UNO RESTAURANT CORP, 424B1, 1995-05-24

UNO RESTAURANT CORP
424B1, 1995-05-24
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<PAGE> 1
2,000,000 SHARES

[LOGO]

COMMON STOCK

All of the shares of Common Stock offered hereby are being sold by Uno
Restaurant Corporation (the "Company"). The Company's Common Stock is traded on
the New York Stock Exchange under the symbol "UNO." On May 23, 1995, the last
reported sale price of the Common Stock on the New York Stock Exchange was
$10.50 per share. See "Price Range of Common Stock."

SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
=========================================================================================
<CAPTION>
Price to Underwriting Proceeds to
Public Discount(1) Company(2)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share........................... $10.50 $0.57 $9.93
Total(3)............................ $21,000,000 $1,140,000 $19,860,000
=========================================================================================

<FN>
(1) See "Underwriting" for information concerning indemnification of the
Underwriter and other matters.

(2) Before deducting expenses payable by the Company estimated at $255,000.

(3) The Company has granted the Underwriter a 30-day option to purchase up to
300,000 additional shares of Common Stock solely to cover over-allotments,
if any. If the Underwriter exercises this option in full, the Price to
Public will total $24,150,000, the Underwriting Discount will total
$1,311,000 and the Proceeds to Company will total $22,839,000. See
"Underwriting."
</TABLE>

The shares of Common Stock are offered by the Underwriter named herein,
subject to receipt and acceptance by it and subject to its right to reject any
order in whole or in part. It is expected that delivery of the certificates
representing such shares will be made against payment therefor at the office of
Montgomery Securities on or about May 31, 1995.

------------------------
MONTGOMERY SECURITIES

May 23, 1995

<PAGE> 2

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

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

<PAGE> 3

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, NW, Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's Regional Offices at Citicorp Center, 500 West Madison, Suite 1400,
Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, NW, Room 1024, Judiciary Plaza,
Washington, D.C. 20549, at prescribed rates. The Company's Common Stock is
listed on the New York Stock Exchange, and such reports, proxy statements and
certain other information can also be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.

The Company has filed with the Commission in Washington, D.C., a
Registration Statement on Form S-2 under the Securities Act of 1933, as amended,
with respect to the Common Stock being offered hereby. This Prospectus does not
contain all of the information set forth in such Registration Statement and the
exhibits and schedules thereto to which reference is hereby made. The statements
in this Prospectus as to the contents of such Registration Statement are
qualified in their entirety by such reference. The Registration Statement,
together with its exhibits and schedules, may be inspected at the Public
Reference Section of the Commission in Washington, D.C. at the address noted
above, and copies of all or any part thereof may be obtained from the Commission
upon payment of the prescribed fees.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed with the Commission pursuant to the Exchange
Act are incorporated herein by reference:

1. The Company's Annual Report on Form 10-K for the fiscal year ended
October 2, 1994;

2. The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended January 1, 1995 and April 2, 1995; and

3. The proxy statement for the Company's Annual Meeting of
Stockholders held on February 8, 1995.

The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
the documents referred to above, excluding exhibits thereto. Requests should be
made to: Investor Relations, Uno Restaurant Corporation, 100 Charles Park Road,
West Roxbury, Massachusetts 02132, telephone number (617) 323-9200
------------------------

UNO(R), PIZZERIA UNO(R) and PIZZERIA DUE(R) are registered trademarks of
Uno Restaurant Corporation.

3
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the detailed
information and Consolidated Financial Statements, including the Notes thereto,
appearing elsewhere in this Prospectus. Except as otherwise noted, all
information in this Prospectus assumes no exercise of the Underwriter's
over-allotment option. All share and per share data, including market prices, in
this Prospectus have been adjusted for the five-for-four Common Stock splits
effected on September 10, 1990 and February 28, 1995. "Fiscal 1992," "fiscal
1993," "fiscal 1994," "fiscal 1995" and "fiscal 1996" refer to the fiscal years
ended on September 27, 1992, October 3, 1993, October 2, 1994, October 1, 1995
and September 29, 1996, respectively.

THE COMPANY

Uno Restaurant Corporation (the "Company") owns and operates 73 and
franchises 58 casual dining, full-service restaurants under the name "Pizzeria
Uno...Chicago Bar & Grill." The restaurants offer a diverse, high-quality menu
at moderate prices in a casual, friendly atmosphere. The restaurants feature the
Company's signature Chicago-style deep-dish pizza and a selection of entrees,
including thin crust pizza, pasta, fajitas, ribs, steak and chicken, as well as
a variety of appetizers, salads, sandwiches and desserts. The Company's
restaurants average approximately 6,200 square feet with seating for an average
of approximately 180 guests. For the 52 weeks ended April 2, 1995, Company-owned
restaurants averaged $1,932,000 in sales. Company-owned restaurants are located
predominantly in the Northeast and Mid-Atlantic states, and franchised
restaurants are located throughout the United States.

In fiscal 1993, the Company began implementing strategic initiatives
intended to strengthen its position in casual dining and to distinguish its
restaurants from quick service pizza, pizza and pasta, and full-service Italian
restaurants. As part of this strategy, during fiscal 1994, the Company invested
approximately $2.5 million in new kitchen capabilities, including saute
stations, grills and fryers, for its Company-owned restaurants enabling the
Company to enhance the quality, breadth and appeal of its non-pizza menu items.
To better communicate its concept and broadened menu to consumers, the Company
refined the name of its restaurants to Pizzeria Uno . . . Chicago Bar & Grill
and upgraded the design and decor of its restaurants to be consistent with its
casual dining theme. In addition, in fiscal 1993, the Company increased the size
of its deep-dish pizzas to provide greater value, and added additional
restaurant managers in many of its higher volume units to improve overall
service. The Company believes these strategic initiatives directly contributed
to an increase in its average guest check and increases in comparable store
sales of 6.5% in fiscal 1994 and 6.6% for the 26 weeks ended April 2, 1995.

The Company recently has been expanding its channels of distribution to
capitalize on the Pizzeria Uno brand name and the appeal of its signature
Chicago-style deep-dish pizza. Currently, the Company is distributing
refrigerated and frozen Chicago-style deep-dish pizza to approximately 870
supermarkets, primarily in New England, for sale in their fresh deli counters
and frozen food sections. Since January 1993, the Company has also been
supplying frozen Pizzeria Uno brand, Chicago-style deep-dish pizza to American
Airlines for service on its flights. Approximately 1.6 million Pizzeria Uno
brand pizzas were served aboard American Airlines flights during fiscal 1994.
The Company is testing a similar pizza product at Pizzeria Uno kiosks in 14
General Cinema theaters. The Company also operates three neighborhood,
limited-seating take-out units under the name "Uno...Pizza Takery." These units
are located in strip centers, occupy approximately 2,000 square feet and offer
limited seating for up to 40 customers.

The Company acquired the rights to the name "Pizzeria Uno" from the late
Ike Sewell, who opened the original Pizzeria Uno restaurant in Chicago, Illinois
in 1943 and is considered the originator of Chicago-style deep-dish pizza. The
Company opened its first Pizzeria Uno restaurant in 1979. During fiscal 1995,
the Company expects to open approximately 18 restaurants, 11 of which were open
as of May 5, 1995, and during fiscal 1996, the Company expects to open
approximately 20 restaurants. During fiscal 1995, the Company expects
franchisees to open approximately six restaurants, three of which were open as
of May 5, 1995, and during fiscal 1996, the Company expects franchisees to open
approximately 10 restaurants.

4
<PAGE> 5
<TABLE>
THE OFFERING
<S> <C>
Common Stock offered by the Company..................... 2,000,000 shares
Common Stock to be outstanding after the offering....... 13,374,699 shares(1)
Use of proceeds......................................... To repay indebtedness, to develop
additional restaurants and for
working capital
New York Stock Exchange symbol.......................... UNO
<FN>
---------------
(1) Excluding 996,610 shares issuable upon exercise of outstanding stock
options, of which stock options to acquire 426,017 shares were exercisable
as of April 2, 1995.
</TABLE>
<TABLE>
SUMMARY CONSOLIDATED FINANCIAL AND STATISTICAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA AND NUMBER OF RESTAURANTS)
<CAPTION>
TWENTY-SIX WEEKS
FISCAL YEAR ENDED ENDED
---------------------------------------------------- -------------------
SEP 30 SEP 29 SEP 27 OCT 3 OCT 2 APR 3 APR 2
1990 1991 1992(1) 1993 1994 1994 1995
-------- -------- -------- -------- -------- -------- --------
(53 WKS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues................................ $ 54,691 $ 71,325 $ 84,113 $108,945 $124,065 $ 55,812 $ 73,127
Operating income........................ 6,994 5,979 3,052 8,085 10,291 3,540 5,341
Income before taxes..................... 6,666 5,492 2,902 7,000 9,446 3,263 4,387
Net income.............................. 3,820 3,155 1,762 4,163 5,756 1,941 2,763
Earnings per share...................... $ .38 $ .29 $ .16 $ .37 $ .51 $ .17 $ .24
========= ========= ========= ========= ========= ========= =========
OPERATING DATA:
Average annualized restaurant
sales(2).............................. $ 2,037 $ 1,874 $ 1,787 $ 1,807 $ 1,886 $ 1,756 $ 1,866
Number of restaurants at end of period:
Company-owned Pizzeria Uno(3)......... 31 39 50 56 65 58 74
Other Company-owned(4)................ 2 1 1 1 1 1 4
Franchised(5)......................... 47 55 59 58 61 61 60
-------- -------- -------- -------- -------- -------- --------
Total................................. 80 95 110 115 127 120 138
========= ========= ========= ========= ========= ========= =========
</TABLE>

<TABLE>
<CAPTION>
APRIL 2, 1995
---------------------------
ACTUAL AS ADJUSTED(6)
-------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Total assets....................................................................... $113,147 $113,147
Long-term debt and capital lease obligations, including current portions........... 37,538 17,933
Shareholders' equity............................................................... 58,961 78,566

<FN>
---------------
(1) Fiscal 1992 results include a pre-tax expense of $2,500,000 ($1,518,000, or
$.13 per share, after tax) in connection with the closing of two
restaurants.

(2) Full-service Company-owned Pizzeria Uno restaurants open for all or part of
period. See "Management's Discussion and Analysis of Financial Condition and
Results of Operation -- General." For a discussion of estimated average
annualized restaurant sales for franchisees, see "Business -- Franchise
Program."

(3) Includes three limited service Pizzeria Uno units as of April 2, 1995; two
limited service Pizzeria Uno units in fiscal 1994 and 1990; and one limited
service Pizzeria Uno unit in fiscal 1993 and 1992.

(4) Includes one Mexican restaurant and three Bay Street Grill restaurants as of
April 2, 1995; one Mexican restaurant in fiscal 1994, 1993 and 1992, one
steakhouse restaurant in fiscal 1991; and two steakhouse restaurants in
fiscal 1990. See "Business -- Other Business Development."

(5) Includes two limited service Pizzeria Uno units as of April 2, 1995, two in
fiscal 1994 and one in fiscal 1991.

(6) Adjusted to reflect the sale of 2,000,000 shares by the Company at the
public offering price of $10.50 per share and the application of the
estimated net proceeds therefrom. See "Use of Proceeds" and
"Capitalization."
</TABLE>

5
<PAGE> 6

THE COMPANY

The original "Pizzeria Uno" restaurant was founded in 1943 by the late Ike
Sewell, who is considered the originator of Chicago-style deep-dish pizza. In
1955, Mr. Sewell opened a second restaurant, called "Pizzeria Due," across the
street from his original Pizzeria Uno restaurant.

In 1979, the Company acquired from Mr. Sewell the worldwide rights to
certain names, including "Uno," "Pizzeria Uno," "Pizzeria Due" and "Ike Sewell's
Original Chicago Pizza" (with the exception of the right to use the names in
Illinois) for the purpose of developing and expanding the concept. The Company
opened its first Pizzeria Uno restaurant in 1979 and licensed its first
franchisee for the operation of a Pizzeria Uno restaurant in 1980. In fiscal
1992, the Company purchased the original Pizzeria Uno and Pizzeria Due
restaurants in Chicago, Illinois and the rights to develop additional
restaurants in Illinois.

The Company is a Delaware corporation organized in August 1986 as a holding
company for the Pizzeria Uno business. Unless otherwise indicated, the term
"Company," as used in this Prospectus, refers to Uno Restaurant Corporation, its
predecessors and its subsidiaries. The Company's principal offices are located
at 100 Charles Park Road, West Roxbury, Massachusetts 02132, and its telephone
number is (617) 323-9200.

INVESTMENT CONSIDERATIONS

In addition to the other information in this Prospectus or incorporated
herein by reference, prospective investors should carefully consider the
following factors in evaluating an investment in the Common Stock offered
hereby.

GROWTH

The Company's continued growth depends on its ability to open new
restaurants and to operate such restaurants profitably. Prior to fiscal 1995,
the Company did not open more than nine restaurants in any fiscal year. However,
the Company plans to open approximately 18 restaurants in fiscal 1995 (of which
11 were open as of May 5, 1995), and approximately 20 restaurants in fiscal
1996. Many of its new restaurants will be opened in geographic markets in which
the Company has limited or no previous operating experience. There can be no
assurance that the Company will be successful in opening the number of
restaurants anticipated in a timely manner, if at all, or that, if opened, those
restaurants will be operated profitably. The Company's ability to expand the
number of its restaurants will depend upon a number of factors, including the
selection and availability of suitable restaurant sites, the negotiation of
acceptable lease or purchase terms, the securing of required governmental
permits and approvals, the hiring, training and retaining of skilled management
and other personnel and the availability of adequate financing, many of which
are beyond the control of the Company. See "Business -- Restaurant Expansion."

GEOGRAPHIC CONCENTRATION

Of the Company's existing 73 full-service Pizzeria Uno restaurants as of
May 5, 1995, 52 are located in the Northeast, including 21 in Massachusetts and
17 in New York. Accordingly, the Company's results of operations may be more
affected by adverse economic conditions in such areas than more geographically
diverse restaurant companies. See "Business -- Restaurant Locations."

FRANCHISING

The Company's success and continued growth are partially dependent upon its
franchisees and the manner in which they operate and develop their Pizzeria Uno
restaurants to promote and develop the Pizzeria Uno concept and its reputation
for quality and value. Although the Company has established criteria to evaluate
prospective franchisees, there can be no assurance that the Company's existing
or future franchisees will have the business abilities or access to financial
resources necessary to open Pizzeria Uno restaurants or will successfully
develop or operate Pizzeria

6
<PAGE> 7

Uno restaurants in their franchise areas in a manner consistent with the
Company's standards. In addition, there can be no assurance that the Company
will be able to identify and attract new franchisees necessary to meet the
Company's expansion plans. See "Business -- Restaurant Expansion" and
"Business -- Franchise Program."

COMPETITION

Competition in the restaurant industry is increasingly intense. The Company
competes principally with mid-priced, full-service restaurants primarily on the
basis of the quality of food offered, menu selection, price, service and decor.
There is also intense competition for real estate sites, personnel and qualified
franchisees. The Company has many well-established competitors, some with
substantially greater financial resources and longer histories of operation than
the Company, including competitors already established in regions into which the
Company is planning to expand, as well as competitors planning to expand in the
same regions. The Company's competitors also include regional and local chains
as well as local owner-operated restaurants. See "Business -- Competition."

RISKS OF RESTAURANT INDUSTRY

The restaurant business is affected by many factors, including changes in
consumer tastes and eating habits, changes in local, regional and national
economic conditions, inclement weather, demographic trends and traffic patterns
and the types, number and location of competing restaurants. In addition,
factors such as inflation, increased food, labor and employee benefit costs and
the availability of experienced management and hourly employees may also
adversely affect the Company's restaurants.

INCREASES IN FOOD AND OTHER COSTS

The Company's profitability is dependent on its ability to anticipate and
react to increases in food, labor, employee benefits and similar costs over
which the Company has very limited control. In the past, the Company has been
able to anticipate and minimize any adverse effect on the Company's
profitability due to increasing costs through its purchasing practices and menu
price adjustments, but there can be no assurance that it will be able to do so
in the future.

GOVERNMENT REGULATION

The Company, its franchisees and each of their restaurants are subject to
licensing and regulation by a number of government authorities, including
alcoholic beverage control, health, safety, sanitation, building and fire
agencies in the state or municipality in which the restaurant is located.
Restaurant operating costs are affected by increases in the minimum hourly wage,
unemployment tax rates, sales taxes, compliance with the Americans with
Disabilities Act, and similar matters. The Company is also subject to federal
regulation and certain state laws which govern the offer and sale of franchises.
Many state franchise laws impose substantive requirements on the franchise
agreement, including limitations on noncompetition provisions and the
termination or nonrenewal of a franchise. Difficulties in obtaining, or the
failure of the Company to obtain or retain, food or liquor licenses or approval
to sell franchises could have a material adverse effect on the Company's
business and its plans for expansion. See "Business -- Government Regulation."

DRAM SHOP LIABILITY

The Company is subject to "dram shop" statutes, which generally provide
that an individual injured by an intoxicated person has the right to recover
damages from an establishment that wrongfully served alcoholic beverages to the
intoxicated person. While the Company currently maintains dram shop insurance,
there can be no assurance that dram shop insurance will continue to be available
to the Company at commercially reasonable prices, if at all, or that such
insurance, if

7
<PAGE> 8

maintained, will be sufficient to cover any claims against the Company for dram
shop liability for which it may be held liable. See "Business -- Government
Regulation."

DEPENDENCE ON KEY PERSONNEL

The Company believes that the development of its business has been, and
will continue to be, dependent on Aaron D. Spencer, its Chairman and Chief
Executive Officer, Craig S. Miller, its President and Chief Operating Officer,
and other key executive employees. The loss of Mr. Spencer's or Mr. Miller's
services could have a material adverse effect upon the Company's business and
development, and there can be no assurance that qualified replacements would be
available. The Company's continued growth will also depend on its ability to
attract and retain additional skilled management personnel. See
"Business -- Restaurant Management" and "Management."

CONTROL BY MANAGEMENT AND PRINCIPAL SHAREHOLDER

Following the completion of this offering, Mr. Spencer, the principal
shareholder of the Company, will beneficially own, in the aggregate,
approximately 41.3% of the outstanding Common Stock. As a result, in practical
effect he will continue to control the election of the Board of Directors of the
Company and the direction of the affairs of the Company. See "Management" and
"Principal Shareholders." If Mr. Spencer's record and beneficial ownership falls
below 33% of the outstanding Common Stock, there would be a default under the
Company's revolving credit facility 30 days following such event, and in the
event he ceases to serve actively as a director and full time employee of the
Company for any reason, including his death, a default would be triggered 60
days following such event.

STOCK PRICE VOLATILITY

The Company's Common Stock has been traded on the New York Stock Exchange
since 1991. The market price of the Common Stock could fluctuate substantially
due to a variety of factors, including quarterly operating results of the
Company or other restaurant companies, changes in general conditions in the
economy, the financial markets or the restaurant industry, natural disasters or
other developments affecting the Company or its competitors. In addition, in
recent years the stock market has experienced extreme price and volume
fluctuations. This volatility has had a significant effect on the market prices
of securities issued by many companies for reasons unrelated to the operating
performance of these companies. See "Price Range of Common Stock."

ANTITAKEOVER PROVISIONS

The Company's Restated Certificate of Incorporation, as amended, contains
certain provisions which may render more difficult an unfriendly tender offer,
proxy contest, merger or change in control of the Company. This could limit the
price that certain investors might be willing to pay in the future for shares of
the Common Stock. See "Description of Capital Stock and Other Matters."

8
<PAGE> 9

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,000,000 shares of
Common Stock offered by the Company hereby (at the public offering price of
$10.50 per share) are estimated to be approximately $19,605,000 ($22,584,000 if
the Underwriter's over-allotment option is exercised in full). The Company
intends to use the net proceeds for repayment of a portion of the principal
amount of $34,000,000 outstanding under the Company's unsecured revolving credit
facility as of May 23, 1995, which had been borrowed primarily for the
development of additional restaurants and for working capital. The revolving
credit facility bears interest at the lender's prime rate or alternatively at
125 basis points above LIBOR and will convert to a three year term loan in
December 1997. As of May 23, 1995, the weighted average interest rate on the
revolving credit facility was 7.55%. The Company anticipates using its revolving
credit facility in the future for repayment of all or a portion of the $6.7
million of principal outstanding under its senior, unsecured notes, for the
development of additional restaurants and for working capital.

DIVIDEND POLICY

The Company has never paid any cash dividends on its Common Stock and for
the foreseeable future intends to continue its policy of retaining earnings to
finance its development and growth. The Board of Directors may reconsider this
policy from time to time in light of conditions then existing, including the
Company's earnings performance, financial condition and capital requirements.
Pursuant to both the private placement in June 1990 of $10.0 million of senior,
unsecured notes with a major insurance company and a $50.0 million unsecured
revolving credit facility obtained in December 1994, the Company became subject
to various financial and operating covenants, including limitations on the
payments of cash dividends. The most restrictive limitations, in general,
restrict the Company from paying cash dividends, if such payment, when
aggregated with certain other payments, would exceed 35% of net income for the
then most recent four-quarter period, or would cause certain net tangible asset
and debt ratios to be exceeded. See Note 6 of Notes to Consolidated Financial
Statements.

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is traded on the New York Stock Exchange under
the symbol "UNO." The following table sets forth, for the periods indicated, the
high and low sales prices per share of Common Stock as reported by the New York
Stock Exchange.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL YEAR ENDED OCTOBER 3, 1993
First Quarter.......................................................... $ 8.20 $ 4.50
Second Quarter......................................................... 6.60 4.80
Third Quarter.......................................................... 6.50 5.30
Fourth Quarter......................................................... 7.70 5.80
FISCAL YEAR ENDED OCTOBER 2, 1994
First Quarter.......................................................... 8.70 7.00
Second Quarter......................................................... 8.50 6.50
Third Quarter.......................................................... 8.60 7.10
Fourth Quarter......................................................... 10.90 7.90
FISCAL YEAR ENDED OCTOBER 1, 1995
First Quarter.......................................................... 11.10 9.30
Second Quarter......................................................... 12.80 10.10
Third Quarter (through May 23, 1995)................................... 12.00 10.25
</TABLE>

The last reported sale price of the Common Stock on the New York Stock
Exchange on May 23, 1995 was $10.50 per share. As of May 5, 1995, the Company
believes there were approximately 3,700 beneficial owners of the Company's
Common Stock, represented by 496 holders of record.

9
<PAGE> 10
<TABLE>
CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company as of April 2, 1995, and as adjusted to reflect the issuance and sale of
2,000,000 shares of Common Stock offered by the Company hereby (at the public
offering price of $10.50 per share) and the application of the estimated net
proceeds therefrom.

<CAPTION>
APRIL 2, 1995
-----------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Current portions of long-term debt and capital lease
obligations(1)(2)................................................ $ 3,402 $ 3,402
======== ==========
Long-term debt and capital lease obligations(1)(2):
Revolving credit facility........................................ $30,024 $10,419
Senior notes..................................................... 3,334 3,334
Capital lease obligations........................................ 778 778
------- -----------
Total long-term debt and capital lease obligations............ 34,136 14,531
------- -----------
Shareholders' equity:
Preferred Stock, $1.00 par value, 1,000,000 shares authorized;
none issued................................................... -- --
Common Stock, $.01 par value, 25,000,000 shares authorized;
11,374,699 shares issued, 13,374,699 shares issued
as adjusted(3)................................................ 114 134
Additional paid-in capital....................................... 30,830 50,415
Retained earnings................................................ 28,017 28,017
------- -----------
Total shareholders' equity.................................... 58,961 78,566
------- -----------
Total capitalization........................................ $93,097 $93,097
======== ==========

<FN>
---------------
(1) See Notes 6 and 13 of Notes to Consolidated Financial Statements.

(2) See Note 5 of Notes to Consolidated Financial Statements.

(3) Excludes 996,610 shares of Common Stock issuable upon exercise of
outstanding stock options, of which options to acquire 426,017 shares were
exercisable as of April 2, 1995.
</TABLE>
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<PAGE> 11

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data of the Company for
fiscal 1994, fiscal 1993 and fiscal 1992 have been derived from the consolidated
financial statements of the Company, which have been audited by Ernst & Young
LLP, as indicated in their report included elsewhere herein. The selected
consolidated financial data of the Company for the fiscal years ended September
29, 1991 and September 30, 1990 have been derived from consolidated financial
statements of the Company audited by Ernst & Young LLP, which are not included
herein. The selected consolidated financial data for the twenty-six week periods
ended April 2, 1995 and April 3, 1994 are derived from unaudited financial
statements. Selected consolidated financial data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations," and the financial statements and the related notes included
elsewhere in this Prospectus. Unaudited data for the twenty-six week periods
ended April 2, 1995 and April 3, 1994 include, in the opinion of management, all
adjustments (consisting only of normal, recurring accruals) necessary to state
fairly the information set forth therein. Operations for the twenty-six week
period ended April 2, 1995 are not necessarily indicative of the results that
may be expected for the entire year ending October 1, 1995.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED 26 WEEKS ENDED
--------------------------------------------------------- ---------------------
SEP 30 SEP 29 SEP 27 OCT 3 OCT 2 APR 3 APR 2
1990 1991 1992 1993 1994 1994 1995
------- ------- ------- -------- -------- -------- --------
(53 WKS)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Restaurant sales............... $50,593 $65,921 $77,500 $98,234 $112,674 $ 49,980 $ 66,767
Consumer product sales......... 1,136 1,996 3,106 7,073 7,418 3,896 4,353
Franchise income............... 2,962 3,408 3,507 3,638 3,973 1,936 2,007
------- ------- ------- -------- -------- -------- --------
54,691 71,325 84,113 108,945 124,065 55,812 73,127
Costs and expenses:
Cost of food and beverages..... 12,589 16,187 19,224 26,024 30,177 13,731 18,432
Labor and benefits............. 15,438 21,017 24,912 32,990 36,935 16,813 22,089
Occupancy costs................ 7,387 10,735 14,492 17,295 18,979 8,680 10,584
Other operating costs.......... 2,981 5,013 9,638(1) 9,166 10,751 5,049 6,189
General and administrative..... 5,886 7,298 7,022 8,233 9,277 4,390 5,621
Depreciation and amortization.. 3,416 5,096 5,773 7,152 7,655 3,609 4,871
------- ------- ------- -------- -------- -------- --------
47,697 65,346 81,061 100,860 113,774 52,272 67,786
------- ------- ------- -------- -------- -------- --------
Operating income................. 6,994 5,979 3,052 8,085 10,291 3,540 5,341
Other expense.................... (328) (487) (150) (1,085) (845) (277) (954)
------- ------- ------- -------- -------- -------- --------
Income before income taxes....... 6,666 5,492 2,902 7,000 9,446 3,263 4,387
Provision for income taxes....... 2,846 2,337 1,140 2,837 3,690 1,322 1,624
------- ------- ------- -------- -------- -------- --------
Net income....................... $ 3,820 $ 3,155 $ 1,762 $ 4,163 $ 5,756 $ 1,941 $ 2,763
======= ======= ======= ======= ======== ======== ========
Earnings per common share........ $ 0.38 $ 0.29 $ 0.16 $ 0.37 $ 0.51 $ 0.17 $ 0.24
======= ======= ======= ======= ======== ======== ========
Weighted average shares
outstanding.................... 10,023 10,738 11,313 11,291 11,360 11,377 11,684
BALANCE SHEET DATA:
Total assets..................... $43,299 $61,260 $68,117 $74,735 $ 92,221 $ 79,650 $113,147
Long-term debt and capital lease
obligations, including current
portions....................... 10,478 10,477 10,475 11,973 21,523 15,552 37,538
Shareholders' equity............. 26,141 43,131 45,090 49,375 55,958 51,364 58,961
<FN>
---------------
(1) Fiscal 1992 results include a pre-tax expense of $2,500,000 ($1,518,000, or
$.13 per share, after tax) in connection with the closing of two
restaurants.
</TABLE>

11
<PAGE> 12

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company's revenues are derived primarily from three sources:
Company-owned restaurant sales, consumer product sales and franchise income from
franchised restaurants. Franchise income includes both royalty income and
initial franchise fees. Certain expenses (cost of food and beverages, labor and
benefits, occupancy costs, other operating costs and depreciation and
amortization) relate directly to Company-owned restaurants and consumer product
sales, while general and administrative expenses relate to all operations.

The Company capitalizes certain costs relating to the opening of new
restaurants until they open, at which time the costs are amortized over 12
months on a straight line basis.

The Company analyzes its operations on the basis of operating weeks,
comparable store sales and average annualized restaurant sales. An operating
week is one week of operation for one full-service restaurant. A restaurant is
included in the comparable store sales base after it has completed 16 months of
operation, and it is included in the comparable store base for all subsequent
periods presented, including monthly, quarterly and annually, with appropriate
weighting for partial periods. A restaurant is included in the calculation of
average annualized restaurant sales from its first week of operation and for all
subsequent periods presented including monthly, quarterly and annually, with
appropriate weighting for partial periods.

The Company's fiscal year ends on the close of business on the Sunday
closest to September 30 in each year. The fiscal year ended October 3, 1993
included 53 weeks of operations.

RESULTS OF OPERATIONS

<TABLE>
The following table sets forth the percentage relationship to total
revenues, unless otherwise indicated, of certain items included in the Company's
income statements, as well as certain operating data, for the periods indicated:
<CAPTION>
FISCAL YEAR ENDED 26 WEEKS ENDED
---------------------------------- --------------------
SEP 27 OCT 3 OCT 2 APR 3 APR 2
1992 1993 1994 1994 1995
-------- -------- -------- ------- --------
(53 WKS)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues:
Restaurant sales...................................... 92.1% 90.2% 90.8% 89.6% 91.3%
Consumer product sales................................ 3.7 6.5 6.0 7.0 6.0
Franchise income...................................... 4.2 3.3 3.2 3.4 2.7
-------- -------- -------- ------- --------
Total............................................. 100.0 100.0 100.0 100.0 100.0
Costs and expenses:
Cost of food and beverages(1)......................... 23.9 24.7 25.1 25.5 25.9
Labor and benefits(1)................................. 30.9 31.3 30.8 31.2 31.1
Occupancy costs(1).................................... 18.0 16.4 15.8 16.1 14.9
Other operating costs(1).............................. 12.0(2) 8.7 9.0 9.4 8.7
General and administrative............................ 8.3 7.6 7.5 7.9 7.7
Depreciation and amortization(1)...................... 7.2 6.8 6.4 6.7 6.8
-------- -------- -------- ------- --------
Operating income........................................ 3.7 7.4 8.3 6.3 7.3
Other expense........................................... (.2) (1.0) (.7) (.5) (1.3)
-------- -------- -------- ------- --------
Income before taxes..................................... 3.5 6.4 7.6 5.8 6.0
Provision for income taxes.............................. 1.4 2.6 3.0 2.4 2.2
-------- -------- -------- ------- --------
Net income.............................................. 2.1% 3.8% 4.6% 3.4% 3.8%
======== ======== ======== ======= ========
OPERATING DATA:
Average annualized restaurant sales(3)................ $ 1,787 $ 1,807 $ 1,886 $ 1,756 $ 1,866
Number of restaurants at end of period:
Company-owned Pizzeria Uno(4)....................... 50 56 65 58 74
Other Company-owned(5).............................. 1 1 1 1 4
Franchised(6)....................................... 59 58 61 61 60
-------- -------- -------- ------- --------
Total............................................. 110 115 127 120 138
======== ======== ======== ======= ========
</TABLE>

12
<PAGE> 13

---------------
(1) Percentage of restaurant and consumer product sales.
(2) Fiscal 1992 results include a pre-tax expense of $2,500,000 ($1,518,000, or
$.13 per share, after tax) in connection with the closing of two
restaurants.
(3) Full-service Company-owned Pizzeria Uno restaurants open for all or part of
period. See "-- General." For a discussion of estimated average annualized
restaurant sales for franchisees, see "Business -- Franchise Program."
(4) Includes three limited service Pizzeria Uno units as of April 2, 1995; two
limited service Pizzeria Uno units in fiscal 1994; and 1990; and one limited
service Pizzeria Uno unit in fiscal 1993 and 1992.
(5) Includes one Mexican restaurant and three Bay Street Grill restaurants as of
April 2, 1995; one Mexican restaurant in fiscal 1994, 1993 and 1992; one
steakhouse restaurant in fiscal 1991; and two steakhouse restaurants in
fiscal 1990. See "Business -- Other Business Development."
(6) Includes two limited service Pizzeria Uno units as of April 2, 1995, two in
fiscal 1994 and one in fiscal 1991.

TWENTY-SIX WEEKS ENDED APRIL 2, 1995 COMPARED TO TWENTY-SIX WEEKS ENDED APRIL 3,
1994

Total revenues increased 31.0% to $73.1 million for the 26 weeks ended
April 2, 1995 from $55.8 million in the comparable period in 1994. Company-owned
restaurant sales increased 33.6% to $66.8 million for the 26 weeks ended April
2, 1995 due primarily to a 19.8% increase in operating weeks of full-service
Pizzeria Uno restaurants resulting from the addition of 14 restaurants during
the past four quarters, as well as the purchase of three Bay Street Grill
restaurants in December 1994. See "Business -- Other Business Development." The
increase in restaurant sales was also due to a 6.6% increase in comparable store
sales for the 26 weeks ended April 2, 1995.

Consumer product sales increased 11.7% to $4.4 million for the 26 weeks
ended April 2, 1995 from $3.9 million in the comparable period in 1994 due to
higher sales of Pizzeria Uno brand and private label refrigerated pizza, as well
as increased shipments of frozen pizza for tests by customers outside New
England.

Franchise income increased 3.7% to $2.0 million for the 26 weeks ended
April 2, 1995 from $1.9 million in the comparable period in 1994. Royalty income
increased 7.8% to $2.0 million for the 26 weeks ended April 2, 1995 generally
due to an increase in franchise restaurant sales. Initial franchise fees totaled
$55,000 for the 26 weeks ended April 2, 1995 compared to $125,000 in the
comparable period in 1994.

Cost of food and beverages as a percentage of restaurant and consumer
product sales increased to 25.9% for the 26 weeks ended April 2, 1995 from 25.5%
in the comparable period in 1994. This percentage cost increase primarily
reflected changes in sales mix toward a larger percentage of higher-cost
non-pizza menu items.

Labor and benefits as a percentage of restaurant and consumer product sales
decreased slightly to 31.1% for the 26 weeks ended April 2, 1995 from 31.2% in
the comparable period in 1994, principally due to the leverage of higher
comparable store sales.

Occupancy costs as a percentage of restaurant and consumer product sales
declined to 14.9% for the 26 weeks ended April 2, 1995 from 16.1% in the
comparable period in 1994, primarily due to an increased number of owned
restaurant properties and the operating leverage provided by the increase in
comparable store sales noted above.

Other operating costs declined as a percentage of restaurant and consumer
product sales to 8.7% for the 26 weeks ended April 2, 1995 from 9.4% in the
comparable period in 1994. The primary reasons for this improvement were lower
advertising expenses as a percentage of restaurant and consumer product sales
and the operating leverage provided by the increase in comparable store sales.

General and administrative expenses decreased as a percentage of total
revenues to 7.7% for the 26 weeks ended April 2, 1995 from 7.9% in the
comparable period in 1994 as a result of allocating certain fixed expenses over
a larger revenue base.

Depreciation and amortization expenses as a percentage of restaurant and
consumer product sales increased slightly to 6.8% for the 26 weeks ended April
2, 1995 from 6.7% in the comparable

13
<PAGE> 14

period in 1994, principally due to increased amortization of pre-opening costs
associated with the higher rate of unit growth.

Operating income increased 50.9% to $5.3 million for the 26 weeks ended
April 2, 1995 compared to $3.5 million in the comparable period in 1994. The
operating profit margin improved to 7.3% from 6.3%, primarily as a result of the
increase in Company-owned restaurants and comparable store sales.

Other expense increased to $954,000 or 1.3% of total revenues for the 26
weeks ended April 2, 1995 from $277,000 or .5% of total revenues in the
comparable period in 1994. This increase was due to higher interest expense
associated with the increased level of debt used to fund the Company's
accelerated expansion plan and its ownership of an increasing number of
restaurant properties. In addition, other expense in the comparable period in
1994 was favorably affected by a $312,000 gain on the sale of a restaurant to a
franchisee.

The effective income tax rate declined to 37.0% for the 26 weeks ended
April 2, 1995 from 40.5% in the comparable period in 1994. The effective income
tax rate for the 26 weeks ended April 2, 1995 was lower primarily due to the
effect of the FICA tip tax credit which became effective on January 1, 1994 and
generally lower state income taxes.

FISCAL 1994 COMPARED TO FISCAL 1993 (53 WEEKS)

Total revenue increased 13.9% to $124.1 million in fiscal 1994 from $108.9
million in the prior year. Company-owned restaurant sales increased 14.7% to
$112.7 million in fiscal 1994 due primarily to a 9.4% increase in operating
weeks of full-service restaurants resulting from the addition of eight new
restaurants, and a 6.5% increase in comparable store sales.

Consumer product sales increased 4.9% to $7.4 million in fiscal 1994 from
$7.1 million in the prior year primarily due to expanded sales of private label,
thin-crust pizzas to several supermarket chains in New England. Initial
shipments of both refrigerated and frozen Pizzeria Uno brand pizzas commenced in
fiscal 1994 to new customers in New York, New Jersey, Pennsylvania and Ohio in
order to expand the Company's regional presence beyond New England.

Franchise income increased 9.2% to $4.0 million in fiscal 1994 from $3.6
million in the prior year. Royalty income increased 9.5% to $3.8 million in
fiscal 1994 from $3.5 million in the prior year primarily due to an increase of
7.1% in average unit sales. Initial franchise fees totaled $150,000 in fiscal
1994 compared to $147,500 in fiscal 1993.

Cost of food and beverages as a percentage of restaurant and consumer
product sales increased to 25.1% in fiscal 1994 from 24.7% in the prior year,
reflecting primarily changes in sales mix toward a larger percentage of higher
cost non-pizza menu items.

Labor and benefits as a percentage of restaurant and consumer product sales
decreased slightly to 30.8% in fiscal 1994 from 31.3% in the prior year,
principally due to the leverage of higher comparable store sales.

Occupancy costs as a percentage of restaurant and consumer product sales
declined to 15.8% in fiscal 1994 from 16.4% in the prior year, resulting from
the Company's purchase of the real estate for several restaurants since fiscal
1992, and the operating leverage provided by the increase in comparable store
sales.

Other operating costs as a percentage of restaurant and consumer product
sales were 9.0% for fiscal 1994, remaining relatively unchanged from 8.7% in the
prior year.

14
<PAGE> 15

General and administrative expenses decreased as a percentage of total
revenues to 7.5% in fiscal 1994 from 7.6% in the prior year, principally due to
the allocation of certain fixed expenses over a larger revenue base.

Depreciation and amortization expenses as a percentage of restaurant and
consumer product sales decreased to 6.4% in fiscal 1994 from 6.8% in the prior
year principally due to the increase in comparable store sales.

Operating income increased 27.3% to $10.3 million in fiscal 1994 from $8.1
million for the prior year. The operating profit margin increased to 8.3% in
fiscal 1994 from 7.4% in the prior year, principally due to an increase in
Company-owned restaurants and comparable store sales.

Other expense declined to $845,000 in fiscal 1994 from $1.1 million in the
prior year, principally due to a $312,000 gain on the sale of a restaurant to a
franchisee in fiscal 1994.

The effective income tax rate declined to 39.1% in fiscal 1994 from 40.5%
in fiscal 1993, primarily due to the FICA tip credit, which became effective on
January 1, 1994.

FISCAL 1993 (53 WEEKS) COMPARED TO FISCAL 1992

Total revenue increased 29.5% to $108.9 million in fiscal 1993 from $84.1
million in the prior year. Company-owned restaurant sales increased 26.8% to
$98.2 million in fiscal 1993 due to a 23.6% increase in operating weeks of
full-service restaurants resulting from the addition of six new restaurants.
Comparable-store sales declined slightly by .4%.

Consumer product sales increased 127.7% to $7.1 million in fiscal 1993 from
$3.1 million in the prior year. This growth was due principally to new channels
of distribution. Specifically, significant sales to American Airlines, and
penetration into the New York metropolitan area were responsible for the rapid
expansion of this business. Also, shipments were initiated to new customers in
Pennsylvania and New Jersey. A new production facility opened in January 1993,
and additional capacity was added in fiscal 1993 to support this growth.

Franchise income increased 3.7% to $3.6 million in fiscal 1993 from $3.5
million in the prior year. Royalty income increased 6.2% to $3.5 million in
fiscal 1993 from $3.3 million in the prior year due to a 3.6% increase in
operating weeks resulting from the opening of three new restaurants. Initial
franchise fees totaled $147,500 in fiscal 1993 compared to $220,000 in fiscal
1992 due to fewer new franchise openings.

Cost of food and beverages as a percentage of restaurant and consumer
product sales increased to 24.7% in fiscal 1993 from 23.9% in the prior year,
primarily as a result of the Company's decision to increase the size of its
deep-dish pizzas in fiscal 1993.

Labor and benefits as a percentage of restaurant and consumer product sales
increased slightly to 31.3% in fiscal 1993 from 30.9% in the prior year,
primarily as a result of the Company's decision to add additional managers in
many of its high-volume restaurants in fiscal 1993.

Occupancy costs as a percentage of restaurant and consumer product sales
declined to 16.4% in fiscal 1993 from 18.0% in the prior year, principally due
to the Company's purchase of several restaurants in fiscal 1992 and 1993, and
the operating leverage provided by the sales growth of the consumer products
business.

Other operating costs as a percentage of restaurant and consumer product
sales decreased to 8.7% in fiscal 1993 from 12.0% in the prior year, primarily
due to a pre-tax charge of $2.5 million in fiscal 1992 related to the closing of
two restaurants.

General and administrative expenses decreased as a percentage of total
revenues to 7.6% in fiscal 1993 from 8.3% in the prior year, principally due to
the allocation of certain fixed expenses over a larger revenue base.

15
<PAGE> 16

Depreciation and amortization expenses as a percentage of restaurant and
consumer product sales decreased to 6.8% in fiscal 1993 from 7.2% in the prior
year, principally due to the increase in comparable store sales.

Operating income increased 164.9% to $8.1 million in fiscal 1993 compared
to $3.1 million in the prior year. Fiscal 1992 results included a pre-tax charge
of $2.5 million discussed above. The operating profit margin improved to 7.4% in
fiscal 1993 from 6.6% in the prior year excluding the $2.5 million pre-tax
charge in fiscal 1992.

Other expense increased to $1.1 million in fiscal 1993 from $150,000 in the
prior year. The principal factors for this increase were higher interest costs
and a decline in investment income as the Company financed its growth in 1993
through the use of its available cash and its revolving credit facility.

The effective income tax rate was 40.5% in fiscal 1993 compared to 39.3% in
the prior year due to the benefit of tax-exempt interest income received in
fiscal 1992.

LIQUIDITY AND SOURCES OF CAPITAL

The following table presents a summary of the Company's cash flows for the
fiscal years 1992, 1993 and 1994 and for the 26 weeks ended April 2, 1995.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED 26 WEEKS
---------------------------------------- ENDED
SEPTEMBER 27 OCTOBER 3 OCTOBER 2 APRIL 2
1992 1993 1994 1995
------------ ----------- ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net cash provided by operating
activities.............................. $ 9,028 $ 10,987 $ 14,462 $ 5,930
Net cash used in investing activities..... (9,890) (11,869) (24,441) (22,932)
Net cash provided by financing
activities.............................. 375 1,440 9,942 16,255
-------- --------- --------- ---------
Increase (Decrease) in cash and cash
equivalents............................. $ (487) $ 558 $ (37) $ (747)
======== ========= ========= =========
</TABLE>

Historically, the Company has leased most of its restaurant locations and
pursued a strategy of controlled growth, financing its expansion principally
from operating cash flow, equity offerings and from the sale of senior,
unsecured notes and short-term borrowing under revolving lines of credit. During
fiscal 1992, 1993 and 1994, the Company's investment in property, equipment and
leasehold improvements was $18.7 million, $12.5 million and $22.2 million,
respectively, and during the 26 week period ended April 2, 1995, such investment
was $22.6 million.

The Company currently plans to open approximately 38 restaurants during
fiscal 1995 and fiscal 1996, 11 of which were open as of May 5, 1995. The
Company expects that the average cash investment required to open a full-service
Pizzeria Uno restaurant, excluding land and preopening costs, will be
approximately $1.5 million. For the balance of fiscal 1995, the Company has
planned $19.0 million in additional capital expenditures primarily for the
development of new restaurants.

As of April 2, 1995, the Company had outstanding indebtedness of $30.0
million under its unsecured, revolving line of credit, $6.7 million of senior,
unsecured notes and $847,000 in capital lease obligations. In December 1994, the
Company obtained a $50.0 million revolving credit facility to replace its then
existing $20.0 million revolving credit facility. The new revolving credit
facility will convert to a three year term loan in December 1997. Advances under
the revolving credit facility will accrue interest at the lender's prime rate,
or alternatively, 125 basis points above LIBOR. The Company intends to use the
proceeds of this offering to repay a portion of the principal amount outstanding
under its revolving credit facility. The Company anticipates using the revolving
credit facility in the future for repayment of all or a portion of the $6.7
million of principal outstanding under its senior, unsecured notes, for the
development of additional restaurants and for working capital.

16
<PAGE> 17

The Company believes that existing cash balances, the proceeds from this
offering, cash generated from operations and borrowings under its revolving line
of credit will be sufficient to satisfy the Company's working capital and
capital expenditure requirements through fiscal 1996.

IMPACT OF INFLATION

Inflation has not been a major factor in the Company's business for the
last several years. The Company believes it has historically been able to pass
on increased costs through menu price increases, but there can be no assurance
that it will be able to do so in the future. Future increases in local area
construction costs could adversely affect the Company's ability to expand.

SEASONALITY

The Company's business is seasonal in nature, with revenues and, to a
greater degree, operating income being lower in its first and second quarters
than its other quarters due to the Company's reduced winter volumes. See Note 12
of Notes to Consolidated Financial Statements.

17
<PAGE> 18

BUSINESS

GENERAL

The Company owns and operates 73 and franchises 58 casual dining,
full-service restaurants under the name "Pizzeria Uno...Chicago Bar & Grill."
The restaurants offer a diverse, high-quality menu at moderate prices in a
casual, friendly atmosphere. The restaurants feature the Company's signature
Chicago-style deep-dish pizza and a selection of entrees, including thin crust
pizza, pasta, fajitas, ribs, steak and chicken, as well as a variety of
appetizers, salads, sandwiches and desserts. The Company's restaurants average
approximately 6,200 square feet with seating for an average of approximately 180
guests. For the 52 weeks ended April 2, 1995, Company-owned restaurants averaged
$1,932,000 in sales. Company-owned restaurants are located predominantly in the
Northeast and Mid-Atlantic states, and franchised restaurants are located
throughout the United States.

In fiscal 1993, the Company began implementing strategic initiatives
intended to strengthen its position in casual dining and to distinguish its
restaurants from quick service pizza, pizza and pasta, and full-service Italian
restaurants. As part of this strategy, during fiscal 1994, the Company invested
approximately $2.5 million in new kitchen capabilities, including saute
stations, grills and fryers, for its Company-owned restaurants enabling the
Company to enhance the quality, breadth and appeal of its non-pizza menu items.
To better communicate its concept and broadened menu to consumers, the Company
refined the name of its restaurants to Pizzeria Uno . . . Chicago Bar & Grill
and upgraded the design and decor of its restaurants to be consistent with its
casual dining theme. In addition, in fiscal 1993, the Company increased the size
of its deep-dish pizzas to provide greater value and added additional restaurant
managers in many of its higher volume units to improve overall service. The
Company believes these strategic initiatives directly contributed to an increase
in its average guest check and increases in comparable store sales of 6.5% in
fiscal 1994 and 6.6% for the 26 weeks ended April 2, 1995.

RESTAURANT CONCEPT AND MENU

Pizzeria Uno restaurants are full-service, casual dining restaurants,
featuring the Company's signature Chicago-style deep-dish pizza and a diverse
menu of high quality, moderately-priced menu items. The Company's target market
is middle to upper-middle income individuals in the 17 to 49 year-old age group.
The restaurants are generally open from 11:00 a.m. to midnight, seven days per
week.

18
<PAGE> 19

The restaurants feature the Company's signature Chicago-style deep-dish
pizzas and a selection of entrees, including thin crust pizza, pastas, fajitas,
ribs, steak and chicken, as well as a variety of appetizers, salads, sandwiches
and desserts. The Company's signature product, its Chicago-style, deep-dish
pizza, filled with ingredients such as fresh meats, spices, vegetables and real
cheeses, is baked according to proprietary recipes. The Company believes that
its proprietary recipes produce a superior pizza that is difficult to duplicate.
In fiscal 1994, the Company invested approximately $2.5 million in new kitchen
capabilities, including saute stations, grills and fryers, for its Company-owned
restaurants enabling the Company to enhance the quality, breadth and appeal of
its non-pizza items. For the 26 weeks ended April 2, 1995 the Company's average
per guest check for full service Company-owned restaurants was approximately
$9.40. For fiscal 1994, sales of alcoholic beverages accounted for approximately
18% of total restaurant sales.

RESTAURANT DESIGN AND SITE SELECTION

The Company has recently upgraded the design and decor of its restaurants
to be consistent with its theme as "Pizzeria Uno...Chicago Bar & Grill."
Pizzeria Uno restaurants are designed and decorated to provide a friendly and
comfortable atmosphere expected of full-service, casual dining restaurants and
distinguished from typical pizza restaurants. The decor of each restaurant
emphasizes quality with wood, brick and brass. To ensure quality and compliance
with Company standards, preliminary exterior design and complete interior and
kitchen design for all Company-owned and franchised restaurants are prepared by
the Company. The Company's current prototype free-standing restaurant occupies
approximately 6,400 square feet, with a seating capacity of approximately 200
customers.

The Company considers the specific location of a restaurant to be critical
to its long-term success and devotes significant effort to the investigation and
evaluation of potential sites. One or more of the Company's executive officers
inspect and approve the site for each Company-owned and franchised restaurant.
Within each target market area, the Company evaluates population density and
demographics, major retail and office concentration and traffic patterns. In
addition, the Company evaluates visibility, accessibility, proximity to direct
competition and various other site specific factors. Pizzeria Uno restaurants
are located in both urban and suburban markets, in free-standing buildings,
strip centers and malls. Restaurant development is currently targeted at high
profile, free-standing locations.

Historically, the Company has leased most of its restaurants to minimize
investment costs. Since fiscal 1992, however, the Company began selectively
purchasing real estate to develop new restaurants where available and when the
expected long-term cost of owning the real estate is less than the cost of
leasing. Of the 18 Company-owned restaurants opened between October 4, 1993 and
May 5, 1995, 14 are located in leased facilities and four are fee owned
properties. See " -- Properties."

19
<PAGE> 20

RESTAURANT LOCATIONS

The following tables provide the locations for Company-owned and franchised
restaurants as of May 5, 1995.

COMPANY-OWNED RESTAURANTS(81)

COLORADO (1) Danvers Bay Ridge
Denver Dedham Forest Hills
Framingham Manhattan(5)
CONNECTICUT (5) Hanover Lynbrook
Danbury Hyannis Massapequa
Fairfield Kingston Rochester
Manchester Lynnfield Syracuse
Milford Newton(2)(c) Vestal
West Hartford Newtonville (d) Yonkers
Revere
FLORIDA (3) Shrewsbury(d) OHIO (1)
Daytona Beach Springfield Columbus
Orlando Waltham (d)
Ormond Beach Woburn PENNSYLVANIA (4)
Paoli
ILLINOIS (5) MISSOURI (1) Philadelphia(2)(e)
Aurora St. Louis Pittsburgh
Chicago(3)(a) Chesterfield Monroeville
Schaumburg(b)
NEW HAMPSHIRE(3) RHODE ISLAND (1)
MAINE (1) Concord Warwick
Portland Manchester
Nashua VIRGINIA (5)
MARYLAND (5) Balston
Baltimore NEW JERSEY (2) Fairfax
Bel Air Paramus Norfolk
Bethesda Woodbridge (b) Potomac Mills
Towson Reston
Waldorf NEW YORK (17)
Albany WASHINGTON, DC(2)
MASSACHUSETTS (25) Amherst Cleveland Park
Boston(5) Buffalo Union Station
Braintree New York City
Brockton Bayside
Burlington
Cambridge(2)

FRANCHISED RESTAURANTS(60)

ARIZONA (1) KENTUCKY (1) OHIO (6)
Tempe Lexington Cincinnati(2)
CALIFORNIA (9) MARYLAND (1) Cleveland(3)
Cupertino Deep Creek Dayton
Fremont MASSACHUSETTS (4) OKLAHOMA (1)
Los Angeles Holyoke Tulsa
San Diego(2) Marlborough PENNSYLVANIA (5)
San Francisco(3) Springfield(2)(c) King of Prussia
Santa Clara MICHIGAN (2) Langhorne
CANADA (1) Ann Arbor Media
Toronto Bloomfield Philadelphia(2)
FLORIDA (5) MINNESOTA (2) PUERTO RICO (2)
Miami Minnetonka San Juan(2)
Orlando(3) Edina TEXAS (5)
Tampa NEVADA (1) Addison
HAWAII (1) Las Vegas Arlington
Honolulu NEW JERSEY (4) Dallas
ILLINOIS (2) Cherry Hill Ft. Worth
Champaign Secaucus Houston
Chicago(d) South Plainfield WASHINGTON, DC(1)
INDIANA (2) Wayne Georgetown
Indianapolis NEW YORK (1) WISCONSIN (3)
Merrillville Poughkeepsie Milwaukee
Madison(2)
[FN]
---------------
(a) Includes one Mexican restaurant.
(b) Bay Street Grill.
(c) Includes one limited seating, take-out restaurant.
(d) Limited seating, take-out restaurant.
(e) Includes one Bay Street Grill.

20
<PAGE> 21

UNIT ECONOMICS

For the 12 month period ended April 2, 1995, the 57 Company-owned
restaurants opened prior to April 3, 1994 generated average restaurant sales of
approximately $1,927,000, average restaurant operating income of approximately
$274,000 (or 14.2% of sales) and average restaurant cash flow of approximately
$393,000 (or 20.4% of sales). The 18 Company-owned restaurants opened in fiscal
1994 and fiscal 1995 had an average cash investment of approximately $1,503,000
for building, leasehold improvements, furniture, fixtures and equipment, but
excluding land costs and pre-opening expenses. The Company expects that the
average cash investment required to open a full-service Pizzeria Uno restaurant
will be approximately $1.5 million, excluding land and pre-operating expenses.
In the future, the Company anticipates that it will continue to purchase a
portion of its new restaurant locations and expects that its total investment
for each fee owned unit will be approximately $2.0 to $2.5 million and its
overall average investment, including leased locations, will be approximately
$1.6 to $1.8 million per unit.

RESTAURANT EXPANSION

The Company intends to continue opening Company-owned restaurants in two of
its primary metropolitan markets, New York and Baltimore/Washington, D.C. The
Company is also engaged in site development efforts in Chicago, Orlando and
Denver. Due to its current concentration of restaurants in New England, future
expansion in this market will be more selective. In fiscal 1994, the Company
opened seven restaurants, acquired three restaurants, sold one restaurant and
closed one restaurant. The Company expects to open approximately 18 restaurants
in fiscal 1995 (11 of which were open as of May 5, 1995) and approximately 20
restaurants in fiscal 1996.

The Company will continue to grant franchisees the right to expand the
Pizzeria Uno restaurant business throughout the United States and, as
opportunities arise, outside the United States. In fiscal 1994, four franchised
restaurants were opened, one Company-owned restaurant was sold to a franchisee,
three franchised restaurants were sold to the Company and one franchised
restaurant was closed. During fiscal 1995, the Company expects franchisees to
open approximately six restaurants, three of which were open as of May 5, 1995,
and during fiscal 1996, the Company expects franchisees to open approximately 10
restaurants. As of May 5, 1995, three franchised restaurants have closed during
fiscal 1995. See "-- Franchise Program."

OTHER BUSINESS DEVELOPMENT

The Company has recently been expanding its consumer product business
principally through distribution of its deep-dish pizza in the fresh deli
counters and frozen food sections of approximately 870 supermarkets in New
England, New York, New Jersey, Pennsylvania and Ohio. Currently, Pizzeria Uno
deep-dish pizza is the leading brand of fresh, refrigerated pizza sold in New
England supermarkets. The Company also is currently supplying private-label
thin-crust pizza to selected New England supermarket chains. In addition, in
January 1993, the Company began supplying frozen deep-dish pizzas to American
Airlines for service on its flights. Approximately 1.6 million pizzas were
served aboard American Airlines flights during fiscal 1994. Finally, the Company
is testing the sale of frozen pizzas at Pizzeria Uno kiosks currently located in
14 General Cinema movie theaters. To support the growth of the Company's
consumer product business, a production facility in Brockton, Massachusetts
began operation in January 1993. The Company expanded the facility later in
fiscal 1993 and currently is further expanding the facility. See
"-- Properties."

The Company is continuing to test other traditional and non-traditional
distribution channels for its signature, deep-dish pizza product. The Company
currently operates three limited-seating take-out units with the name
"Uno...Pizza Takery." The units are located in strip centers, occupy
approximately 2,000 square feet and offer limited seating for up to 40
customers.

In December 1994, the Company purchased three Bay Street Grill restaurants
located in Schaumburg, Illinois, Woodbridge, New Jersey and Philadelphia,
Pennsylvania. The Bay Street Grill

21
<PAGE> 22

restaurants are full-service, casual dining restaurants, which specialize in
seafood. The Company is currently evaluating the Bay Street Grill concept for
potential expansion.

RESTAURANT MANAGEMENT

The staff for a typical Pizzeria Uno restaurant consists of one general
manager, two assistant managers and approximately 50 to 70 hourly employees,
many of whom are part-time personnel. Managers of Company-owned restaurants are
compensated with a salary plus a performance bonus based on restaurant sales and
profits. The Company believes that turnover among the Company's restaurant
managers is below the industry average.

The Company conducts an initial ten-week training program for all managers
and franchisees focusing on restaurant operations. There is continuing training
of Company-owned restaurant managers through specialized training programs and
regular meetings that emphasize the areas of leadership, quality of food
preparation and service. The Company requires its food handling personnel and
alcohol serving employees to participate in a training program to ensure the
sanitary and responsible service of food and alcohol. The training program is
conducted annually. The Company also holds quarterly regional meetings and an
annual national meeting of franchisees and Company managers which focus on
continuing training in marketing, new products, site selection and aspects of
business management.

Each Company-owned restaurant manager and franchisee is required to comply
with an extensive operations manual which contains detailed standards and
specifications for all elements of operations. The Company generally visits
franchisees on a quarterly basis, but continuing training of franchised
restaurant managers is the responsibility of the franchisees.

The Company employs 12 regional operations directors. The Company also
currently employs five field-service supervisors to monitor all franchised
restaurants. Their duties include quarterly visits and detailed, annual
inspections of quality, service and sanitation. As additional restaurants are
opened, the Company intends to add qualified supervisors in order to maintain
quality control.

PURCHASING

The Company negotiates directly with suppliers for all primary food
ingredients and beverage products to ensure adequate supplies and to obtain
competitive prices. The Company seeks competitive bids from suppliers on many of
its primary food ingredients on a periodic basis no less than annually for each
supplier. The Company approves suppliers of these ingredients and products and
requires its suppliers to adhere to product specifications established by the
Company. Several key ingredients are proprietary. They are manufactured for the
Company under private label and sold to authorized distributors for resale to
Company-owned restaurants and franchisees. The Company and its franchisees
purchase substantially all food and beverage products from authorized local or
national distributors. In some cases, franchisees find it more economical to
purchase most of these products from the same distributors servicing the
Company-owned restaurants in order to take advantage of volume discounts. The
Company does not derive any income from suppliers or distributors on sales to
franchisees. All essential food and beverage products are available, or upon
short notice can be made available, from alternative qualified suppliers.

ADVERTISING AND MARKETING

For fiscal 1994, the Company spent 2.7% of restaurant and consumer product
sales on advertising and marketing. The Company relies primarily on television,
radio, direct mail and print advertising. Through an advertising cooperative
fund, the Company prepares regional and local advertising materials and also
produces menus and promotional programs for both franchised and Company-owned
restaurants.

Franchisees are required to contribute a fee of up to 1.0% of franchised
restaurant sales to the advertising cooperative fund, and the Company
contributes an equal percentage of Company-owned

22
<PAGE> 23

restaurant sales. Except for the materials prepared and distributed by the
Company through the advertising cooperative fund, franchisees are responsible
for the implementation of advertising and marketing for their respective
restaurants, subject to adherence to Company-established guidelines. In
addition, the Company's franchise agreement requires franchisees to spend at
least 2% of franchised restaurant sales each year on local advertising and
public relations.

FRANCHISE PROGRAM

As of May 5, 1995, the Company had 60 franchised Pizzeria Uno restaurants
operated by 34 franchisees located in 19 states, the District of Columbia,
Puerto Rico and Canada. Historically, franchises were granted on a unit-by-unit
basis, rather than by territory. The Company is currently pursuing territory
development by entering into development agreements with franchisees for
construction of one or more restaurants over a certain period of time and within
a certain geographic area. The Company is in continual discussions with existing
and prospective franchisees for the development of certain geographic areas and
expects to grant additional franchises to qualified applicants with
restaurant-related operating experience and requisite financial resources.

New domestic franchisees are required to pay at the time the development
agreement is signed a nonrefundable fee of $10,000 per restaurant committed to
be developed. The Company's current franchise agreement also requires
franchisees to pay a unit franchisee fee of $30,000 per restaurant before
signing a franchise agreement for a specific location and a continuing monthly
royalty based on a percentage of restaurant sales. Royalties and franchise fees
for international franchises are negotiated on an individual basis. Royalties
received by the Company averaged 4.4% of franchised restaurant sales for the 26
weeks ended April 2, 1995. At the beginning of fiscal 1992, the Company
implemented a variable royalty plan that allows royalty rate reductions from
contractual rates for those franchised restaurants meeting certain criteria. It
is available only to those franchised restaurants that do not achieve minimum
sales levels during their first five years of operation in relation to their
overall capital investment, including capitalized lease obligations. The minimum
royalty rate under the variable royalty plan is 3% and ranges up to 5%. Seven
franchised restaurants currently qualify for some degree of royalty rate
reduction under the variable royalty plan.

The Company receives weekly and monthly sales reports from its franchisees
and in addition, conducts test sales audits of all franchisees on an annual
basis. Based upon these reports, the Company believes that the average
annualized sales for its franchised restaurants in fiscal 1994 was approximately
$1.4 million.

The franchise agreements generally prohibit the Company from granting
competing franchises or opening competing restaurants within three miles of a
franchised restaurant. The franchise agreements have an initial term of 20 years
with three successive ten-year renewal periods at the option of the franchisee,
provided that the agreement has not previously been terminated by either party.
Upon each renewal, the Company may require a franchisee to sign a revised
franchise agreement and to make capital expenditures to renovate the restaurant,
but may not increase the continuing monthly royalty or charge a renewal fee. The
Company retains the right to terminate a franchise agreement for a variety of
reasons, including significant and willful understatement of gross receipts,
failure to pay fees, material misrepresentation on an application for a
franchise, or material breach or default under the franchise agreement,
including failure to maintain Company operating standards. Many state franchise
laws limit the ability of a franchisor to terminate or refuse to renew a
franchise. The Company has the right to audit and receive certain monthly and
annual financial and other information from franchisees.

The Company's initial training program for franchisees is similar to its
training program for management trainees and employees in Company-owned
restaurants. See "-- Restaurant Management." In order to ensure uniform quality
standards, the Company requires franchisees to comply with Company
specifications as to space, design and decor, menu items, principal food
ingredients and day-to-day operations, as set forth in the Company's operations
manual. The Company's

23
<PAGE> 24

executives or field-service personnel generally visit each franchise location at
least four times per year.

The Company guarantees certain limited equipment and leasehold improvement
financing to qualified franchisees through an agreement with an unaffiliated
finance company. Under this agreement, the Company guarantees financing provided
by the finance company to qualified franchisees in the maximum aggregate amount
of $2.1 million for all franchisees combined. The Company has also guaranteed up
to a maximum of $447,000 of future lease payments in the event of default by
specific franchisees.

COMPETITION

The restaurant business is highly competitive with respect to price,
service and food quality, and is often affected by changes in consumer tastes,
economic conditions and population and traffic patterns. There is also intense
competition for real estate sites, personnel and qualified franchisees. The
Company competes within each market with locally-owned restaurants as well as
with national and regional restaurant chains, some of which operate more
restaurants and have greater financial resources and longer operating histories
than the Company.

EMPLOYEES

The Company employs approximately 5,537 persons, 115 of whom are corporate
personnel and 329 of whom are field service or restaurant managers or trainees.
The remaining employees are restaurant personnel, many of whom are part-time. Of
the 115 corporate employees, 60 are in management positions and 55 are general
office employees.

The Company considers its employee relations to be good. None of the
Company's employees is covered by collective bargaining agreements except for
employees of its restaurants in the urban Chicago area who are members of the
Hotel Employees and Restaurant Employees International Union of the AFL-CIO, and
who are subject to a collective bargaining agreement with the Company through
November 30, 1996.

TRADEMARKS

The Company regards its many trademarks and service marks as having
significant value and as being an important factor in the marketing of its
products. Its most significant marks include "Uno," "Pizzeria Uno" and "Pizzeria
Due." The Company's registrations of its significant marks expire at various
times from 1998 to 2005. However, the Company intends to renew its registration
of such marks prior to expiration. The Company has applied for federal
registration of the trademark "Pizzeria Uno . . . Chicago Bar & Grill." The
Company's policy is to pursue registration of its marks whenever possible and to
oppose strenuously any infringement of its marks.

GOVERNMENT REGULATION

The Company is subject to various federal, state and local laws affecting
its business. Each of the Company's restaurants is subject to licensing and
regulation by a number of governmental authorities, which may include alcoholic
beverage control, health and safety and fire agencies in the state or
municipality in which the restaurant is located. Difficulties or failures in
obtaining the required licenses or approvals could delay or prevent the
development of a new restaurant in a particular area.

Alcoholic beverage control regulations require each of the Company's
restaurants to apply to a state authority and, in certain locations, county and
municipal authorities for a license or permit to sell alcoholic beverages on the
premises. Typically, licenses must be renewed annually and may be revoked or
suspended for cause at any time. Alcoholic beverage control regulations relate
to numerous aspects of the daily operations of the Company's restaurants,
including minimum age of

24
<PAGE> 25

patrons and employees, hours of operation, advertising, wholesale purchasing,
inventory control, and handling, storage and dispensing of alcoholic beverages.

The Company may be subject in certain states to "dram-shop" statutes, which
generally provide a person injured by an intoxicated person the right to recover
damages from an establishment which wrongfully served alcoholic beverages to
such person. The Company carries liquor liability coverage as part of its
existing comprehensive general liability insurance.

The Company is also subject to federal and a substantial number of state
laws regulating the offer and sale of franchises. Such laws impose registration
and disclosure requirements on franchisors in the offer and sale of franchises.
These laws often also apply substantive standards to the relationship between
franchisor and franchisee and limit the ability of a franchisor to terminate or
refuse to renew a franchise.

The Company is subject to the rules and regulations of various federal,
state and local health agencies, including the United States Food and Drug
Administration (the "FDA") and the United States Department of Agriculture. The
FDA specifies standards for nutrition content claims and health claims made in
connection with food items offered in the Company's restaurants. The FDA also
prescribes the format and content of nutrition information required to appear on
labels of certain products, including the Company's line of fresh and frozen
items sold through supermarkets.

PROPERTIES

As of May 5, 1995, the Company leased 69 and owned 12 of the locations for
its restaurants. The leases for Company-owned restaurants typically have initial
terms of 20 years with certain renewal options and provide for a base rent plus
real estate taxes, insurance and other expenses, plus additional percentage
rents based on revenues of the restaurant. All of the Company's franchised
restaurants are in space leased from parties unaffiliated with the Company, with
the exception of one franchised restaurant which is subleased from the Company.
Franchised restaurant leases typically have lease terms through the initial term
of the franchise agreements. See "-- Restaurant Design and Site Selection" and
"-- Restaurant Locations."

The Company's executive offices are located in two adjacent buildings,
consisting of approximately 25,000 square feet, in West Roxbury, Massachusetts.
These buildings house the Company's executive, administrative and clerical
offices, as well as certain training facilities. The Company believes that it
has sufficient executive office space for the foreseeable future. See Note 4 of
Notes to Consolidated Financial Statements.

In January 1993, the Company purchased a 30,000 square foot production
plant in Brockton, Massachusetts that produces fresh and frozen pizzas. See
"-- Other Business Development."

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<PAGE> 26

MANAGEMENT

The directors and executive officers of the Company and their ages are as
follows:

<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Aaron D. Spencer.............. 64 Chairman, Chief Executive Officer and Director
Craig S. Miller............... 45 President, Chief Operating Officer and Director
Robert M. Brown............... 47 Senior Vice President -- Finance, Chief Financial
Officer, Treasurer and Director
Alan M. Fox................... 48 Senior Vice President -- Purchasing, President Uno
Foods Inc.
William A. Gallucci........... 63 Senior Vice President -- Franchising
Thomas W. Gathers............. 39 Senior Vice President -- Human Resources and Training
Eugene I. Lee................. 34 Senior Vice President -- Operations
Damon M. Liever............... 40 Senior Vice President -- Marketing
S. James Coppersmith.......... 62 Director
John T. Gerlach............... 62 Director
E. Robert Kinney.............. 78 Director
Stephen J. Sweeney............ 66 Director
</TABLE>

The following is certain additional information concerning each director
and executive officer of the Company. When used below, positions held with the
Company include positions held with the Company's predecessors and subsidiaries.

Mr. Spencer, the founder and Chief Executive Officer of the Company, has
been Chairman since 1986 and previously served as the Company's President until
1986. Mr. Spencer has 29 years of experience in the restaurant industry and was
the founder and owner of the predecessor of the Company which operated a chain
of 24 Kentucky Fried Chicken franchised restaurants at the time the restaurants
were sold.

Mr. Miller has been President and Chief Operating Officer since 1986. From
1984 to 1986, he served as a Vice President and then Executive Vice President of
the Company. Prior to joining the Company, Mr. Miller spent eleven years with
the General Mills Inc. restaurant subsidiary, including four years in various
executive capacities with Casa Gallardo Mexican restaurants and six years with
the Red Lobster restaurant chain. Mr. Miller has a total of 27 years of
experience in the restaurant industry.

Mr. Brown has been Senior Vice President-Finance since 1988 and has served
as Chief Financial Officer and Treasurer since 1987. From 1987 to 1988, he
served as Vice President-Finance of the Company. From 1984 to 1987, Mr. Brown
served as vice president, treasurer and chief financial officer of the waste
management subsidiary of Genstar Corporation, and was employed by SCA Services,
Inc. from 1980 to 1984, most recently as assistant controller. Mr. Brown is a
certified public accountant and has worked in accounting and finance since 1969.

Mr. Fox has been Senior Vice President-Purchasing since October 1990. Also,
since 1990, Mr. Fox has been President of Uno Foods Inc., the Company's
subsidiary responsible for retail pizza distribution. Mr. Fox served as Senior
Vice President-Purchasing and Development from 1989 to October 1990, and served
as Vice President of Purchasing from 1988 to 1989. Prior to joining the Company,
from 1971 to 1988, Mr. Fox served as vice president-purchasing at Worcester
Quality Foods, Inc. a wholesale food service distributor. Mr. Fox has a total of
23 years of experience in the restaurant and food service industries.

26
<PAGE> 27

Mr. Gallucci has been Senior Vice President-Franchising since 1994. From
1988 to 1994 he served as Senior Vice President-Operations and from 1985 to
1988, he served as Vice President-Operations of the Company. Prior to joining
the Company, Mr. Gallucci served for twelve years with Magic Pan International,
Inc. as a division operations vice president, and prior to that he was employed
by Stouffer Corporation for 16 years. Mr. Gallucci has a total of 37 years of
experience in the restaurant industry.

Mr. Gathers has been Senior Vice President-Human Resources and Training
since November 1992. Mr. Gathers served as Vice President-Human Resources and
Training since August 1990. Prior to joining the Company, Mr. Gathers served in
several senior training and development functions with the General Mills Inc.
restaurant subsidiary from 1981 to 1990. Mr. Gathers has a total of 18 years of
experience in the restaurant industry.

Mr. Lee has been Senior Vice President-Operations since October 1994. From
1992 to 1994, he served as Vice President-Operations of the Company. From 1988,
when he joined the Company, to 1992, Mr. Lee held several operations management
positions. Prior to joining the Company, Mr. Lee served for 10 years with the
York Steak House division of General Mills Inc. as an area supervisor. Mr. Lee
has a total of 16 years of experience in the restaurant industry.

Mr. Liever has been Senior Vice President-Marketing since January 1994.
From 1993 to 1994, he served as Vice President-Marketing of the Company. Prior
to joining the Company, Mr. Liever served as vice president-marketing for the
Black-Eyed Pea restaurant division of Unigate PLC from 1991 to 1993. From 1981
to 1991 Mr. Liever held several senior marketing positions with PepsiCo
subsidiaries, including Frito-Lay and Taco Bell.

Mr. Coppersmith was President and General Manager of WCVB-TV, a division of
The Hearst Corporation, in Boston from September 1990 until his retirement in
June 1994. From 1982 to September 1990, Mr. Coppersmith was Vice President and
General Manager of WCVB-TV. From 1981 to 1982, he served as president of the
Television Division of Hubbard Broadcasting Inc., as general manager of its
Tampa/St. Petersburg station, WTOG-TV, and as president of F&F Productions, a
subsidiary of Hubbard Broadcasting Inc. From 1977 to 1981, Mr. Coppersmith was
vice president and general manager of WNEW-TV, Metromedia in New York. Mr.
Coppersmith has worked in the television broadcasting field since 1965. He is
presently a director of Waban Inc. and trustee of a number of investment
companies for which Sun America Asset Management Corp. is the investment
adviser. He is also Chairman of the Board of Trustees of Emerson College and a
member of the Board of Governors of the Boston Stock Exchange Incorporated.

Mr. Gerlach has been the Director of the Graduate Business Program of
Sacred Heart University since July 1992. He has also been the Director of the
Center for Policy Issues of Sacred Heart University since January 1990. From
1988 to January 1990, he was an Adjunct Professor of Finance in the Graduate
School of Business at Drexel University. From 1986 to 1988, he was associate
director of Bear, Stearns & Co. From 1985 to 1986, he was a consultant for The
Horn & Hardart Co., and from 1982 to 1985, he was the president and chief
operating officer of The Horn & Hardart Co. Prior to that time, he was a vice
president of General Mills Inc. He is presently a director of American Woodmark
Corp., and Security American Financial Enterprises, Inc.

Mr. Kinney is currently a Director and was President, Director and Chief
Executive Officer of all the funds in the IDS Mutual Fund Group, a division of
American Express, from 1982 to 1987. Prior to that time, he was chairman and
chief executive officer of General Mills Inc. Mr. Kinney is also a director of
IDEXX Laboratories, Inc. and UNUM Life Limited.

Mr. Sweeney was Chairman of the Board of Boston Edison Company from 1986 to
1992. He was chief executive officer of Boston Edison Company from 1984 to 1990,
and president of Boston Edison Company from 1983 to 1987. Mr. Sweeney is a
director of Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance
Company, Liberty Financial Services, the Boston Stock Exchange Incorporated and
Microscript, Inc.

The Company's Restated Certificate of Incorporation and Bylaws provide for
a Board of Directors consisting of seven directors who are elected at the annual
meeting of shareholders and are

27
<PAGE> 28

divided into three classes with each class being elected for a staggered
three-year term. Any director may be removed from office for cause by the
affirmative vote of the holders of at least 60% of the outstanding shares of the
Company's Common Stock entitled to vote in the election of directors. Directors
may also be removed from office upon the vote of a majority of Continuing
Directors (as defined in the Restated Certificate of Incorporation).

For a description of provisions of the Company's Restated Certificate of
Incorporation that provide for elimination of directors' liability under certain
circumstances and of the provisions of indemnity agreements between the Company
and each of the Directors, see "Description of Capital Stock and Other
Matters -- Limitation of Directors' and Officers' Liability; Indemnification
Agreements."

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information as of April 2, 1995,
concerning the beneficial ownership of Common Stock by each director, certain
executive officers, all executive officers and directors as a group, and each
person known by the Company to be the beneficial owner of 5% or more of the
Company's Common Stock. This information is based upon information received from
or on behalf of the named individuals.

<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES OF OUTSTANDING SHARES
COMMON STOCK ----------------------
BENEFICIALLY BEFORE AFTER
NAME OWNED(1) OFFERING OFFERING(2)
---- ------------ -------- -----------
<S> <C> <C> <C>
Robert M. Brown(3)(4)(5)(6)............................. 37,131 * *
S. James Coppersmith(3)................................. 19,592 * *
Alan M. Fox(3)(5)(6).................................... 48,845 * *
William A. Gallucci(3)(5)(6)............................ 34,630 * *
John T. Gerlach(3)...................................... 14,542 * *
E. Robert Kinney(3)(7).................................. 34,806 * *
Craig S. Miller(3)(5)(6)(8)............................. 249,567 2.2% 1.9%
Aaron D. Spencer(3)(5)(9)............................... 5,563,064 48.5% 41.3%
Stephen J. Sweeney(3)................................... 13,753 * *
FMR Corp.(10)........................................... 835,375 7.3% 6.2%
Gardner Lewis Asset Management(11)...................... 595,250 5.2% 4.5%
Executive Officers and Directors
as a Group (12 Persons)(12)........................... 6,048,340 51.6% 44.1%
<FN>
---------------
* Represents less than 1%

(1) Unless otherwise noted, the beneficial owners listed have sole voting and
investment power over the shares listed.

(2) Assumes the Underwriter does not exercise its over-allotment option.

(3) Includes the following shares subject to options exercisable within 60 days
after April 2, 1995: Mr. Brown -- 29,689; Mr. Coppersmith -- 12,114; Mr.
Fox -- 30,821; Mr. Gallucci -- 28,642; Mr. Gerlach -- 6,410; Mr.
Kinney -- 2,346; Mr. Miller -- 116,250; Mr. Spencer -- 85,000; Mr.
Sweeney -- 9,378.

(4) Includes 1,625 shares held by Mr. Brown's spouse.

(5) Includes the following shares held in participant accounts under the
employee stock ownership provision of the Employee Stock Ownership Plan:
Mr. Brown -- 746; Mr. Fox -- 453; Mr. Gallucci -- 372; Mr. Miller -- 1,408;
Mr. Spencer -- 795.

(6) Includes the following shares held in participant accounts under the 401(k)
savings provision of the Employee Stock Ownership Plan: Mr. Brown -- 71;
Mr. Fox -- 71; Mr. Gallucci -- 71; and Mr. Miller -- 112.

(7) Includes 156 shares held by Mr. Kinney's spouse and 4,125 shares held by a
trust created by Mr. Kinney.

(8) Includes 9,375 shares held by a trust created by Mr. Miller.

(9) Includes 4,192,707 shares held by Uno Associates, a partnership owned 80%
by Mr. Spencer and 10% each by his two adult children, Lisa S. Cohen and
Mark Spencer. Also includes 176,562 shares held by a charitable foundation
of which Mr. Spencer is a trustee. The mailing address of Uno Associates
and Mr. Spencer is 100 Charles Park Road, West Roxbury, Massachusetts
02132.
</TABLE>
28
<PAGE> 29

(10) Based on a Schedule 13G filed in February 1995. FMR Corp. ("FMR") is a
parent holding company of Fidelity Management & Research Company
("Fidelity"), which acts as an investment advisor to several investment
companies. Fidelity is the beneficial owner of 755,000 shares of Common
Stock. Edward C. Johnson 3d ("Johnson"), Chairman of FMR, and FMR Corp.
through control of Fidelity, each has sole power to dispose of 755,000
shares of Common Stock, but neither Johnson nor FMR have sole power to vote
or direct the voting of the shares of Common Stock owned by Fidelity's
funds (the "Funds"), which power resides with the Funds' boards of
trustees. Fidelity Management Trust Company ("Fidelity Trust"), also a
wholly-owned subsidiary of FMR, is the beneficial owner of 80,375 shares of
Common Stock as a result of its serving as investment manager of
institutional accounts. Johnson and FMR, through control of Fidelity Trust,
have sole voting and dispositive power over such 80,375 shares. The address
of FMR, Fidelity and Fidelity Trust is 82 Devonshire Street, Boston,
Massachusetts 02109.

(11) Based on a Schedule 13G filed in February 1995. Gardner Lewis Asset
Management ("Gardner") has the sole investment power over the 595,250
shares of Common Stock. It has sole voting power with respect to 525,250
shares and shared voting power with respect to 5,250 shares. The address of
Gardner is 285 Wilmington-West Chester Pike, Chadds Ford, Pennsylvania
19317.

(12) Includes all shares beneficially owned and options exercisable within 60
days after April 2, 1995 by the executive officers and directors named and
as described above, 9,375 shares beneficially owned and 22,188 shares
subject to options exercisable within 60 days after April 2, 1995, held by
three executive officers not specifically named above, and an aggregate of
124 shares held in participant accounts under the 401(k) savings and
employee stock ownership provisions of the Employee Stock Ownership Plan
for three executive officers not specifically named above.

29
<PAGE> 30

DESCRIPTION OF CAPITAL STOCK AND OTHER MATTERS

The authorized capital stock of the Company consists of 1,000,000 shares of
Preferred Stock, $1.00 par value per share, and 25,000,000 shares of Common
Stock, $.01 par value per share. Only Common Stock is issued and outstanding.

The following descriptions of the capital stock, certain additional charter
provisions relating to changes in control and directors' liability, Change in
Control Protection Agreements and certain Indemnification Agreements are
qualified in all respects by reference to the Restated Certificate of
Incorporation and By-Laws of the Company and the form of Change in Control
Protection Agreements and Indemnification Agreements, copies of which are
incorporated by reference as exhibits to the Registration Statement of which
this Prospectus is a part.

PREFERRED STOCK

No shares of the Preferred Stock have been issued, and the Company has no
present plans to issue any such shares. The Board of Directors has the
authority, without action by the shareholders, to create one or more series of
Preferred Stock and determine the number of shares, designation, price,
redemption terms, conversion and voting rights with respect to any such series.
The issuance of any such series of Preferred Stock could be used to render more
difficult an unfriendly tender offer, proxy contest, merger or other change in
control of the Company.

COMMON STOCK

The Common Stock offered hereby, when issued and sold as contemplated by
this Prospectus, will be validly issued, fully paid and non-assessable. Subject
to the prior rights of any series of Preferred Stock which may, from time to
time, be outstanding, the holders of Common Stock are entitled to receive
dividends out of assets legally available therefor at such times and in such
amounts as the Board of Directors may determine. See "Dividend Policy."

The shares of Common Stock are neither redeemable nor convertible, and the
holders thereof have no preemptive or subscription rights to purchase any
securities of the Company. Upon liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to receive pro rata the assets
of the Company which are legally available for distribution, after payment of
all debts and other liabilities and subject to the prior rights of the holders
of the Preferred Stock, if any.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar of the Company's shares of Common Stock is
Mellon Securities Transfer Services, East Hartford, Connecticut.

ADDITIONAL CHARTER PROVISIONS

In addition to the Preferred Stock, the Company's Restated Certificate of
Incorporation includes several additional provisions which may render more
difficult an unfriendly tender offer, proxy contest, merger or change in control
of the Company.

Fair Price Provision. The so-called "Fair Price Provision," is intended to
protect shareholders who do not tender their shares in a takeover bid by
guaranteeing them a minimum price for their shares in any subsequent attempt to
purchase such remaining shares at a price lower than the acquiror's original
acquisition price. The Fair Price Provision requires the affirmative vote of the
holders of 60% of the Company's outstanding Common Stock for certain business
combinations with a Related Person unless specified price criteria and
procedural requirements are met or the business combination is approved by a
majority of the Continuing Directors. A Related Person is any person who was not
a stockholder of the Company as of March 30, 1987 and who acquires more than 5%
of the Company's Common Stock after March 30, 1987.

Anti-Greenmail Provision. The Company's Restated Certificate of
Incorporation also contains a so-called "Anti-Greenmail Provision." The
provision is intended to discourage speculators who accumulate beneficial
ownership of a significant block of stock and then seek to have the corporation
repurchase the shares at a premium price. This tactic has become known as
greenmail. The Anti-

30
<PAGE> 31

Greenmail Provision precludes the Company from purchasing any shares of Common
Stock from a Related Person who has beneficially owned such shares for less than
two years prior to the date of such purchase, at a per share price in excess of
the highest closing sale price of the Common Stock during the 30-day period
immediately preceding the date of such purchase, unless the purchase is approved
by a majority of the holders of the outstanding shares of Common Stock,
excluding any votes cast by the Related Person. Shareholder approval is not
required for such purchases when the offer is made available on the same terms
to all holders of shares of Common Stock, when the purchases are effected
pursuant to an open-market purchase program conducted in accordance with Rule
10b-18 promulgated under the Exchange Act, or when the purchases are approved by
a majority of Continuing Directors.

Other. Another provision included in the Company's Restated Certificate of
Incorporation requires the Board of Directors to consider social, economic and
other factors in evaluating whether certain types of corporate transactions
proposed by another party are in the best interests of the Company and its
shareholders.

In addition, the Company's Restated Certificate of Incorporation provides
for a classified Board of Directors. See "Management" above. The Company's
Bylaws may be amended or repealed by a majority of Continuing Directors or by
the affirmative vote of the holders of 60% of the outstanding Common Stock;
provided however, any such amendment or repeal which is approved by a majority
of the Continuing Directors and thereafter submitted to the shareholders for
ratification, may be so ratified by the affirmative vote of the holders of a
majority of the outstanding Common Stock.

As a result of the foregoing provisions in the Company's Restated
Certificate of Incorporation and Bylaws requiring the approval of the holders of
60% of the Company's Common Stock, certain transactions which may be beneficial
to shareholders could be rendered more difficult to approve. Since Aaron Spencer
will be the beneficial owner of approximately 41.3% of the outstanding Common
Stock immediately after the sale of shares offered hereby, Mr. Spencer will have
the ability to prevent the consummation of any such transactions requiring
shareholder approval. In addition, Mr. Spencer will have the practical ability
to elect all of the members of the Board of Directors. See "Principal
Shareholders."

CHANGE IN CONTROL PROTECTION AGREEMENTS

The Company has entered into Change in Control Protection Agreements with
each of its officers that provide for the continued employment of such officers
for periods ranging from between 12 and 24 months upon a change in control of
the Company or the occurrence of certain specified events. The agreements
provide for severance payments that are, in general, the equivalent of salary
and benefits for the balance of the employment period if such officers are
terminated, other than for cause, or resign under specified circumstances,
within up to two years of such occurrence.

LIMITATION OF OFFICERS' AND DIRECTORS' LIABILITY; INDEMNIFICATION AGREEMENTS

The Company's Restated Certificate of Incorporation and Bylaws include
provisions (i) to eliminate the personal liability of the Company's directors
for monetary damages resulting from breaches of their fiduciary duty and (ii) to
require the Company to indemnify its directors and officers to the fullest
extent permitted by Delaware law. The Company has entered into indemnification
agreements with each of its directors and anticipates that it will enter into
similar agreements with any future directors. The Company may also enter into
similar agreements with certain of the Company's officers who are not also
directors. Generally, the indemnification agreements attempt to provide the
maximum protection permitted by Delaware law with respect to indemnification of
directors.

The Company does not have directors' and officers' liability insurance.
However, in the future, the Company may determine that it is appropriate to
secure such insurance.

31
<PAGE> 32

UNDERWRITING

Montgomery Securities (the "Underwriter") has agreed, subject to the terms
and conditions set forth in the underwriting agreement (the "Underwriting
Agreement"), to purchase from the Company 2,000,000 shares of Common Stock at
the public offering price less the underwriting discount set forth on the cover
page of this Prospectus. The Underwriting Agreement provides that the
obligations of the Underwriter are subject to certain conditions precedent and
that the Underwriter is committed to purchase all of such shares if any are
purchased.

The Underwriter has advised the Company that the Underwriter proposes
initially to offer the shares of Common Stock to the public on the terms set
forth on the cover page of this Prospectus. The Underwriter may allow to
selected dealers a concession of not more than $0.33 per share, and the
Underwriter may allow, and such dealers may reallow, a concession of not more
than $0.10 per share to certain other dealers. After the offering, the offering
price and other selling terms may be changed by the Underwriter. The Common
Stock is offered subject to receipt and acceptance by the Underwriter and to
certain other conditions, including the right to reject orders in whole or in
part.

The Company has granted an option to the Underwriter, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to a maximum
of 300,000 additional shares of Common Stock to cover over-allotments, if any,
at the same price per share as the 2,000,000 shares to be purchased by the
Underwriter. The Underwriter may purchase such shares only to cover over-
allotments made in connection with this offering.

The Underwriting Agreement provides that the Company will indemnify the
Underwriter against certain liabilities, including civil liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), or will contribute to
payments the Underwriter may be required to make in respect thereof.

All of the Company's executive officers and directors have agreed that, for
a period of 90 days after the date of this Prospectus, they will not, without
the prior written consent of the Underwriter, directly or indirectly offer to
sell, sell or otherwise dispose of any shares of Common Stock or any securities
convertible or exchangeable for shares of Common Stock. In addition, the Company
has agreed that for a period of 90 days after the date of this Prospectus, it
will not, without the prior written consent of the Underwriter, directly or
indirectly offer to sell, issue, distribute or otherwise dispose of any equity
securities or securities convertible into or exchangeable for equity securities
or any options, rights or warrants with respect to any equity securities except
(i) for the shares of Common Stock offered by the Company hereby or (ii) for
shares of Common Stock issued pursuant to exercise of outstanding options
disclosed in this Prospectus or (iii) for options or shares granted after the
date of this Prospectus under the Company's 1987 Stock Option Plan, 1989
Non-Qualified Stock Option Plan for Non-Employee Directors, 1993 Non-Qualified
Stock Option Plan for Non-Employee Directors or Employee Stock Ownership Plan.

LEGAL MATTERS

The validity of the securities offered by the Company hereby has been
passed upon for the Company by Brown, Rudnick, Freed & Gesmer, Boston,
Massachusetts. Certain legal matters in connection with the Common Stock offered
hereby will be passed upon for the Underwriter by Hale and Dorr, Boston,
Massachusetts.

EXPERTS

The consolidated financial statements of the Company at October 2, 1994 and
October 3, 1993, and for each of the three years in the period ended October 2,
1994, appearing in this Prospectus and Registration Statement have been audited
by Ernst & Young LLP, independent auditors, as set forth in their reports
thereon appearing herein and in the Registration Statement and are included in
reliance upon such reports given upon the authority of such firm as experts in
accounting and auditing.

32
<PAGE> 33

UNO RESTAURANT CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Report of Independent Auditors........................................................ F-2
Consolidated Balance Sheets -- October 2, 1994 and October 3, 1993 and unaudited at
April 2, 1995....................................................................... F-3
Statements of Consolidated Income -- Years ended October 2, 1994, October 3, 1993 and
September 27, 1992, and unaudited for the twenty-six weeks ended April 2, 1995 and
April 3, 1994....................................................................... F-4
Statements of Consolidated Shareholders' Equity -- Years ended October 2, 1994,
October 3, 1993, September 27, 1992, and unaudited for the twenty-six weeks ended
April 2, 1995 and April 3, 1994..................................................... F-5
Statements of Consolidated Cash Flows -- Years ended October 2, 1994, October 3, 1993
and September 27, 1992 and unaudited for the twenty-six weeks ended April 2, 1995
and April 3, 1994................................................................... F-6
Notes to Consolidated Financial Statements............................................ F-7
</TABLE>

F-1
<PAGE> 34

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Uno Restaurant Corporation

We have audited the accompanying consolidated balance sheets of Uno
Restaurant Corporation and subsidiaries as of October 2, 1994 and October 3,
1993, and the related consolidated statements of income, shareholders' equity,
and cash flows for each of the three years in the period ended October 2, 1994.
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 consolidated financial position of Uno Restaurant
Corporation and subsidiaries at October 2, 1994 and October 3, 1993, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended October 2, 1994, in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Boston, Massachusetts
November 1, 1994, except for
Note 13, as to which the date is
February 8, 1995

F-2
<PAGE> 35
UNO RESTAURANT CORPORATION AND SUBSIDIARIES

<TABLE>
CONSOLIDATED BALANCE SHEETS

<CAPTION>
OCTOBER 3 OCTOBER 2 APRIL 2
1993 1994 1995
--------- --------- -----------
(UNAUDITED)
(IN THOUSANDS,
EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
ASSETS

Current assets:
Cash and cash equivalents.............................. $ 998 $ 961 $ 214
Royalties receivable................................... 476 553 597
Consumer product receivable............................ 496 473 682
Inventory.............................................. 1,315 1,744 1,936
Deferred pre-opening costs............................. 483 568 1,180
Deferred income taxes.................................. 807 139 238
Prepaid expenses and other current assets.............. 1,722 1,600 3,184
------- ------- ---------
Total current assets..................................... 6,297 6,038 8,031
Property, equipment and leasehold improvements, net...... 65,509 80,057 100,051
Deferred income taxes.................................... 1,182 1,303 1,435
Other assets:
Deposit (Note 2)....................................... -- 3,000 --
Liquor licenses and other assets....................... 1,179 1,336 3,184
Royalty fee, net....................................... 568 487 446
------- ------- ---------
1,747 4,823 3,630
------- ------- ---------
$74,735 $92,221 $ 113,147
======= ======= =========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable....................................... $ 4,600 $ 5,006 $ 6,619
Accrued expenses....................................... 4,167 4,064 4,620
Accrued compensation and taxes......................... 1,541 2,357 2,319
Income taxes payable................................... 883 654 138
Current portions of long-term debt and capital lease
obligations......................................... 3,333 3,400 3,402
------- ------- ---------
Total current liabilities................................ 14,524 15,481 17,098
Long-term debt, net of current portion................... 8,167 17,303 33,358
Capital lease obligations, net of current portion........ 472 820 778
Deferred rent............................................ 2,197 2,659 2,952
Shareholders' equity:
Preferred Stock, $1.00 par value, 1,000,000 shares
authorized, no shares issued or outstanding......... -- -- --
Common Stock, $.01 par value, 12,000,000 shares in 1993
and 1994 and 25,000,000 shares in 1995 authorized,
8,976,418 shares in 1993, 9,072,499 shares in 1994
and 11,374,699 shares in 1995 issued and
outstanding......................................... 90 91 114
Additional paid-in capital............................. 29,787 30,613 30,830
Retained earnings...................................... 19,498 25,254 28,017
------- ------- ---------
Total shareholders' equity............................... 49,375 55,958 58,961
------- ------- ---------
$74,735 $92,221 $ 113,147
======= ======= =========
</TABLE>
See accompanying notes.

F-3
<PAGE> 36
UNO RESTAURANT CORPORATION AND SUBSIDIARIES
<TABLE>

STATEMENTS OF CONSOLIDATED INCOME
<CAPTION>
TWENTY-SIX WEEKS
FISCAL YEAR ENDED ENDED
----------------------------------------- -----------------
SEPTEMBER 27 OCTOBER 3 OCTOBER 2 APRIL 3 APRIL 2
1992 1993 1994 1994 1995
------------ ---------- --------- ------- -------
(53 WEEKS) (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenues:
Restaurant sales............... $ 77,500 $ 98,234 $ 112,674 $49,980 $66,767
Consumer product sales......... 3,106 7,073 7,418 3,896 4,353
Franchise income............... 3,507 3,638 3,973 1,936 2,007
-------- -------- --------- ------- -------
84,113 108,945 124,065 55,812 73,127
Costs and expenses:
Cost of food and beverages..... 19,224 26,024 30,177 13,731 18,432
Labor and benefits............. 24,912 32,990 36,935 16,813 22,089
Occupancy costs................ 14,492 17,295 18,979 8,680 10,584
Other operating costs.......... 9,638 9,166 10,751 5,049 6,189
General and administrative..... 7,022 8,233 9,277 4,390 5,621
Depreciation and
amortization................ 5,773 7,152 7,655 3,609 4,871
-------- -------- --------- ------- -------
81,061 100,860 113,774 52,272 67,786
-------- -------- --------- ------- -------
Operating income................. 3,052 8,085 10,291 3,540 5,341
Other income (expense):
Interest expense............... (783) (1,077) (1,147) (546) (937)
Other income (expense)......... 633 (8) 302 269 (17)
-------- -------- --------- ------- -------
(150) (1,085) (845) (277) (954)
-------- -------- --------- ------- -------
Income before income taxes....... 2,902 7,000 9,446 3,263 4,387
Provision for income taxes....... 1,140 2,837 3,690 1,322 1,624
-------- -------- --------- ------- -------
Net income....................... $ 1,762 $ 4,163 $ 5,756 $ 1,941 $ 2,763
======== ======== ========= ======= =======
Earnings per common share........ $ .16 $ .37 $ .51 $ .17 $ .24
======== ======== ========= ======= =======
Weighted average number of common
shares......................... 11,313 11,291 11,360 11,377 11,684
</TABLE>

See accompanying notes.

F-4
<PAGE> 37
UNO RESTAURANT CORPORATION AND SUBSIDIARIES

<TABLE>
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY

<CAPTION>
COMMON STOCK ADDITIONAL
--------------- PAID-IN RETAINED TREASURY
SHARES AMOUNT CAPITAL EARNINGS STOCK TOTAL
------ ------ ---------- --------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1991............... 8,939 $ 89 $ 29,548 $13,573 $(79) $43,131
Net income................................ -- -- -- 1,762 -- 1,762
Exercise of stock options................. 25 1 129 -- -- 130
Tax benefit from exercise of non-qualified
stock options........................... -- -- 67 -- -- 67
------ ---- -------- ------- ---- -------
Balance at September 27, 1992............... 8,964 90 29,744 15,335 (79) 45,090
Net income................................ -- -- -- 4,163 -- 4,163
Exercise of stock options................. 12 -- 20 -- 79 99
Tax benefit from exercise of non-qualified
stock options........................... -- -- 23 -- -- 23
------ ---- -------- ------- ---- -------
Balance at October 3, 1993.................. 8,976 90 29,787 19,498 -- 49,375
Net income................................ -- -- -- 5,756 -- 5,756
Exercise of stock options................. 96 1 712 -- -- 713
Tax benefit from exercise of non-qualified
stock options........................... -- -- 114 -- -- 114
------ ---- -------- ------- ---- -------
Balance at October 2, 1994.................. 9,072 91 30,613 25,254 -- 55,958
Net income for twenty-six weeks........... -- -- -- 2,763 -- 2,763
5-for-4 stock split....................... 2,275 23 (23) -- --
Exercise of stock options................. 28 -- 174 -- -- 174
Tax benefit from exercise of non-qualified
stock options........................... -- -- 66 -- -- 66
------ ---- -------- ------- ---- -------
Balance at April 2, 1995 (Unaudited)........ 11,375 $114 $ 30,830 $28,017 $ -- $58,961
====== ==== ======== ======= ==== =======
</TABLE>
See accompanying notes.

F-5
<PAGE> 38
UNO RESTAURANT CORPORATION AND SUBSIDIARIES
<TABLE>
STATEMENTS OF CONSOLIDATED CASH FLOWS

<CAPTION>
TWENTY-SIX WEEKS
FISCAL YEAR ENDED ENDED
-------------------------------------- -------------------
SEPTEMBER 27 OCTOBER 3 OCTOBER 2 APRIL 3 APRIL 2
1992 1993 1994 1994 1995
------------ ----------- --------- -------- --------
(53 WEEKS) (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income........................ $ 1,762 $ 4,163 $ 5,756 $ 1,941 $ 2,763
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization... 5,874 7,235 7,765 3,658 4,921
Deferred income taxes........... (1,968) (424) 547 10 (231)
Provision for deferred rent..... 1,050 735 462 379 293
Gain on disposal of equipment... (47) (82) (321) (332) (9)
Loss on closure of
restaurants.................. 2,500 -- -- -- --
Changes in operating assets and
liabilities, net of effects
of purchase of business:
Royalties receivable....... 139 (55) (77) (86) (44)
Consumer product
receivable.............. 116 (330) 23 117 (209)
Inventory.................. (283) (127) (429) (36) (192)
Prepaid expenses and other
assets.................. (1,224) (1,299) (983) (998) (2,977)
Accounts payable and
accrued expenses........ 1,041 794 1,948 572 2,131
Income taxes payable....... 68 377 (229) (638) (516)
-------- --------- --------- -------- --------
Net cash provided by
operating
activities............ 9,028 10,987 14,462 4,587 5,930
-------- --------- --------- -------- --------
INVESTING ACTIVITIES
Additions to property, equipment
and leasehold improvements...... (18,731) (12,460) (22,170) (9,477) (22,625)
Proceeds from sale of fixed
assets.......................... 303 483 2,529 2,517 9
Increase in deposit............... -- -- (3,000) (1,800) --
Purchase of business, net of cash
acquired and deposit............ (2,744) 108 (1,800) -- (316)
Sale of marketable securities..... 11,829 -- -- -- --
Net advances to unconsolidated
subsidiary...................... (547) -- -- -- --
-------- --------- --------- -------- --------
Net cash used in
investing
activities............ (9,890) (11,869) (24,441) (8,760) (22,932)
-------- --------- --------- -------- --------
FINANCING ACTIVITIES
Proceeds from long-term debt...... 11,595 31,735 39,895 15,135 31,075
Principal payments on long-term
debt and capital lease
obligations..................... (11,417) (30,417) (30,780) (11,556) (15,060)
Exercise of stock options......... 197 122 827 48 240
-------- --------- --------- -------- --------
Net cash provided by
financing
activities............ 375 1,440 9,942 3,627 16,255
-------- --------- --------- -------- --------
Increase (decrease) in cash and
cash equivalents................ (487) 558 (37) (546) (747)
Cash and cash equivalents at
beginning of year............... 927 440 998 998 961
-------- --------- --------- -------- --------
Cash and cash equivalents at end
of period....................... $ 440 $ 998 $ 961 $ 452 $ 214
======== ========= ========= ======== ========
</TABLE>

See accompanying notes.

F-6
<PAGE> 39
UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of Uno
Restaurant Corporation and its wholly-owned subsidiaries (the "Company"). All
intercompany accounts and transactions have been eliminated in consolidation.
Company-owned restaurants are located predominantly in the Northeast and
Mid-Atlantic states, and franchised restaurants are located throughout the
United States.

Fiscal Year

The Company's fiscal year ends on the close of business on the Sunday
closest to September 30 in each year. The fiscal year ended October 3, 1993
included 53 weeks of operations.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of
three months or less at the date of purchase to be cash equivalents.

Inventory

Inventory, which consists of food, beverages and store supplies, is stated
at the lower of cost (first-in, first-out method) or market.

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are recorded at cost. The
Company provides for depreciation of buildings and equipment over their
estimated useful lives using the straight-line method. Leasehold improvements
are amortized over the shorter of their estimated useful lives or the term of
the lease using the straight-line method.

Revenue Recognition -- Franchise Fees

The Company defers franchise fees until the franchisee opens the restaurant
and all services have been substantially performed; at that time, the entire
amount of the fee is recorded as income. Royalty income is recorded as earned
based on rates provided by the respective franchise agreements. Expenses related
to franchise activities amounted to approximately $1,506,000, $1,210,000 and
$1,427,000, $732,000 and $737,000 in fiscal years 1992, 1993 and 1994 and the
twenty-six week period ended April 3, 1994 and April 2, 1995, respectively.

<TABLE>
A summary of full-service franchise unit activity is as follows:

<CAPTION>
TWENTY-SIX WEEKS
FISCAL YEAR ENDED ENDED
------------------------------------ -----------------
SEPTEMBER 27 OCTOBER 3 OCTOBER 2 APRIL 3 APRIL 2
1992 1993 1994 1994 1995
------------ --------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
Units operating at beginning of year......... 55 59 58 58 59
Units opened................................. 8 3 5 5 2
Units closed................................. (4) (2) (1) (1) (3)
Units purchased by the Company............... -- (2) (3) (3) --
--- --- --- --- ---
Units operating at end of period............. 59 58 59 59 58
=== === === === ===
</TABLE>

F-7
<PAGE> 40

UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Pre-opening Costs

Costs relating to the opening of new restaurants are deferred until the
restaurants open and are amortized over 12 months from that point using the
straight-line method.

Income Taxes

In fiscal year 1994 and the twenty-six week periods ended April 2, 1995 and
April 3, 1994, deferred income taxes are recognized for temporary differences
between financial statement and income tax bases of assets and liabilities for
which income tax benefits and obligations will be realized in future years. In
fiscal years 1993 and 1992, the provision for deferred income taxes represents
the tax effect of differences in the timing of income and expense recognition
for tax and financial statement purposes (See Note 10).

Earnings Per Share

Earnings per share amounts are calculated based upon the weighted average
number of shares outstanding, giving effect to the dilutive effect of stock
options. Average shares outstanding and all per share amounts included in the
accompanying consolidated financial statements and notes are based on the
increased numbers of shares giving retroactive effect to the five-for-four stock
split discussed in Note 13.

Reclassifications

Certain amounts in the accompanying 1993 and 1992 financial statements have
been reclassified to permit comparison with 1994.

Unaudited Interim Consolidated Financial Statements

The consolidated balance sheet as of April 2, 1995 and the statements of
consolidated income, shareholders' equity and cash flows for the twenty-six week
periods ended April 3, 1994 and April 2, 1995 are unaudited and in the opinion
of management, include all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation of the Company's consolidated financial
position, consolidated results of operations and cash flows.

2. BUSINESS ACQUISITIONS AND DISPOSITIONS

Effective August 1, 1992, the Company purchased all of the outstanding
shares of the original Pizzeria Uno, Pizzeria Due and Su Casa restaurants and
properties in Chicago. The agreement also includes the rights to future
development in the Illinois market. Effective December 10, 1993, the Company
acquired the leasehold improvements and equipment of three franchised
restaurants in Connecticut.

These acquisitions have been accounted for under the purchase method of
accounting. The results of operations of the acquired companies prior to the
dates of acquisition would not have a material impact on the consolidated
results of operations in fiscal years 1994, 1993 and 1992.

In September 1994, the Company entered into an agreement with Bay Street
Restaurants, Inc. to purchase the net assets of three restaurants located in
Illinois, New Jersey and Pennsylvania. The arrangement was subject to the
satisfaction of certain governmental licensing requirements, and accordingly,
the aggregate purchase price has been recorded as a refundable deposit as of
October 2, 1994. The transaction was consummated in December 1994.

F-8
<PAGE> 41

UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. BUSINESS ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
On November 8, 1993, the Company sold to a franchisee for $2,500,000 a
Pizzeria Uno restaurant in Lake Buena Vista, Florida and recorded a gain of
$312,000, which has been included in other income. The Company acquired full
ownership of its previous joint venture during fiscal year 1993 by paying cash
of $45,000 and assuming liabilities in the amount of $2,500,000.

3. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

<TABLE>
Property, equipment and leasehold improvements consist of the following:

<CAPTION>
OCTOBER 3 OCTOBER 2 APRIL 2
1993 1994 1995
--------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Land............................................. $ 5,030 $ 7,601 $ 9,166
Buildings........................................ 6,954 9,729 11,502
Equipment........................................ 24,410 31,797 37,789
Leasehold improvements........................... 50,019 55,657 66,868
Construction in progress......................... 690 2,870 6,518
------- -------- --------
87,103 107,654 131,843
Less allowances for depreciation and
amortization................................... 21,594 27,597 31,792
------- -------- --------
$65,509 $ 80,057 $100,051
======= ======== ========
</TABLE>

4. RELATED-PARTY TRANSACTIONS

The Company leases three buildings from its principal shareholder for a
restaurant and for corporate office space. Rent expense in the amounts of
$436,000, $446,000, $442,000, $221,000 and $218,000 was charged to operations in
fiscal years 1992, 1993 and 1994 and the twenty-six week periods ended April 3,
1994 and April 2, 1995, respectively. The Company believes that the terms of
these leases approximate fair rental value.

The Company's President and his brother own and operate three franchised
restaurants. Additionally, the Chairman of the Company owns a 50% interest in a
franchised limited service pizza restaurant, and one of the directors of the
Company has a partnership interest in a franchised restaurant. These franchisees
pay royalties to the Company under standard franchise agreements, with the
exception of the pizza bakery, which is being operated as a test concept, and as
a result, is not currently being charged royalties. Royalties waived for the
pizza bakery were $3,000, $14,000, $7,000 and $7,000 in fiscal years 1993, 1994
and the twenty-six week periods ended April 3, 1994 and April 2, 1995,
respectively.

5. LEASES

The Company conducts the majority of its operations in leased facilities,
which are accounted for as capital or operating leases. The leases typically
provide for a base rent plus real estate taxes, insurance and other expenses,
plus additional contingent rent based upon revenues of the restaurant.
Contingent rent amounted to $916,000, $842,000, $981,000, $332,000 and $391,000
in fiscal years 1992, 1993 and 1994 and the twenty-six week periods ended April
3, 1994 and April 2, 1995, respectively.

F-9
<PAGE> 42

UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. LEASES -- (CONTINUED)
<TABLE>
At October 2, 1994, the minimum rental commitments under all noncancelable
capital and operating leases with initial or remaining terms of more than one
year are as follows:
<CAPTION>
OPERATING CAPITAL
FISCAL YEAR LEASES LEASES
----------- --------- -------
(IN THOUSANDS)
<S> <C> <C>
1995........................................................... $ 7,485 $ 130
1996........................................................... 7,569 130
1997........................................................... 7,769 130
1998........................................................... 7,671 130
1999........................................................... 7,479 130
Thereafter..................................................... 73,801 1,385
--------- -------
$ 111,774 2,035
=========
Less amount representing interest.............................. 1,148
-------
Present value of net minimum lease payments.................... 887
Less current portion of obligation under capital leases........ 67
-------
Long-term obligation under capital leases...................... $ 820
=======
</TABLE>

<TABLE>
Total expenses for all leases were as follows:
<CAPTION>
CAPITAL
CAPITAL LEASE LEASE ASSET OPERATING LEASE
INTEREST AMORTIZATION RENTALS
------------- ------------ ---------------
(IN THOUSANDS)
<S> <C> <C> <C>
Fiscal years ended:
September 27, 1992..................... $40 $ 44 $ 8,149
October 3, 1993........................ 41 44 9,337
October 2, 1994........................ 51 58 10,193
Twenty-six weeks ended:
April 3, 1994.......................... 20 22 4,643
April 2, 1995.......................... 32 36 5,480
</TABLE>

Certain operating lease agreements contain free rent inducements and
scheduled rent increases which are being amortized over the terms of the
agreements, ranging from 15 to 20 years, using the straight-line method.

F-10
<PAGE> 43
UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. FINANCING ARRANGEMENTS
<TABLE>
Long-term debt consists of the following:
<CAPTION>
OCTOBER 3 OCTOBER 2 APRIL 2
1993 1994 1995
---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
10.22% senior notes payable to Cigna Insurance
Company in three annual installments of $3,333,
beginning June 1, 1994.......................... $ 10,000 $ 6,667 $ 6,667
Revolving credit and note agreement............... 1,500 13,969 30,024
-------- -------- --------
11,500 20,636 36,691
Less current portion.............................. 3,333 3,333 3,333
-------- -------- --------
$ 8,167 $ 17,303 $ 33,358
======== ======== ========
</TABLE>

The note agreements contain certain financial and operating covenants,
including maintenance of certain levels of net worth and income.

During 1994, the Company expanded its $10,000,000 unsecured revolving
line of credit and note agreement to $20,000,000, expiring on June 1, 1997. The
Company is entitled to borrow at its discretion amounts which accrue interest at
the LIBOR rate plus 125 basis points or at the prime rate plus 1/4%. At October
2, 1994, borrowings of $8,500,000 accrue interest at 6.125% (LIBOR rate plus 125
basis points) and borrowings of $5,469,000 accrue interest at 8% (prime rate
plus 1/4%) and are payable on June 1, 1997. At October 2, 1994, $6,031,000 was
available to the Company for borrowing under this agreement. A commitment fee,
which ranges from .375% to .5%, is accrued on unused borrowings under the credit
agreement.

<TABLE>
Annual principal maturities of long-term debt are as follows (in
thousands):
<CAPTION>
FISCAL YEAR
-----------
<S> <C>
1995.............................................. $3,333
1996.............................................. 3,334
1997.............................................. 13,969
-------
$20,636
=======
</TABLE>

The Company made cash payments of interest of $1,091,000, $1,219,000,
$1,465,000, $673,000 and $887,000 during fiscal years 1992, 1993 and 1994 and
twenty-six week periods ended April 3, 1994 and April 2, 1995, respectively. The
Company capitalized interest during the construction period of newly constructed
restaurants amounting to $329,000, $186,000, $228,000, $97,000 and $278,000 in
fiscal year 1994, 1993, 1992 and the twenty-six week periods ended April 3, 1994
and April 2, 1995, respectively, and included those amounts in leasehold
improvements.

The Company provides certain limited lease financing to qualified
franchisees through an agreement with an unaffiliated finance company. The
Company's maximum guarantee under the agreement was $2,100,000 at October 2,
1994.

The Company has also guaranteed up to a maximum of $447,000 of future lease
payments in the event of default by specific franchisees.

The Company has an outstanding letter of credit in the amount of $150,000
at October 2, 1994, which expires in fiscal year 1996.

F-11
<PAGE> 44

UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. PREPAID EXPENSES AND OTHER CURRENT ASSETS

<TABLE>
Prepaid expenses and other current assets consist of the following:

<CAPTION>
OCTOBER 3 OCTOBER 2
1993 1994
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Prepaid expenses....................................... $ 434 $ 694
Insurance refunds receivable........................... 730 296
Other accounts receivable.............................. 558 610
------- -------
$ 1,722 $ 1,600
======= =======
</TABLE>

8. ACCRUED EXPENSES

<TABLE>
Accrued expenses consist of the following:
<CAPTION>
OCTOBER 3 OCTOBER 2
1993 1994
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Accrued rent........................................... $ 1,136 $ 1,380
Accrued utilities...................................... 289 486
Accrual for loss on closure of restaurants............. 1,418 588
Accrued group insurance................................ 209 252
Accrued interest....................................... 333 223
Other.................................................. 782 1,135
------- -------
$ 4,167 $ 4,064
======= =======
</TABLE>

9. EMPLOYEE BENEFIT PLANS

The Company maintains an Employee Stock Ownership Plan ("ESOP") and a
401(k) Savings Plan ("Savings Plan") for all of its eligible employees.
Contributions to the ESOP are discretionary and are allocated among all
employees based upon the participants' compensation. The Savings Plan is
maintained in accordance with the provisions of Section 401(k) of the Internal
Revenue Code and allows all employees with at least six months of service to
make annual tax-deferred voluntary contributions up to 15% of their salary. The
Company may match 25% of the first 2% and 10% of the next 4% of the employees'
contributions. Total contributions made to the plans were $25,000, $25,000,
$110,000, $74,000 and $114,000 in fiscal years 1992, 1993, 1994 and the
twenty-six week periods ended April 3, 1994 and April 2, 1995, respectively.

Effective October 1, 1994, the Company adopted a Deferred Compensation Plan
which allows officers to defer a portion of their compensation. Annual deferral
amounts are limited to 20% of the participant's income. Deferred compensation
expense in the amounts of $265,000 and $36,000 were recorded in fiscal year 1994
and the twenty-six week period ended April 2, 1995, respectively.

10. INCOME TAXES

Effective October 4, 1993, the Company adopted Financial Accounting
Standards Board ("FASB") Statement No. 109 ("Statement 109"). Under Statement
109, the liability method is used in accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on the
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse.

F-12
<PAGE> 45

UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. INCOME TAXES -- (CONTINUED)
As permitted by Statement 109, the Company has elected not to restate the
financial statements of any prior years. The effect of the change on net income
for fiscal 1993, as well as the cumulative effect, was not material.

<TABLE>
Deferred taxes are attributable to the following temporary differences at
October 2, 1994 (in thousands):

<S> <C>
DEFERRED TAX ASSETS:
Deferred rent........................................................... $1,087
Depreciation............................................................ 350
Accrued expenses........................................................ 277
Franchise fees.......................................................... 101
Other................................................................... 473
------
Total deferred tax assets................................................. 2,288
DEFERRED TAX LIABILITIES:
Deferred pre-opening costs.............................................. 313
Prepaid insurance....................................................... 172
Royalty fee............................................................. 92
Other................................................................... 269
------
Total deferred tax liabilities............................................ 846
------
NET DEFERRED TAX ASSETS................................................... $1,442
======
</TABLE>

<TABLE>
The provision (credit) for income taxes consisted of the following:

<CAPTION>
DEFERRED METHOD LIABILITY METHOD
------------------------- ------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED TWENTY-SIX TWENTY-SIX
SEPTEMBER 27 OCTOBER 3 OCTOBER 2 WEEKS ENDED WEEKS ENDED
1992 1993 1994 APRIL 3, 1994 APRIL 2, 1995
------------ ---------- ---------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Current:
Federal................ $ 2,052 $2,490 $2,536 $ 1,008 $ 1,508
State.................. 1,056 771 607 304 347
-------- ------ ------ ------- -------
3,108 3,261 3,143 1,312 1,855
Deferred:
Federal................ (1,298) (370) 243 8 (195)
State.................. (670) (54) 304 2 (36)
-------- ------ ------ ------- -------
(1,968) (424) 547 10 (231)
-------- ------ ------ ------- -------
Income tax expense....... $ 1,140 $2,837 $3,690 $ 1,322 $ 1,624
======== ====== ====== ======= =======
</TABLE>

F-13
<PAGE> 46

UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. INCOME TAXES -- (CONTINUED)

<TABLE>
Components of the provision (credit) for deferred income taxes were as
follows:
<CAPTION>
FISCAL YEAR ENDED
--------------------------
SEPTEMBER 27 OCTOBER 3
1992 1993
------------ ---------
(IN THOUSANDS)
<S> <C> <C>
Reserve for store closings.................................. $ (932) $ 396
Provision for deferred rent................................. (432) (344)
Pre-opening costs........................................... (11) (275)
Depreciation................................................ (79) (203)
Other....................................................... (514) 2
-------- -----
$ (1,968) $(424)
======== =====
</TABLE>

<TABLE>
A reconciliation of the effective tax rates with the federal statutory
rates is as follows:
<CAPTION>
LIABILITY METHOD
DEFERRED METHOD --------------------------------------
------------------------- TWENTY-SIX TWENTY-SIX
YEAR ENDED YEAR ENDED YEAR ENDED WEEKS ENDED WEEKS ENDED
SEPTEMBER 27 OCTOBER 3 OCTOBER 2 APRIL 3, APRIL 2,
1992 1993 1994 1994 1995
------------ ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Federal statutory rate... 34.0% 34.0% 34.0% 34.0% 34.0%
State income taxes, net
of federal income tax
benefit................ 8.8 6.7 6.0 6.2 4.5
Tax credits.............. -- -- (1.8) -- (2.1)
Other.................... (3.5) (.2) .9 .3 .6
----- ---- ---- ---- ----
Effective income tax
rate................... 39.3% 40.5% 39.1% 40.5% 37.0%
==== ==== ==== ==== ====
</TABLE>

The Company made income tax payments of $2,970,000, $2,826,000, $3,779,000,
$2,427,000 and $2,595,000 during fiscal years 1992, 1993, 1994 and the twenty
six week periods ended April 3, 1994 and April 2, 1995 respectively.

11. STOCK OPTION PLANS

The 1987 Employee Stock Option Plan (the "Plan") provides for up to
1,875,000 shares of common stock issuable upon exercise of options granted under
the Plan. Options may be granted at an exercise price not less than fair market
value on the date of grant. All options vest at a rate of 20% per year beginning
one year after the date of grant, with the exception of 93,750 and 62,500
options granted to the President and Chairman of the Company, respectively,
which vest immediately at the date of grant. All options terminate ten years
after the date of grant, with the exception of the 175,000 options granted to
the Chairman, which terminate five years after the date of grant. Options
outstanding at October 2, 1994 are non-qualified stock options.

The 1989 and 1993 Non-Qualified Stock Option Plans for Non-Employee
Directors (the "Directors Plans") provide for up to 101,563 shares of Common
Stock issuable upon exercise of options granted under the Directors Plans. The
1989 and 1993 Directors Plans terminate on November 10, 1999 and August 17,
2002, respectively, but such termination shall not affect the validity of
options granted prior to the dates of termination. Options are to be granted at
an exercise price equal to the fair market value of the shares of Common Stock
at the date of grant. Options granted under the Directors Plans may be exercised
commencing one year after the date of grant and ending ten years from the date
of grant.

F-14
<PAGE> 47

UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. STOCK OPTION PLANS -- (CONTINUED)
Information regarding the Company's stock option plans, updated to reflect
the five-for-four stock split described in Note 13, is summarized below:

<TABLE>
<CAPTION>
TWENTY-SIX
FISCAL YEAR ENDED WEEKS ENDED
-------------------------------------- -----------
SEPTEMBER 27 OCTOBER 3 OCTOBER 2 APRIL 2
1992 1993 1994 1995
------------ ----------- --------- -----------
<S> <C> <C> <C> <C>
Options outstanding at beginning of
fiscal year................................ 563,655 713,013 960,483 1,043,735
Granted...................................... 206,875 334,966 257,298 24,628
Exercised (at $4.07 to $8.64 per share)...... (30,413) (24,313) (120,101) (33,839)
Canceled..................................... (27,104) (63,183) (53,945) (37,914)
------------ ----------- --------- -----------
Options outstanding at close of fiscal
year....................................... 713,013 960,483 1,043,735 996,610
=========== ========== ========= ==========
Option price range at close of fiscal $4.07 $4.07 $4.07 $4.07
period..................................... to $11.40 to $11.40 to $11.40 to $11.80
Options exercisable at close of fiscal
period..................................... 406,913 444,126 430,249 426,017
Options available for grant at close of
fiscal period.............................. 76,889 -- 679,448 692,734
</TABLE>

12. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of unaudited quarterly consolidated results of
operations (in thousands, except per share data):

<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------
DECEMBER 27 MARCH 28 JUNE 27
1992 1993 1993 OCTOBER 3
----------- -------- ------- 1993
----------
(14 WEEKS)
<S> <C> <C> <C> <C>
Revenue................................. $23,788 $ 24,767 $28,432 $ 31,958
Gross profit(1)......................... 5,018 5,116 5,813 7,060
Operating income........................ 1,600 1,415 2,030 3,040
Income before income taxes.............. 1,407 1,108 1,740 2,745
Net income.............................. 815 643 1,014 1,691
Earnings per share...................... .07 .06 .09 .15
</TABLE>

<TABLE>
<CAPTION>
QUARTER ENDED
--------------------------------------------------
JANUARY 2 APRIL 3 JULY 3 OCTOBER 2
1994 1994 1994 1994
--------- ------- ------- ---------
<S> <C> <C> <C> <C>
Revenue...................................... $27,567 $28,028 $32,259 $36,211
Gross profit(1).............................. 5,501 5,575 6,903 8,512
Operating income............................. 1,755 1,771 2,639 4,126
Income before income taxes................... 1,780 1,483 2,362 3,821
Net income................................... 1,059 882 1,490 2,325
Earnings per share........................... .09 .08 .13 .21
</TABLE>

F-15
<PAGE> 48

UNO RESTAURANT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. QUARTERLY FINANCIAL DATA (UNAUDITED) -- (CONTINUED)

<TABLE>
<CAPTION>
QUARTER ENDED
---------------------
JANUARY 1 APRIL 2
1995 1995
--------- -------
<S> <C> <C>
Revenue.............................................. $35,976 $37,151
Gross profit(1)...................................... 7,773 7,771
Operating income..................................... 2,786 2,555
Income before income taxes........................... 2,415 1,972
Net income........................................... 1,520 1,243
Earnings per share................................... .13 .11
<FN>
---------------
(1) Restaurant and consumer product sales, less cost of food and beverages,
labor and benefits, occupancy, and other operating expenses, excluding
advertising expenses.
</TABLE>

13. SUBSEQUENT EVENTS

On November 15, 1994, the Board of Directors of the Company voted a
five-for-four split of the Company's common stock, to be effected in the form of
a stock dividend, payable to shareholders on February 28, 1995. The stock split
was approved by the shareholders on February 8, 1995 in connection with approval
to increase the number of authorized shares of common stock from 12,000,000 to
25,000,000.

In December 1994, the Company obtained a $50 million revolving credit
facility to replace its existing $20 million revolving credit facility. This new
facility will convert to a three-year term loan in December 1997.

F-16
<PAGE> 49

[INSERT PICTURE]

[ADD CAPTION]

[LOGO]
<PAGE> 50
===============================================================================

No dealer, salesman or any other person has been authorized to give any
information or make any representations other than those contained in this
Prospectus in connection with the offering described herein, and, if given or
made, such information or representations must not be relied upon as having
been authorized by the Company or any Underwriter. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than those specifically offered hereby or of any securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make an
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances create an
implication that the information herein is correct as of any time subsequent to
its date.

<TABLE>
-----------------
TABLE OF CONTENTS
-----------------
<CAPTION>
Page
------
<S> <C>
Available Information.................. 3
Incorporation of Certain Documents by
Reference............................ 3
Prospectus Summary..................... 4
The Company............................ 6
Investment Considerations.............. 6
Use of Proceeds........................ 9
Dividend Policy........................ 9
Price Range of Common Stock............ 9
Capitalization......................... 10
Selected Consolidated Financial Data... 11
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 12
Business............................... 18
Management............................. 26
Principal Shareholders................. 28
Description of Capital Stock and Other
Matters.............................. 30
Underwriting........................... 32
Legal Matters.......................... 32
Experts................................ 32
Index to Consolidated Financial
Statements........................... F-1
</TABLE>
===============================================================================
===============================================================================

2,000,000 SHARES

[LOGO]

COMMON STOCK

------------
PROSPECTUS
------------

MONTGOMERY SECURITIES

May 23, 1995

===============================================================================
<PAGE> 51
Appendix

Description of Photographs Pursuant to 17 CFR 232.304

1. Front Cover: The Company's logo is centered at the top of the page between
"2,000,000 Shares" and "Common Stock."

2. Cover 2: Collage consisting of five color photographs and the "Pizzeria
Uno...Chicago Bar & Grill" service mark. The photographs depict the
following:

a. Exterior view of free-standing Pizzeria Uno restaurant in a
landscaped setting;

b. Various foods including fresh tomatoes, grated cheese, garlic, two
of the Company's deep-dish pizzas, a salad and two pasta dishes; a single slice
is pulled away from the deep-dish pizza in the foreground;

c. In a casual setting, two women and a man sit together at a
restaurant table with plates of food, a breadbasket and a "table-tent";

d. A deep-dish pizza, with a single slice pulled slightly away from
the pizza; pizza appears beside fresh tomatoes, cheese and garlic; and

e. A composite image including a saute pan filled with vegetables, a
dish of pasta and a woman wearing a baseball-style cap.

3. Cover 3: A collage of eight photographs portraying the following:

a. An interior view of a full service Pizzeria Uno restaurant;

b. Photographs of two separate couples dining;

c. A family dining at a table;

d. A chef holding a plate of food;

e. A waitress delivering food orders; and

f. Three photographs of a variety of pizzas, pasta dishes, salads and
other dishes.

4. Cover 4: A single page Pizzeria Uno menu.

<PAGE> 52

5. Cover 5: A collage consisting of seven photographs with superimposed
headings "American Airlines," "The Takery," "General Cinema Theaters," and
"Consumer Products." The images depict the following:

a. An American Airlines jet;

b. A General Cinema marquee;

c. An exterior and an interior view of an "Uno...Pizza Takery";

d. A deep-dish pizza;

e. The Company's refrigerated pizzas and calzones beside other
consumer products; and

f. Uno's patented cardboard "Lunch Box" beside a deep-dish pizza and
bowl of soup.

6. Back Cover: The Company's logo is centered at the top of the page between
"2,000,000 Shares" and "Common Stock."