ROADHOUSE GRILL INC, 10-K, 1998-07-27

ROADHOUSE GRILL INC
10-K, 1998-07-27
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<PAGE> 1
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Transition Period from December 29, 1997 to April 26, 1998

Commission File Number: 0-28930

ROADHOUSE GRILL, INC.
(Exact name of registrant as specified in its charter)

FLORIDA 65-0367604
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

6600 NORTH ANDREWS AVENUE, SUITE 160, FT. LAUDERDALE, FLORIDA 33309
(Address of principal executive offices and zip code)

Registrant's telephone number (954)489-9699

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, PAR
VALUE $.03 PER SHARE

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 BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED,
TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates
of the registrant as of June 10, 1998 was $12,355,369 based upon the closing
sale price of $4.88 as reported on the Nasdaq National Market on June 10, 1998.

The number of shares of the registrant's common stock outstanding as of
June 10, 1998 was 9,308,741.

================================================================================

<PAGE> 2

ROADHOUSE GRILL, INC.
FORM 10-K
17 WEEKS ENDED APRIL 26, 1998

INDEX
<TABLE>

PAGE
----
<S> <C>
PART I

Item 1. Business.............................................................................. 1

Item 2. Properties............................................................................ 6

Item 3. Legal Proceedings..................................................................... 8

Item 4. Submission of Matters to a Vote of Security Holders................................... 8

PART II

Item 5. Market for Registrant's Common Equity and
Related Shareholder Matters.................................................... 8

Item 6. Selected Financial Data............................................................... 10

Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................................. 12

Item 8. Financial Statements and Supplementary Data........................................... 19

Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure......................................... 19

PART III

Item 10. Directors and Executive Officers of the Registrant.................................... 20

Item 11. Executive Compensation................................................................ 21

Item 12. Security Ownership of Certain Beneficial Owners and Management........................ 26

Item 13. Certain Relationships and Related Transactions........................................ 27

PART IV

Item 14. Financial Statements and Exhibits..................................................... 29

Signatures ...................................................................................... 30

</TABLE>

<PAGE> 3
PART I

ITEM 1. BUSINESS

This Form 10-K contains forward-looking statements, including statements
regarding, among other things (i) the Company's growth strategies, (ii)
anticipated trends in the economy and the restaurant industry and (iii) the
Company's future financing plans. In addition, when used in this Form 10-K, the
words "believes," "anticipates," "expects" and similar words often are intended
to identify certain forward-looking statements. These forward-looking statements
are based largely on the Company's expectations and are subject to a number of
risks and uncertainties, many of which are beyond the Company's control. Actual
results could differ materially from these forward-looking statements as a
result of changes in trends in the economy and the restaurant industry,
reductions in the availability of financing, increases in interest rates and
other factors. In light of the foregoing, there is no assurance that the
forward-looking statements contained in this Form 10-K will in fact prove
correct or occur. The Company does not undertake any obligation to revise these
forward-looking statements to reflect future events or circumstances.

This Form 10-K is for the transition period which consists of a 17 week
period from December 28, 1997 to April 26, 1998 (the "transition period").

OVERVIEW

As of April 26, 1998 Roadhouse Grill, Inc. (the "Company") owns and
operates 44 and franchises three full-service, casual dining restaurants under
the name "Roadhouse Grill." A Roadhouse Grill offers a diverse, moderately
priced lunch and dinner menu highlighting exhibition cooking of steaks and other
grilled entrees. Roadhouse Grill features fresh baked yeast rolls, appetizers
and home-made ice cream as signature items. The Roadhouse Grill concept is
designed to appeal to a broad range of customers, including business people,
couples, singles and particularly families.(1) Restaurants have an open layout,
with rustic decor and prominently positioned buckets of free peanuts. Since
incorporation in October the Company has opened 44 restaurants in ten states.(2)

The founder and Chief Executive Officer of the Company resigned in July
1997. In November 1997, the Board of Directors (the "Board") appointed Ayman
Sabi, a member of the Board, to head a management committee to review Company
operations and improve Company performance. Mr. Sabi was subsequently elected
President and Chief Executive Officer on February 6, 1998.

The new management team formulated a three-point plan to improve the
Company's operating performance. Implementation of the performance improvement
plan commenced in the fourth calendar quarter of 1997, and continues through the
transitional period. Plan points are as follows:

1. IMPROVE UNIT ECONOMICS AND OPERATING MARGINS by better managing food, labor
and other operating costs. PROGRESS AND RECENT DEVELOPMENTS INCLUDE:

o Cost of labor has been reduced by over two percentage points from 29.6%,
for the 17 weeks ended April 27, 1997 to 27.4% for the 17 weeks ended April
26, 1998, by reducing labor overhead at the restaurant level, restructuring
the compensation program for reception staff, and reorganizing the
Company's meat-cutting functions;

o Cost of goods has declined one full percentage point from 33.2% for the 17
weeks ended April 27, 1997 to 32.2% for the 17 weeks ended April 26, 1998,
as a result of improved purchasing, competitive bidding and improved
portion control.

2. INCREASE SAME STORE SALES PERFORMANCE through increased advertising and
greater brand awareness. PROGRESS AND RECENT DEVELOPMENTS INCLUDE:

o Same store sales increased 0.2 percentage points for the 17 weeks ended
April 26, 1998 compared to the 17 weeks ended April 27, 1998. This
increase, compared to a 3.2% decline for the twelve months ended December
28, 1997, reversed a trend of declining same store sales which had
adversely affected Company performance since the first quarter of 1995;

o The Company retained WestWayne, Inc., an advertising agency with
demonstrated success in supporting restaurant chain growth, to develop and
manage an integrated TV, radio and print advertising campaign. The
Company's "Rambunctious Roadhouse" campaign will run in the Company's major
markets through the fourth calendar quarter of 1998.

- ----------
1 In 1997, for the second consecutive year, Roadhouse Grill was voted
"Favorite Family Dining Restaurant" in a survey conducted by SUNSHINE
MAGAZINE, the South Florida based Sun-Sentinel Sunday magazine.
2 The Company also has a 50% interest in a limited liability company which
owns the Kendall, Florida restaurant ("Kendall"). Two franchised locations
are located in Kuala Lumpur, capital city of Malaysia, and one domestic
franchise is located in Las Vegas, Nevada.
<PAGE> 4

3. ENHANCE REAL ESTATE AND NEW RESTAURANT DEVELOPMENT through
improved site selection and better construction management. PROGRESS AND
RECENT DEVELOPMENTS INCLUDE:

o Rejection of nine restaurant sites identified by previous management but
determined by the new management team to be unacceptable;

o Implementation of accelerated new site identification program, based on
concentration within media and management-efficient market areas;

o Termination of previous sole-source construction and equipment contracts
and implementation of competitive bidding for construction, fixtures and
equipment;

o Development of improved restaurant layout plan with increased seating and
reduced overall area and costs.

During the transition period, the Company placed a priority on finding the right
sites rather than a less studied process with the objective of insuring that new
site developments are selected and developed as a result of its more analytic
site identification process. The Company rejected several sites and removed them
from the development schedule. Replacement of such sites in the development
pipeline has been largely completed but validation and improvement of pending
sites results in the deferral of new restaurant openings during a transition
period anticipated by management to extend into the third calendar quarter.

Management believes that the benefits of its revised operating plan are
beginning to be realized, and will contribute increasingly to Company
performance over the coming quarters.

ADVERTISING AND MARKETING

The Company attempts to build brand-awareness by providing a distinctive
dining experience that results in a significant number of new customers being
attracted through word of mouth, as well as by traditional marketing efforts and
promotional activities. The Company believes that clustering multiple
restaurants in target markets will help build brand-awareness and increase
efficiencies in its marketing efforts. In the latter part of 1997, the Company
conducted an advertising agency review and selected WestWayne Inc. because of
that company's former success, especially with restaurant chains. Focus groups
were conducted by WestWayne and the Company in the latter half of fiscal 1997
resulting in a new strategy to create and build brand identity via radio and
television media. This new strategy was implemented during the transition
period. The advertising is focused on "irreverent" or "rambunctious" behavior at
Roadhouse Grill restaurants. The Company's new motto is: "There is a time and a
place to get rambunctious...Roadhouse Grill. Where you can always eat, drink and
be yourself." The Company also markets at the restaurant level through
sponsorship of community charity activities, sporting events, festivals and
Chamber of Commerce events.

FRANCHISING

The Company has granted franchise rights to the Roadhouse Grill concept in
Asia and the Pacific Rim and in certain limited geographic areas in the United
States. Pursuant to its expansion strategy, the Company expects to concentrate
its future franchising activity in Asia and the Pacific Rim through its
international franchisees, Roadhouse Grill Asia Pacific (H.K.) Limited
("Roadhouse Grill Hong Kong") and Roadhouse Grill Asia Pacific (Cayman) Limited
("Roadhouse Grill Asia"). Berjaya Group (Cayman) Limited ("Berjaya") directly or
indirectly owns Roadhouse Grill Hong Kong and Roadhouse Grill Asia.

INTERNATIONAL FRANCHISING. In January 1996, the Company entered into a
Master Development Agreement with Roadhouse Grill Hong Kong, which provides for
the development and franchising of Roadhouse Grill restaurants in Hong Kong.
Under the agreement, Roadhouse Grill Hong Kong is not required to develop any
specific number of restaurants in Hong Kong, but any restaurants that it
develops are credited against the development obligations of Roadhouse Grill
Asia under Roadhouse Grill Asia's Master Development Agreement with the Company.
Roadhouse Grill Hong Kong or its affiliates are not required to pay any
franchise or reservation fee for restaurants that it develops, but it is
responsible for paying or reimbursing approved expenses incurred by the Company
in connection with the opening of each restaurant. In addition, Roadhouse Grill
Hong Kong is required to pay a royalty on gross sales in connection with the
operation of each of its restaurants. Under certain circumstances, Roadhouse
Grill Hong Kong or the Company may grant franchises to third parties in Hong
Kong. In that event, the Company is entitled to receive 50% of any franchise
and reservation fees and 50% of any royalty fee payable by the third party
franchisee, subject to limitations on the amounts payable to the Company of
$10,000 per restaurant in the case of franchise and reservations fees and 2.5%
of gross sales in the case of royalty fees. Effective December 1, 1997, the
agreement was amended to allow the Company to receive 40% of any royalty fee
payable by the third party franchisee, subject to a limitation of 2% of gross
sales. Amounts for franchise and reservation fees were left unchanged.

2
<PAGE> 5
In January 1996, the Company also entered into a Master Development
Agreement with Roadhouse Grill Asia which covers countries in Asia and the
Pacific Rim (other than Hong Kong), including, but not limited to, Australia,
China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea,
the Philippines and Thailand. Under the agreement, Roadhouse Grill Asia is
required to open and maintain at least thirty Roadhouse Grill restaurants during
the first ten years of the term of the agreement, with a minimum of two
restaurants to be developed each year. Under certain circumstances, Roadhouse
Grill Asia or the Company may grant franchises to third parties in the
territory. The fee arrangements under the agreement are substantially the same
as those under the agreement between the Company and Roadhouse Grill Hong Kong.
See Item 13 "Certain Relationships and Related Transactions."

DOMESTIC FRANCHISING. The Company has entered into franchise arrangements
for the development and operation of Roadhouse Grill restaurants in Clark
County, Nevada. The first Clark County franchise opened in July 1997 in Las
Vegas, Nevada, and the second one is under construction and is expected to open
during the summer of calendar 1998.

COMPETITION

The restaurant industry is highly competitive. The Company competes with a
broad range of restaurants, including national and regional casual dining chains
as well as locally-owned restaurants, some of which operate with concepts
similar to that of the Company. Many of the Company's competitors are well
established and have substantially greater market presence and financial and
other resources than the Company. The entrance of new competitors into the
Company's market areas or the expansion of operations by existing competitors
could have a material adverse effect on the Company's results of operations and
financial condition. In addition, the Company competes with other restaurant
companies and retailers for sites, labor and, in many cases, customers. The
Company believes that the key competitive factors in the restaurant industry are
quality of food and service, price, location and concept. To the extent that one
or more of its competitors becomes more successful with respect to any of the
key competitive factors, the Company's business could be adversely affected.

The restaurant industry is affected by changes in consumer tastes as well
as national, regional and local economic conditions, demographic trends, traffic
patterns, and the type, number and location of competing restaurants. Dependence
on fresh meats and produce also subjects restaurant companies to the risk that
shortages or interruptions of supply could adversely affect the availability,
quality or cost of ingredients. In addition, factors such as inflation,
increased food, labor and employee benefit costs and the availability of
qualified management and hourly employees also may adversely affect the
restaurant industry generally and the Company's restaurants in particular. The
success and future profitability of the Company will depend in part on its
ability to identify and to respond appropriately to changing conditions within
the restaurant industry.

GOVERNMENT REGULATION

Each Roadhouse Grill restaurant is subject to numerous federal, state and
local laws and governmental regulations, including those relating to the
preparation, sale and service of food and alcoholic beverages, designation of
non-smoking and smoking areas, accessibility of restaurants to disabled
customers, development and construction of restaurants and environmental
matters. Roadhouse Grill also is subject to laws governing its relationship with
employees, including minimum wage requirements, overtime, working conditions and
immigration requirements. Difficulties or failures in obtaining the required
construction and operating licenses, permits or approvals could delay or prevent
the opening of a new restaurant. Roadhouse Grill believes that it is operating
in compliance in all material respects with applicable laws and regulations that
govern its operations.

Alcoholic beverage control regulations require each Roadhouse Grill
restaurant to apply to a state authority and, in certain locations, county
and/or municipal authorities for a license or permit to sell alcoholic beverages
on the premises and to provide service for extended hours. Typically, licenses
must be renewed annually and may be revoked or suspended for cause at any time.
If a liquor license for any restaurant were lost, revenues for that restaurant
would be adversely affected. Alcoholic beverage control regulations relate to
numerous aspects of the Company's restaurants, including minimum age of patrons
consuming and employees serving alcoholic beverages, hours of operation,
advertising, wholesale purchasing, inventory control, and handling, storage and
dispensing of alcoholic beverages. The Company is also subject to "dram-shop"
statutes, which generally provide a person, injured by an intoxicated person the
right to recover damages from an establishment that wrongfully served alcoholic
beverages to the intoxicated person. The Company carries liquor liability
coverage as part of its existing comprehensive general liability insurance.

3
<PAGE> 6
In connection with its sale of franchises, the Company is subject to the
United States Federal Trade Commission rules and regulations and state laws that
regulate the offer and sale of franchises. The Company also is subject to laws
that regulate certain aspects of the franchise relationship.

The Company is subject to various local, state and federal laws regulating
the discharge of pollutants into the environment. The Company believes that its
operations are in compliance in all material respects with applicable
environmental laws and regulations. The Company conducts environmental audits of
all proposed restaurant sites in order to determine whether there is any
evidence of contamination prior to purchasing or entering into a lease with
respect to such sites. However, there can be no assurance that the Company will
not incur material environmental liability in connection with any of its owned
or leased properties.

EMPLOYEES

At April 26, 1998, the Company employed 270 salaried employees, of whom 34
served in corporate and administrative capacities and 236 served as restaurant
management personnel. In addition, the Company employed 4,707 persons on an
hourly basis. None of the Company's employees are covered by a collective
bargaining agreement, and the Company has never experienced an organized work
stoppage, strike or labor dispute. The Company believes its relations with its
employees are good.

TRADEMARKS, SERVICE MARKS AND TRADE DRESS

Roadhouse Grill believes its trademarks, service marks and trade dress are
important to its marketing efforts. Roadhouse Grill has registered the
"Roadhouse Grill" service mark, the "Cowboy Jim and rocking chair" design and
the slogan "Good Food and a Smile . . . That's Roadhouse Style" with the U.S.
Patent and Trademark Office. The Company currently has registered the "Roadhouse
Grill" service mark in France and Malaysia and has been approved for
registration in Canada. Roadhouse Grill has certain foreign trademarks in
various stages of the registration process in several countries; however, the
Company has temporarily ceased the registration process and will resume such
process on a case-by-case basis in the near future in certain of those
countries.

4
<PAGE> 7

RECENT DEVELOPMENTS

On December 11, 1997, the Company's Board of Directors voted to change the
Company's fiscal year to coincide with that of the majority shareholder, Berjaya
Group (Cayman) Limited. The new fiscal year will end on the last Sunday in April
and consist of four 13 week quarters structured as follows:

1st Quarter - May, June, July
2nd Quarter - August, September, October
3rd Quarter - November, December, January
4th Quarter - February, March, April

The following is a pro forma summary (unaudited) of the quarterly results of
operations for the 12 months ended April 1997 and the 12 months ended April 1998
with the quarters structured according to the new fiscal year:

<TABLE>
<CAPTION>
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
12 MONTHS ENDED APRIL 1997:
Total revenues $ 14,461,029 $ 16,667,139 $ 20,017,892 $ 23,501,609 $ 74,647,669
Operating income (loss) (389,522) (226,897) 369,188 1,599,131 1,351,900
Pretax income (loss) (569,296) (484,571) 105,271 1,451,383 502,787
Net income (loss) (569,296) (484,571) 95,271 1,412,047 453,541
Basic net income (loss) per common share (0.12) (0.10) 0.01 0.15 0.07
Diluted net income (loss) per common share (0.12) (0.10) 0.01 0.15 0.07

12 MONTHS ENDED APRIL 1998:
Total revenues $ 23,083,009 $ 22,866,463 $ 25,042,652 $ 29,202,089 $100,194,213
Income prior to unusual or infrequent items 106,957 549,636 1,194,285 1,954,387 3,805,265
(Loss) from impairment of assets(1) -- -- (1,120,238) -- (1,120,238)
Operating income(2) 106,957 549,636 74,047 1,954,387 2,685,027
Pretax income (loss)(3) (105,607) 119,344 (999,226) 1,554,879 569,390
Net income (loss) (148,307) 69,844 (1,073,309) 1,504,601 352,829
Basic net income (loss) per common share (0.02) 0.01 (0.12) 0.16 0.04
Diluted net income (loss) per common share (0.02) 0.01 (0.12) 0.16 0.04

</TABLE>

Subsequent to the transition period, the Company received financing
commitments of $36.5 million, which will be used for developing new restaurants.
These commitments of $16.5 million and $20 million were obtained from Franchise
Finance Corporation of America and CNL Group, Inc., respectively. These
commitments added substantial flexibility to the current development plan
allowing the Company to focus on development of sites identified and on finding
new sites for additional restaurants. There is no guarantee that these
additional financings will be completed. (See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources").

In August 1996, the Company entered into an agreement to purchase the
remaining 50 percent interest in the Kendall Roadhouse Grill, L.C. a limited
liability company that owned Kendall from the joint venture partners for a
purchase price of $2,300,000. The purchase price was to be paid from the
proceeds of the initial public offering (the "IPO") completed by the Company in
November 1996 in which 2,500,000 shares were sold at $6.00 per share. During the
first quarter of 1997, the agreement was amended as follows: the purchase price
was changed to $1,800,000 with a deposit of $400,000 paid in January 1997, and
the remaining $1,400,000 payable by December 31, 1997 when the acquisition is
closed and consummated. Subsequent to December 1997, the Company negotiated the
price down to $1,600,000 and anticipates completing the purchase in August 1998.

- ----------

1 During the third quarter of pro forma 1998, the Company recognized an
impairment loss of $1,120,238, or $0.12 per share, relating to the
write-down of two under-performing Company-Owned restaurants.
2 During the first quarter of pro forma 1998, the Company recognized
non-recurring severance charges of $430,000, or $0.05 per share. These
charges were incurred for the departure of key executives of the Company.
3 During the third quarter of pro forma 1998, the Company incurred a loss on
divestiture of an under-performing joint venture of $611,000, or $0.07 per
share.

5
<PAGE> 8

ITEM 2. PROPERTIES

As of April 26, 1998, all but 13 of the Company's restaurants were located
in leased space. Initial lease expirations range from five to twenty years, with
the majority of these leases providing renewal options extending the lease term
to twenty years. All of the Company's leases provide for a minimum annual rent,
and five of the leases call for additional rent based on sales volume at the
particular location over specified minimum levels. Generally, the leases are
triple net leases which require the Company to pay the costs of insurance, taxes
and a portion of the lessors' operating costs.

The Company leases approximately 8,000 square feet for its corporate
offices in Fort Lauderdale, Florida under a three-year lease expiring September
30, 1998. The Company is currently seeking new office space and expects to sign
a new lease prior to September 1998.

The following table provides information with respect to each of the
Company's owned, leased, franchised and joint venture restaurants as of April
26, 1998:

<TABLE>
<CAPTION>
APPROXIMATE SQUARE
FOOTAGE/SEATING OWNED, LEASED
LOCATION OPENING DATE CAPACITY(1) OR FRANCHISED
- -------- ------------ ----------------- -------------
<S> <C> <C> <C>

COMPANY-OWNED:
- --------------

Pembroke Pines (Fort Lauderdale), FL March 1, 1993 5,800/210 Leased
North Miami, FL(2) November 1, 1993 7,800/220 Leased
Coral Springs (Fort Lauderdale), FL December 6, 1993 10,000/230 Leased
West Palm Beach, FL February 21, 1994 6,000/220 Leased
Winter Park (Orlando), FL September 10, 1994 12,000/240 Leased
Deerfield Beach (Fort Lauderdale), FL January 16, 1995 7,500/230 Leased
Bradenton, FL February 20, 1995 10,000/280 Owned
Davie (Fort Lauderdale), FL(2) March 15, 1995 5,800/210 Leased
Tampa, FL April 10, 1995 8,600/220 Leased
St. Petersburg, FL May 16, 1995 6,200/190 Leased
Delray Beach, FL June 27, 1995 7,500/230 Leased
Kissimmee, FL July 18, 1995 7,500/230 Owned
Lakeland, FL July 18, 1995 6,300/190 Leased
Jacksonville, FL August 15, 1995 8,300/210 Owned
Orlando South, FL October 10, 1995 7,500/230 Leased
Tallahassee, FL October 30, 1995 7,500/230 Owned
Ocala, FL October 31, 1995 7,500/230 Owned
Fort Lauderdale, FL(2)(3) December 14, 1995 12,000/200 Leased
North Palm Beach, FL February 15, 1996 8,500/230 Owned
Sandy Springs (Atlanta), GA March 14, 1996 6,800/210 Leased
Longwood (Orlando), FL May 13, 1996 7,500/230 Owned
Orange Park (Jacksonville), FL May 30, 1996 6,800/210 Owned
Fort Myers, FL July 2, 1996 6,800/210 Owned
Columbia, SC July 2, 1996 8,400/220 Owned
Cheektowaga (Buffalo), NY August 27, 1996 5,000/190 Leased
Kennesaw (Atlanta), GA September 4, 1996 6,800/210 Leased

</TABLE>

- ----------------------------

1 Excludes bar seating.
2 The North Miami restaurant originally was owned by a limited liability
company in which the Company held a 50% ownership interest. The Davie and
Fort Lauderdale restaurants were both opened in March 1993, as franchised
restaurants. The Company acquired 100% ownership of the North Miami, Davie
and Fort Lauderdale restaurants in March 1995.
3 The Fort Lauderdale restaurant was closed for remodeling from September to
December 1995. The date indicated in the above chart is the restaurant's
re-opening date.

<PAGE> 9

<TABLE>
<CAPTION>
APPROXIMATE SQUARE
FOOTAGE/SEATING OWNED, LEASED
LOCATION OPENING DATE CAPACITY(1) OR FRANCHISED
- -------- ------------ ------------------- -------------

COMPANY-OWNED:
- --------------

<S> <C> <C> <C>
Amherst (Buffalo), NY September 24, 1996 5,000/190 Leased
Lake Worth (West Palm Beach), FL October 22, 1996 6,000/200 Leased
Greenville, SC October 22, 1996 6,800/210 Owned
Duluth (Atlanta), GA November 25, 1996 6,800/210 Leased
Rochester, NY December 4, 1996 7,140/210 Leased
Melbourne, FL January 21, 1997 6,800/192 Leased
Biloxi, MS March 11, 1997 6,000/200 Leased
Columbia, SC April 8, 1997 6,800/210 Owned
Hilliard (Columbus), OH May 27, 1997 6,800/210 Leased
Baton Rouge, LA June 29, 1997 6,800/210 Leased
Mobile, AL June 27, 1997 6,800/210 Leased
Marrero, LA September 9, 1997 6,800/210 Leased
Shreveport, LA October 27, 1997 6,800/210 Leased
Miami, FL December 9, 1997 6,800/210 Leased
Columbus, OH December 9, 1997 6,800/210 Leased
N. Little Rock, AR December 16, 1997 6,800/210 Owned
Morrow, GA February 24, 1998 7,600/211 Leased
Kenner, LA March 31, 1998 6,800/212 Leased

FRANCHISED:
- -----------

Bangsar Baru, Malaysia November 20, 1995 5,800/160 Franchised
Ampang, Malaysia April 24, 1996 7,000/200 Franchised
Las Vegas, NV July 15, 1997 6,800/253 Franchised

JOINT VENTURES:
- ---------------

Kendall (Miami), FL June 28, 1994 8,000/230 50 Percent Owned

</TABLE>
- ---------------
1 Excludes bar seating.

<PAGE> 10

ITEM 3. LEGAL PROCEEDINGS

The Company is party to certain legal proceedings arising in the ordinary
course of business. In the opinion of the Company, any resulting liability will
not have a material adverse effect on the Company or its business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no maters submitted for a vote of security holders during the
transition period.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

MARKET INFORMATION

The Company's authorized and issued common equity consists of 9,305,408
shares of common stock, par value $.03 per share.

The common stock of the Company is traded over-the-counter on the NASDAQ
National Market System ("NASDAQ") under the symbol "GRLL". The following table
indicates the high and low sale prices for the Common Stock as reported by
NASDAQ:

BID PRICES
----------
TRANSITION PERIOD HIGH LOW
----------------- ---- ---

January 1998 3.63 3.13
February 1998 4.50 3.25
March 1998 4.25 3.94
April 1998 4.69 3.88

BID PRICES
----------
FISCAL 1997 HIGH LOW
----------- ---- ---

First Quarter 7.50 4.88
Second Quarter 6.00 5.00
Third Quarter 7.81 4.63
Fourth Quarter 5.19 3.19

BID PRICES
----------
FISCAL 1996 HIGH LOW
----------- ---- ---

Fourth Quarter 6.38 5.63

The Company's common stock commenced trading on November 26, 1996.

DIVIDENDS

Since the Company's IPO in 1996, the Company has not declared or paid any
cash dividends or distributions on its capital stock. The Company does not
intend to pay any cash dividends on its Common Stock in the foreseeable future,
as the current policy of the Company's Board of Directors is to retain all
earnings to support operations and finance expansion. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources." Future declaration and payment of dividends,
if any, will be determined in light of then current conditions, including the
Company's earnings, operations, capital requirements, financial condition, and
other factors deemed relevant by the Board of Directors.

8
<PAGE> 11

NUMBER OF STOCKHOLDERS

As of June 10, 1998, there were 65 shareholders of record (not including
those shares held through brokerage accounts) of the Company's common stock.

9
<PAGE> 12

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth for the periods and the dates indicated
selected financial data of the Company. The following should be read in
conjunction with the Financial Statements and Notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
appearing elsewhere in this Form 10-K.

(IN THOUSANDS, EXCEPT PER SHARE DATA)

FISCAL YEAR
--------------------------------------------------------------------------------------
1993 1994 1995 1996 1997
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:

Total revenues $ 3,465 $ 11,389 $ 34,275 $ 62,433 $ 92,795

Cost of restaurant sales:
Food and beverage 1,471 4,085 12,084 21,382 30,991
Labor and benefits 988 4,606 12,019 19,749 27,849
Occupancy and other 1,219 2,318 8,710 13,773 19,598
----------- ----------- ----------- ----------- -----------

Total cost of restaurant sales 3,678 11,009 32,813 54,904 78,438

Depreciation and amortization 47 415 1,663 3,136 4,980

General and administrative 280 1,913 3,328 4,471 6,208
Impairment of long-lived assets -- -- -- -- 1,120
----------- ----------- ----------- ----------- -----------

Total operating expenses 4,005 13,337 37,804 62,511 90,746
----------- ----------- ----------- ----------- -----------

Operating income (loss) (540) (1,948) (3,529) (78) 2,049

Other income (expense):
Interest expense, net (40) (180) (404) (1,296) (1,552)
Equity in income (loss) of
affiliates (1) (136) (411) 284 206 62
Other, net 3 20 159 278 320
Loss on sale of investment in
affiliate -- -- -- -- (611)
----------- ----------- ----------- ----------- -----------

Total other income (expense) (173) (571) 39 (812) (1,781)
----------- ----------- ----------- ----------- -----------
Pretax income (loss) (713) (2,519) (3,490) (890) 268

Income tax -- -- -- -- 176
----------- ----------- ----------- ----------- -----------

Net income (loss) $ (713) $ (2,519) $ (3,490) $ (890) $ 92
=========== =========== =========== =========== ===========

Basic and diluted
net income per common share (0.46) (1.12) (1.00) (0.18) 0.01
=========== =========== =========== =========== ===========

Weighted average common shares outstanding 1,560,358 2,247,507 3,496,570 4,909,894 9,305,408
=========== =========== =========== =========== ===========

Weighted average common shares and share
equivalents outstanding - assuming dilution 1,560,358 2,247,507 3,496,570 4,909,894 9,305,408
=========== =========== =========== =========== ===========

</TABLE>

<TABLE>
<CAPTION>
(UNAUDITED)
17 WEEKS 17 WEEKS
ENDED ENDED
APRIL 27, APRIL 26,
1997 1998
----------- -----------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:

Total revenues $ 30,285 $ 37,684

Cost of restaurant sales:
Food and beverage 10,056 12,129
Labor and benefits 8,957 10,340
Occupancy and other 6,214 8,376
----------- -----------

Total cost of restaurant sales 25,227 30,845

Depreciation and amortization 1,454 2,145

General and administrative 1,773 2,210
Impairment of long-lived assets -- --
----------- -----------

Total operating expenses 28,454 35,200
----------- -----------

Operating income (loss) 1,831 2,484

Other income (expense):
Interest expense, net (347) (719)
Equity in income (loss) of
affiliates (1) 29 57
Other, net 110 119
Loss on sale of investment in
affiliate -- --
----------- -----------

Total other income (expense) (208) (543)
----------- -----------
Pretax income (loss) 1,623 1,941

Income tax 40 81
----------- -----------

Net income (loss) $ 1,583 $ 1,860
=========== ===========

Basic and diluted
net income per common share 0.17 0.20
=========== ===========

Weighted average common shares outstanding 9,305,408 9,305,408
=========== ===========

Weighted average common shares and share
equivalents outstanding - assuming dilution 9,315,307 9,326,642
=========== ===========

</TABLE>

- ----------

1 See Note 1 of Financial Statements.

10
<PAGE> 13

(IN THOUSANDS, EXCEPT PER SHARE DATA)

FISCAL YEAR
-------------------------------------------------------------------
1993 1994 1995 1996 1997
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>

BALANCE SHEET DATA:

Working capital $ (2,040) $ 7,409 $ (7,560) $ (5,605) $ (5,886)

Total assets 1,685 24,843 42,201 67,335 75,432

Long-term debt and due to related parties,
including current portion 1,591 4,858 13,324 13,657 18,115

Obligations under capital leases,
including current portion -- 1,272 4,484 4,271 7,908

Total shareholders' equity (deficit) $ (613) $ 17,639 $ 20,261 $ 41,100 $ 41,295

</TABLE>

<TABLE>
<CAPTION>
(UNAUDITED)
17 WEEKS 17 WEEKS
ENDED ENDED
APRIL 27, APRIL 26,
1997 1998
-------- --------
<S> <C> <C>

BALANCE SHEET DATA:

Working capital $(10,776) $ (5,864)

Total assets 67,943 80,108

Long-term debt and due to related parties,
including current portion 12,850 19,095

Obligations under capital leases,
including current portion 4,186 7,542

Total shareholders' equity (deficit) $ 42,705 $ 43,154

</TABLE>

<PAGE> 14

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Roadhouse Grill, Inc. owns and operates 44 and franchises three
full-service, casual dining restaurants under the name "Roadhouse Grill". The
Company was incorporated in October 1992 and opened the first Company-Owned
restaurant in Pembroke Pines, Florida in March of 1993. Since then, the Company
has opened 43 more restaurants in Florida, Georgia, South Carolina, Mississippi,
Louisiana, Arkansas, Alabama, New York, Ohio, and South Carolina. The Company
also has a 50% interest in a limited liability company which owns Kendall. Two
franchised locations are located in Kuala Lumpur, capital city of Malaysia, and
one domestic franchise is located in Las Vegas, Nevada.

On December 11, 1997, the Company's Board of Directors voted to change the
Company's fiscal year to the last Sunday in April to coincide with that of the
majority shareholder, Berjaya.

During 1997, the Company had four restaurants licensed by Buffets, Inc.
During the transition period, the Company dissolved its licensee arrangement
with Buffets, Inc. Buffets, Inc. will discontinue using the Roadhouse Grill name
in its present form and there are no future liabilities on either company's
part.

The Company's revenues are derived primarily from the sale of food and
beverages. Sales of alcoholic beverages accounted for approximately 12.5%, 11.7%
and 11.5% of total revenues in fiscal 1996, fiscal 1997 and the transition
period, respectively. Franchise and management fees have accounted for less than
1% of the Company's total revenues for all periods since its inception.

The Company's new restaurants can be expected to incur above-average costs
during the first few months of operation. Pre-opening costs, such as employee
recruiting and training costs and other initial expenses incurred in connection
with the opening of a new restaurant, are amortized over a twelve-month period
commencing with the first full accounting period after the restaurant opens.
During the transition period, pre-opening expenses incurred in connection with
the opening of two Company-Owned restaurants averaged approximately $111,000.

In the first four years of operation, fiscal 1993, fiscal 1994, fiscal 1995
and fiscal 1996, the Company incurred net losses of $713,000, $2.5 million, $3.5
million, and $890,000, respectively. As a result of the Company's net operating
losses and associated net operating loss carry-forward, the Company had no
federal income tax payable for fiscal years ended December 29, 1996 and December
28, 1997 and for the transition period. Accordingly, the Company has made no
provision for federal income taxes payable for such fiscal years or for the
transition period. At April 26, 1998, the Company had a Florida net operating
loss carry-forward of approximately $1,400,000.

The average cash investment, excluding real estate costs and pre-opening
expenses, required to open each of the Roadhouse Grill restaurants opened by the
Company prior to April 26, 1998 was approximately $1,400,000. The average real
estate acquisition cost for the 13 restaurant sites owned by the Company was
approximately $911,000. The Company has obtained financing in connection with
the acquisition of its owned properties, which financing generally has required
a down payment of 10% of the purchase price. The average annual occupancy cost
for the restaurant sites leased by the Company is approximately $103,000 per
site. The Company expects that the average cash investment required to open its
prototype restaurants, including pre-opening expenses but excluding real estate
costs, will be approximately $1.1 million or $1.6 million, depending upon
whether the Company converts an existing building or constructs a new
restaurant.

In February 1998, the Company's Board of Directors elected Vincent Tan as
Chairman of the Board of Directors of the Company. Mr. Tan replaced Tan Kim Poh
who passed away in January 1998. Vincent Tan is the Chairman and Chief Executive
Officer of Berjaya Group Berhad, a Malaysian Company which owns Berjaya, the
majority shareholder of the Company. Berjaya Group Berhad is a multibillion
dollar conglomerate with over 22,000 employees worldwide and is headquartered in
Malaysia.

In February 1998, the Company's Board of Directors elected Ayman Sabi as
President and Chief Executive Officer of the Company. Mr. Sabi served as
Chairman of the Company's Executive Committee from November 1997 to February
1998. He is also a director and shareholder of Roadhouse Grill and has
significant experience in the restaurant and retail industries.

12
<PAGE> 15
$1,800,000 with a deposit of $400,000 paid in January 1997, and the remaining
$1,400,000 payable by December 31, 1997 when the acquisition is closed and
consummated. Subsequent to December 1997, the Company negotiated the price down
to $1,600,000 and anticipates completing the purchase on August 1998.

In December 1996, the Company purchased, from an unaffiliated third party,
a 50% interest in Boca Roadhouse, L.C., a limited liability company that owns
the Boca Raton, Florida, Roadhouse Grill restaurant ("Boca"). Prior to the
acquisition, the restaurant had been a franchise managed by the Company under a
management agreement. In December 1997, operations at Boca were discontinued and
the Company sold its interest in Boca to Boca Raton Roadhouse Grill, L.C.,
recognizing a loss of $611,000.

In January 1997, the Company developed a plan to deal with the Year 2000
problem and began converting its computer systems to be Year 2000 compliant. The
plan provides for the conversion efforts to be completed by the end of 1999. The
Year 2000 problem is the result of computer programs being written using two
digits rather than four to define the applicable year. The Company believes that
it will not experience a material impact due to conversion efforts.

13
<PAGE> 16

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated certain selected
statement of operations data expressed as a percentage of total revenues:

<TABLE>
<CAPTION>
17 Weeks 17 Weeks
Fiscal Fiscal Fiscal Ended Ended
1995 1996 1997 April 27, 1997 April 26, 1998
------- ------- ------- -------------- --------------

<S> <C> <C> <C> <C> <C>
Total revenues ............................ 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Company restaurant sales:
Food and beverage ...................... 35.3 34.2 33.4 33.2 32.2
Labor and benefits ..................... 35.1 31.6 30.0 29.6 27.4
Occupancy and other .................... 23.9 20.5 18.9 18.1 20.8
Pre-opening amortization ............... 1.5 1.6 2.2 2.4 1.4
------- ------- ------- ------- -------
Total cost of Company restaurant sales 95.8 87.9 84.5 83.3 81.8

Depreciation and amortization ............. 4.9 5.0 5.4 4.8 5.7
General and administrative ................ 9.7 7.2 6.7 5.9 5.9
Impairment of long-lived assets ........... -- -- 1.2 -- --
------- ------- ------- ------- -------
Total operating expenses ............... 110.4 100.1 97.8 94.0 93.4

Operating income (loss) ................ (10.4) (0.1) 2.2 6.0 6.6
Total other income (expense) .............. 0.1 (1.3) (1.9) (0.6) (1.4)

Pretax income (loss) ...................... (10.3) (1.4) 0.3 5.4 5.2

Income tax ................................ -- -- 0.2 0.1 0.2
------- ------- ------- ------- -------

Net income (loss) ......................... (10.3)% (1.4)% 0.1% 5.3% 5.0%
======= ======= ======= ======= =======

</TABLE>

17 WEEKS ENDED APRIL 27, 1997 COMPARED TO 17 WEEKS ENDED APRIL 26, 1998

RESTAURANTS OPEN. At April 26, 1998, there were 44 Company-Owned
restaurants in operation, excluding Kendall. At April 27, 1997, there were 34
Company-Owned restaurants, excluding Kendall and Boca. (In December 1997, the
Company sold its ownership interest in the limited liability company which owned
Boca.) This represents a 29.4% increase in the number of Company-Owned
restaurants.

TOTAL REVENUES. Total revenues increased $7.4 million, or 24.4%, from $30.3
million for the 17 weeks ended April 27, 1997 to $37.7 million for the 17 weeks
ended April 26, 1998. This increase is primarily attributable to 10
Company-Owned restaurant openings. Same store sales (the 25 restaurants opened
18 months or longer) were up 0.2% reversing a three-year period of declines.
Management believes that this positive trend results from a media advertising
campaign launched in February of 1998. In the comparable period of 1997,
advertising expenditures had been curtailed. The new management team selected a
new advertising agency late in 1997 with a view toward building brand-awareness
through investment spending on media advertising in the Company's key
media-efficient markets.

OPERATING MARGINS. The new management team implemented a plan during the
transition period to improve unit economics, operating margins and overall
profitability. As a result of the execution of the plan, food and beverage costs
decreased by 1.0% point from 33.2% for the 17 weeks ended April 27, 1997 to
32.2% for the 17 weeks ended April 26, 1998. This decrease was due primarily to
improved control methods and increased management review and supervision. Labor
and benefits expense decreased by 2.2% points from 29.6% for the 17 weeks ended
April 27, 1997 to 27.4% for the 17 weeks ended April 26, 1998. This decrease was
due to the restructuring of restaurant level management, inclusion of hostesses
as tipped employees and improved productivity of the Company's in-store meat
operations. Occupancy & Other expense increased by 2.7% points from 18.1% for
the 17 weeks ended April 27, 1997 to 20.8% for the 17 weeks ended April 26, 1998
as a result of management's conscious decision to concentrate on building brand-
awareness through investment spending on production and media advertising.
Advertising expense was curtailed in the prior year's comparable period.

PRE-OPENING AMORTIZATION as a percentage of total revenues decreased by
1.0% points from 2.4% for the 17 weeks ended April 27, 1997 to 1.4% for the 17
weeks ended April 26, 1998. The decrease is due to a larger base of restaurants
open for more than one year, which no longer have pre-opening expense.

14
<PAGE> 17
DEPRECIATION AND AMORTIZATION. As a percentage of total revenues,
depreciation and amortization increased by 0.9% points from 4.8% for the 17
weeks ended April 27, 1997 to 5.7% for the 17 weeks ended April 26, 1998. This
is primarily due to the Company entering into sale-leaseback transactions for
the financing of certain restaurant furniture, fixtures and equipment. The
transactions resulted in capital leases with terms shorter than the original
lives of the furniture, fixtures and equipment.

GENERAL AND ADMINISTRATIVE. As a percentage of total revenues, general and
administrative expense was comparable for the two periods presented.

TOTAL OTHER INCOME (EXPENSE). As a percentage of total revenues, other
(expense) increased by 0.8% points from (0.6)% for the 17 weeks ended April 27,
1997 to (1.4%) for the 17 weeks ended April 26, 1998. This variance is due to an
increase in interest expense as a result of additional expansion debt financing.

TWELVE MONTHS ENDED DECEMBER 28, 1997 ("FISCAL 1997") COMPARED TO THE
TWELVE MONTHS ENDED DECEMBER 29, 1996 ("FISCAL 1996")

RESTAURANTS OPEN. At the beginning of fiscal 1997, there were 33
Company-Owned restaurants in operation (including the Kendall and Boca Raton,
Florida restaurants, which were owned by limited liability companies in which
the Company held a 50% ownership interest). During fiscal 1997, the Company
opened 11 new restaurants and sold its ownership interest in the Boca Raton
limited liability company, ending the year with 42 Company-Owned restaurants in
operation (excluding the Kendall limited liability company in which the Company
held a 50% ownership interest). This represents a 27.3% year-over-year increase
in the number of Company-Owned restaurants.

TOTAL REVENUES. Total revenues increased $30.4 million, or 48.6%, from
$62.4 million in fiscal 1996 to $92.8 million for fiscal 1997. This increase was
attributable to the opening of additional restaurants during fiscal 1997 and the
inclusion of all 13 Company-Owned restaurants added in fiscal 1996 for the
entire fiscal year ended 1997. For fiscal 1997, same-store sales decreased 3.2%
based on a restaurant base of 23 restaurants, with 22 located in Florida.

COMPANY-OPERATED MARGINS

Food and beverage costs decreased as a percentage of total revenues from
34.2% for fiscal 1996 to 33.4% in fiscal 1997. This decrease was the result of
various margin improvement initiatives, an increase in the availability of
volume discounts and a larger base of mature restaurants which have lower
average food costs than recently opened locations.

Labor and benefit costs as a percentage of total revenues decreased from
31.6% in fiscal 1996 to 30.0% in fiscal 1997. This decrease was the result of
improved productivity of the Company's in-store meat operation and the larger
base of mature restaurants which lessens the overall impact of higher labor
costs normally experienced at recently opened restaurants.

Occupancy and other costs decreased as a percentage of total revenues from
22.1% in fiscal 1996 to 21.1% in fiscal 1997. This decrease was primarily
attributable to operating efficiencies achieved in direct operating expenses and
a decrease in marketing expense partially offset by an increase in pre-opening
amortization as a percentage of sales.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization as a
percentage of total revenues increased from 5.0% for fiscal 1996 to 5.4% for
fiscal 1997. This is primarily due to the Company entering into sale-leaseback
transactions for the financing of certain restaurant furniture, fixtures and
equipment. The transactions resulted in capital leases with terms shorter than
the original lives of the furniture, fixtures and equipment; therefore,
depreciation expense increased for the year ended December 28, 1997.

GENERAL AND ADMINISTRATIVE. General and administrative expense as a
percentage of total revenues decreased from 7.2% for fiscal 1996 to 6.7% for
fiscal 1997. This decrease is a result of economies of scale attained due to a
greater number of Company-Owned restaurants in operation during fiscal 1997
compared to fiscal 1996, partially offset by severance charges totaling
$430,000.

IMPAIRMENT OF LONG-LIVED ASSETS. The Company recognized an impairment loss
of $1,120,238 relating to the write-down of assets of two Company-Owned
restaurants. The write-down was calculated according to the provisions of
Financial Accounting Standard SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed Of". This Statement
requires that long-lived assets be reviewed for impairment whenever
circumstances indicate that the carrying amount of an asset may not be
recoverable. The impairment loss to be recognized is measured by the amount by
which the carrying amount of the assets exceeds the fair value of the assets.

TOTAL OTHER INCOME (EXPENSE). As a percentage of revenues, other (expense)
increased by 0.6% points from (1.3)% for fiscal 1996 to (1.9)% for fiscal 1997.
This variance was primarily due to a loss incurred on the sale of Boca during
fiscal 1997. The loss amounted to $611,000 or 0.7% of revenues. This was
partially offset by a decrease in interest expense of 0.4% as a percent of
revenues due to higher sales volumes from new restaurants without a
corresponding increase in interest expense dollars. Also impacting this variance
is a 0.2% decrease as a percent of revenues in equity in net income of
affiliate.

15
<PAGE> 18

TWELVE MONTHS ENDED DECEMBER 29, 1996 COMPARED TO THE TWELVE MONTHS ENDED
DECEMBER 31, 1995 ("FISCAL 1995")

RESTAURANTS OPEN. At the beginning of fiscal 1996, there were 18
Company-Owned restaurants in operation (excluding the Kendall, Florida Roadhouse
Grill restaurant, which was owned by a limited liability company in which the
Company held a 50% ownership interest). At December 29, 1996, there were 32
Company-Owned restaurants in operation (excluding the Kendall and Boca Raton
limited liability companies in which the company held a 50% ownership interest),
a 77.8% year-over-year increase in the number of Company-Owned restaurants.

TOTAL REVENUES. Total revenues increased $28.1 million, or 82.2%, from
$34.3 million in fiscal 1995 to $62.4 million for fiscal 1996. This increase was
attributable to the opening of additional restaurants during fiscal 1996 and the
inclusion of all 13 Company-Owned restaurants added in fiscal 1995 for the
entire fiscal year ended 1996, and was partially offset by modest decreases in
sales at other restaurants opened during such period.

COMPANY-OPERATED MARGINS

Food and beverage costs decreased as a percentage of total revenues from
35.3% for fiscal 1995 to 34.2% in fiscal 1996. This decrease reflects, (i) the
opening of new restaurants over a larger base of Company-Owned restaurants in
operation during the fiscal year ended December 29, 1996 compared to the fiscal
year ended December 31, 1995 and (ii) a continuing decline in food costs
resulting from increased efficiencies associated with the implementation in
fiscal 1995 of detailed recipes, training manuals, inventory controls and other
management tools.

Labor and benefit costs as a percentage of total revenues decreased from
35.1% in fiscal 1995 to 31.6% in fiscal 1996. The decrease was primarily
attributable to spreading the costs associated with training managers for new
restaurants over a larger base of Company-Owned restaurants in operation during
fiscal 1996 compared to fiscal 1995.

Occupancy and other costs decreased as a percentage of total revenues from
25.4% in fiscal 1995 to 22.1% in fiscal 1996. The decreased percentage resulted
primarily from a significant increase in the percentage of restaurants owned, as
opposed to leased, by the Company during fiscal 1996, as compared to fiscal
1995.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization as a
percentage of total revenues increased from 4.9% for fiscal 1995 to 5.0% for
fiscal 1996. The increase in this percentage resulted primarily from an increase
in the percentage of restaurants owned by the Company as opposed to leased
during fiscal 1996, as compared to fiscal 1995.

GENERAL AND ADMINISTRATIVE. General and administrative expense as a
percentage of total revenues decreased from 9.7% for fiscal 1995 to 7.2% for
fiscal 1996. Economies of scale resulting from a greater number of Company-Owned
restaurants in operation during fiscal 1996 compared to fiscal 1995, were offset
by increased expenses in the latter half of fiscal 1995 associated with
increasing the management and support staff infrastructure in anticipation of
future expansion.

TOTAL OTHER INCOME (EXPENSE). Total other income (expense) decreased by
$851,000 from income of $39,000 in fiscal 1995 to expense of $812,000 in fiscal
1996. This decrease resulted primarily from interest expense incurred in
connection with the purchase of a total of ten restaurants sites during fiscal
1995 and fiscal 1996, and was partially offset by income earned by Kendall
which was accounted for under the equity method of accounting. See Note 6 of
Notes to Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

The Company requires capital principally for the opening of new restaurants
and has financed its requirements through the private placement of Common Stock
and Preferred Stock, an Initial Public Offering, bank loans, leasing facilities
and loans from certain private parties, including present and former
shareholders of the Company.

On January 8, 1998, the Company received financing commitments totaling $15
million from Finova Capital Corporation with four tranches at various interest
rates and maturity dates. Tranche one is for a total of $3.5 million, $2.9
million of which was funded on March 27, 1998. Tranche one is for a term of 10
years, with an interest rate of 8.96%, collateralized by personal property and
fixtures at four Company-Owned restaurants. The loan facility contains customary
financial covenants including minimum cash flow coverage ratio and leverage
ratio. These funds will be used for expansion of the Company. The remaining
tranches will be utilized, if necessary, throughout 1998. There can be no
assurance that these additional financings will be completed.

In September 1997, the Company entered into a $15 million loan facility
with Finova Capital Corporation. The facility consists of a 15-year term loan
collateralized by real estate with a 9.55% interest rate. The loan facility
contains customary financial covenants including minimum cash flow coverage
ratio and leverage ratio. The proceeds were used, in part, to liquidate existing
mortgages on 12 restaurants, which amounted to $7.4 million as of September 28,
1997. The remaining balance of $7.3 million, net of fees and other costs, was
used primarily for expansion of the Company.

<PAGE> 19

In June 1997 and July 1997, the Company entered into sale leaseback
agreements with unaffiliated third parties for interior furniture, fixtures and
equipment located in 11 Company-Owned restaurants. The Company received proceeds
of approximately $1.8 million and $2.3 million, respectively, net of fees and
other costs. These proceeds were used for expansion of the Company.

The Company's capital expenditures aggregated approximately $5.6 million
for the transition period, substantially all of which were used to open
Roadhouse Grill restaurants. These were partially financed by cash flows from
operations and funds received from the loan facility with Finova Capital
Corporation.

At December 28, 1997, the Company owed Berjaya, its majority shareholder,
$3,000,000 under a promissory note dated September 27, 1996, bearing interest at
8.5%. In January 1998, the Company paid $1,500,000 of the outstanding balance on
this promissory note. On February 6, 1998, the Company's Board of Directors
approved the issuance of 400,000 shares of common stock to Berjaya to convert
the remaining debt outstanding of $1,500,000 to common equity at a price of
$3.75 per share based on the closing market price as of February 6, 1998. The
transaction is expected to be consummated during the first quarter of fiscal
1999.

The Company anticipates that it will require additional financing in order
to continue to open new restaurants. The Company has identified prospective
sources of such financing including a revolving credit facility and
build-to-suit financing arrangements. There can be no guarantee or assurance
that the Company will conclude current financing discussions or that necessary
financing will otherwise be available on terms acceptable to the Company, if at
all. In the event the Company is unable to secure additional financing
sufficient to support continued growth, the Company's operating and financial
plans would require revision.

Subsequent to the transition period, the Company entered into financing
commitments of $36.5 million, which will be used by the Company for developing
new restaurants. These commitments of $16.5 million and $20 million were
obtained from Franchise Finance Corporation of America and CNL Group, Inc.,
respectively. These commitments add substantial flexibility to the Company's
current development plan allowing the Company to focus on development of sites
identified and on finding new sites for additional restaurants.

Funds available for operations and expansion of the Company at April 26,
1998 were $3.6 million. As is common in the restaurant industry, the Company has
generally operated with negative working capital ($5.9 million as of April 26,
1998). The Company does not have significant receivables (excluding a note
receivable to a related party, which was paid on July 24, 1998) nor inventory.
The Company receives trade credit on its purchases of food and supplies. There
is no assurance that these additional financings will be completed.

SEASONALITY AND QUARTERLY RESULTS

The Company's sales and earnings fluctuate seasonally. Historically, the
Company's highest earnings have occurred in its first and fourth fiscal
quarters.

On December 11, 1997, the Company's Board of Directors voted to change the
Company's fiscal year to coincide with that of the majority shareholder,
Berjaya. The new fiscal year will end on the last Sunday in April and consist of
four 13 week quarters structured as follows:

1st Quarter - May, June, July
2nd Quarter - August, September, October
3rd Quarter - November, December, January
4th Quarter - February, March, April

With the new fiscal year structure, the Company's highest earnings are
expected to occur in the third and fourth fiscal quarters. See Item 1 "Recent
Developments" for a pro forma summary of the quarterly results of operations for
the 12 months ended April 1997 and the 12 months ended April 1998 with the
quarters structured according to the new fiscal year.

In addition, quarterly results have been, and in the future are likely to
be, substantially affected by the timing of new restaurant openings. Because of
the seasonality of the Company's business and the impact of new restaurant
openings, results for any quarter are not necessarily indicative of the results
that may be achieved for a full fiscal year.

IMPACT OF INFLATION

The Company does not believe that inflation has materially affected its
results of operations during the past five fiscal years. Substantial increases
in costs and expenses, particularly food, supplies, labor and operating expenses
could have a

17
<PAGE> 20

significant impact on the Company's operating results to the extent that such
increases cannot be passed along to customers.

ACCOUNTING MATTERS

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No.
128"). This Statement specifies the computation, presentation and disclosure
requirements for earnings per share ("EPS"). It replaces the presentation of
primary and fully diluted EPS with basic and diluted EPS. Basic EPS excludes all
dilution and is based upon the weighted average number of common shares
outstanding during the year. Diluted EPS reflects the potential dilution that
would occur if securities or other contracts to issue common stock were
exercised or converted into common stock. The Company has adopted the provisions
of SFAS No. 128 which is effective for periods ending after December 15, 1997.
The Company has restated all previously reported per share amounts to conform to
the new presentation.

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 129, "Disclosure of Information about
Capital Structure" ("SFAS No. 129"), which establishes standards for disclosing
information about an entity's capital structure. This Statement is effective for
financial statements for both interim and annual periods ending after December
15, 1997. The Company adopted SFAS No.129 during fiscal 1997 and determined
there was no material impact to the Company's financial statements and notes
thereto.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130"), which establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of general-purpose financial statements. This Statement requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income, be reported in a financial statement that is
displayed with the same prominence as other financial statements. This Statement
is effective for fiscal years beginning after December 15, 1997. The Company
adopted SFAS No. 130 during fiscal 1997 and determined there was no material
impact to the Company's finanicial statements and notes thereto.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures About Segments of an
Enterprise and Related Information" ("SFAS No. 131"). This Statement supersedes
Statement of Financial Accounting Standards No. 14 and parts of various other
statements and provides accounting guidance for reporting information about
operating segments in annual financial statements by public business enterprises
and requires such enterprises to report selected information about operating
segments in interim financial reports. The Statement uses a "management
approach" to identify operating segments. Reportable segments are operating
segments that meet specified quantitative thresholds. The Statement also uses a
"management approach" for determining some of the information required to be
disclosed. This Statement is effective for fiscal years beginning after December
15, 1997. The Company adopted SFAS No. 131 during the 17 weeks ended April 26,
1998 and determined that there is no material impact to the Company's financial
statements and notes thereto.

In March 1998, the AICPA Accounting Standards Executive Committee issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 provides guidance
in determining capitalizable costs incurred in connection with the development
or acquisition of internal use software. SOP 98-1 states that certain costs
incurred during the "Application Development Stage," (design of chosen path,
coding, installation to hardware, and testing) be capitalized. These costs
include external direct costs of materials and services consumed in developing
or obtaining internal use software, payroll and payroll-related costs for
employees who are directly associated with and who devote time to the
internal-use software project, and interest cost in accordance with SFAS No. 34,
"Capitalization of Interest Costs." SOP 98-1 is effective for fiscal years
beginning after December 15, 1998. Initial application should be as of the
beginning of the fiscal year and applied to costs incurred for all projects
during that fiscal year, including projects in progress upon initial application
of SOP 98-1. The Company does not believe that the adoption of SOP 98-1 will
have a material impact on the Company's financial statements and notes thereto.

In April 1998, the AICPA Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). SOP 98-5 defines start-up activities broadly (including
organizational costs) and requires that the cost of start-up activities be
expensed as incurred. SOP 98-5 amends provisions of a number of existing SOPs
and audit and accounting guides. SOP 98-5 is effective for fiscal years
beginning after December 15, 1998. The Company's current accounting policy is to
capitalize pre-opening costs and amortize them over a one-year period. The
effect of initially applying the provisions of SOP 98-5 will be reported as a
change in accounting principle at the beginning of the period of adoption and
thereafter all such costs will be expensed as incurred. Amounts capitalized as
pre-opening costs as of April 26, 1998 were $966,688.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). This Statement establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If certain conditions are
met, a derivative may be specifically designated as (a) a hedge of the exposure
to changes in the fair value of a recognized asset or, (b) a hedge of the
exposure to variable cash flows of a forecasted transaction, or (c) a hedge of
the foreign currency exposure of a net investment in a foreign operation, an
unrecognized firm commitment, an available-for-sale security, or a
foreign-currency-denominated forecasted transaction. The accounting for changes
in the fair value of a derivative (that is, gains and losses) depends on the
intended use of the derivative and the resulting designation. This Statement
shall be effective for all fiscal quarters of all fiscal years beginning after
June 15, 1999. The Company does not believe that the adoption of SFAS No. 133
will have a material impact on the Company's financial statements and notes
thereto.

18
<PAGE> 21

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See " Index to Financial Statements" on Page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

19
<PAGE> 22
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information regarding the directors and executive officers of the Company
is as follows:

VINCENT TAN, age 46. The Company's Board of Directors elected Vincent Tan
as Chairman of the Board of Directors of the Company in February 1998. Mr. Tan
replaced Tan Kim Poh who passed away in January 1998. Vincent Tan is the
Chairman and Chief Executive Officer of Berjaya Group Berhad, a Malaysian
company which owns Berjaya, the majority shareholder of the Company.(1)

AYMAN SABI, age 34. Mr. Sabi was elected President and Chief Executive
Officer of the Company in February 1998. He served as Chairman of the Company's
Executive Committee from November 1997 to February 1998. Mr. Sabi became a
director of the Company in February 1997. He is presently the Chairman and Chief
Executive Officer of SABi Ventures, a trading, contracting and investment
company which owns, operates and invests in various restaurant and retail
concepts, both domestically and internationally. Mr. Sabi also serves, or has
served, as a member of the Board of Directors of various retail companies and
financial institutions including The White House; Tunis International Bank,
Tunisia and New Global Holdings.(1)

ALAIN K.K. LEE, age 42. Alain K.K. Lee was elected as a director of the
Company in January 1998. Mr. Lee is currently a Deputy General Manager for
Berjaya Group Berhad, a Malaysian company which owns Berjaya, the majority
shareholder of the Company. He serves on the Board of several affiliated
companies in the food industry. Mr. Lee has also served as Berjaya Group Chief
Financial Officer and Deputy Chief Executive Officer of several other Berjaya
Group companies.

PHILIP FRIEDMAN, age 51. Mr. Friedman has served as a director of the
Company since September 1996. Since January 1996, Mr. Friedman has served as
President of Panda Management, Inc. In addition, since June 1986, Mr. Friedman
has served as the President of P. Friedman & Associates, Inc., a business
planning and management consulting firm. He is Chairman of the Board of Rosti
Restaurants. Mr. Friedman is also a director of Eateries, Inc., Paramark, Inc.
and P&E Production Technology Management, Inc. On occasion, Mr. Friedman has
taken interim advisory positions with clients of P. Friedman & Associates, Inc.
and these positions have included: Advisor to the President of Roy Rogers
Restaurants (1993), Chief Financial Officer for Service America Corporation
(1990) and Executive Vice President for Sutton Place Gourmet (1988). From 1984
to 1986, Mr. Friedman was Vice President of Finance Administration and the
Senior Planning Associate of Cini-Little International, Inc. Prior to that, he
was Vice President of Planning and Vice President, Big Boy Franchising for
Marriott Corporation. Mr. Friedman held similar executive positions with
Chi-Chi's, Inc. and Pepsico's Pizza Hut division.

PHILLIP RATNER, age 53. Mr. Ratner has served as a director of the Company
since March 1997. He was the Chairman, President and Chief Executive Officer of
Spaghetti Warehouse, Inc., Garland, Texas and resigned from these positions
during the transition period. From 1984 to 1994, Mr. Ratner served in various
executive positions, including President and Chief Executive Officer in 1987,
with Acapulco Restaurants, Inc. Prior to his association with Acapulco
Restaurants, Mr. Ratner was employed by El Torito from 1979 to 1984, serving as
Executive Vice President of Operations from 1982 to 1984.

DENNIS C. JONES, age 44. Mr. Jones has served as Chief Financial Officer,
Executive Vice-President of Finance and Treasurer of the Company since March
1996. From October 1994 to January 1996, Mr. Jones served as Chief Financial
Officer of Louise's Trattoria, Inc., which operated 19 Italian restaurants,
primarily in southern California. From 1984 to October 1994, Mr. Jones was
employed by Acapulco Restaurants, Inc., which operated approximately 50 Mexican
restaurants, primarily in California, in various financial management positions,
including Chief Financial Officer from January 1991 to October 1994.

MARK SCOBEE, age 34. Mr. Scobee has served as Vice-President of Operations
of the Company since May 1998, as Vice-President of Human Resources since August
1994 and as Director of Operations since February 1993. From September 1991 to
February 1993, Mr. Scobee served as an Area Supervisor for Logan's Roadhouse,
Inc. From August 1988 to September 1991, Mr. Scobee served as a restaurant
General Manager for Thomas and King, a franchisee of Applebee's Neighborhood
Grill & Bar.

BRAD H. HABER, age 37. Mr. Haber served as Vice-President of Operations of
the Company from June 1997 to May 1998, as Vice-President of Training since
September 1996 and as Director of Training since March 1995. From February 1992
to March 1995, Mr. Haber served as Manager Training Supervisor and as a
restaurant general manager of

- ----------
1 Mr. Tan (through Berjaya Group Berhad) was an investor and a director of
Roasters Corp. ("Roasters"). Mr. Sabi (directly and through affiliates) was
also an investor in Roasters, a distressed franchisor and operator of
rotisserie chicken restaurants. To assist in resolving operating and
financial problems experienced by Roasters, and with the objective of
protecting the interests of shareholders, Mr. Sabi accepted a position as
director of Roasters. Mr. Sabi joined the board of directors in April 1997
in order to evaluate the distressed situation and provide the board with
options and alternatives for a solution. Mr. Tan and Mr. Sabi ceased to be
directors of Roasters in November 1997 and December 1997, respectively.
Efforts to improve performance were not successful and Roasters filed for
protection from creditors in March 1998 under Chapter 11 of the Bankruptcy
Code.

20
<PAGE> 23

O'Charley's Restaurants, Inc. From June 1990 to February 1992, Mr. Haber was
employed by Brinker International, Inc. as the manager of a Chili's restaurant.
Mr. Haber resigned as Vice-President of Operations of the Company in May 1998.

All directors serve until the next annual meeting of shareholders and the
election and qualification of their successors. Directors receive $2,500 for
attending each meeting.

Officers are appointed by the Board of Directors and serve at the
discretion of the Board.

The Company currently has an Audit Committee and a Compensation Committee.
During the transition period, the Board of Directors held one meeting. Neither
the Audit Committee nor the Compensation Committee held a meeting during the
transition period. Subsequent to the transition period, the Audit Committee held
one meeting on May 22, 1998.

To the Company's knowledge for the 17 weeks ended April 26, 1998, no person
who was a director, officer or beneficial owner of greater than 10% of the
Company's outstanding common stock or any other person subject to Section 16 of
the Securities and Exchange Commission act of 1934 failed to file on a timely
basis reports required by Section 16 of such act.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the amount of compensation for services
rendered in all capacities to the Company during the transition period, fiscal
1997, fiscal 1996 and fiscal 1995 by the executive officers of the Company who
received annualized compensation in excess of $100,000 during the transition
period:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------- ------------------------ --------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR(1) SALARY BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION
- --------------------------- ------- ------- ----- ------------ -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Ayman Sabi 1998 $117,692 -- -- -- -- -- --
Director, President 1997 -- -- $ 60,000(2) -- -- -- --
and Chief Executive Officer

J. David Toole III(3) 1998 -- -- -- -- -- -- --
Former Director, President 1997 296,154 $ 50,000 -- -- -- -- --
and Chief Executive Officer 1996 200,000 100,000 -- -- -- -- --
1995 120,000 34,566 -- -- -- -- --

Dennis C. Jones 1998 $ 47,306 -- -- -- -- -- --
Chief Financial Officer 1997 132,527 -- -- -- -- -- --
and Executive Vice-President 1996 72,692 -- -- -- -- -- --
1995 -- -- -- -- -- -- --

Mark Scobee 1998 $ 33,412 -- -- -- -- -- --
Vice-President of 1997 89,915 -- -- -- -- -- --
Operations 1996 78,461 -- -- -- -- -- --
1995 67,734

Brad H. Haber 1998 $ 36,681
Former Vice-President of 1997 103,373 -- -- -- -- -- --
Operations(4) 1996 73,461 -- -- -- -- -- --
1995 49,841 -- -- -- -- -- --

</TABLE>

- ----------

1 1998 amounts are for the 17 weeks ended April 26, 1998.
2 Amount represents fees paid to SABi International, a management consulting
and investment firm owned by Mr. Sabi.
3 Mr. Toole III resigned as Chief Executive Officer, President and Director
of the Company in July 1997. The compensation recorded in 1997 includes
amounts agreed upon by the Company in Mr. Toole III's separation agreement.
During 1998, the remaining amount of $84,000, based on the agreement, was
paid to Mr. Toole III. The Company accrued Mr. Toole III's entire severance
expense in 1997.
4 Mr. Haber resigned as Vice-President of Operations of the Company in May
1998.

21
<PAGE> 24

OPTIONS GRANTS TABLES

The following table sets forth information concerning the stock options
granted to the Named Executives in 1997:

OPTION GRANTS IN 1997 FISCAL YEAR
(INDIVIDUAL GRANTS)

<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL
SECURITIES UNDERLYING OPTIONS GRANTED TO EXERCISE OR BASE EXPIRATION
NAME OPTIONS GRANTED EMPLOYEES IN FISCAL YEAR PRICE ($/SH) DATE
- ---- -------------- ------------------------ ------------ ----
<S> <C> <C> <C> <C>
Dennis C. Jones 30,000 16.0% $6.75 December 2004

Mark Scobee 10,000 5.3% $6.75 December 2004

Brad H. Haber(1) 15,000 8.0% $6.75 August 1998

</TABLE>

The following table sets forth information concerning the stock options granted
to the Named Executives during the transition period:

OPTION GRANTS IN TRANSITION PERIOD
(INDIVIDUAL GRANTS)

<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL
SECURITIES UNDERLYING OPTIONS GRANTED TO EXERCISE OR BASE EXPIRATION
NAME OPTIONS GRANTED EMPLOYEES IN TRANSITION PERIOD PRICE ($/SH) DATE
- ---- -------------- ------------------------------ ------------ ----
<S> <C> <C> <C> <C>
Ayman Sabi 195,000 61.9% $3.50 February 2008

</TABLE>

OPTION REPRICING TABLE

The following table sets forth information concerning stock options that were
repriced in 1997:

OPTION REPRICING

<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF MARKET PRICE ORIGINAL
SECURITIES OF STOCK AT EXERCISE OPTION TERM
UNDERLYING TIME OF PRICE AT NEW REMAINING AT
OPTIONS REPRICING TIME OF EXERCISE DATE OF
NAME DATE REPRICED(#) ($) REPRICING PRICE($) REPRICING
- ---- ---- ----------- --- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>

Dennis C. Jones 7/2/97 16,666 $5.88 $10.80 $6.75 78 months

Mark Scobee 7/2/97 6,666 $5.88 $10.80 $6.75 78 months

Brad H. Haber(1) 7/2/97 6,666 $5.88 $10.80 $6.75 78 months

</TABLE>

- ----------

1 Mr. Haber resigned as Vice-President of Operations of the Company in May
1998. The expiration date of his options was accelerated to August 1998 in
accordance with the Company's Stock Option Plan.

22
<PAGE> 25

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Company's executive compensation program is administered by the
Compensation and Stock Option Committee (the "Committee") of the Board, which
has responsibility for all aspects of the compensation program for the executive
officers of the Company. The Committee is composed entirely of non-employee
directors who are not eligible to participate in any of the Company's executive
compensation programs.

OVERVIEW AND PHILOSOPHY

The Objectives of the Company's executive compensation programs are to:

o Attract, motivate and retain the highest quality executives.

o Align their financial interests with those of the Company's long-term
investors.

o Inspire them to achieve tactical and strategic objectives in a manner
consistent with the Company's corporate values.

In furtherance of these objectives, the Company's executive compensation
policies and programs are designed to:

o Focus participants on high priority goals to increase shareholder value.

o Encourage behaviors that exemplify the Company's core values relating to
customers, quality of performance, employees, integrity, teamwork and good
citizenship.

o Increase executive stock ownership to promote a proprietary interest in the
success of the Company.

There are two major components of the Company's executive officer
compensation: (1) base salary and (2) long-term stock incentives. Formerly, the
Company had an annual cash bonus incentive program for the President and Chief
Executive Officer.

BASE SALARY

In establishing base salaries for executive officers for the transition
period, the Committee considered (1) the significant scope of the duties and
responsibilities of each officer's position, (2) individual contributions, (3)
the increased experience level gained over the past year by those executive
officers holding new positions, (4) the Committee's overall philosophy of paying
executive officers according to a competitive framework, and (5) comparable
compensation practices in the casual dining industry.

Compensation for the transition period for Ayman Sabi, Roadhouse Grill's
President and Chief Executive Officer, consisted primarily of a base salary,
potential bonuses based on corporate performance and stock option awards. The
Committee determined Mr. Sabi's base salary for 1998 after considering several
factors, including those described above with respect to all executives under
Base Compensation. Specifically, the Committee focused on Mr. Sabi's role in the
continuing profitability of Roadhouse Grill. The Committee also focused on Mr.
Sabi's experience, the demand for executives with these skills and the Company's
desire to continue to retain his services. In addition, the Committee also
considered Mr. Sabi's commitment to the long-term success of Roadhouse Grill.
Mr. Sabi's annual compensation for 1998 is $360,000 and he was awarded stock
options to purchase 195,000 shares of common stock at $3.50 per share.

LONG-TERM STOCK INCENTIVES

The Committee believes that stock options are an important component of
executive compensation. The Company believes that stock options encourage
executive officers to remain in the Company's employ, as long-term rewards are
linked to stock price appreciation.

The Board adopted the 1994 Stock Option Plan (the "Original Plan") with an
effective date of February 14, 1994. The Board and the shareholders of the
Company amended and restated the Original Plan effective November 8, 1996 by
adopting and approving the Plan. The Plan provides for grants of nonqualified
stock options to Company employees and to non-employee officers, directors and
consultants of the Company. The Plan is administered by the Compensation and
Stock Option Committee. A maximum of 516,666 shares of common stock may be
issued pursuant to the Plan. As of April 26, 1998, options to purchase 384,260
shares were outstanding under the Plan at a weighted-average exercise price of
$6.59 per share. Except for 3,333 options which vested immediately upon their
grant, all of the options granted to date under the Plan vest over a three year
period from the date of grant, subject to the acceleration of vesting upon a
change of control of the Company.

23
<PAGE> 26

The term of the options is determined by the Committee, but in any event
may not exceed ten years from the date of grant. The exercise price, which is
the fair market value on the date of the grant, may be paid in cash, common
stock or a combination of both cash and common stock.

In addition to options that have been granted under the Plan, the Company
has granted options, which were not covered by the Plan. Options were granted to
J. David Toole, III (former President and Chief Executive Officer) to acquire up
to 166,666 shares of the Company's common stock at a price of $7.50 per share
and up to 150,000 shares of the Company's common stock at $5.58 per share. These
options had original expiration dates of September 2002 and October 2004,
respectively. Due to his resignation from the Company in July 1997, it was
determined in his severance agreement that the expiration dates for both sets of
options would be July 31, 1998. In February 1998, options were granted to the
President and Chief Executive Officer, the general counsel and a consultant of
the Company to purchase 300,000 shares of the Company's common stock at a
purchase price of $3.50 per share. According to the terms of the original
agreement, these options vested as follows: 100,000 vested at the date of grant,
100,000 vested upon attainment and maintenance of an average closing price for
the Company's common stock, over a ten day period, of at least $6.50 per share,
and the final 100,000 vested upon attainment and maintenance of an average
closing price for the Company's common stock, over a ten day period, of at least
$9.50 per share. The agreement was later amended with respect to the vesting
schedule, and the general counsel and consultant became employees of the
Company. According to the terms of the new agreement, all the options vest at
the date of grant. These options are exercisable for a period of ten years after
grant.

OTHER INFORMATION

Section 162(m) of the Internal Revenue Code places an annual limitation of
$1,000,000 on the compensation of certain executive officers of publicly held
corporations that can be deducted for federal income tax purposes unless such
compensation is based on performance. No executive officer of the Company
received annualized compensation in excess of $1,000,000 during the transition
period or in any prior year. The Company's bonus and equity-based compensation
plans are designed to meet the requirements of Section 162(m) by basing all
incentive compensation on identifiable performance criteria. The Committee does
not anticipate that any executive officer base salary will exceed $1,000,000.

VINCENT TAN ALAIN K.K. LEE PHILLIP RATNER

24
<PAGE> 27

PERFORMANCE GRAPH

The following line graph compares the percentage change in the cumulative
total return of Roadhouse Grill's ("GRLL") Common Stock, Nasdaq Combination
Composite Index and a Company compiled peer group index ("Peer Group")
consisting of Rare Hospitality International, Inc. ("RARE"); Lone Star
Steakhouse & Saloon ("STAR"); Outback Steakhouse, Inc. ("OSSI"); and Logan's
Roadhouse, Inc. ("RDHS") over the period December 29, 1997 through April 26,
1998. The graph assumes an initial investment of $100 on December 29, 1997, the
first day of the transition period, and the reinvestment of dividends, if any.

Roadhouse Grill, Inc.
Peer Company Stock Comparison for Form 10-K dated April 26, 1998

<TABLE>
<CAPTION>
Peer Grp Peer Grp GRLL Nasdaq
GRLL OSSI RARE RDHS STAR Subtotal COMP Index index Comp indx
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
29-Dec-97 3.3130 28.7500 9.0000 14.2500 17.1880 69.1880 1537.4500 1.000 1.000 1.000
30-Jan-98 3.2500 32.0000 9.6250 18.2500 18.3130 78.1880 1619.3600 1.130 0.981 1.053
27-Feb-98 4.2500 35.7500 9.8750 21.2500 21.0630 87.9380 1770.5100 1.271 1.283 1.152
31-Mar-98 3.8750 39.1250 11.8750 22.6250 22.6880 96.3130 1835.6800 1.392 1.170 1.194
24-Apr-98 4.6250 37.8750 13.3130 24.3750 20.5000 96.0630 1868.9600 1.388 1.396 1.216
</TABLE>

Nasdaq
Peer Group GRLL Composite

Dec 100.0 100.0 100.0
Jan 113.0 98.1 105.3
Feb 127.1 128.3 115.2
Mar 139.2 117.0 119.4
Apr 138.8 139.6 121.6

25
<PAGE> 28
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Board has fixed the close of business on June 10, 1998, as the record
date, on which there were outstanding 9,308,741 shares. The following table sets
forth certain information regarding the beneficial ownership of the Company's
Common Stock as of June 10, 1998 by each person known to the Company to own
beneficially more than five percent of the Company's Common Stock, each
director, each named executive, and all executive officers and directors as a
group.

COMMON STOCK
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
- ------------------------------------ ------------------ ----------------
<S> <C> <C>
Vincent Tan (1) 5,635,466 60.5%
Ayman Sabi (2) 200,000 2.2%
Arab Multinational Investment Company 160,565 1.8%
Societe Financiere Privee S.A. Geneve 411,950 4.4%
Alain K.K. Lee (3) -- --
Philip Friedman (4) 5,000 0.1%
Phillip Ratner (5) 5,000 0.1%
Dennis C. Jones (6) 22,110 0.2%
Mark Scobee (7) 12,778 0.1%
Brad H. Haber (8) 11,110 0.1%
Dr. Christian F. Horn (9) 582,922 6.3%
Berjaya Group (Cayman) Limited (1) 5,635,466 60.5%
Cupertino Ventures Partnership III, L.P. (9) 551,256 5.9%
All executive officers and directors 6,463,979 69.4%
as a group (eight persons) (1)(2)(3)(4)(5)(6)(7)(8)(10)
</TABLE>
- ----------

1 Mr. Vincent Tan was elected Chairman of the Board of Directors of the
Company in February 1998. The common stock shown above includes 5,635,466
shares beneficially owned by Berjaya Group (Cayman) Limited ("Berjaya"). As
Chairman/Chief Executive Officer of Berjaya Group Berhad, the owner of 100%
of the outstanding shares of Berjaya, Mr. Tan may be deemed to be the
beneficial owner of all of the shares owned by Berjaya in accordance with
Rule 13d-3 under the Securities and Exchange Act of 1934. Mr. Tan disclaims
ownership of the shares beneficially owned by Berjaya. The address for Mr.
Tan and Berjaya is Level 28, Menara Shahzan Insas, 30 Jalan Sultan Ismail,
50250 Kuala Lumpur, Malaysia.

2 Includes 200,000 shares beneficially owned by Mr. Sabi that are
exercisable within 60 days of the date of this Form 10-K. Mr. Sabi owns no
shares of record and (i) 160,565 shares beneficially owned by Arab
Multinational Investment Company; and (ii) 411,950 shares beneficially
owned by Societe Financiere Privee S.A. Geneve. As agent for these
entities, Mr. Sabi may be deemed to be the beneficial owner of all of the
shares owned by these entities in accordance with Rule 13d-3 under the
Securities and Exchange Act of 1934. Mr. Sabi disclaims ownership of the
shares beneficially owned by Arab Multinational Investment Company and
Societe Financiere Privee S.A. Geneve. The address for Mr. Sabi is 6600 N.
Andrews Avenue, Suite 160, Ft. Lauderdale, Florida 33309.

3 Alain K.K. Lee was elected director of the Company in January 1998. Mr. Lee
is currently a Deputy General Manager for Berjaya Group Berhad, a Malaysian
company which owns Berjaya, the majority shareholder to the Company. Mr.
Lee's address is 6600 N. Andrews Avenue, Suite 160, Ft. Lauderdale, Florida
33309.

4 Represents 5,000 shares subject to options owned by Mr. Friedman that are
exercisable within 60 days of the date of this Form 10-K. The address for
Mr. Friedman is 899 El Centro Street, South Pasadena, California 91030.

5 Represents 5,000 shares subject to options owned by Mr. Ratner that are
exercisable within 60 days of the date of this Form 10-K. The address for
Mr. Ratner is 10 Eastshore, Heath, Texas 75087.

6 Includes 21,110 shares subject to options beneficially owned by Mr. Jones
that are exercisable within 60 days of the date of this Form 10-K. The
address for Mr. Jones is 6600 N. Andrews Avenue, Suite 160, Ft. Lauderdale,
Florida 33309.

7 Represents 12,778 shares subject to options beneficially owned by Mr.
Scobee that are exercisable within 60 days of this Form 10-K. The address
for Mr. Scobee is 6600 N. Andrews Ave, Suite 160, Ft. Lauderdale, Florida
33309.

8 Represents 11,110 shares subject to options beneficially owned by Mr. Haber
that are exercisable by August 1, 1998. The address for Mr. Haber is 6600
N. Andrews Avenue, Suite 160, Ft. Lauderdale, Florida 33309.

9 Includes (i) 15,000 shares subject to options beneficially owned by Dr.
Horn that are exercisable within 60 days of the date of this Form 10-K and
(ii) 551,256 shares beneficially owned by Cupertino. As the Managing
Partner of Horn Ventures II, L.P., a general partner of Cupertino, Dr. Horn
may be deemed to the beneficial owner of all the shares owned by Cupertino
in accordance with Rule 13d-3 under the Securities Exchange Act of 1934.
Dr. Horn served as Chairman of the Board of Directors of the Company from
August 1996 to July 1997 and was a director of the Company from January
1994 to July 1997. He resigned from both capacities in July 1997. The
address for Dr. Horn and Cupertino is 20300 Stevens Creek Blvd., Suite 330,
Cupertino, California, 95014.

10 Includes 254,998 shares subject to options that are exercisable within 60
days of the date of this Form 10-K.

26
<PAGE> 29

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In fiscal 1995, the Company obtained loans in the aggregate amount of
approximately $2.5 million from John Y. Brown, Jr. During fiscal 1995, Mr. Brown
was the Chairman of the Board of Directors of the Company and was a shareholder.
In January 1996, these loans were consolidated and extended under the Company's
unsecured promissory note dated January 15, 1996, in the principal amount of
$2.5 million, bearing interest at 8.5 percent per annum, the principal of and
accrued interest on which were due and payable in full upon the closing, and
from the proceeds, of the Initial Public Offering. The funds obtained by the
Company from such loan were used to finance the opening of new restaurants. The
loan was initially unsecured but in July 1996 was cross-collateralized by the
lien granted on the additional $1.5 million loan described in the next
paragraph.

In July 1996, the Company borrowed an additional $1.5 million from Mr.
Brown under the Company's secured promissory note dated July 12, 1996, bearing
interest at 8.5 percent per annum, the principal of and accrued interest on
which were paid on August 19, 1996 from a portion of the proceeds of the
Company's $2.0 million loan from Berjaya described below. The loan, the proceeds
of which were used to finance the opening of new restaurants, was secured by a
lien on all of the furniture, fixtures and equipment located in the Company's
restaurants on July 12, 1996 that had not been previously pledged to a third
party. Following the repayment of this loan, the Company, in September 1996,
obtained a new loan from Mr. Brown in the amount of $1.5 million, which was
secured by the same collateral as the July 1996 note and which is evidenced by
the Company's promissory note dated September 5, 1996, bearing interest at 5.0
percent per annum and payable in full upon the closing of the Initial Public
Offering. The proceeds of this loan were used for general corporate purposes,
including opening new restaurants.

In July 1996, the Company borrowed $500,000 from Cupertino, a shareholder
of the Company, under the Company's unsecured promissory note dated July 15,
1996, bearing interest at 8.5 percent per annum, the principal of and accrued
interest on which were paid on August 19, 1996. The proceeds of this loan were
used to finance the opening of new restaurants. Dr. Christian F. Horn, former
Chairman of the Board of Directors of the Company, is the Managing Partner of
Horn Ventures Partners II, L.P., which is a General Partner of Cupertino.

In August 1996, the Company borrowed $2.0 million from Berjaya, the
majority shareholder of the Company, under an unsecured promissory note dated
August 16, 1996, bearing interest at 8.5 percent per annum. The proceeds of this
loan were used to liquidate the July 1996 $1.5 million loan from Mr. Brown and
the $500,000 loan from Cupertino described above. In September 1996, the Company
borrowed $3.0 million from Berjaya under an unsecured promissory note dated
September 27, 1996, bearing interest at 8.5 percent per annum. The proceeds of
this loan were used for general corporate purposes, including opening new
restaurants. In November 1997, the Company paid Berjaya $2,000,000 in order to
liquidate the promissory note dated August 16, 1996. In January 1998, the
Company paid $1,500,000 of the outstanding amount of the promissory note dated
September 1996. On February 6, 1998, the Company's Board of Directors approved
the issuance of 400,000 shares to Berjaya to convert the $1,500,000 debt
outstanding to common equity at a price of $3.75 per share, based on the closing
market price as of February 6, 1998. Vincent Tan, the Chairman of the Board of
Directors of the Company, is Chairman and Chief Executive Officer of Berjaya
Group Berhad.

Berjaya owns Roadhouse Grill Hong Kong and Roadhouse Grill Asia. In January
1996, the Company entered into a Master Development Agreement with Roadhouse
Grill Hong Kong which provides for the development and franchising of Roadhouse
Grill restaurants in Hong Kong. Under the agreement, Roadhouse Grill Hong Kong
is not required to develop any specific number of restaurants in Hong Kong, but
any restaurants that it develops are credited against the development
obligations of Roadhouse Grill Asia under Roadhouse Grill Asia's Master
Development Agreement with the Company. Roadhouse Grill Hong Kong is not
required to pay any franchise or reservation fee for restaurants that it
develops, but it is responsible for paying or reimbursing approved expenses
incurred by the Company in connection with the opening of each restaurant. In
addition, Roadhouse Grill Hong Kong was required to pay a royalty in connection
with the operation of each of its restaurants in the amount of 2% of gross sales
for each restaurant's first three years of operation and 3% thereafter.
Effective December 1, 1997, the agreement was amended with respect to royalty
fees. The royalty fees will remain at 2% of gross sales for the life of the
agreement. Under certain circumstances, Roadhouse Grill Hong Kong or the Company
was able to grant franchises to third parties in Hong Kong. In that event, the
Company was entitled to receive 50% of any franchise and reservation fees and
50% of any royalty fee payable by the third party franchisee, subject to
limitations on the amounts payable to the Company of $10,000 per restaurant in
the case of franchise and reservations fees and 2.5 % of gross sales in the case
of royalty fees. Effective December 1, 1997, the agreement was amended to allow
the Company to receive 40% of any royalty fee payable by the third party
franchisee, subject to a limitation of 2% of gross sales. Amounts for franchise
and reservation fees were unchanged.

27
<PAGE> 30
agreement, Roadhouse Grill Asia is required to open and maintain at least thirty
Roadhouse Grill restaurants during the first ten years of the term of the
agreement, with a minimum of two restaurants to be developed each year. Under
certain circumstances, Roadhouse Grill Asia or the Company may grant franchises
to third parties in the territory. The fee arrangement under the agreement is
substantially the same as those under the agreement between the Company and
Roadhouse Grill Hong Kong.

During the fourth quarter of 1997, the Company engaged National Retail
Group Inc. ("NRG"), a real estate and retailing consulting firm, and SABi
International Developments, Inc. ("SABi"), a management consulting and
investment firm, to provide specified real estate development and management
consulting services to the Company, addressing problems from previous management
actions. SABi is wholly-owned by Ayman Sabi. NRG is an affiliate of Ayman Sabi.
Mr. Sabi was and remains a director of the Company, was Chairman of the
Company's Executive Committee from November 1997 to February 1998, and was
elected President and Chief Executive Officer of the Company on February 6,
1998. During fiscal 1997, the Company paid fees and reimbursed expenses in the
aggregate amounts of $168,214 and $60,000 to NRG and SABi, respectively. During
the transition period, the Company paid fees and reimbursed expenses in the
aggregate amount of $141,048 to NRG. The Company did not make any payments to
SABi during the 17 weeks ended April 26, 1998. The Company believes amounts paid
for services rendered by NRG and SABi were fair and competitive, and represented
the fair market value of such services.

On April 13, 1998, the Company issued a promissory note to Berjaya for
$1,000,000, with an annual interest rate of 10.55%. The note was scheduled to be
repaid on June 15, 1998. The Company extended payment of the note to July 24,
1998, at which date the note was paid.

28
<PAGE> 31

PART IV

ITEM 14. FINANCIAL STATEMENTS AND EXHIBITS

(a) List of documents filed as part of this report:

1. Financial Statements

The Financial Statements are listed in the accompanying "Index to
Financial Statements" on Page F-1.

2. Financial Statement Schedules

Financial Statement Schedules are listed in the accompanying "Index to
Financial Statements" on Page F-1

3. Exhibits

The exhibits filed with or incorporated by reference in this report
are listed on the Exhibit Index beginning on page E-1.

(b) Reports on Form 8-K:

The Company filed no reports on Form 8-K during the period covered by
this Form 10-K.

29
<PAGE> 32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, on this 27th day of
July, 1998.

ROADHOUSE GRILL, INC.

By: /s/ AYMAN SABI
----------------------------------
Ayman Sabi
President, Chief Executive Officer
and Director

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----

<S> <C> <C>
/s/ AYMAN SABI President, Chief Executive July 27, 1998
--------------------------------- Officer and Director
Ayman Sabi (Principal Executive Officer)

/s/ DENNIS C. JONES Chief Financial Officer July 27, 1998
--------------------------------- (Principal Financial Officer
Dennis C. Jones and Principal Accounting Officer)
Director

/s/ VINCENT TAN Chairman of the Board July 27, 1998
--------------------------------- of Directors
Vincent Tan

/s/ PHILIP FRIEDMAN July 27, 1998
--------------------------------- Director
Philip Friedman

/s/ PHILLIP RATNER Director July 27, 1998
-----------------------------------
Phillip Ratner

/s/ ALAIN K.K. LEE Director July 27, 1998
-----------------------------------
Alain K.K. Lee

</TABLE>

30
<PAGE> 33

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report ....................................................................... F-2

Balance Sheets as of December 28, 1997 and April 26, 1998 .......................................... F-3

Statements of Operations for the Fiscal Years Ended December 31, 1995, December 29, 1996,
December 28, 1997 and for the 17 weeks ended April 26, 1998 .................................... F-4

Statements of Changes in Shareholders' Equity for the Fiscal Years Ended December 31, 1995,
December 29, 1996, December 28, 1997 and for the 17 weeks ended April 26, 1998 ................. F-5

Statements of Cash Flows for the Fiscal Years Ended December 31, 1995, December 29, 1996,
December 28, 1997 and for the 17 weeks ended April 26, 1998 .................................... F-6

Notes to Financial Statements ...................................................................... F-7

</TABLE>

F-1
<PAGE> 34

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Roadhouse Grill, Inc.:

We have audited the accompanying balance sheets of Roadhouse Grill, Inc. as of
December 28, 1997 and April 26, 1998 and the related statements of operations,
shareholders' equity and cash flows for each of the years in the three year
period ended December 28, 1997 and the 17 weeks ended April 26, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Roadhouse Grill, Inc. as of
December 28, 1997 and April 26, 1998 and the results of its operations and its
cash flows for each of the years in the three year period ended December 28,
1997 and the 17 weeks ended April 26, 1998 in conformity with generally accepted
accounting principles.

KPMG Peat Marwick LLP

July 24, 1998
Miami, Florida

F-2
<PAGE> 35

ROADHOUSE GRILL, INC.

BALANCE SHEETS
December 28, 1997 and April 26, 1998

<TABLE>
<CAPTION>
December 28, April 26,
1997 1998
------------ ------------
<S> <C> <C>
Assets

Current assets:
Cash and cash equivalents .................................. $ 3,733,390 $ 3,554,875
Accounts receivable ........................................ 162,815 242,381
Inventory .................................................. 930,580 939,169
Due from related party ..................................... -- 1,000,000
Current portion of note receivable ......................... 80,371 182,536
Pre-opening costs, net ..................................... 1,104,080 966,688
Deferred tax assets, net ................................... -- 421,000
Prepaid expenses ........................................... 814,910 542,031
------------ ------------
Total current assets .................................... 6,826,146 7,848,680

Note receivable .............................................. 139,804 111,557
Property & equipment, net .................................... 63,434,855 66,898,728
Intangible assets, net of accumulated amortization of $161,341
and $120,652 at December 28, 1997 and April 26, 1998,
respectively ............................................... 839,101 614,551
Other assets ................................................. 3,558,444 4,022,865
Investment in and advances to affiliates ..................... 633,194 611,710
------------ ------------

Total assets ........................................... $ 75,431,544 $ 80,108,091
============ ============

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable ........................................... $ 3,760,665 $ 4,857,804
Accrued expenses ........................................... 4,352,536 5,459,569
Due to related party ....................................... 3,000,000 1,500,000
Current portion of long-term debt .......................... 463,862 687,788
Current portion of capital lease obligations ............... 1,134,723 1,207,367
------------ ------------
Total current liabilities .............................. 12,711,786 13,712,528

Long-term debt ............................................... 14,651,376 16,906,928
Capital lease obligations .................................... 6,773,662 6,335,004
------------ ------------

Total liabilities ....................................... 34,136,824 36,954,460

Shareholders' equity:
Common stock $.03 par value. Authorized 30,000,000 shares;
issued and outstanding 9,305,408 ........................... 279,162 279,162
Additional paid-in capital ................................. 48,535,944 48,535,944
Accumulated deficit ........................................ (7,520,386) (5,661,475)
------------ ------------

Total shareholders' equity .............................. 41,294,720 43,153,631
Commitments and contingencies (note 12 and 13) ............... -- --
------------ ------------
Total liabilities and shareholders' equity ................... $ 75,431,544 $ 80,108,091
============ ============

</TABLE>

See accompanying notes to financial statements.

F-3

<PAGE> 36

ROADHOUSE GRILL, INC.

STATEMENTS OF OPERATIONS

For the fiscal years ended December 31, 1995, December 29, 1996, December 28,
1997 and for the 17 weeks ended April 26, 1998

<TABLE>
<CAPTION>
December 31, December 29, December 28, April 26,
1995 1996 1997 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Total revenue .................................... $ 34,275,496 $ 62,433,131 $ 92,795,056 $ 37,684,203

Cost of restaurant sales:
Food and beverage ............................. 12,084,134 21,381,810 30,991,210 12,129,493
Labor and benefits ............................ 12,019,723 19,748,626 27,849,037 10,340,174
Occupancy and other ........................... 8,197,699 12,747,007 17,577,212 7,855,818
Pre-opening amortization ...................... 512,898 1,026,525 2,021,114 520,240
------------ ------------ ------------ ------------

Total cost of restaurant sales ................ 32,814,454 54,903,968 78,438,573 30,845,725

Depreciation and amortization .................... 1,662,650 3,136,272 4,980,469 2,145,076
General and administrative ....................... 3,327,680 4,470,900 6,207,580 2,210,483
Impairment of long-lived assets .................. -- -- 1,120,238 --
------------ ------------ ------------ ------------

Total operating expenses ..................... 37,804,784 62,511,140 90,746,860 35,201,284
------------ ------------ ------------ ------------

Operating income (loss) ....................... (3,529,288) (78,009) 2,048,196 2,482,919

Other income (expense):
Interest expense, net ......................... (404,009) (1,296,393) (1,552,496) (718,511)
Equity in net income of affiliates ............ 284,241 206,489 61,892 57,012
Other, net .................................... 159,152 277,983 320,408 118,647
Loss on sale of investment in affiliate ....... -- -- (610,550) --
------------ ------------ ------------ ------------

Total other income (expense) ............. 39,384 (811,921) (1,780,746) (542,852)
------------ ------------ ------------ ------------

Pretax income (loss) .......................... (3,489,904) (889,930) 267,450 1,940,067

Income tax .................................... -- -- 175,705 81,156
------------ ------------ ------------ ------------

Net income (loss) ........................ $ (3,489,904) $ (889,930) $ 91,745 $ 1,858,911
============ ============ ============ ============

Basic and diluted net income (loss) per
common share ..................................... $ (1.00) $ (0.18) $ 0.01 $ 0.20
============ ============ ============ ============

Weighted average common shares
outstanding ...................................... 3,496,570 4,909,894 9,305,408 9,305,408
============ ============ ============ ============

Weighted average common shares and
share equivalents outstanding - assuming
dilution ......................................... 3,496,570 4,909,894 9,305,408 9,326,642
============ ============ ============ ============

</TABLE>

See accompanying notes to financial statements.

F-4
<PAGE> 37

ROADHOUSE GRILL, INC.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the fiscal years ended December 31, 1995, December 29, 1996, December 28,
1997 and for the 17 weeks ended April 26, 1998

COMMON STOCK PREFERRED STOCK
SHARES AMOUNT SHARES AMOUNT
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Balance January 1, 1995 ................... 3,181,482 $ 95,444 5,875,025 $ 58,750

Issuance of common stock ............... 620,264 18,618 -- --
Stock options exercised ................ 118,518 3,556 -- --
Stock options outstanding .............. -- -- -- --
Deferred compensation .................. -- -- -- --
Net loss ............................... -- -- -- --
--------- ------------ --------- ------------

Balance December 31, 1995 ................. 3,920,624 117,618 5,875,025 58,750

Issuance of common stock ............... 3,287,030 98,612 -- --
Conversion of Series A to common .......
shares .......................... 1,175,000 35,250 (3,525,000) (35,250)
Conversion of Series B to common
shares .......................... 922,754 27,682 (2,350,025) (23,500)
Deferred compensation .................. -- -- -- --
Net loss ............................... -- -- -- --
--------- ------------ --------- ------------

Balance December 29, 1996 ................. 9,305,408 279,162 -- --

Deferred compensation .................. -- -- -- --
Net income ............................. -- -- -- --
--------- ------------ --------- ------------

Balance December 28, 1997 ................. 9,305,408 279,162 -- --
Net income ............................. -- -- -- --
--------- ------------ --------- ------------

Balance April 26, 1998 .................... 9,305,408 $ 279,162 -- $ --
========= ============ ========= ============

</TABLE>

<TABLE>
<CAPTION>
ADDITIONAL
PAID-IN ACCUMULATED
CAPITAL DEFICIT TOTAL
------------ ------------ ------------
<S> <C> <C> <C>
Balance January 1, 1995 ................... $ 20,717,368 $ (3,232,297) $ 17,639,265

Issuance of common stock ............... 6,000,573 -- 6,019,191
Stock options exercised ................ 49,777 -- 53,333
Stock options outstanding .............. 118,800 -- 118,800
Deferred compensation .................. (79,200) -- (79,200)
Net loss ............................... -- (3,489,904) (3,489,904)
------------ ------------ ------------

Balance December 31, 1995 ................. 26,807,318 (6,722,201) 20,261,485

Issuance of common stock ............... 21,590,608 -- 21,689,220
Conversion of Series A to common .......
shares .......................... -- -- --
Conversion of Series B to common
shares .......................... (4,182) -- --
Deferred compensation .................. 39,600 -- 39,600
Net loss ............................... -- (889,930) (889,930)
------------ ------------ ------------

Balance December 29, 1996 ................. 48,433,344 (7,612,131) 41,100,375

Deferred compensation .................. 102,600 -- 102,600
Net income ............................. -- 91,745 91,745
------------ ------------ ------------

Balance December 28, 1997 ................. 48,535,944 (7,520,386) 41,294,720
Net income ............................. -- 1,858,911 1,858,911
------------ ------------ ------------

Balance April 26, 1998 .................... $ 48,535,944 $ (5,661,475) $ 43,153,631
============ ============ ============

</TABLE>

See accompanying notes to financial statements.

F-5

<PAGE> 38

ROADHOUSE GRILL, INC.
STATEMENTS OF CASH FLOWS

For the fiscal years ended December 31, 1995, December 29, 1996, December 28,
1997 and for the 17 weeks ended April 26, 1998

<TABLE>
<CAPTION>
December 31, December 29, December 28, April 26,
1995 1996 1997 1998
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net income (loss) ................................................... $ (3,489,904) $ (889,930) 91,745 1,858,911
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization ..................................... 2,175,548 4,162,797 7,001,583 2,665,316
Deferred tax benefit............................................... -- -- -- (421,000)
Noncash compensation expense ...................................... 39,600 39,600 102,600 --
Equity in net income of affiliate ................................. (284,241) (206,489) (61,892) (57,012)
Impairment of long-lived assets ................................... -- -- 1,120,238 --
Loss on sale of investment in affiliate ........................... -- -- 610,550 --
Changes in assets and liabilities, net of acquisitions of
businesses:
Decrease (increase) in accounts receivable ........................ 133,868 (76,716) 79,218 (79,566)
(Increase) in inventory ........................................... (300,608) (408,640) (116,355) (8,589)
(Increase) in pre-opening costs ................................... (763,839) (2,218,197) (1,616,884) (382,848)
(Increase) in other assets ........................................ (882,068) (176,422) (1,911,280) (478,347)
Decrease (increase) in prepaid expense ............................ (85,342) (336,880) (237,027) 272,879
(Decrease) increase in accounts payable ........................... 911,772 3,414,788 (1,486,073) 1,097,139
(Decrease) increase in accrued expenses ........................... 1,760,798 759,644 1,361,504 1,107,033
------------ ------------ ------------ -----------
Net cash provided by (used in) operating activities ............. (784,416) 4,063,555 4,937,927 5,573,916
------------ ------------ ------------ -----------

Cash flows from investing activities
Dividends received from affiliate ................................... -- -- 58,335 70,002
Advances to affiliates, net ......................................... 26,031 (222,120) (41,241) 8,494
Payments for intangibles ............................................ -- (54,570) (30,912) (4,761)
Issuance of note to related party ................................... -- -- -- (1,000,000)
Issuance of promissory note ......................................... -- -- -- (100,000)
Proceeds from payment on notes receivable ........................... 49,235 46,362 74,998 26,082
Proceeds from sale-leaseback transactions ........................... 1,185,960 395,164 4,286,578 --
Purchase of property and equipment .................................. (14,541,042) (19,859,672) (15,192,521) (5,594,988)
Acquisition of restaurants .......................................... (3,000,000) (480,000) --
Deposit on Kendall restaurant acquisition ........................... -- -- (400,000) --
Capital contribution to affiliate ................................... -- (75,000) (25,351) --
------------ ------------ ------------ -----------

Net cash used in investing activities ........................... (16,279,816) (20,249,836) (11,270,114) (6,595,171)
------------ ------------ ------------ -----------

Cash flows from financing activities
Proceeds from short-term debt and amounts due to related parties .... 6,615,000 7,000,000 -- --
Repayments of amounts due to related parties ........................ -- (4,600,000) (2,000,000) (1,500,000)
Proceeds from long-term debt ........................................ -- -- 15,000,000 2,880,000
Repayments of long-term debt ........................................ (407,977) (694,459) (8,542,148) (171,246)
Payments on capital lease obligations ............................... (144,765) (256,381) (649,432) (366,014)
Proceeds from issuance of common and preferred stock ................ 6,072,524 18,189,235 -- --
------------ ------------ ------------ -----------

Net cash provided by financing activities ......................... 12,134,782 19,638,395 3,808,420 842,740
------------ ------------ ------------ -----------

Increase (decrease) in cash and cash equivalents ....................... (4,929,450) 3,452,114 (2,523,767) (178,515)
Cash and cash equivalents at beginning of year ......................... 7,734,493 2,805,043 6,257,157 3,733,390
------------ ------------ ------------ -----------
Cash and cash equivalents at end of year ............................... $ 2,805,043 $ 6,257,157 $ 3,733,390 3,554,875
============ ============ ============ ===========
Supplementary disclosures:
Interest paid ....................................................... $ 525,276 $ 1,369,897 $ 2,215,401 808,822
============ ============ ============ ===========
Income taxes paid ................................................... $ -- $ -- $ 155,836 $ 22,800
============ ============ ============ ===========

</TABLE>

Noncash investing and financing activities:

During the fiscal year ended December 31, 1995, the Company entered into
capital leases for property and equipment in the amount of $4,100,000. In
addition, the Company entered into mortgage notes payable amounting to
approximately $2,000,000 during the fiscal year ended December 31, 1995. The
Company assumed $270,000 in debt in connection with the assumption of a lease
from a third party.

During the fiscal year ended December 29, 1996, $3,500,000 of long-term debt
was converted to common stock. The Company entered into capital lease
obligations and seller financing mortgage agreements of $44,000 and $2,144,070,
respectively, during the period from January 1, 1996 to December 29, 1996.

See accompanying notes to financial statements.

F-6
<PAGE> 39

ROADHOUSE GRILL, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 1995, December 29, 1996, December 28, 1997 and April 26, 1998

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) BUSINESS

Roadhouse Grill, Inc. (the "Company") was incorporated under the laws of
the state of Florida in 1992. The principal business of the Company is the
operation of specialty restaurants. The Company has also granted franchises and
licenses to operate restaurants under the "Roadhouse Grill" name.

As of April 26, 1998, Roadhouse Grill, Inc. owns and operates 44 and
franchises three full-service, casual dining restaurants under the name
"Roadhouse Grill". The Company was incorporated in October 1992 and opened the
first Company-Owned restaurant in Pembroke Pines, Florida in March of 1993.
Since then, the Company has opened 43 more restaurants in Florida, Georgia,
South Carolina, Mississippi, Louisiana, Arkansas, Alabama, New York and Ohio.
The Company has a 50 percent interest in a limited liability company which owns
the Kendall, Florida restaurant ("Kendall"). The Company manages the operations
of the Kendall restaurant pursuant to its operating agreement. Under this
operating agreement, the Company receives management fees and is allocated its
share of the restaurant's profits and losses. Two franchised locations are
located in Kuala Lumpur, capital city of Malaysia, and one domestic
franchise is located in Las Vegas, Nevada.

On December 11, 1997, the Company's Board of Directors voted to change the
Company's fiscal year to coincide with that of the majority shareholder, Berjaya
Group (Cayman) Limited ("Berjaya"). The new fiscal year will end on the last
Sunday in April.

During 1997, the Company had four restaurants licensed by Buffets, Inc.
During the 17 weeks ended April 26, 1998, the Company dissolved its licensee
arrangement with Buffets, Inc. Buffets, Inc. will discontinue using the
Roadhouse Grill name in its present form and there are no future liabilities on
either company's part.

During 1997, the Company also had a 50 percent interest in Boca Raton
Roadhouse Grill, L.C., a limited liability company that owned the Boca Raton,
Florida Roadhouse Grill restaurant ("Boca"). In December 1997, operations at the
Boca restaurant were discontinued and the Company sold its interest in Boca to
Boca Raton Roadhouse Grill, L.C. The Company recognized a loss of $611,000 on
the sale of its fifty percent interest. During 1997, the Company managed the
operations of Boca pursuant to its operating agreement. Under such operating
agreement, the Company received management fees and was allocated its share of
the restaurant's profits and losses.

(B) INVESTMENT IN AFFILIATES

The Company's 50 percent interest in Kendall is accounted for under the
equity method.

Property and equipment are carried at cost less accumulated depreciation.
The cost of restaurants held under capital leases is recorded at the lower of
the net present value of the minimum lease payments or the fair value of the
leased property at the inception of the lease. Repairs and maintenance are
charged to expense as incurred. Major renewals and betterments, which
substantially extend the useful life of the property, are capitalized and
depreciated over the useful life of the asset. When assets are retired or
otherwise disposed of, the cost and accumulated depreciation are removed from
their respective accounts and any gain or loss is recognized.

Depreciation is calculated using the straight-line method over the
estimated useful lives of the assets. Amortization of capitalized leased assets
is calculated using the straight-line method over the shorter of the estimated
useful life of the leased asset or the lease term.

The Company adopted the provisions of SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of", on
January 1, 1996. This Statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to the fair value of an asset. If
such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell. The adoption of this
Statement did not have a material impact on the Company's financial position or
results of operations. During the fourth

F-7
<PAGE> 40

quarter of 1997, the Company recognized an impairment loss of $1,120,238 for the
write-down of assets at two Company-Owned restaurants.

(D) INTANGIBLE ASSETS

Intangible assets consist primarily of goodwill recorded as a result of a
restaurant acquisition in 1995 (see Note 13) and are being amortized on a
straight-line basis over 17 years, which is the lease term of the respective
restaurant property. The Company evaluates whether changes have occurred that
would require revision of the remaining estimated useful life of the assigned
goodwill or render goodwill not recoverable. If such circumstances arise, the
Company uses undiscounted future cash flows to determine whether the goodwill is
recoverable.

(E) CASH AND CASH EQUIVALENTS

The Company considers all short-term investments with an original maturity
of three months or less to be cash equivalents.

(F) INVENTORY

Inventories are valued at the lower of cost (based on first-in, first-out
inventory costing) or net realizable value and consist primarily of restaurant
food items, beverages and paper supplies.

(G) INCOME TAXES

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

(H) PRE-OPENING COSTS

Pre-opening costs are costs incurred in the opening of new stores
(primarily payroll costs) which are capitalized and amortized over a one-year
period commencing with the first full period after the new restaurant opens.

Deferred costs related to sites subsequently determined to be
unsatisfactory, and general site selection costs which cannot be identified with
a specific restaurant, are charged to operations.

(I) FISCAL YEAR

The Company's fiscal year ends on the last Sunday in April.

(J) USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

(K) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of financial instruments have been determined
based on available information and appropriate valuation methodologies. The
carrying amounts of accounts receivable, accounts payable and accrued expenses
approximate fair value due to the short-term nature of the accounts. The fair
value of long-term debt is estimated based on market rates of interest currently
available to the Company. The fair value of long-term debt at December 28, 1997
and April 26, 1998 is approximately $15,115,238 and $17,594,716, respectively.

(L) REVENUE RECOGNITION

Total revenues include sales at Company-Owned restaurants, royalties
received from restaurants operating under franchise agreements, and fees earned
under management agreements. Revenue earned from the game rooms and vending
machines in the restaurants is included in other income.

(M) NEW ACCOUNTING STANDARDS

In February 1997, Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 129, "Disclosure of Information
about Capital Structure" ("SFAS No. 129"), which establishes standards for
disclosing information about an entity's capital structure. This Statement is
effective for financial statements for both interim and annual periods ending
after December 15, 1997. The Company adopted SFAS No. 129 during fiscal 1997 and
determined there was no material impact to the Company's financial statements
and notes thereto.

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"), which establishes
standards for reporting and display of comprehensive income and its

F-8
<PAGE> 41
components (revenues, expenses, gains, and losses) in a full set of
general-purpose financial statements. This Statement requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income, be reported in a financial statement that is displayed
with the same prominence as other financial statements. This Statement is
effective for fiscal years beginning after December 15, 1997. The Company
adopted SFAS No. 130 during fiscal 1997 and determined there was no material
impact to the Company's financial statements and notes thereto.

In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
No. 133"). This Statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. If certain conditions are met, a derivative may be
specifically designated as (a) a hedge of the exposure to changes in the fair
value of a recognized asset or, (b) a hedge of the exposure to variable cash
flows of a forecasted transaction, or (c) a hedge of the foreign currency
exposure of a net investment in a foreign operation, an unrecognized firm
commitment, an available-for-sale security, or a foreign-currency-denominated
forecasted transaction. The accounting for changes in the fair value of a
derivative (that is, gains and losses) depends on the intended use of the
derivative and the resulting designation. This Statement shall be effective for
all fiscal quarters of all fiscal years beginning after June 15, 1999. The
Company does not believe that the adoption of SFAS No. 133 will have a material
impact on the Company's financial statements and notes thereto.

(N) NET INCOME (LOSS) PER COMMON SHARE

In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("SFAS No. 128"). This Statement
specifies the computation, presentation and disclosure requirements for earnings
per share ("EPS"). It replaces the presentation of primary and fully diluted EPS
with basic and diluted EPS. Basic EPS excludes all dilution and is based upon
the weighted average number of common shares outstanding during the year.
Diluted EPS reflects the potential dilution that would occur if securities or
other contracts to issue common stock were exercised or converted into common
stock. The Company has adopted the provisions of SFAS No. 128 which is effective
for periods ending after December 15, 1997. The Company has restated all
previously reported per share amounts to conform to the new presentation.

F-9

<PAGE> 42
On October 9, 1996, the Board of Directors declared a one-for-three reverse
stock split (see Note 8). All per share data appearing in the financial
statements have been retroactively adjusted for the reverse split.

(O) ADVERTISING COSTS

During 1995, the Company adopted Statement of Position 93-7, "Reporting on
Advertising Costs" ("SOP 93-7"). The adoption of SOP 93-7 did not have a
material impact on the Company's financial position or results of operations.
The Company expenses all advertising costs as incurred. Advertising expense for
the fiscal years ending December 31, 1995, December 29, 1996, December 28, 1997
and for the 17 weeks ended April 26, 1998 amounted to approximately $1,273,000,
$1,378,000, $1,127,000 and $1,394,000, respectively. Advertising expense is
included within "occupancy and other" in the accompanying Statements of
Operations.

(P) RECLASSIFICATIONS

Certain prior year balances have been reclassified to conform to the
current presentation.

F-10
<PAGE> 43

(2) COMPARATIVE STATEMENT OF OPERATIONS

The following represents the Company's (unaudited) Comparative Statement of
Operations for the 17 weeks ended April 27, 1997:

<TABLE>
<CAPTION>
(in thousands, except per share data)
April 27,
1997
-------------
<S> <C>
Total revenue .................................... $ 30,285

Cost of restaurant sales:
Food and beverage ............................. 10,056
Labor and benefits ............................ 8,957
Occupancy and other ........................... 6,214
-------------

Total cost of restaurant sales ................ 25,227

Depreciation and amortization .................... 1,454
General and administrative ....................... 1,773
-------------

Total operating expenses ..................... 28,454
-------------

Operating income .............................. 1,831

Other income (expense):
Interest expense, net ......................... (347)
Equity in net income of affiliates ............ 29
Other, net .................................... 110
Loss on sale of investment in affiliate ....... --
-------------

Total other (expense) .................... (208)
-------------

Pretax income ................................. 1,623

Income tax .................................... 40
-------------

Net income ............................... $ 1,583
=============

Basic and diluted net income per
common share ..................................... $ 0.17
=============

Weighted average common shares
outstanding ...................................... 9,305,408
=============

Weighted average common shares and
share equivalents outstanding - assuming
dilution ......................................... 9,315,307
=============

</TABLE>

The unaudited Statement of Operations for the 17 weeks ended April 27,
1997 reflects all adjustments which are, in the opinion of management, necessary
to a fair statement of operations for the 17 weeks ended April 27, 1997.

F-11
<PAGE> 44

(3) PROPERTY AND EQUIPMENT

Property and equipment, net, consist of the following at:

<TABLE>
<CAPTION>
DECEMBER 28, APRIL 26, ESTIMATED
1997 1998 USEFUL LIVES
----------- ----------- ------------
<S> <C> <C> <C>
Building .......................... $18,459,424 $18,350,737 20 years
Land .............................. 11,848,765 11,698,765 -
Furniture and equipment ........... 17,867,811 20,031,354 3-7 years
Leasehold improvements ............ 23,614,442 25,750,918 7-10 years
----------- -----------

71,790,442 75,831,774

Less accumulated depreciation ..... 9,373,710 11,371,273
----------- -----------
62,416,732 64,460,501

Construction in progress .......... 1,018,123 2,438,227
----------- -----------
$63,434,855 $66,898,728
=========== ===========

</TABLE>

Included in property and equipment are buildings and equipment under
capital leases of $8,937,819 and $8,924,883 at December 28, 1997 and April 26,
1998, respectively (see Note 4). The Company capitalized interest costs of
approximately $394,000 and $51,598 during the fiscal period ended December 28,
1997 and the 17 weeks ended April 26, 1998, respectively, with respect to
qualifying construction projects.

(4) CAPITAL LEASES

The following is a schedule of future minimum lease payments required under
capital leases as of April 26, 1998:

<TABLE>
<S> <C>
1999 .................................................. $ 2,027,522
2000 .................................................. 2,033,329
2001 .................................................. 1,757,012
2002 .................................................. 1,122,166
2003 .................................................. 479,694
Thereafter ............................................ 4,637,146
-----------
Total minimum lease payments .......................... 12,056,869
Less amount representing interest at varying rates
ranging from 9.5 percent to 13 percent .............. 4,514,498
-----------

Present value of net minimum capital lease payments ... 7,542,371

Less current portion of capital lease obligations ..... 1,207,367
-----------
Minimum capital lease obligations excluding current
portion .............................................. $ 6,335,004
===========

</TABLE>

During the fiscal year ended December 28, 1997, the Company entered into
several agreements for the sale and leaseback of restaurant equipment for a
period of forty-eight months at five Company restaurants and sixty months at six
Company restaurants, which were recorded as capital leases. The equipment was
sold at book value of approximately $4,286,000. The restaurants had been opened
for less than a year and had minimal accumulated depreciation, as such, no
material gain or loss resulted from the transaction.

F-12
<PAGE> 45

(5) OPERATING LEASES

The Company leases the majority of its operating restaurant facilities. The
lease terms range from 5 to 10 years and generally provide for renewal options
extending the lease term to 20 years.

The following is a schedule of future minimum lease payments required under
operating leases that have remaining noncancelable lease terms in excess of one
year as of April 26, 1998:

1999 .............................. $ 3,194,593
2000 .............................. 3,094,560
2001 .............................. 3,052,914
2002 .............................. 2,966,274
2003 .............................. 2,921,966
Thereafter ........................ 14,008,876
-----------
Total minimum lease payments ...... $29,239,183
===========

The total rent expense for operating leases was $1,524,900, $1,719,900,
$3,900,700 and $1,225,300 for fiscal 1995, fiscal 1996, fiscal 1997 and the 17
weeks ended April 26, 1998, respectively.

F-13
<PAGE> 46
(6) INVESTMENT IN AND ADVANCES TO AFFILIATES

As discussed in Note 1(a), the Company had a 50 percent interest in Boca at
December 29, 1996, and a 50 percent interest in Kendall at December 31, 1995,
December 29, 1996, December 28, 1997 and April 26, 1998.

The Company accounted for these investments under the equity method.
Summarized balance sheet and income statement information for these investments
is as follows:
<TABLE>
<CAPTION>
DECEMBER 28, APRIL 26,
SUMMARIZED BALANCE SHEETS: 1997 1998
-------------------------- ---------- ----------
<S> <C> <C>
Current assets ...................... $ 55,267 $ 36,065
Property and equipment, net ......... 648,937 663,943
Other ............................... 19,721 19,090
---------- ----------
Total assets ...................... 723,925 719,098
---------- ----------

Current liabilities ................. 369,564 320,586
---------- ----------
Total liabilities ................. 369,564 320,586
---------- ----------

Net assets .......................... $ 354,361 $ 398,512
========== ==========

Revenue ............................. $3,226,727 $1,055,129
---------- ----------
Operating income .................... $ 335,055 $ 181,448
---------- ----------
Net income .......................... $ 287,031 $ 186,682
---------- ----------
</TABLE>
Under the terms of the operating agreements discussed in Note 1(a), profits
and losses are allocated 50 percent to each partner for each affiliate. Kendall
cash distributions are paid 25 percent to the Company and 75 percent to its
partner until such time as the partners recover their investment. Thereafter,
the cash distributions are paid 50 percent to each partner.

Also included in investment in and advances to affiliates at December 28,
1997 and April 26, 1998 is $250,400 and $231,400 in cash advances made by the
Company to its affiliates.

(7) LONG-TERM DEBT

In September 1997, the Company entered into a $15 million loan facility
with Finova Capital Corporation. The facility consists of a 15-year term loan
collateralized by real estate with a 9.55% interest rate. The proceeds were used
in part to liquidate existing mortgages on 12 restaurants, which amounted to
$7.4 million as of September 1997. The remaining balance of $7.3 million, net of
fees and other costs, was primarily used for expansion of the Company. Monthly
principal and interest payments for this facility are due through October 2012.

On March 27, 1998, the Company entered into a $2,880,000 loan facility with
Finova Capital Corporation. The facility consists of a 10-year term loan
collateralized by personal property and fixtures at four Company-Owned
restaurants with an interest rate of 8.96%. The Company's management expects
that the proceeds, net of fees and other costs, will be used primarily for
expansion of the Company.

Annual maturities on notes payable as of April 26, 1998 are as follows:

1999 .................... $ 687,788
2000 .................... 755,218
2001 .................... 829,264
2002 .................... 910,577
2003 .................... 999,869
Thereafter .............. 13,412,000
-----------
17,594,716

Less current portion .... 687,788
-----------
$16,906,928
===========

The carrying amount of assets used as collateral is approximately
$23,120,775 and $22,982,992 at December 28, 1997 and April 26, 1998,
respectively.

F-14

<PAGE> 47
(8) CAPITAL STOCK

As of December 31, 1995, the Company's capital structure consisted of
30,000,000 shares of authorized common stock, with a par value of $.01 of which
11,761,872 shares were issued and outstanding.

In April 1996, Berjaya converted $3,500,000 of debt into shares of common
stock at $3.60 per share. In addition, Berjaya purchased an additional
$5,000,000 of shares of common stock at $3.60 per share.

On October 9, 1996, the Board of Directors approved a one-for-three reverse
stock split, which was effective prior to the date of the Company's Initial
Public Offering ("IPO"). In addition, the Board of Directors approved an
increase in the common stock par value from $0.01 to $0.03. The number of shares
in the accompanying financial statements have been restated to retroactively
reflect the reverse stock split. There were no changes to the Company's common
stock and additional paid-in capital accounts as a result of the reverse stock
split and par value change.

In December 1996, the Company completed an IPO of 2,500,000 shares of
common stock at $6.00 per share. The proceeds of approximately $13.2 million,
net of underwriting discounts and other costs incurred in connection with the
IPO, were used for the repayment of debt, the acquisition of a 50 percent
interest in a former franchised restaurant, and for expansion of the Company.

On February 6, 1998, the Company's Board of Directors approved the issuance
of 400,000 shares to Berjaya to convert $1,500,000 of debt outstanding to common
equity at a price of $3.75 per share, based on the closing market price as of
February 6, 1998. The debt carried an interest rate of 8.5% and was scheduled to
be repaid during the first quarter of 1998. The transaction is expected to be
consummated during the first quarter of fiscal 1999.

(9) STOCK OPTION PLANS

During the fiscal year ended January 1, 1995, options were issued to the
former President and Chief Executive Officer to purchase 355,555 shares of the
authorized, but unissued shares of common stock at a purchase price of $0.15 per
share in connection with the founding of the Company. An additional 500,000
options were issued to the former President and Chief Executive Officer at $2.50
per share during the fiscal year ended January 1, 1995. These options are
exercisable at any time prior to July 31, 1998. During the fiscal year ended
December 31, 1995, certain of these options were exercised whereby 355,555
shares of common stock were purchased at $0.15 per share. In October 1996, the
Company granted 450,000 options to the former President and Chief Executive
Officer at $3.60 per share, subject to adjustment for the reverse stock split
discussed below and for such other adjustments provided in the stock option
agreement. In connection with the granting of these options, the Company has
recorded $39,600, $39,600, $102,600 and $0 in compensation expense for each of
the fiscal years ended December 31, 1995, December 29, 1996, December 28, 1997
and the 17 weeks ended April 26, 1998, respectively. At December 31, 1995,
December 29, 1996, December 28, 1997 and for the 17 weeks ended April 26, 1998,
deferred compensation expense amounted to $79,200, $39,600, $0 and $0,
respectively, and is included in additional paid-in capital.

As discussed in Note 8, the Board of Directors declared a one-for-three
reverse stock split in October 1996. Concurrent with the reverse split, the
number of shares issuable upon the exercise of each outstanding option was
adjusted for the one-for-three reverse split and the exercise of each
outstanding option was adjusted such that the total amount paid upon exercise of
the option in full did not change. All of the following information regarding
stock options has been adjusted to reflect the reverse stock split.

A Stock Option Plan (the "Plan") was adopted during 1994, and later
amended, for employees of the Company and members of the Board of Directors who
are not employees, and 83,333, 216,666, 516,666 and 516,666 shares of the
Company's common stock were reserved for issuance pursuant to such plan at
December 31, 1995, December 29, 1996, December 28, 1997 and April 26, 1998,
respectively. These options vest over a three-year period from the date of grant
and are exercisable for a period of ten years after grant. On April 25, 1994,
options were issued to a consultant of the Company to purchase 3,333 shares of
common stock at a purchase price of $4.50 per share. During the fiscal years
ending December 31, 1995, the Company granted options to employees under the
stock option plan to purchase 52,658 shares of common stock at $7.50 per share
and granted certain directors options to purchase 6,666 shares of the Company's
common stock at a price of $7.50 per share. During 1996, the Company granted
options to employees to purchase 115,416 shares of common stock at a price of
$10.80 per share and certain directors options to purchase 50,000 shares of the
Company's common stock at a price ranging from $6.00 to $6.13 per share. During
1997, the Company granted options to employees to purchase 173,000 shares of
common stock at a price of $6.75 per share and certain directors options to
purchase 15,000 shares of the Company's common stock at a price of $6.38 per
share.

In February 1998, options were granted to the President and Chief Executive
Officer, the general counsel and a consultant of the Company to purchase 300,000
shares of the authorized, but unissued shares of common stock at a purchase
price of $3.50 per share. According to the terms of the original agreement (the
"Agreement"), these options vested as follows: 100,000 vested at the date of
grant, 100,000 vested upon attainment and maintenance of an average closing
price for the Company's common stock, over a ten day period, of at least $6.50
per share, and the final 100,000 vested upon attainment and maintenance of an
average closing price for the Company's common stock, over a ten day period, of
at least $9.50 per share. The Agreement was later amended (effective as of the
grant date) with respect to the vesting schedule and the general counsel and
consultant became employees of the Company. According to the terms of the
amended agreement, all the options vest at the date of grant. The options are
exercisable for a period of ten years after

F-15

<PAGE> 48

grant. In addition, the Company granted options to purchase 15,000 shares of
common stock, at $3.50 per share, to the family of Tan Kim Poh, deceased former
Chairman of the Board of Directors of the Company. These options were all
granted outside the Plan. No compensation expense was recorded as a result of
these issuances during the 17 weeks ended April 26, 1998.

At April 26, 1998, there were 144,628 additional shares available for grant
under the Plan. The per share weighted-average fair value of stock options
granted during 1995, 1996, 1997 and the 17 weeks ended April 26, 1998, was
$4.12, $4.20, $3.49 and $2.05, respectively, on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions: 1995 - expected dividend yield 0.0%, risk-free interest rate of
6.6%, historical volatility of 66.4% and an expected life of 8 years; 1996 -
expected dividend yield 0.0%, risk-free interest rate of 6.6%, historical
volatility of 66.4% and an expected life of 8 years; 1997 - expected dividend
yield 0.0%, risk-free interest rate of 6.1%, historical volatility of 63.6% and
an expected life of 4 years; 1998 (17 weeks ended April 26, 1998) - expected
dividend yield 0.0%, risk-free interest rate of 5.5%, historical volatility of
63.6% and an expected life of 5 years.

On February 11, 1997, the Board of Directors authorized a repricing program
which allows employees to elect to reprice all of their outstanding options to
purchase common stock of the Company, granted under the Stock Option Agreement
dated May 1, 1996. Effective February 11, 1997, the employees' stock options
were repriced to $6.75 per share and registered with the Securities and Exchange
Commission (the "SEC") effective July 2, 1997.

The Company applies Accounting Principles Board ("APB") Opinion No. 25
"Accounting for Stock Issued to Employees", in accounting for its Plan and,
accordingly, recognized compensation expense for certain options, as discussed
above. Had the Company determined compensation cost based on the fair value at
the grant date for its stock options under SFAS No. 123, "Accounting for
Stock-Based Compensation", the Company's net income (loss) would have been
reduced (increased) to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
17 WEEKS
FISCAL FISCAL FISCAL ENDED
1995 1996 1997 APRIL 26, 1998
----------- ----------- ------- --------------
<S> <C> <C> <C> <C>
Net income (loss) As reported $(3,489,904) $ (889,930) $91,745 $1,858,911
Pro forma (3,612,122) (1,278,541) (9,773) 1,211,680

Net income (loss) per share As reported $ (1.00) $ (0.18) $ 0.01 $ 0.20
Pro forma (1.03) (0.26) 0.00 $ 0.13

</TABLE>

Pro forma net income (loss) reflects only options granted in 1995, 1996,
1997 and the 17 weeks ended April 26, 1998. Therefore, the full impact of
calculating compensation cost for stock options under SFAS No. 123 is not
reflected in the pro forma net income (loss) amounts presented above because
compensation cost is reflected over the options' vesting period ranging from one
to three years and compensation cost for options granted prior to January 1,
1995 is not considered.

F-16
<PAGE> 49

Stock option activity during the periods indicated is as follows:

<TABLE>
<CAPTION>
NUMBER OF WEIGHTED-AVERAGE
SHARES EXERCISE PRICE
-------- ---------------
<S> <C> <C>
Balance at January 1, 1995 ........ 288,518 $ 4.57
Granted ...................... 59,324 7.50
Exercise ..................... (118,518) 0.45
Forfeited .................... -- --
Expired ...................... -- --

Balance at December 31, 1995 ...... 229,324 7.46
Granted ...................... 315,416 7.56
Exercised .................... -- --
Forfeited .................... -- --
Expired ...................... -- --

Balance at December 29, 1996 ...... 544,740 7.52
Granted ...................... 188,000 6.72
Exercised .................... -- --
Forfeited .................... (15,068) 6.86
Expired ...................... (18,349) 7.13

Balance at December 28, 1997 ...... 699,323 6.66

Granted ...................... 315,000 3.50
Exercised .................... -- --
Forfeited .................... (24,331) 6.75
Expired ...................... (1,287) 7.14

Balance at April 26, 1998 ......... 988,705 $ 5.65

</TABLE>

At April 26, 1998 the range of exercise prices and weighted-average
remaining contractual life of outstanding options was $3.50 to $7.50 and 5.2
years, respectively.

At December 28, 1997 the range of exercise prices and weighted-average
remaining contractual life of outstanding options was $4.50 to $7.50 and 3.7
years, respectively.

At December 29, 1996 the range of exercise prices and weighted-average
remaining contractual life of outstanding options was $4.50 to $10.80 and 6.77
years, respectively.

At December 29, 1996, December 28, 1997 and April 26, 1998, the number of
options exercisable was 135,875, 398,417 and 384,260, respectively, and the
weighted-average exercise price of those options was $7.43, $6.66 and $6.59,
respectively.

F-17
<PAGE> 50

(10) INCOME TAXES

As a result of the Company's net operating losses and associated net
operating loss carry-forward, the Company had no federal income tax payable for
fiscal years ended December 31, 1995, December 29, 1996, and December 28, 1997.
The Company had an income tax payable of $456,153 at April 26, 1998. In fiscal
1997, the Company had income tax expense amounting to $175,705, representing
state income tax and alternative minimum tax. Income tax expense for the 17
weeks ended April 26, 1998 consists of the following:

<TABLE>
<S> <C>
Current:
Federal ................ $ 458,000
State .................. 44,156
--------
502,156

Deferred federal ......... (421,000)
--------
$ 81,156
========
</TABLE>
The tax effects of the temporary differences comprising deferred tax assets
and liabilities are as follows:
<TABLE>
<CAPTION>
DECEMBER 28, APRIL 26,
1997 1998
----------- -------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforward ................... $ 666,000 $ 50,000
Pre-opening expenses, differences principally
due to differences in amortization ............ 319,000 284,000
Accrued workers' compensation ..................... 131,000 149,000
Property and equipment ............................ 1,004,000 937,000
Other ............................................. 1,178,000 1,796,000
Less valuation allowance .......................... (3,258,000) (2,540,000)
----------- -----------
40,000 676,000

Deferred tax liabilities:
Property and equipment principally due to
differences in depreciation .................... -- (92,000)
Other ............................................. (40,000) (163,000)
----------- -----------
$ -- $ 421,000
=========== ===========
</TABLE>
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
level of historical income, scheduled reversal of deferred tax liabilities, and
projected further taxable income in making this assessment.

At April 26, 1998, the Company has a Florida net operating loss
carry-forward of $1,400,000 consisting of $780,000 and $620,000 expiring in
varying amounts through 2010 and 2011, respectively.

The actual income tax expense differs from the "expected" income tax effect
(computed by applying the U.S. federal corporate tax rate of 34 percent to
earnings before income taxes), for the 17 weeks ended April 26, 1998 as follows:

APRIL 26,
1998
----------

Income taxes at statutory rates................... 34.00 %
State and local taxes, net of federal
tax benefit................................... 4.85 %
FICA tip tax credit............................... 2.27 %
Utilization of Net Operating Loss Carry-forward... (20.51)%
Release of valuation allowance.................... (16.55)%
Other non-deductible items........................ 0.12 %
-------
4.18 %
=======
(11) CONCENTRATIONS OF BUSINESS AND CREDIT RISK

Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash in bank and investment
custodian accounts. At times, the Company maintains cash balances in excess of
insured limits. The custodian of the investment account is a major financial
institution.

Approximately 56 percent of the restaurants currently owned and operated by
the Company are located in the state of Florida. Consequently, the operations of
the Company are affected by fluctuations in the Florida economy. Furthermore,
the Company may be affected by changing conditions within the food service
industry.

F-18
<PAGE> 51

For the fiscal years ended December 29, 1996, December 28, 1997 and the 17
weeks ended April 26, 1998, two suppliers comprised approximately 89%, 94% and
82%, respectively, of the Company's purchases. Purchases from these suppliers
were approximately $21.4, $32.3 million and $9.5 million for fiscal 1996, 1997
and the 17 weeks ended April 26, 1998, respectively.

(12) COMMITMENTS AND CONTINGENCIES

The Company is a party to legal proceedings arising in the ordinary course
of business, many of which are covered by insurance. In the opinion of
management, disposition of these matters will not materially affect the
Company's financial condition.

At April 26, 1998, the Company had three restaurants under development. The
estimated cost to complete these restaurants and other capital projects in
process was approximately $605,000 at April 26, 1998.

(13) ACQUISITIONS

At January 1, 1995, the Company was a 50 percent owner in its North Miami
restaurant. In January 1995, the Company acquired the remaining 50 percent
interest in North Miami for $800,000. The transaction was accounted for using
the purchase method of accounting. The purchase price was allocated based on the
fair value of the assets acquired at the time of acquisition. Approximately
$797,000 was allocated to property and equipment and approximately $65,000 was
allocated to inventory and other assets. In connection with the acquisition, the
Company also assumed certain liabilities in the amount of $385,000.

During March 1995, the Company acquired two Roadhouse Grill restaurants
from a franchisee for $2.2 million. The transaction was accounted for using the
purchase method of accounting. The purchase price of the restaurants was
allocated to property and equipment based on the estimated fair value of the
assets at the date of acquisition. Approximately $1,555,000 was allocated to
property and equipment as a result of the acquisition. The acquisition generated
goodwill of approximately $645,000.

In August 1996, the Company entered into an agreement to purchase the
remaining 50 percent interest in the Kendall Roadhouse Grill, L.C., a limited
liability company, that owned the Kendall Joint Venture from the joint venture
partners for a purchase price of $2,300,000. The purchase price was to be paid
from the proceeds of the IPO completed by the Company in December 1996 in which
2,500,000 shares were sold at $6.00 per share. During the first quarter of 1997,
the agreement was amended as follows: the purchase price was changed to
$1,800,000 with a deposit of $400,000 paid in January 1997, and the remaining
$1,400,000 payable by December 31, 1997 when the acquisition is closed and
consummated. Subsequent to December 1997, the Company negotiated the price down
to $1,600,000 and anticipates completing the purchase in August 1998.

In December 1996, the Company acquired a 50 percent ownership interest in
Boca for approximately $480,000. The transaction was accounted for using the
purchase method of accounting. The excess of the purchase price over the fair
value of the investment amounted to $203,000 and was treated as goodwill, which
was being amortized over the remaining lease term of Boca. Subsequent to the
acquisition, the Company and the owner of the remaining 50 percent interest each
contributed $75,000 to Boca.

In December 1997, operations at Boca were discontinued and the Company sold
its interest in Boca to Boca Raton Roadhouse Grill, L.C. (See Note 1(a)). Prior
to this event, the Company managed the operations of Boca pursuant to its
operating agreement. Under such operating agreement, the Company received
management fees and was allocated its share of the restaurant's profits and
losses.

(14) EMPLOYEE 401(k) PLAN AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

On June 3, 1997, the Board of Directors of the Company approved a plan to
provide mid-level employees with an employee savings plan pursuant to Section
401(k) of the Internal Revenue Service Code (the "Code"). As an alternative to
providing highly compensated employees with participation in such 401(k) plan,
which would have required the Company to extend plan benefits to a broader group
of employees, the Company also authorized a Supplemental Executive Retirement
Plan (the "SERP") for execution. A formal plan, in each case, was adopted by the
Company during the fourth quarter of 1997.

The 401(k) plan permits participants to contribute, on a pre-tax basis, a
percentage of compensation but not in excess of the maximum level allowed by the
Code. The Company will match 10% up to the first six percent contributed by each
employee. The cost recognized by the Company for the fiscal year ended December
28, 1997 and the 17 weeks ended April 26, 1998, for matching contributions, was
approximately $5,400 and $6,000, respectively.

The SERP permits participants to contribute, on a pre-tax basis, a maximum
of 15% of annual compensation. The Company will match 100% up to the first 10%
of annual compensation contributed. The cost recognized by the Company for the
fiscal year ended December 28, 1997 and for the 17 weeks ended April 26, 1998,
for matching contributions, was approximately $16,600 and $16,400, respectively.

F-19
<PAGE> 52

(15) RELATED PARTY TRANSACTIONS

Berjaya directly or indirectly owns Roadhouse Grill Asia Pacific (H.K.)
Limited ("Roadhouse Grill Hong Kong") and Roadhouse Grill Asia Pacific (Cayman)
Limited ("Roadhouse Grill Asia"). In January 1996, the Company entered into a
Master Development Agreement with Roadhouse Grill Hong Kong which provides for
the development and franchising of Roadhouse Grill restaurants in Hong Kong.
Roadhouse Grill Hong Kong is not required to pay any franchise or reservation
fee for restaurants that it develops, but it is responsible for paying or
reimbursing approved expenses incurred by the Company in connection with the
opening of each restaurant. In addition, Roadhouse Grill Hong Kong is required
to pay a royalty in connection with the operation of each of its restaurants in
the amount of 2% of gross sales. Under certain circumstances, Roadhouse Grill
Hong Kong or the Company may grant franchises to third parties in Hong Kong. In
that event, the Company is entitled to receive 50 % of any franchise and
reservation fees and 40 % of any royalty fee payable by the third party
franchisee, subject to limitations on the amounts payable to the Company of
$10,000 per restaurant in the case of franchise and reservations fees and 2% of
gross sales in the case of royalty fees. The Company did not recognize royalty
income for fiscal 1997 and the 17 weeks ended April 26, 1998.

In January 1996, the Company also entered into a Master Development
Agreement with Roadhouse Grill Asia, which covers countries in Asia and the
Pacific Rim (other than Hong Kong), including but not limited to, Australia,
China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea,
the Philippines and Thailand. Under the agreement, Roadhouse Grill Asia is
required to open and maintain at least thirty Roadhouse Grill restaurants during
the first ten years of the term of the agreement, with a minimum of two
restaurants to be developed each year. Under certain circumstances, Roadhouse
Grill Asia or the Company may grant franchises to third parties in the
territory. The fee arrangements under the agreement are substantially the same
as those under the agreement between the Company and Roadhouse Grill Hong Kong.

As of December 28, 1997, there were three Roadhouse Grill restaurants
operating in Malaysia under the Master Development Agreement with Roadhouse
Grill Asia. Subsequent to December 28, 1997, one of the franchisees in Malaysia
ceased operations. The Company recorded $44,000, $51,000 and $95,000 in royalty
income from those restaurants during fiscal 1996, 1997 and the 17 weeks ended
April 26, 1998, respectively.

At December 28, 1997 and April 26, 1998, due to related parties consists
principally of promissory notes in the amounts of $3,000,000 and $1,500,000,
respectively, due to Berjaya. These notes bear interest at 8.5 percent.

On January 12, 1998, the Company paid $1,500,000 of the promissory note,
which had an original principal amount of $3,000,000. On February 6, 1998, the
Company's Board of Directors approved the issuance of 400,000 shares of common
stock to Berjaya to convert the remaining debt outstanding of $1,500,000 to
common equity at a price of $3.75 per share, based on the closing market price
as of February 6, 1998. The debt carried an interest rate of 8.5% and was
scheduled to be repaid during the first quarter of 1998.

During the fourth quarter of 1997, the Company engaged National Retail
Group Inc. ("NRG"), a real estate and retailing consulting firm, and SABi
International Developments, Inc. ("SABi"), a management consulting and
investment firm, to provide specified real estate development and management
consulting services to the Company, addressing problems from previous management
actions. SABi is wholly-owned by Ayman Sabi. NRG is an affiliate of Ayman Sabi.
Mr. Sabi was and remains a director of the Company, was Chairman of the
Company's Executive Committee from November 1997 to February 1998, and was
elected President and Chief Executive Officer of the Company on February 6,
1998. During fiscal 1997, the Company paid fees and reimbursed expenses in the
aggregate amounts of $168,214 and $60,000 to NRG and SABi, respectively. During
the 17 weeks ended April 26, 1998, the Company paid fees and reimbursed expenses
in the aggregate amount of $141,048 to NRG. The Company did not make any
payments to SABi during the 17 weeks ended April 26, 1998. The Company believes
amounts paid for services rendered by NRG and SABi were fair and competitive,
and represented the fair market value of such services.

(16) INTERNAL REVENUE SERVICE EXAMINATION

The Internal Revenue Service is currently examining the Company's income
tax returns for the year ended December 31, 1995 and December 29, 1996. The
Company believes that resolution of this exam will not have a material adverse
effect on the Company's financial condition or results of operation.

F-20
<PAGE> 53

(17) NET INCOME (LOSS) PER COMMON SHARE ("EPS")

The following is a reconciliation of the numerators (net income) and the
denominators (common shares outstanding) of the basic and diluted per share
computations for net income:

<TABLE>
<CAPTION>
17 WEEKS ENDED APRIL 26, 1998
-------------------------------------------
Net Income Shares Amount
---------- --------- -----
<S> <C> <C> <C>
BASIC EPS
Net income available
to common shareholders $1,858,911 9,305,408 $0.20

EFFECT OF DILUTIVE SECURITIES
Stock options -- 21,234 --
---------- --------- -----
DILUTED EPS $1,858,911 9,326,642 $0.20
========== ========= =====
</TABLE>

Options to purchase 685,927 shares of common stock at a weighted-average
exercise price of $6.66 per share were outstanding during the 17 weeks ended
April 26, 1998, but were not included in the computation of diluted EPS because
the options' exercise price was greater than the average market price of the
common shares. The options, which expire on varying dates, were still
outstanding as of April 26, 1998.

<TABLE>
<CAPTION>
17 WEEKS ENDED APRIL 27, 1997
--------------------------------------------
Net Income Shares Amount
---------- --------- ------
<S> <C> <C> <C>
BASIC EPS

Net income available
to common shareholders $1,582,743 9,305,408 $0.17

EFFECT OF DILUTIVE SECURITIES
Stock options -- 9,899 --

DILUTED EPS $1,582,743 9,315,307 $0.17
========== ========= =====
</TABLE>

Options to purchase 403,786 shares of common stock at a weighted-average
exercise price of $8.20 per share were outstanding during the 17 weeks ended
April 27, 1997, but were not included in the computation of diluted EPS because
the options' exercise price was greater than the average market price of the
common shares. The options, which expire on varying dates, were still
outstanding as of April 27, 1997.

As discussed in note 8, on February 6, 1998, the Company's Board of
Directors approved the issuance of 400,000 shares to Berjaya to convert
$1,500,000 of debt outstanding to common equity at a price of $3.75 per share,
based on the closing market price as of February 6, 1998. The debt carried an
interest rate of 8.5% and was scheduled to be repaid during the first quarter of
1998. The transaction is expected to be consummated during the first quarter of
fiscal 1999, as such, these shares are not included in the calculation of EPS as
of April 26, 1998.

For fiscal years ended December 31, 1995, December 29, 1996 and December
28, 1997, the number of weighted average common shares outstanding is
essentially equivalent to the weighted average common share and share
equivalents outstanding - assuming dilution.

F-21

<PAGE> 54

(18) QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of the unaudited quarterly results of operations
for the years ended December 28, 1997 and December 29, 1996:

<TABLE>
<CAPTION>
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR
------------ ------------ ------------ ------------ ------------
<C> <C> <C> <C> <C>
1997:

Total revenues .............................. $ 22,970,545 $ 22,960,818 $ 23,319,421 $ 23,544,272 $ 92,795,056
Operating income (loss) ..................... 1,453,421 1,164,619 (76,761) (493,083) 2,048,196
Net income (loss) ........................... 1,264,794 949,681 (498,699) (1,624,031) 91,745
Basic net income (loss) per common share .... 0.14 0.10 (0.05) (0.17) 0.01
Diluted net income (loss) per common share .. 0.14 0.10 (0.05) (0.17) 0.01

1996:

Total revenues .............................. $ 13,868,867 $ 13,764,180 $ 16,147,214 $ 18,652,870 $ 62,433,131
Operating income (loss) ..................... 476,656 (331,963) (210,251) (12,451) (78,009)
Net income (loss)............................ 346,025 (514,446) (401,047) (320,462) (889,930)
Basic net income (loss) per common share .... .09 (0.11) (0.08) (0.05) (0.18)
Diluted net income (loss) per common share .. .06 (0.11) (0.08) (0.05) (0.18)

</TABLE>

F-22
<PAGE> 55
INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
- ------ -----------

3.1 Articles of Incorporation of the Company (incorporated by reference
from the Company's Registration Statement on Form S-1 as filed with
the Securities and Exchange Commission on September 26, 1996, as
amended (the "Registration Statement")).

3.2 Bylaws of the Company (incorporated by reference from the Company's
Registration Statement).

10.1 Form of the Company's Development Agreement (incorporated by reference
from the Company's Registration Statement Exhibit 10.2).

10.2 Form of the Company's Franchise Agreement (incorporated by reference
from the Company's Registration Statement Exhibit 10.3).

10.3 Form of the Company's Stock Option Agreement (incorporated by
reference from the Company's Registration Statement Exhibit 10.5).

10.4 Sub-Lease Agreement, dated July 31, 1995, between Equitable Real
Estate Investment, Inc., Compass Management and Leasing, Inc. and the
Company, for property located at 6600 N. Andrews Ave., Ste. 160, Ft.
Lauderdale, Florida 33309 (incorporated by reference from the
Company's Registration Statement Exhibit 10.6).

10.5 Assignment and Assumption Agreement, dated March 15, 1995, between
Roadhouse Waterway, Inc. and Roadhouse Grill Commercial, Inc., for
property located in Fort Lauderdale, Florida (lease of restaurant
premises) (incorporated by reference from the Company's Registration
Statement Exhibit 10.7).

10.6 Lease Agreement, dated April 26, 1994, between Piccadilly Cafeterias,
Inc. and the Company, for property located in Winter Park, Florida
(lease of restaurant premises) (incorporated by reference from the
Company's Registration Statement Exhibit 10.8).

10.7 Ground Lease, dated May 25, 1995, between Bruno, Inc. and the Company,
for property located in Sandy Springs, Georgia (lease of restaurant
premises) (incorporated by reference from the Company's Registration
Statement Exhibit 10.9).

10.8 Lease, dated April 17, 1995, between Captec Net Lease Realty, Inc. and
New York Roasters, for property located in Cheektowaga, New York
(lease of restaurant premises, assumed by the Company) (incorporated
by reference from the Company's Registration Statement Exhibit 10.10).

10.9 Operating Agreement dated April 28, 1994, of Kendall Roadhouse Grill,
L.C. (incorporated by reference from the Company's Registration
Statement Exhibit 10.11).

10.10 Management Agreement, dated November 8, 1994, between Boca Roadhouse,
Inc. and the Company (incorporated by reference from the Company's
Registration Statement Exhibit 10.12).

10.11 1994 Registration Rights Agreement, dated February 10, 1994
(incorporated by reference from the Company's Registration Statement
Exhibit 10.19).

10.12 Amendment to 1994 Registration Rights Agreement, dated June 8, 1994
(incorporated by reference from the Company's Registration Statement
Exhibit 10.20).
<PAGE> 56
10.13 Amendment to 1994 Registration Rights Agreement, dated July 26, 1996
(incorporated by reference from the Company's Registration Statement
Exhibit 10.21).

10.14 Stock Option Agreement, dated February 10, 1994, between the Company
and J. David Toole III (incorporated by reference from the Company's
Registration Statement Exhibit 10.22).

10.15 Purchase and Sale Agreement, dated August 30, 1996, between Roadwear,
Inc. and the Company, relating to the Kendall restaurant (incorporated
by reference from the Company's Registration Statement Exhibit 10.28).

10.16 Promissory Note, dated August 16, 1996, made by the Company in favor
of Berjaya (incorporated by reference from the Company's Registration
Statement Exhibit 10.30).

10.17 Master Development Agreement, dated January 5, 1996, between the
Company and Roadhouse Grill Asia (incorporated by reference from the
Company's Registration Statement Exhibit 10.31).

10.18 Lease Transfer and Assumption Agreement for equipment used in the New
York Roadhouse Grill restaurant, dated March 29, 1995, assumed by the
Company (incorporated by reference from the Company's Registration
Statement Exhibit 10.32).

10.19 Promissory Note, dated September 27, 1996, made by the Company in
favor of Berjaya (incorporated by reference from the Company's
Registration Statement Exhibit 10.35).

10.20 Amended and Restated 1994 Stock Option Plan (incorporated by
reference from the Company's Registration Statement Exhibit 10.37).

10.21 Stock Purchase Agreement, dated May 26, 1995, between the Company and
the several purchasers named in Schedule I (incorporated by reference
from the Company's Registration Statement Exhibit 10.38).

10.22 Investment Agreement, dated October 25, 1995, between Berjaya and the
Company (incorporated by reference from the Company's Registration
Statement Exhibit 10.39).

10.23 Stock Option Agreement between the Company and J. David Toole III,
dated October 24, 1996 (incorporated by reference from the Company's
Registration Statement Exhibit 10.41).

10.24 Master Lease Agreement between the Company and Pacific Financial
Company, dated June 2, 1997 (incorporated by reference from the
Company's Form 10-Q for the fiscal quarter ended June 29, 1997 Exhibit
10.42).

10.25 Severance Agreement, dated July 29, 1997, between the Company and John
David Toole III (incorporated by reference to Exhibit 4.8 to
Post-Effective Amendment No. 2 to the Company's Registration Statement
on Form S-8, dated August 19, 1997 Exhibit 10.43).

10.26 Loan and Security Agreement by and between the Company and Finova
Capital Corporation, dated September 12, 1997 (incorporated by
reference from the Company's Form 10-Q for the fiscal quarter ended
September 28, 1997 Exhibit 10.44).

10.27 Mortgage and Security Agreement by and between the Company and Finova
Capital Corporation, dated September 5, 1997 (incorporated by
reference from the Company's Form 10-Q for the fiscal quarter ended
September 28, 1997 Exhibit 10.45).

E-2

<PAGE> 57
10.28 Promissory Note, dated September 5, 1997, made by the Company in
favor of Finova Capital Corporation (incorporated by reference from
the Company's Form 10-Q for the fiscal quarter ended September 28,
1997 Exhibit 10.46).

10.29 Agreement for Purchase and Sale of Membership Interest in Boca
Roadhouse, L.C., a limited liability company, dated December 15, 1997
(incorporated by reference from the Company's Form 10-K for the
fiscal year ended December 28, 1997 Exhibit 10.47).

10.30 Roadhouse Grill, Inc. Deferred Compensation Plan, effective June 3,
1997 (incorporated by reference from the Company's Form 10-K for the
fiscal year ended December 28, 1997 Exhibit 10.48).

10.31 Amendment dated December 1, 1997 to that Master Development Agreement
executed January 5, 1996, by and between Roadhouse Grill, Inc. and
Roadhouse Grill Asia Pacific (H.K.) Limited (incorporated by reference
from the Company's Form 10-K for the fiscal year ended December 28,
1997 Exhibit 10.49).

10.32 Amendment dated December 1, 1997 to that Master Development Agreement
executed January 5, 1996 by and between Roadhouse Grill, Inc. and
Roadhouse Grill Asia Pacific (Cayman) Limited (incorporated by
reference from the Company's Form 10-K for the fiscal year ended
December 28, 1997 Exhibit 10.50).

10.33 Loan and Security Agreement by and between the Company and Finova
Capital Corporation, dated March 27, 1998 (incorporated by reference
from the Company's Form 10-Q for the fiscal quarter ended March 29,
1998 Exhibit 10.51).

10.34 Promissory Note, dated March 27, 1998, made by the Company in favor
of Finova Capital Corporation (incorporated by reference from the
Company's Form 10-Q for the fiscal quarter ended March 29, 1998
Exhibit 10.52).

21.0 Subsidiaries of the Registrant.

23.0 Consent of Experts and Counsel.

27 Financial Data Schedule.

E-3

<PAGE> 1
EXHIBIT 21.0

SUBSIDIARIES OF THE REGISTRANT
- ------------------------------

None

<PAGE> 1
EXHIBIT 23

(KPMG PEAT MARWICK LLP LETTERHEAD)

Independent Auditors' Consent

The Board of Directors
Roadhouse Grill, Inc.

We consent to incorporation by reference in the registration statement No.
333-30593 on Form S-8 of Roadhouse Grill, Inc. of our report dated July 24,
1998, relating to the balance sheets of Roadhouse Grill, Inc. as of December 28,
1997 and April 26, 1998, and the related statements of operations, shareholders'
equity and cash flows for each of the years in the three-year period ended
December 28, 1997 and the 17 weeks ended April 26, 1998, which report appears in
the April 26, 1998 transition report on Form 10-K of Roadhouse Grill, Inc.

/s/ KPMG PEAT MARWICK LLP

July 27, 1998
Miami, Florida

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> APR-26-1998
<PERIOD-START> DEC-29-1997
<PERIOD-END> APR-26-1998
<CASH> 3,554,875
<SECURITIES> 0
<RECEIVABLES> 1,182,536
<ALLOWANCES> 0
<INVENTORY> 939,169
<CURRENT-ASSETS> 7,427,680
<PP&E> 78,270,000
<DEPRECIATION> 11,371,272
<TOTAL-ASSETS> 79,687,091
<CURRENT-LIABILITIES> 13,291,528
<BONDS> 0
0
0
<COMMON> 279,162
<OTHER-SE> 42,874,469
<TOTAL-LIABILITY-AND-EQUITY> 79,687,091
<SALES> 37,579,044
<TOTAL-REVENUES> 37,684,203
<CGS> 30,485,725
<TOTAL-COSTS> 35,201,284
<OTHER-EXPENSES> 175,590
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 718,511
<INCOME-PRETAX> 1,940,067
<INCOME-TAX> 81,156
<INCOME-CONTINUING> 1,858,911
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,858,911
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20

</TABLE>