risks associated with future
growth; inability to achieve and manage planned expansion; fluctuations in
operating results; the need for additional capital; risks associated with our
discretionary consumer spending; inability to compete with larger, more
established competitors; potential labor shortages; our dependence on
governmental licenses; complaints or litigation from guests; and risks
associated with year 2000 issues. Certain of these risk factors are more fully
discussed in our Quarterly Report on Form 10-Q for the period ended March 28,
1999. We caution you, however, that the list of factors above may not be
exhaustive and that those or other factors, many of which are outside of our
control, could have a material adverse effect on us and our results of
operations. All forward-looking statements attributable to persons acting on our
behalf or us are expressly qualified in their entirety by the cautionary
statements set forth here. We assume no obligation to publicly release the
results of any revision or updates to these forward-looking statements to
reflect future events or unanticipated occurrences.

Item 3.   Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk from changes in interest rates on borrowings under
our revolving line of credit that bears interest from time to time at the
lending bank's reference rate plus 0.75% to 1.25%. Because we do not believe
that the maximum available borrowings under the revolving line of credit are
material, we do not believe this risk will be material.

We have no derivative financial instruments or derivative commodity instruments
in our cash and cash equivalents and marketable securities. We invest our cash
and cash equivalents and marketable securities in investment grade, highly
liquid investments, consisting of money market instruments, bank certificates of
deposit, overnight investments in commercial paper, and short term government
and corporate bonds. We have invested the net proceeds from our public offering
in similar investment grade and highly liquid investments.

Many of the food products purchased by us are affected by commodity pricing and
are, therefore, subject to price volatility caused by weather, production
problems, delivery difficulties and other factors which are outside our control.
To control this risk in part, we have fixed price purchase commitments with
terms of one year or less for food and supplies from vendors who supply our
national food distributor. In addition, we believe that substantially all of our
food and supplies are available from several sources, which helps to control
food commodity risks. We believe we have the ability to increase menu prices, or
vary the menu items offered, if needed in response to a food product price
increases.  To compensate for a hypothetical price increase of 10% for food and
supplies, we would need to increase menu prices by an average of 3%, which is
consistent with our average price increase of 3% in fiscal 1998 and 2% in fiscal
1997.  Accordingly, we believe that a hypothetical 10% increase in food product
costs would not have a material effect on our operating results.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

We are currently subject to various legal actions arising in the normal course
of business, none of which are expected to have a material effect on our results
of operations, financial condition or cash flows.

                                       14
Item 2.  Changes in Securities and Use of Proceeds

Since March 29, 1999, we have sold the following securities pursuant to
exemption from registration under the Securities Act.  All of the sales were
made in reliance upon the exemptions from registration provided under Section
4(2) of the Securities Act for transactions not involving a public offering.
All shares were issued directly by us, no underwriters were involved and no
discount, commission or other transaction-related remuneration was paid.

1. On April 21, 1999, we issued 8,152 shares of our common stock for $81.52, or
$.01 per share, to an outside investor upon exercise of a warrant previously
issued to the investor.

2. On April 23, 1999, we issued 1,926 shares of our common stock for $19.26, or
$.01 per share, to an outside investor upon exercise of a warrant previously
issued to the investor.

3. On April 26, 1999, we issued 156,936 shares of our common stock for
$1,130,000 or $7.20 per share, to outside investors upon conversion of certain
subordinated debentures in aggregate principal amount of $1,130,000 held by the
investors.

4. On May 5, 1999, we issued 1,926 shares of our common stock for $19.26, or
$.01 per share, to an outside investor upon exercise of a warrant previously
issued to the investor.

5. On May 18, 1999 we issued 71,843 shares of our common stock to U.S. Bancorp
Piper Jaffray, Inc. and Michael Bochert upon conversion and surrender of 104,532
warrants previously issued to them.

6. On May 18, 1999 we issued 20,824 shares of our common stock to U.S. Bancorp
Piper Jaffray, Inc. upon conversion and surrender of 33,333 warrants previously
issued to it.

Item 3.  Defaults upon Senior Securities

   None

Item 4.  Submission of Matters to a Vote of Security Holders

   None

Item 5.      Other Information
   None

                                       15
Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits
Exhibit No.                                         Description                                   Method of Filing
--------------------   ---------------------------------------------------------------------   ----------------------
3.1   Amended and Restated Articles of Incorporation of the Company (1)       Incorporated By
                                                                                               Reference
                 3.2   Amended and Restated Bylaws of the Company (2)                          Incorporated By
                                                                                               Reference
                 4.1   Specimen Common Stock Certificate (3)                                   Incorporated By
                                                                                               Reference
                 4.2   Securities Purchase Agreement dated as of October 13, 1998 between      Incorporated By
                       the Company and the Purchasers (4)                                      Reference
                 4.3   Non-Statutory Stock Option Agreement between the Company and 1204       Incorporated By
                       Harmon Partnership dated as of June 1, 1998 (5)                         Reference
                 4.4   Form of stock purchase warrant dated as of October 31, 1997 (6)         Incorporated By
                                                                                               Reference
                 4.5   Form of stock purchase warrant dated as of May 19, 1998 (7)             Incorporated By
                                                                                               Reference
                27.1   Financial Data Schedule for the quarter ended June 27, 1999             Electronic
                                                                                               transmission
(1) Incorporated by reference to Exhibit 3.4 to the Company's Registration
         Statement on Form S-1 (Registration No. 333-72593).
     (2) Incorporated by reference to Exhibit 3.5 to the Company's Registration
         Statement on Form S-1 (Registration No. 333-72593).
     (3) Incorporated by reference to the same numbered Exhibit to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (4) Incorporated by reference to Exhibit 10.17 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (5) Incorporated by reference to Exhibit 10.15 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (6) Incorporated by reference to Exhibit 10.12 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (7) Incorporated by reference to Exhibit 10.14 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
(b)  Valuation and Qualifying Accounts:

        None

(c)   Reports on Form 8-K

        No reports on Form 8-K were filed during the fiscal quarter ended June
     27, 1999.

                                       16
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                BUCA, Inc.
                                ----------

                                (Registrant)

Date:  August 6, 1999           By:  /s/ Joseph P. Micatrotto
                                     ------------------------
                                   Joseph P. Micatrotto,
                                   Chairman, President and Chief Executive
                                   Officer
                                   (Principal Executive Officer)

Date:  August 6, 1999           By:  /s/ Greg A. Gadel
                                     -----------------
                                   Greg A. Gadel
                                   Chief Financial Officer

                                       17
Exhibit Index
Exhibit No.                                         Description                                   Method of Filing
--------------------   ---------------------------------------------------------------------   ----------------------
3.2   Restated Certificate of Incorporation of the Company (1)                Incorporated By
                                                                                               Reference
                 3.4   Restated Bylaws of the Company (2)                                      Incorporated By
                                                                                               Reference
                 4.1   Specimen Common Stock Certificate (3)                                   Incorporated By
                                                                                               Reference
                 4.2   Securities Purchase Agreement dated as of October 13, 1998 between      Incorporated By
                       the Company and the Purchasers (4)                                      Reference
                 4.3   Non-Statutory Stock Option Agreement between the Company and 1204       Incorporated By
                       Harmon Partnership dated as of June 1, 1998 (5)                         Reference
                 4.4   Form of stock purchase warrant dated as of October 31, 1997 (6)         Incorporated By
                                                                                               Reference
                 4.5   Form of stock purchase warrant dated as of May 19, 1998 (7)             Incorporated By
                                                                                               Reference
                27.1   Financial Data Schedule for the quarter ended June 27, 1999             Electronic
                                                                                               Transmission
(1) Incorporated by reference to Exhibit 3.4 to the Company's Registration
         Statement on Form S-1 (Registration No. 333-72593).
     (2) Incorporated by reference to Exhibit 3.5 to the Company's Registration
         Statement on Form S-1 (Registration No. 333-72593).
     (3) Incorporated by reference to the same numbered Exhibit to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (4) Incorporated by reference to Exhibit 10.17 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (5) Incorporated by reference to Exhibit 10.15 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (6) Incorporated by reference to Exhibit 10.12 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).
     (7) Incorporated by reference to Exhibit 10.14 to the Company's
         Registration Statement on Form S-1 (Registration No. 333-72593).