CLUCKCORP INTERNATIONAL INC, SB-2/A, 1997-06-06

CLUCKCORP INTERNATIONAL INC
SB-2/A, 1997-06-06
EATING PLACES

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As filed with the Securities and Exchange Commission on June 6, 1997.

Registration No. 333-21067

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO.3 TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED

CLUCKCORP INTERNATIONAL, INC.
(Exact Name of Small Business Issuer
As Specified In Its Charter)

Texas 5812 76-0406417
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code No.) I.D. Number)

1250 N.E. Loop 410, Suite 335
San Antonio, TX 78209
(210) 824-2496
(Address, including zip code, and telephone
number, including area code, of Registrant's principal executive offices)

William J. Gallagher, Chief Executive Officer
CluckCorp International, Inc.
1250 N.E. Loop 410, Suite 335
San Antonio, TX 78209
(210) 824-2496
(Name, address, including zip code, and telephone
number, including area code, of agent for service)

Copies of all communications to:

Gary A. Agron, Esq. Michael R. Koblenz, Esq.
Law Office of Gary A. Agron Mound, Cotton & Wollan
5445 DTC Parkway, Suite 520 One Battery Park Plaza
Englewood, CO 80111 New York, New York 10004
(303) 770-7254 (212) 804-4200
(303) 770-7257 (fax) (212) 344-8066 (fax)

Approximate date of commencement of the Offering: As soon as practicable
after the date of the Offering.
<PAGE>

If this Form is filed to register additional securities for an Offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same Offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same Offering.

If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. __X__

If delivery of the Prospectus is expected to be made pursuant to Rule 434,
check the following box:

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class Amount To Proposed Amount of
of Securities Be Maximum Price Offering Price Registration
to be Registered Registered Per Security Fee
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

Series A Redeemable
Convertible Preferred
Stock, $1.00 par 575,000
value(1) Shares $10.00 $5,750,000 $1,742

Common Stock, $.01
par value, underlying
Series A Redeemable
Convertible Preferred
Stock and issuable upon 1,150,000
conversion or redemption(2)(4) Shares $5.00 $5,750,000 $1,742

Series A Redeemable
Convertible Preferred
Stock underlying
Representative's 50,000
Warrants(3) Shares $16.00 $ 800,000 $ 243

Warrants underlying the 150,000 $ .13 $ 19,500 $6
Representative's Warrants Warrants

Common Stock, $.01
par value, underlying
Series A Redeemable
Convertible Preferred
Stock underlying the
Representative's 400,000
Warrants(2)(3)(4) Shares $5.00 $ 2,000,000 $ 606

Common Stock, $.01 par
value, issuable as
dividends upon the 530,770
Preferred Stock (5) Shares $6.50(5) $ 3,450,005 $1,045

Preferred Stock 1,725,000 $ .10 $ 172,500 $52
Purchase Warrants Warrants

Series A Redeemable 1,725,000 $10.50 $ 18,112,500 $5,489
Convertible Preferred Shares
Stock underlying
Preferred Stock Purchase
Warrants

Common Stock $.01 par
value underlying Series
A Redeemable Convertible
Preferred Stock underlying
the Warrants and issuable
upon conversion or 3,450,000 $ 5.00 $17,250,000 $5,228
redemption(2) Shares

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,485,000(4) $16,155(6)

<PAGE>

<FN>
(1) Includes the overallotment option granted to the Representative to purchase
an additional 75,000 shares of Series A Redeemable Convertible Preferred
Stock ("Preferred Stock").

(2) Issuable upon conversion of the Preferred Stock. It is anticipated that
each share of Preferred Stock will be convertible into no more than two
shares of Common Stock, (based upon a value of $5.00 per share of Common
Stock) with the exact conversion ratio to be based upon the closing price
of the Common Stock on NASDAQ one day prior to the effective date of the
Registration Statement.

(3) Includes 50,000 shares of Preferred Stock issuable upon exercise of the
Representatives Preferred Stock Warrants and 150,000 shares of Preferred
Stock issuable upon exercise of the Representatives Warrants to purchase
Preferred Stock Warrants. The exercise price of the Representatives'
Warrants is equal to 130% of the Preferred Stock price.

(4) Pursuant to Rule 416, there is also being registered hereunder a presently
indeterminable number of shares of Common Stock that may be issued pursuant
to the anti-dilution provisions of the Preferred Stock.

(5) Assumes an annual dividend of 12% on $5,750,000 of Preferred Stock totaling
$690,000 payable in common stock at the current market price of $6.50 per
share, for a period of five years.

(6) $16,694 was previously paid. Accordingly no fees are due with this filing.

[/FN]

</TABLE>

The Registrant hereby amends the Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

(EXHIBIT INDEX LOCATED ON PAGE ___ OF THIS FILING)

iii
<PAGE>

CLUCKCORP INTERNATIONAL, INC.

Cross Reference Sheet

Item Caption Location or Caption in Prospectus

1. Front of Registration Statement and Outside Front Cover Page
Outside Front Cover of Prospectus

2. Inside Front and Outside Back Cover of Inside Front and Outside Back
Prospectus Cover Pages

3. Summary Information and Risk Factors Prospectus Summary; Risk Factors

4. Use of Proceeds Use of Proceeds

5. Determination of Offering Price Risk Factors; Underwriting

6. Dilution Not Applicable

7. Selling Security Holders Not Applicable

8. Plan of Distribution Underwriting

9. Legal Proceedings Business - Litigation

10. Directors, Executive Officers, Management
Promoters and Control Persons

11. Security Ownership of Certain Principal Stockholders
Beneficial Owners and Management

12. Description of Securities Description of Securities

13. Interests of Named Experts and Counsel Not Applicable

14. Disclosure of Commission Position on Limitations on Liability and
Indemnification for Securities Act Indemnification
Liabilities

15. Organization Within Last Five Years Business; Certain Transactions

16. Description of Business Business; Risk Factors

17. Management's Discussion and Analysis Management's Discussion and
or Plan of Operations Analysis of Financial Condition
and Results of Operations

18. Description of Property Business - Properties

19. Certain Relationships and Related Certain Transactions
Transactions

<PAGE>

20. Market for Common Equity and Related Price Range of Common Stock
Stockholder Matters

21. Executive Compensation Management - Executive
Compensation

22. Financial Statements Financial Statements

23. Changes in and Disagreements with Not Applicable
Accountants on Accounting and
Financial Disclosure

v
<PAGE>

Subject to Completion Preliminary Prospectus Dated June 6, 1997

CLUCKCORP INTERNATIONAL, INC.

500,000 Shares of Redeemable Convertible Preferred Stock
and
1,500,000 Redeemable Preferred Stock Purchase Warrants

CluckCorp International, Inc. (the "Company") is offering (the "Offering")
500,000 shares of $1.00 par value Series A Redeemable Convertible Preferred
Stock (the "Preferred Stock") at $10.00 per share and 1,500,000 Redeemable Class
A Preferred Stock Purchase Warrants (the "Warrants") through Global Equities
Group, Inc. as the lead managing underwriter and the representative
("Representative") of the underwriters ("Underwriters") herein named and
Suncoast Capital Corp. as the co-managing underwriter ("Co-Manager").

The Preferred Stock is convertible at the option of the holder at any time
after nine months from the date hereof into shares of the Company's $.01 par
value common stock (the "Common Stock"). The number of shares of Common Stock
issuable upon conversion of each share of Preferred Stock (the "Conversion
Rate") is equal to $10.00, divided by _____ (the "Conversion Price"). The
initial Conversion Rate is _____ shares of Common Stock for each share of
Preferred Stock. No additional cash consideration must be paid to exercise the
conversion right. The Preferred Stock will automatically convert to Common Stock
at the Conversion Rate if the closing price for the Preferred Stock equals or
exceeds $20.00 per share for ten consecutive trading days at any time after nine
months from the date hereof. The Preferred Stock is convertible into Common
Stock at the election of the holder at any time after nine months from the date
hereof. The Preferred Stock may be redeemed in whole or in part, at the option
of the Company after nine months from the date hereof upon 30 days' written
notice (the "redemption date") at 110% of the average bid price per share for
the Preferred Stock on The NASDAQ SmallCap Tier of The NASDAQ Stock Market ("The
NASDAQ SmallCap Market") for the 20 trading days prior to the redemption date.
Dividends on the Preferred Stock are cumulative, will accrue and are payable
quarterly in arrears at a quarterly rate of $.30 per share representing a yield
of 12% per annum. The redemption price and dividends may be paid in cash or in
Common Stock of the Company at the Company's sole discretion. See "Description
of Securities."

Each Warrant entitles the holder to purchase one share of Preferred Stock
at $10.50 per share for a period of five years from the date hereof, subject to
adjustment in certain events. The Preferred Stock and Warrants will be
separately tradeable as of the date hereof and the Warrants may be exercised
after six months from the date hereof. Investors may purchase either Preferred
Stock, or Warrants or both securities.

The Warrants may be redeemed by the Company for $.01 per Warrant upon 30
day's notice at any time after nine months from the date hereof if the closing
price of the Company's Preferred Stock on the NASDAQ SmallCap Market averages at
least $11.00 per share for a period of 20 consecutive trading days or if the
Company redeems the Preferred Stock. See "Description of Securities - Redeemable
Preferred Stock Purchase Warrants."

On June 5, 1997, the closing sale price of the Common Stock on The NASDAQ
SmallCap Market was $7.63 per share. The Company has applied to have the
Preferred Stock and Warrants listed on The NASDAQ SmallCap Market. This Offering
involves a high degree of risk and should not be purchased by investors
requiring current income.

See "Risk Factors." 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.

Price to Underwriting Proceeds to
Public Discounts(1(3 Company(2(3)
----------- ------------- ------------
Per Share $ 10.00 $ 1.00 $ 9.00
Per Warrant $ .10 $ .01 $ .09
Total $ 5,150,000 $ 515,000 $ 4,635,000

(1) Excludes a nonaccountable expense allowance payable by the Company to the
Representative equal to 3% of the aggregate initial public offering price
of the Preferred Stock and Warrants. The Company has agreed to issue
warrants (the "Representative's Warrants") to the Representative to
purchase 50,000 shares of Preferred Stock for $16.00 per share and 150,000
Warrants for $.13 per Warrant and to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."

(2) Before deducting expenses payable by the Company estimated at $350,000,
together with the Representative's nonaccountable expense allowance of
$154,500.

(3) Assumes no exercise of the Representative's option, exercisable within 45
days from the date of this Prospectus, to purchase up to 75,000 additional
shares of Preferred Stock and/or 225,000 Warrants on the same terms, solely
to cover overallotments (the "Overallotment Option"). If the Overallotment
Option is exercised in full, the total Price to Public, Underwriting
Discounts and Proceeds to Company will be $5,922,500, $592,250 and
$5,330,250, respectively. See "Underwriting."

The Preferred Stock and Warrants are offered by the Underwriters, subject
to prior sale, when, as and if delivered to and accepted by the Underwriters,
and subject to their right to reject orders, in whole or in part. It is expected
that delivery of the securities will be made in New York, New York on or about
__________, 1997.

GLOBAL EQUITIES GROUP, INC. SUNCOAST CAPITAL CORP.

The date of this Prospectus is ________________, 1997

<PAGE>

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered by this
Prospectus. As permitted by the rules and regulations of the Commission, this
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement and the exhibits thereto, which may be examined without charge at the
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, copies of which may be obtained from
the Commission upon payment of the prescribed fees.

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
Commission. Such reports, proxy statements and other information may be
inspected at the public reference facilities of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such material
can be obtained at prescribed rates from the Commission at such address. Such
reports, proxy statements and other information can also be inspected at the
Commission's regional offices at 7 World Trade Center, Suite 1300, New York, New
York 10048 and at Northwestern Atrium Center, 500 West Madison, Chicago,
Illinois 60621.

Certain persons participating in this Offering may engage in transactions
that stabilize, maintain, or otherwise affect the price of the securities
including purchase and sale transactions of the securities on The NASDAQ
SmallCap Market. For a description of these activities, see "Underwriting."

For California Residents

Investment in the securities of the Company described in this Prospectus by
California investors is expressly limited to investors who have an adjusted
gross income of at least $65,000 for the calendar year ended December 31, 1996
and an equal amount of adjusted gross income anticipated for the calendar year
ended December 31, 1997, together with a minimum of $250,000 of liquid net worth
(excluding home, home furnishings and automobile). In the event the California
investor does not have an adjusted gross income of $65,000 and liquid net worth
of $250,000, such investor may nevertheless purchase the Company's securities if
he or she has (i) a liquid net worth of $500,000 or more, (ii) $1,000,000 or
more of total net worth or (iii) $200,000 of gross annual income for the year
ended December 31, 1996 or an equal amount of gross annual income anticipated
for the year ending December 31, 1997.

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus. Unless otherwise indicated, the information contained herein
assumes no exercise of the Overallotment Option, the Warrants or the
Representative's Warrants

Except for the historical information contained herein, the matters set
forth in this Prospectus include forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially. These risks and
uncertainties are detailed throughout the Prospectus and will be further
discussed from time to time in the Company's periodic reports filed with the
Commission. The forward-looking statements included in the Prospectus speak only
as of the date hereof.

The Company

The Company owns, operates and franchises quick service restaurants under
the "Harvest Rotisserie" name, which feature marinated oak-roasted rotisserie
chicken, oak-roasted turkey breast, roast ham, meatloaf, an assortment of
sandwiches and other fresh homestyle food items. Harvest Rotisserie restaurants
(sometimes referred to as the "Restaurant(s)") emphasize rotisserie oak-roasted
chicken, turkey and fresh homestyle side dishes consistent with what the Company
believes to be (i) an increased consumer demand for take-home prepared foods,
(ii) an emphasis on lower fat foods such as chicken and turkey, and (iii) the
popularity of homestyle cooking. Harvest Rotisserie side dishes include cold
dishes such as coleslaws and salads and hot dishes such as baked beans,
stuffing, corn, parsley potatoes, macaroni and cheese, steamed fresh vegetables,
mashed potatoes and gravy, rice, creamed spinach, cheese rice and baked cinnamon
apples. The Company maintains strict quality standards in purchasing, storing,
preparing and serving its entrees, side dishes, desserts and other products.

To date, the Company has opened three Restaurants in San Antonio, Texas
(one of which is used as both a training facility and a public restaurant) and
one Restaurant in Corpus Christi, Texas. The Company has also executed leases or
acquired property to develop five additional Restaurants in San Antonio and
Houston, Texas, although it does not have the funds to develop these Restaurants
and intends to use proceeds of the Offering to develop only three of such
Restaurants. The Company's ability to develop the remaining two Restaurants is
contingent upon it obtaining construction financing and equipment lease
financing. See "Use of Proceeds" and "Business-Properties". The Company seeks to
enter into traditional single Restaurant franchise agreements as well as area
development agreements although it has not yet executed any franchise agreements
and has no area development agreements in effect. Area development agreements
require the area developer to develop a specified number of Restaurants within a
delineated territory in accordance with a development schedule. Management
believes that area development agreements allow for the more rapid development
of a target market area by generally more experienced restaurant operators who
are able to realize economies of scale resulting from opening a number of
Restaurants in a given area. These operators often require less management
supervision by Company personnel and provide the Company with higher franchise
fee income in a shorter period of time.

The Company intends to use a substantial portion of the proceeds of the
Offering to acquire restaurant properties in certain metropolitan markets and
sublease the properties to area developers who will operate them as Harvest
Rotisserie restaurants. The Company may require the area developers to execute
promissory notes to the Company representing any acquisition costs advanced by
the Company and may also advance funds to area developers for costs incurred to
convert properties to Harvest Rotisserie restaurants and for working capital.
The Company will then seek to recoup its costs through franchise fee payments
and repayments of any promissory notes issued by the area developers who will
also be responsible to tender restaurant property lease payments directly to the
owners of the properties. See "Use of Proceeds."

History

3
<PAGE>

the original "Cluckers" restaurant concept. The Company acquired from WaterMarc
Food Management, Inc. ("WaterMarc"), formerly Billy Blues Food Corporation and
an affiliate of the Company, the Cluckers franchise development rights for
Texas, Mexico and certain Central American countries. After CWRC had opened ten
company-owned restaurants between 1991 and 1994 in Florida, Georgia and New York
and had sold franchises for an additional 165 restaurants, controlling interest
in CWRC was purchased by Kenny Rogers Roasters, Inc. ("Roasters"), a
nonaffiliate in November 1994. The Company then exchanged its Cluckers area
development agreement with CWRC for systems, franchising materials, signage and
the exclusive right to use the Cluckers name, trademark and service mark solely
in Texas. The Company did not acquire international rights to the Cluckers name
because neither CWRC nor anyone else had obtained any international rights,
other than the Mexican and Central American rights described above. However, the
Company subsequently registered the Cluckers name in Mexico and applied for
trademarks to use the Cluckers name and logos in the United Kingdom, Canada,
Singapore and Malaysia.

The Company is licensed to use the Cluckers name only in Texas, and is
obligated to pay a license fee of 2% of gross sales applicable only to its
Cluckers restaurants in Texas for the first ten years and 1% of gross sales
thereafter. No such license fees are required for Restaurants outside the United
States. In February 1995 and July 1995, the Company formed Cluckers Restaurants,
Inc. and Harvest Restaurants, Inc., wholly-owned Texas corporate subsidiaries,
to act as franchisors for the Company's Cluckers and Harvest Rotisserie
restaurants. The Company is not required to pay a license fee for its Harvest
Rotisserie restaurants because it developed and owns the rights to the Harvest
Rotisserie name and concept.

In February 1996, the Company decided to concentrate on the development,
operation and franchising of Harvest Rotisserie restaurants, which the Company
believes is an improvement over the original Cluckers concept because Harvest
Rotisserie restaurants offer an expanded menu which includes a number of
additional homestyle entrees offering lower fat foods. Accordingly, it converted
its one Cluckers restaurant in San Antonio, Texas to a Harvest Rotisserie
restaurant.

In July 1996, the Company sold 1,000,000 shares of Common Stock and
2,300,000 common stock purchase warrants (the "IPO Warrants") in an initial
public offering ("IPO") of its securities through Global Equities Group, Inc.
("Global" or the "Representative") as representative of the underwriters of the
IPO. Global is also acting as the Representative in this Offering. The Company
realized net proceeds of approximately $4,700,000 from the IPO based upon the
sale of the Common Stock at $5.50 per share and the IPO Warrants at $.125 per
IPO Warrant. Proceeds from the IPO were used to open three Restaurants to date
and will be sufficient to finance an additional three of the five restaurant
properties currently under lease. The remaining two restaurant properties are
the subject of ground leases, and the Company will require additional financing
to construct the buildings which will house the Restaurants. The first three
Restaurants will be completed in 1997. However, there can be no assurance that
financing will be available to the Company to complete the remaining two
Restaurants. See "Business - Properties." Following the IPO, the Company's
Restaurant development schedule was initially delayed as a result of the
Company's decision to eliminate certain Restaurant sites and substitute new
sites selected following the IPO. See "Business - Properties."

The Company's principal executive offices are located at 1250 N.E. Loop
410, Suite 335, San Antonio, Texas 78209, and its telephone number is (210)
824-2496.
4
<PAGE>

The Offering

Securities Offered (1)...........500,000 shares of Preferred Stock and 1,500,000
Warrants. The Preferred Stock and Warrants are
separately tradeable as of the date of this
Prospectus.

Common Stock Outstanding (2).....2,366,030 shares at April 20, 1997.

Estimated Net Proceeds (1).......Approximately $4,130,500 after deducting
commissions and expenses of approximately
$1,019,500 including the Representative's
nonaccountable expense allowance and other
expenses of the Offering.

Use of Proceeds..................Acquisition of Restaurants for sublease to area
developers; financial assistance to area
developers and working capital. See
"Use of Proceeds."

The NASDAQ SmallCap Market
Symbols........................Common Stock: ROTI
IPO Warrants: ROTIW
Preferred Stock: ROTIP
Class A Warrants: ROTIZ

Risk Factors.....................Investment in the securities involves a high
degree of risk and should only be purchased by
investors capable of suffering a loss of their
entire investment. See "Risk Factors."

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

(1) If the Overallotment Option is exercised in full, 75,000 additional shares
of Preferred Stock and 225,000 Warrants will be sold, with net proceeds to
the Company of $672,075 after deducting commissions and expenses.

(2) Does not include an aggregate of __________ shares of Common Stock issuable
upon exercise of outstanding warrants and options (collectively, the
"Existing Options") comprised of (i) 2,300,000 shares issuable upon
exercise of the IPO Warrants, (ii) 300,000 shares issuable upon exercise of
the Warrants earned by the Representative in the IPO (the "Representative's
IPO Warrants"), (iii) __________ shares issuable upon conversion of the
Preferred Stock and the Preferred Stock issuable under the Representative's
Warrants, (iv) ______ shares issuable upon conversion of 1,500,000 shares
of Preferred Stock issuable upon exercise of the Warrants, (vi) 72,000
shares issuable upon exercise of other outstanding common stock purchase
warrants, and (v) 237,000 shares issuable under the Company's 1994 Stock
Option Plan. See "Capitalization" and "Description of Securities."

5
<PAGE>

Description of Preferred Stock

Conversion......... Each share of Preferred Stock is convertible into _____
shares of Common Stock, subject to adjustment under certain
circumstances at any time after nine months from the date
hereof. Fractional shares of Common Stock will be rounded to
the nearest whole share. The Preferred Stock will
automatically convert into Common Stock at any time after
nine months from the date hereof at the Conversion Rate if
the closing price on The NASDAQ SmallCap Market for the
Preferred Stock equals or exceeds $20.00 per share for ten
consecutive trading days.

Redemption......... The outstanding Preferred Stock is redeemable at the
Company's option at any time on or after nine months from
the date hereof upon 30 days' written notice at 110% of the
average bid price per share for the Preferred Stock on The
NASDAQ SmallCap Market for the 20 trading days prior to the
redemption date. The redemption price may be paid in either
cash or in the Company's Common Stock at the sole discretion
of the Company.

Voting Rights...... The Preferred Stock is nonvoting, except as to matters
affecting the rights of the Preferred Stockholders.

Liquidation
Preference.........$10.00 per share, plus accrued and unpaid dividends.

Dividends...........Quarterly cumulative dividends of $.30 per share of
Preferred Stock will be paid in cash or in the Company's
Common Stock at the sole discretion of the Company. The
value of any Common Stock issued will be the last reported
sales price of the Common Stock on The NASDAQ SmallCap
Market on the last day of each calendar quarter, and
fractional shares of Common Stock will be rounded to the
nearest whole share.

Description of
Warrants.......... The Warrants may be exercised for a period of five years
from the date hereof (commencing six months from the date
hereof) at $10.50 per share of Preferred Stock and are
subject to redemption at $.01 per Warrant after nine months
from the date hereof if the closing price of the Company's
Preferred Stock on The NASDAQ SmallCap Market averages at
least $11.00 per share for a period of 20 consecutive days,
or if the Company redeems the Preferred Stock. See
"Description of Securities - Redeemable Preferred Stock
Purchase Warrants."

<PAGE>

Summary Financial Data

The following summary financial data has been derived from the financial
statements of the Company and should be read in conjunction with such financial
statements.

<TABLE>

<CAPTION>
Sixteen Weeks Ended
------------------- Year Ended Year Ended Year Ended
April 20, April 21, December 29, December 31, December 25,
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues:
Restaurant ....................... $ 446,994 $ 63,138 $ 263,892 $ 226,678 $ 243,988
Area development fee, stockholder -- -- -- 50,000 --
--------- --------- ----------- ----------- -----------
446,994 63,138 $ 263,892 $ 276,678 $ 243,988
Cost and Expenses:
Cost of food and paper ........... 230,248 23,734 112,530 82,171 105,650
Restaurant salaries and benefits . 234,685 23,854 125,954 127,400 146,677
Occupancy and related expenses ... 65,012 16,747 58,191 63,605 67,611
Operating expenses ............... 140,219 20,242 73,661 86,641 106,647
General and administrative ....... 436,505 169,945 1,261,198 567,605 197,641
Preopening expenses .............. 86,314 9,493 131,074 59,363 25,783
Depreciation and amortization .... 60,635 30,824 104,467 73,879 58,940
--------- --------- ----------- ----------- -----------
Total operating expenses ..... 1,253,618 294,839 1,877,075 1,060,664 708,949

Loss from operations ............. (806,624) (231,701) (1,613,183) (783,986) (464,961)

Non-operating income (expense):
Interest income .................. 16,882 -- 56,747 -- --
Interest and debt discount expense (7,816) (177,319) (454,818) (140,497) (29,063)
--------- --------- ----------- ----------- -----------
9,066 (177,319) (398,071) (140,497) (29,063)

Net loss ............................. $ (797,558) $ (409,020) $(2,011,254) $ (924,483) $ (494,024)
========== ========== =========== =========== ===========

Net loss per common share ............ $ ( .34) $ ( .32) $ (1.29) $ (0.75) $ (0.49)

Weighted average number of
common shares outstanding(1) ....... 2,316,279 1,285,699 1,553,824 1,224,531 1,005,107

April 20, 1997
----------------------------
Historical As Adjusted(2)
---------- --------------
Balance Sheet Data:
Working capital ...................... $ 5,330 $ 4,135,830
Total assets ......................... 3,179,544 7,310,044
Total liabilities .................... 825,125 825,125
Long-term debt ....................... 49,860 49,860

Stockholders' equity ................. 2,354,419 6,484,919

<FN>

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

(1) Weighted average number of common shares outstanding includes common
equivalent shares issuable upon the exercise of outstanding stock options
and common stock purchase warrants.

(2) To reflect the issuance of the securities offered hereby, excluding
securities which may be issued upon exercise of the Overallotment Option.

</FN>

</TABLE>

7
<PAGE>

RISK FACTORS

Prospective purchasers should carefully consider the following risk factors
and the other information contained in this Prospectus before making an
investment in the securities. Information contained in this Prospectus includes
"forward-looking statements" which can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "should," or
"anticipates" or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy. See, e.g., "Management's Discussion
and Analysis of Financial Condition and Results of Operations." No assurance can
be given that the future results covered by the forward-looking statements will
be achieved. The following matters constitute cautionary statements identifying
important factors with respect to such forward-looking statements, including
certain risks and uncertainties that could cause actual results to vary
materially from the future results covered in such forward-looking statements.
Other unanticipated factors could also cause actual results to vary materially
from the future results covered in such forward-looking statements.

Limited Operating History; Negligible Revenues; Ongoing Substantial
Operating Losses; Lack of Working Capital. The Company has a limited operating
history (commencing in June 1993) upon which potential investors may base an
evaluation of its performance. The Company has operated at a loss since
inception and has accumulated a deficit of $4,374,354 at April 20, 1997. For the
sixteen weeks ended April 20, 1997 and the fiscal years ended December 29, 1996,
and December 31, 1995, the Company reported revenues of $446,994, $263,892 and
$276,678 and net losses of 797,558, $2,011,254 and $924,483, respectively.
Moreover, at April 20, 1997 the Company had only $5,330 of working capital.
There can be no assurance that the Company's operations will become profitable
or that revenues will increase. The Company's operating expenses are expected to
increase due to its expansion plans and, accordingly, it is anticipated that the
Company will incur additional losses unless revenues from an expanded base of
Restaurants or franchise fees become sufficient to offset ongoing operating and
expansion costs, of which there can be no assurance. The likelihood of the
Company's success must be considered in light of the problems, experiences,
difficulties, complications and delays frequently encountered in connection with
the operation and development of new businesses. See "Business" and "Financial
Statements."

Four Restaurants in Operation; Operating Losses; Uncertainty of Market
Acceptance. The Company has only four Restaurants in operation, one of which is
being used both as a training facility and a public restaurant. This restaurant
has operated at a loss since opening in January 1994, and the Company believes
that at least two of its remaining three Restaurants are also currently
operating at a loss. The Company has not conducted any formal market studies
regarding its Harvest Rotisserie concept in Texas or any other markets and has
engaged in limited marketing activities.

Achieving consumer awareness and market acceptance for its Restaurants,
particularly as the Company seeks to penetrate new markets, will require
substantial efforts and expenditures by the Company. There can be no assurance
that the Restaurants will achieve market acceptance. See "Business."

Reliance Upon Public Offering Proceeds. The Company requires the proceeds
of the Offering to develop three additional Restaurants and to finance the
acquisition of Restaurants expected to be subleased to and operated by area
developers selected by the Company. In the event the Offering is not completed,
the Company will not have the funds necessary to open additional Restaurants or
to acquire and sublease Restaurants. See "Use of Proceeds."

Dependence Upon Area Developers. The Company intends to use a substantial
portion of the proceeds of the Offering to acquire restaurant properties to be
subleased to and operated by area developers after conversion to Harvest
Rotisserie restaurants. The Company will acquire the restaurant properties,
sublease the properties to area developers (if area developers are obtained by
the Company) and may also provide funds to the area developers to convert the
properties to Harvest Rotisserie restaurants and for initial working capital.
The Company will then seek to recoup its costs through royalty payments and loan
repayments from the area developers. If the Company is unable to attract area
developers willing to operate the restaurant properties or if the area
developers are unsuccessful in the operation of the restaurant properties, the
Company may be unable to recoup any or all of its investments in the properties
and would also be liable on leases it executed with the property owners. In such
event, the Company's financial condition and results of operations would be
severely adversely affected. The Company has no current understandings,
arrangements or agreements with any such area developers. See "Use of Proceeds"
and "Business - Application of Offering Proceeds."

<PAGE>

Intense Competition. The foodservice industry is intensely competitive with
respect to food quality, concept, location, service and price. There are many
well-established food service competitors with substantially greater financial
and other resources than the Company and with substantially longer operating
histories. The Company competes with take-out food service companies, fast-food
restaurants, casual full-service dine-in restaurants, delicatessens,
cafeteria-style buffets and prepared food stores, as well as with supermarkets
and convenience stores. The number of rotisserie-roasted chicken establishments
and the number of national restaurant chains, fast-food and grocery stores
offering rotisserie-roasted chicken and other homestyle food products have
increased in the past few years, providing direct competition for customers and
resulting in the sale or closing of a number of rotisserie-roasted chicken
establishments including establishments operated by some of the larger franchise
chains. Moreover, other national restaurant chains could introduce new chains of
food service restaurants similar to Harvest Rotisserie. See
"Business-Competition."

Change of Management. Since August 1996, the Company's Chief Executive
Officer (who was also a director of the Company) and two of its outside
directors have resigned. Although the Company has added two new executive
officers and replaced the two directors who resigned, a lack of management
continuity may adversely affect the Company's operations in the near future. See
"Management."

Risks Associated with the Food Service Industry. Food service businesses
are often affected by changes in consumer tastes, national, regional and local
economic conditions, demographic trends, traffic patterns and the type, number,
and location of competing restaurants. Multi-unit food service chains may also
be affected by publicity resulting from poor food quality, illness, injury, or
other health concerns or operating issues stemming from individual restaurants.
Dependence upon frequent deliveries of fresh produce also subjects food service
businesses such as the Company to the risk that shortages or interruptions in
supply caused by adverse weather or other conditions could adversely affect the
availability, quality and cost of food ingredients. In addition, factors such as
inflation, increased food, labor and employee benefits costs, regional weather
conditions and the limited availability of experienced management and hourly
employees may also adversely affect the food service industry in general and the
Company's results of operations and financial condition in particular. See
"Business."

Risks Associated With Expansion. The Company intends to use a portion of
the proceeds of the Offering to open additional Company-owned Restaurants.
Developing additional Restaurants will be dependent upon, among other things,
market acceptance for the Company's Harvest Rotisserie concept, the availability
of suitable Restaurant sites, timely development and construction of the
Restaurants, the hiring of skilled management and other personnel, the Company's
general ability to successfully manage growth (including monitoring Restaurants,
controlling costs and maintaining effective quality controls), the availability
of adequate financing and the Company's ability to attract and retain qualified
franchisees. In the case of franchised restaurants, the Company will also be
substantially dependent upon the management skills of its franchisees. The
Company operates only four restaurants, and ongoing losses reported by these
Restaurants or losses incurred by future Restaurants developed by the Company
would have an adverse effect upon the Company's financial condition and results
of operations. See "Use of Proceeds" and "Business-Restaurant Expansion."

Need for Additional Capital; Unallocated Offering Proceeds. In order to
develop additional Restaurants, the Company will have an ongoing need for
additional capital. The Company has no commitments or arrangements to obtain any
additional capital, and no assurances can be given that such capital will be
available on terms satisfactory to the Company, if at all. The Company's ability
to open the remaining two Restaurants of the five Restaurants for which leases
have been executed is contingent upon the Company's ability to obtain
construction financing and equipment lease financing. If it is unable to do so,
the Company will be required to delay the opening of these two Restaurants. The
Company's management has broad discretion with respect to the allocation of the
$830,500 (20.1% of the net proceeds of the Offering) reserved for working
capital. See "Use of Proceeds" and "Business-Properties."

Importance of Attracting Competent Area Developers and Franchisees. The
Company's future success will be dependent upon its ability to attract and
retain Restaurant area developers and franchisees and the manner in which
Restaurant franchisees operate, develop and promote their Restaurants.
Currently, the Company has no area developers or franchisees. There can be no
assurance that franchisees will have the business abilities or access to

9
<PAGE>

financial resources necessary to open the Restaurants required by their
franchise agreements or that they will operate their Restaurants in a manner
consistent with the Company's concept and standards. The Company competes for
qualified franchisees with multinational fast food chains, national and regional
restaurant chains and other regional and local restaurant franchisors. Many
restaurant franchisors have greater market recognition and greater financial,
marketing and human resources than the Company. See "Business-Competition."

Adverse Effect of Government Regulation; Franchise Risks. The restaurant
industry is subject to numerous federal, state and local government regulations,
including those relating to the preparation and sale of food and those relating
to building and zoning requirements. The Company and future franchisees are also
subject to laws relating to employees, including minimum wage requirements,
overtime, working and safety conditions and citizenship requirements. In
addition, the Company is subject to regulation by the Federal Trade Commission
and must comply with many state laws which govern the offer, sale and
termination of franchises. Compliance with such laws is time-consuming and
expensive, and failure to comply could result in the Company being unable to
offer franchises and could subject the Company to significant liability to
franchisees. Developing a franchise program is costly and requires a significant
amount of ongoing management effort. The Company has not sold any franchises nor
entered into any area development agreements. The failure to obtain or retain
food licenses or approvals to sell franchises or an increase in the minimum wage
rate, employee benefits costs (including costs associated with mandated health
insurance coverage), or other costs associated with employees, could adversely
affect the operations of the Company and its franchisees. See
"Business-Regulation."

Limited Menu. The Company's Harvest Rotisserie restaurants have limited
menus with chicken and turkey products accounting for a majority of sales. A
decline in consumer demand for poultry products or increased chicken or turkey
prices would have an adverse effect on the Company's operations. In addition,
the Company could be affected by health-related concerns, such as fear of
bacterial infection, relating to poultry. If the Company seeks to expand its
menu selections, there can be no assurance that new menu selections will achieve
market acceptance. See "Business-Introduction."

Competitors Offer Discount Pricing. A number of quick service restaurant
companies (including chicken restaurants) have recently experienced lower growth
rates and declines in average sales per restaurant, in response to which certain
of these companies have adopted discount pricing strategies. Such strategies
could have the effect of drawing customers away from companies which do not
engage in discount pricing and could negatively impact the operating margins of
other competitors who do attempt to match these discount prices.

Possible Inadequacy of General Liability and Commercial Insurance; Product
Liability Insurance. Although the Company carries general liability, product
liability and commercial insurance of up to $2,000,000, there can be no
assurance that its coverage will be adequate to protect it against general,
commercial or product liability claims. Any general, commercial or product
liability claim which is not covered by such policy, or is in excess of the
limits of liability of such policy, could have a material adverse effect on the
financial condition of the Company. There can be no assurance that the Company
will be able to maintain its insurance on reasonable terms. See
"Business-Insurance."

No Assurance of Trademark and Service Mark Protection; Limited Exclusivity.
The Company believes that its Harvest Rotisserie and Cluckers names, trademarks
and service marks ("Marks") have value and are important to the marketing of its
Restaurants and products. There can be no assurance, however, that the Company's
Marks do not or will not violate the proprietary rights of others, that the
Company's Marks would be upheld if challenged or that the Company would not
otherwise be prevented from using its Marks. The Company has registered with the
United States Patent Office its Harvest Rotisserie name and service mark. The
Company's exclusive right to the Cluckers Marks is limited in the United States
to the state of Texas. There can be no assurance that the Company will obtain
sufficient protection for its Harvest Rotisserie or Cluckers Marks or that it
will have the financial resources to enforce or defend its Marks. See
"Business-Trademarks and Service Marks."

Dependence Upon Qualified Personnel and Executive Officers. The Company's
operations depend in part upon its ability to retain and hire qualified
personnel and the continued services of its executive officers. The loss of
services of any of the Company's executive officers, whether as a result of
death, disability or otherwise, could have a material adverse effect upon the
Company's operations. The Company does not have employment agreements with any
of its executive officers or employees (except Mr. Gallagher) and does not carry
key person insurance on any of their lives. See "Management."

10
<PAGE>

No Dividends on Common Stock; Dilution Caused By Issuance of Common Stock
to Pay Preferred Stock Dividends. The Company has not paid any dividends on its
Common Stock since its inception and does not anticipate paying any dividends in
the foreseeable future. The Company plans to retain earnings, if any, to finance
the development and expansion of its business. Dividends on the Preferred Stock
may be paid in cash or in the Company's Common Stock at the sole discretion of
the Company. Should the Company elect to pay Preferred Stock dividends in Common
Stock, the ownership of Common Stock by the existing holders of Common Stock
will be diluted. See "Dividend Policy" and "Description of Securities-Preferred
Stock."

Potential Adverse Effect of "In the Money" Warrants. The IPO Warrantholders
may purchase up to 2,300,000 shares of Common Stock at $4.00 per share, which is
considered to be "in the money" because the exercise price is below the current
market price of the Common Stock. Accordingly, the exercise of the IPO Warrants
may have a depressive effect upon the market price of the Common Stock by
significantly increasing the number of shares outstanding. See "Description of
Securities-IPO Warrants."

Potential Adverse Effect of Shares Issuable Upon Exercise of Stock Options
and Shares Eligible for Future Sale. The Company has 2,366,030 shares of Common
Stock outstanding as of April 20, 1997, and has reserved for issuance an
aggregate of __________ shares of Common Stock upon exercise of the Existing
Options. An aggregate of 1,000,000 shares issued in the IPO, 2,300,000 shares
underlying the IPO Warrants and __________ shares issuable upon conversion of
the Preferred Stock and Preferred Stock issuable upon exercise of the Warrants
have been previously registered or are being registered hereby. Additionally,
300,000 shares issuable upon exercise of the Representative's IPO Warrants and
__________ shares issuable upon conversion of the Representative's Warrants are
subject to demand registration rights, and 257,280 shares issued in connection
with the exercise of common stock purchase warrants must be registered by the
Company by August 10, 1997. Finally, a total of 990,000 shares of the Company's
Common Stock outstanding have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), are "restricted securities" but may be
sold from time to time under Rule 144 of the Securities Act, subject to lock-up
agreements restricting the sale of 750,000 of such shares until August 1997
except with the written consent of the Representative. The remaining 240,000
shares are subject to a lock-up agreement restricting sale through August 1997
executed by JEB Investment Company ("JEB"). However, the shares were
subsequently foreclosed upon by WaterMarc, and the JEB lock-up agreement may not
be effective against WaterMarc, in which event the 240,000 shares may be sold
prior to August 1997. Exercise of the Existing Options could dilute the
Company's net tangible book value and/or prove to be a hindrance to future
financing. The holders of Existing Options may exercise them at a time when the
Company might otherwise be able to obtain additional equity capital on terms
more favorable to the Company. Exercise of registration rights and maintenance
of a current prospectus in connection with the IPO Warrants, the shares issuable
upon conversion of the Preferred Stock and the Representative's Warrants could
involve substantial expense to the Company at a time when it could not afford
such expenditures and may adversely affect the terms upon which the Company
could obtain additional financing. See "Certain Transactions", "Description of
Securities" and "Shares Eligible for Future Sale."

Representative's Limited Underwriting Experience. The Representative was
recently organized and has acted as a representative of the Underwriters in only
one prior public offering (which was the Company's IPO), although it has
participated as a dealer in offerings underwritten by others. This lack of
underwriting experience may adversely affect the development or continuation of
a trading market for the Preferred Stock and Warrants and negatively influence
the market price of the securities following the Offering. See "Underwriting."

Potential Adverse Effect Due to Underwriters' Influence on the Market Price
of the Securities. A significant amount of the securities offered hereby may be
sold to customers of the Representative and the Underwriters. Such customers
subsequently may engage in transactions for the sale or purchase of the
securities through or with the Underwriters. Should the Representative make a
market in the securities, this market-making activity may terminate at any time.
Accordingly, the Representative may exert a dominating influence on the market,
if one develops, for the securities, and the price and liquidity of the
securities may be significantly affected by the degree, if any, of the
Underwriters' participation in such market.

Maintenance Criteria for The NASDAQ SmallCap Market Securities. The
National Association of Securities Dealers, Inc. ("the NASD"), which administers
The NASDAQ SmallCap Market, sets the criteria for continued eligibility on The

11
<PAGE>

NASDAQ SmallCap Market. In order to continue to be included on The NASDAQ
SmallCap Market, a company must maintain $2 million in total assets, a $200,000
market value of its public float and $1 million in total capital and surplus. In
addition, continued inclusion requires two market-makers, at least 300 holders
of the Common Stock and a minimum bid price of $1 per share; provided, however,
that if a company falls below such minimum bid price, it will remain eligible
for continued inclusion in The NASDAQ SmallCap Market if the market value of the
public float is at least $1 million and the Company has $2 million in capital
and surplus. The Company's failure to meet these maintenance criteria in the
future or future maintenance requirements imposed by The NASDAQ SmallCap Market
may result in the discontinuance of the inclusion of its securities in The
NASDAQ SmallCap Market. In such event, trading, if any, in the securities may
then continue to be conducted in the non-NASDAQ over-the-counter market in what
are commonly referred to as the electronic bulletin board and the "pink sheets."

As a result, an investor may find it more difficult to dispose of or to
obtain accurate quotations as to the market value of the securities. In
addition, the Company would be subject to Rule 15g (the "Rule") promulgated
under the Exchange Act, which imposes various sales practice requirements on
broker-dealers who sell securities governed by the Rule to persons other than
established customers and accredited investors. For these types of transactions,
the broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transactions
prior to sale. Consequently, the Rule may have an adverse effect on the ability
of broker-dealers to sell the securities, which may affect the ability of
purchasers in the Offering to sell the securities in the secondary market. The
NASD recently proposed significantly more stringent maintenance requirements
which require $2 million in net tangible assets, 500,000 shares in the public
float and elimination of the exception to the $1 per share bid price
requirement. Should these new maintenance requirements be adopted, it will be
progressively more difficult for the Company to remain on NASDAQ.

Disclosure Related to Penny Stocks. The Commission has adopted rules that
define a "penny stock" as equity securities priced at under $5.00 per share
which are not listed for trading on The NASDAQ SmallCap Market (unless (i) the
issuer has a net worth of $2,000,000 if in business for more than three years or
$5,000,000 if in business for less than three years or (ii) the issuer has had
average annual revenues of $6,000,000 for the prior three years. In the event
that any of the Company's securities are characterized in the future as penny
stock, broker-dealers dealing in the securities will be subject to the
disclosure rules for transactions involving penny stocks which require the
broker-dealer among other things to (i) determine the suitability of purchasers
of the securities and obtain the written consent of purchasers to purchase such
securities and (ii) disclose the best (inside) bid and offer prices for such
securities and the price at which the broker-dealer last purchased or sold the
securities. The additional burdens imposed upon broker-dealers may discourage
them from effecting transactions in penny stocks, which could reduce the
liquidity of the securities offered hereby.

Stockholder Approval Not Required for Issuance of Preferred Stock;
Prevention of Change in Control. The authorized capital stock of the Company
includes 5,000,000 shares of Preferred Stock (none of which are currently
outstanding), which may be issued from time to time in one or more series with
such designations, voting powers, if any, preferences and relative,
participating, optional or other special rights, and such qualifications,
limitations and restrictions thereof, as are determined by resolution of the
Board of Directors of the Company without approval of the Company's common
stockholders. The issuance of Preferred Stock may have the effect of delaying,
deferring or preventing a change in control of the Company without further
action by stockholders and could adversely affect the rights and powers,
including voting rights, of the holders of Common Stock. In certain
circumstances, the issuance of Preferred Stock could depress the market price of
the Common Stock. See "Description of Securities-Preferred Stock."

Limitation on Directors' Liability. The Company's Articles of Incorporation
provide for certain limitations on the liability of the Company's directors to
its stockholders for monetary damages. See "Description of Securities-Directors'
Liability."

Redemption of Preferred Stock; Payment in Cash or Common Stock. Commencing
nine months from the date of this Prospectus, the Preferred Stock may be
redeemed by the Company on 30 days' prior written notice at 110% of the average
bid price per share for the Preferred Stock on NASDAQ for the 20 trading days
prior to the redemption date. Accordingly, holders of the Preferred Stock may be
required to either exchange their Preferred Stock for Common Stock or accept a
fixed payment price for each share of Preferred Stock. Moreover, the redemption
payment may be in cash or Common Stock of the Company, in the Company's sole
discretion. See "Description of Securities."

No Assurance of an Active Public Market. While the Preferred Stock and
Warrants will be free of restrictions on transfer, there is presently no public

12
<PAGE>

market for the Preferred Stock or Warrants, and although the Company has applied
to have the Preferred Stock and Warrants included on The NASDAQ SmallCap Market,
there can be no assurance that an active market will develop or be maintained.
Accordingly, there can be no assurance that purchasers will be able to sell the
Preferred Stock or Warrants in the future. See "Description of Securities."

Non-Registration in Certain Jurisdictions of Shares of Common Stock
Underlying the Preferred Stock. The Preferred Stock is not convertible unless,
at the time of conversion, the Company has a current prospectus covering the
shares of Common Stock issuable upon conversion of such Preferred Stock and such
shares of Common Stock have been registered, qualified or deemed to be exempt
under the securities laws of the state of residence of the holders of such
Preferred Stock. Although the Company is registering the underlying Common Stock
hereby and will use its best efforts to maintain a current prospectus relating
thereto while the Preferred Stock is outstanding, there is no assurance that it
will be able to do so.

Redemption of Warrants. The Warrants may be redeemed by the Company at any
time after nine months from the date of this Prospectus upon 30 days' written
notice to the Warrantholders at $.01 per Warrant if the closing price of the
Company's Preferred Stock on the NASDAQ SmallCap Market averages at least $11.00
per share for a period of 20 consecutive trading days or if the Company redeems
the Preferred Stock. In such event, the Warrants will only be exercisable until
the close of business on the date fixed for redemption in such notice. Any
Warrants not exercised by such time will cease to be exercisable, and the
holders will be entitled only to the redemption price. See "Description of
Securities - Redeemable Preferred Stock Purchase Warrants."

Prospectus Must Be Current to Exercise Warrants; Non-Registration in
Certain Jurisdictions of Shares of Preferred Stock Underlying the Warrants. The
Warrants are not convertible or exercisable unless, at the time of exercise, the
Company has a current prospectus covering the shares of Preferred Stock issuable
upon exercise of the Warrants and such shares of Preferred Stock have been
registered, qualified or deemed to be exempt under the securities laws of the
state of residence of the holders of such Warrants. There can be no assurance
that the Company will maintain a current prospectus or that the securities will
be qualified or registered under any state laws.

The Preferred Stock and Warrants are separately tradeable as of the date of
this Prospectus. Subsequently, purchasers may buy Warrants in the aftermarket or
may move to jurisdictions in which the shares of Preferred Stock underlying the
Warrants are not registered or qualified during the period that the Warrants are
exercisable. In this event, the Company would be unable to issue Preferred Stock
to those persons desiring to exercise their Warrants unless and until the shares
could be qualified for sale in jurisdictions in which the purchasers reside, or
an exemption from this qualification exists in such jurisdiction. Accordingly,
Warrantholders would have no choice but to attempt to sell the Warrants in a
jurisdiction where such sale is permissible or allow them to expire unexercised.
See "Description of Securities."

Purchasers may buy Preferred Stock in the aftermarket or may move to
jurisdictions in which the shares of Common Stock underlying the Preferred Stock
are not so registered or qualified during the period that the Preferred Stock is
outstanding. In this event, the Company would be unable to issue Common Stock to
those persons desiring to convert their shares of Preferred Stock unless and
until such shares could be qualified for sale in jurisdictions in which such
purchasers reside, or an exemption from such qualification exists in such
jurisdiction. In such event, the holders of Preferred Stock could be unable to
convert their shares to Common Stock. See "Description of Securities."

Offering Price Arbitrarily Determined. The offering price of the Preferred
Stock and exercise price of the Warrants were arbitrarily determined through
negotiations between the Representative and the Company and do not necessarily
bear any relationship to the Company's assets, earnings or other investment
criteria. See "Underwriting."

PRICE RANGE OF COMMON STOCK

The Company's Common Stock has traded on The NASDAQ SmallCap Market under
the symbol "ROTI" since July 9, 1996.

<PAGE>

The following table sets forth for the quarters indicated the range of high
and low closing prices of the Company's Common Stock as reported by The NASDAQ
SmallCap Market.

Price
---------------

By Quarter Ended: High Low
- ----------------- ------- -------

October 6, 1996.................................$8.25 $5.67
December 29, 1996...............................$7.75 $5.75
April 20, 1997..................................$7.75 $6.00
July 13, 1997 (through June 5, 1997)............$8.00 $7.25

As of June 5, 1997, the Company had approximately 600 beneficial and record
holders of the Common Stock.

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the
securities after deducting underwriting commissions and expenses and other
expenses of the Offering are expected to be $4,130,500. The Company intends to
apply the net proceeds generally over a 12-month period as follows:

<TABLE>
Amount Percent
------ -------
<S> <C> <C>

Acquisition of Restaurants for resale to area developers(1)............. 2,200,000 50.9%
Develop three Restaurants (2)........................................... 600,000 14.5%
Financial assistance to area developers(2).............................. 1,200,000 14.5%
Working capital ........................................................ 730,500 20.1%
-------- ----
TOTALS.................................................................. $4,130,500 100.0%

<FN>

- -------------------
(1) The Company intends to acquire approximately 12 existing restaurant
properties in certain metropolitan markets, from unrelated parties, sell
the assets of the restaurant properties (such as furniture, fixtures and
equipment) and sublease the real estate leases from unrelated parties, to
area developers selected by the Company for operation of the properties as
Harvest Rotisserie restaurants. Area developers will be required to pay for
the assets in cash or by execution of a promissory note payable to the
Company in installments over a negotiated period of time. The promissory
notes will be secured by the restaurant assets as well as the real estate
lease on the property. The Company estimates that costs to acquire these
properties (assuming the real estate and buildings are not purchased) will
range from $100,000 to $500,000 per property and will average approximately
$175,000 per property. The acquisition of the restaurant properties
represents a significant portion of the net proceeds raised in the Offering
and limits the availability of such funds for other corporate purposes.
Moreover, should future operating results from the acquired restaurant
properties result in losses, the Company's working capital and liquidity
would be further reduced. See "Business-Application of Offering Proceeds"
and "Business-Restaurant Purchase Agreements."

(2) Represents the cost to develop and open three additional Company-owned
Restaurants. See "Business-Properties".

(3) The Company intends to provide financing (in addition to acquiring the
restaurant properties) to area developers selected by the Company who agree
to operate the restaurant properties leased to them by the Company. This
financing will include costs incurred by the area developer to convert the
properties to Harvest Rotisserie restaurants and initial working capital.
The Company estimates such area developer financing will average $100,000
per restaurant property and, accordingly, the Company will finance the
conversion of up to six Restaurants. Any unused area developer financing
will be added to working capital. See "Business-Application of Offering
Proceeds."

</FN>
</TABLE>

Pending application, the net proceeds of the Offering will be invested in
interest bearing savings accounts, certificates of deposit and money market
accounts. Except for the working capital allocation, the net proceeds will not
be used to open more than three Company-owned Restaurants unless the Restaurants
are developed for resale to area developers. See "Business-Restaurant
Expansion." See also "Business-Restaurant Purchase Agreements" for a description
of the nine restaurant properties the Company has contracted to acquire for
resale to prospective area developers. Any additional proceeds received upon the
exercise of the Warrants, the Representative's Warrants or the Representative's
Overallotment Option will be added to working capital.

14
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
April 20, 1997, and as adjusted to reflect the sale of the securities offered
hereby and the application of the net proceeds therefrom as described in "Use of
Proceeds."

<TABLE>

April 20,
1997
Historical As Adjusted(2)
---------- --------------
<S> <C> <C>
Stockholders' equity:
Preferred Stock, $1.00 par value, 5,000,000 shares authorized,
no shares issued and outstanding, 500,000 shares as adjusted $ -- $ 500,000
Common Stock, $.01 par value, 10,000,000 shares authorized,
2,366,030 shares issued and outstanding(1) ................. 23,660 23,660
Additional paid-in capital ..................................... 6,705,113 10,335,613
Accumulated deficit ............................................ (4,374,354) (4,374,354)
----------- -----------
Total stockholders' equity ......................................... 2,354,419 6,484,919
----------- -----------
Total capitalization ............................................... $ 2,354,419 $ 6,484,919
=========== ===========

<FN>

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

(1) Does not include an aggregate of __________ shares of Common Stock issuable
upon exercise of outstanding warrants and options (collectively, the
"Existing Options") comprised of (i) 2,300,000 shares issuable upon
exercise of the IPO Warrants, (ii) 300,000 shares issuable upon exercise of
the Warrants earned by the Representative in the IPO (the "Representative's
IPO Warrants"), (iii) __________ shares issuable upon conversion of the
Preferred Stock and the Preferred Stock issuable under the Representative's
Warrants, (iv) ______ shares issuable upon conversion of 1,500,000 shares
of Preferred Stock issuable upon exercise of the Warrants, (vi) 72,000
shares issuable upon exercise of other outstanding common stock purchase
warrants, and (v) 237,000 shares issuable under the Company's 1994 Stock
Option Plan. See "Capitalization" and "Description of Securities."

(2) To reflect the issuance of the securities offered hereby, excluding
securities which may be issued upon exercise of the Overallotment Option.

</FN>

</TABLE>

DIVIDEND POLICY

The Company has never paid cash dividends on its Common Stock and intends
to retain earnings, if any, for use in the operation and expansion of its
business. The amount of future dividends, if any, will be determined by the
Board of Directors based upon the Company's earnings, financial condition,
capital requirements and other conditions. The Company will pay quarterly
cumulative dividends of $.30 per share of Preferred Stock in cash or in the
Company's Common Stock at the sole discretion of the Company. The value of any
Common Stock issued will be the last reported sales price of the Common Stock on
NASDAQ on the last day of each calendar quarter. See "Description of Securities-
Preferred Stock."

15
<PAGE>

SELECTED FINANCIAL DATA

The selected financial information set forth below has been derived from
the Company's financial statements, which appear elsewhere in the Prospectus.
The selected financial data is qualified in its entirety by, and should be read
in conjunction with, the financial statements and the notes thereto included
elsewhere herein. Interim data for the sixteen weeks ended April 20, 1997 and
April 21, 1996, have been derived from unaudited financial statements which are
also included herein. The results of operations for the sixteen weeks ended
April 20, 1997, are not necessarily indicative of the results to be expected for
the full year.

Sixteen Weeks Ended
------------------- Year Ended Year Ended Year Ended
April 20, April 21, December 29, December 31, December 25,
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues:
Restaurant ....................... $ 446,994 $ 63,138 $ 263,892 $ 226,678 $ 243,988
Area development fee, stockholder -- -- -- 50,000 --
--------- --------- ----------- ----------- -----------
446,994 63,138 $ 263,892 $ 276,678 $ 243,988
Cost and Expenses:
Cost of food and paper ........... 230,248 23,734 122,530 82,171 105,650
Restaurant salaries and benefits . 234,685 23,854 125,954 127,400 146,677
Occupancy and related expenses ... 65,012 16,747 58,191 63,605 67,611
Operating expenses ............... 140,219 20,242 73,661 86,641 106,647
General and administrative ....... 436,505 169,945 1,261,198 567,605 197,641
Preopening expenses .............. 86,314 9,493 131,074 59,363 25,783
Depreciation and amortization .... 60,635 30,824 104,467 73,879 58,940
--------- --------- ----------- ----------- -----------
Total operating expenses ..... 1,253,618 294,839 1,877,075 1,060,664 708,949

Loss from operations ............. (806,624) (231,701) (1,613,183) (783,986) (464,961)

Net loss ............................. $ (797,558) $ (409,020) $(2,011,254) $ (924,483) $ (494,024)
========== ========== =========== =========== ===========

Net loss per common share ............ $ ( .34) $ ( .32) $ (1.29) $ (0.75) $ (0.49)

Weighted average number of
common shares outstanding(1) ....... 2,316,279 1,285,699 1,553,824 1,224,531 1,005,107

Stockholders' equity ................. 2,354,419 6,484,919

<FN>

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

(1) Weighted average number of common shares outstanding includes common
equivalent shares issuable upon the exercise of outstanding stock options
and common stock purchase warrants.

(2) To reflect the issuance of the securities offered hereby, excluding
securities which may be issued upon exercise of the Overallotment Option.

</FN>
</TABLE>
16
<PAGE>

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

General

The Company was organized in June 1993 and opened its San Antonio Cluckers
restaurant in January 1994. The Company's operating results for 1994 and 1995,
including its limited revenues and ongoing losses, primarily reflect the
operations of its one Cluckers restaurant located in San Antonio, Texas. During
the fourth quarter of 1994, the Company established its corporate offices and
began the initial development of its franchising program. During the third
quarter of 1995, the Company began refinements to its Cluckers restaurant which
evolved into the Harvest Rotisserie restaurant. In February 1996 the Company
elected to limit its activities to the development of Harvest Rotisserie
restaurants and opened its first Harvest Rotisserie restaurant in November 1996.
In January and February 1997 the Company open two additional Harvest Rotisserie
restaurants, and in January 1997, the Company converted its San Antonio Cluckers
restaurant to a Harvest Rotisserie restaurant, at a cost of $25,000. To date,
the Company has four Restaurants in operation but has not sold any franchises
nor does it have any area development agreements in effect.

Results of Operations - For the sixteen weeks ended April 20, 1997 and April 21,
1996.

Revenues. Restaurant revenues for the sixteen weeks ended April 20, 1997
were $446,994, an increase of $383,856 as compared to the same period in 1996.
The increase in revenue was due to the opening of three additional restaurants
from November 1996 to February 1997. On a comparative basis, same store revenues
decreased $29,743 or 47.1% between the two periods. The decrease in same store
revenues was due in part to a reduction in the restaurant operating hours for
the Company's only restaurant in operation during the second quarter of 1996.
This restaurant is currently open five days each week from 11 a.m. to 2 p.m. and
is being used as a training facility. Initial sales volumes from the three newly
opened stores have met management expectations. Typically revenues from new
stores are not as high in the first several periods following openings as in
later periods. Management anticipates that sales volumes for its existing
restaurants will improve in future periods as a result of marketing efforts and
enhanced name recognition as the Company opens additional restaurants in the San
Antonio area, although there can be no such assurance.

Costs and Expenses. Cost of food and paper were 51.5% of restaurant
revenues for the sixteen weeks ended April 20, 1997, as compared to 37.6% for
the same period in 1996. The increase in food and paper costs was due to the
opening of new restaurants during the period. Costs of sales is generally higher
as a percentage of revenue for newly opened restaurants than for mature
restaurants due to increased food usage for opening promotions and
inefficiencies caused by less experienced employees.

Restaurant salaries, benefits, occupancy and related expenses, and
operating expenses include all other restaurant level operating expenses, the
major components of which are direct and indirect labor, payroll taxes and
benefits, operating supplies, rent, advertising, repairs and maintenance,
utilities, and other occupancy costs. The combined total of these expenses was
$439,916 or 98.4% of restaurant revenues for the sixteen weeks ended April 20,
1997, as compared to $60,843 or 96.4% for the same period in 1996. A substantial
portion of these costs are fixed or indirectly variable. For the sixteen week
period ended April 20, 1997, these costs were disproportionate to revenues due
to the opening of new restaurants, which have higher expenses during the initial
periods after opening.

General and administrative expenses increased $266,560 or 157% for the
sixteen weeks ended April 20, 1997, as compared to the same period in 1996. The
increase resulted from the initial development of a corporate infrastructure
needed to support the planned expansion of Company-owned and franchised stores,
and continued expenses associated with the Company's expansion efforts.

Preopening expenses were $86,314 and $9,493 for the sixteen weeks ended
April 20, 1997 and April 21, 1996, respectively. Substantially all of the
increase in 1997 relates to the two additional restaurants opened during the
period and expenses associated with obtaining new sites for future restaurant
development.

Interest and Debt Discount Expense. Interest and debt discount expense
decreased by $169,503 for sixteen weeks ended April 20, 1997 as compared to the
same period in 1996, primarily as a result of the repayment of all outstanding
bridge notes in July 1996.

17
<PAGE>

Net Loss. The Company incurred net losses of $797,558 for the sixteen weeks
ended April 20, 1997 as compared to $409,020 for the same period in 1996. The
increase in net loss was primarily the result of significantly higher general
and administrative expenses, preopening costs and initial operating losses for
newly opened restaurants. The Company expects to incur losses in future periods
until it generates sufficient revenues from expanded restaurant operations or
from franchising activities to offset ongoing operating, financing and
expansions costs.

Results of Operations-Fiscal Year 1996 Compared to Fiscal Year 1995.

Revenues. Restaurant revenues for 1996 were $263,892, a 16.4% increase as
compared to 1995. The increase in revenues was due to the opening of an
additional restaurant in November 1996. On a comparative basis, same store
revenues decreased $32,820, or 14.5%, between 1996 and 1995. The decrease in
same store revenues was due in part to a reduction in the restaurant operating
hours for the Company's only restaurant during the second quarter of 1996. The
restaurant is currently open five days each week from 11 a.m. to 2 p.m. and is
also being used as a training facility. Restaurant revenues in 1996 were
approximately 34% of capacity for the restaurant and below the restaurant's
operating costs. Management attributes the low sales volumes to the partial use
of the restaurant as a training facility, reduced hours of operation and the
lack of a drive-thru window at the restaurant, which is located in a shopping
center. Management anticipates that the sales volume for this restaurant may
improve marginally in future periods due to enhanced name recognition as the
Company opens additional Restaurants in the San Antonio area, although there can
be no such assurance. The Company expects that most new restaurants will be
free-standing with drive-thru windows.

During 1995, revenues included an area development fee for $50,000 with a
then director of the Company. The area development arrangement was subsequently
modified extensively. See "Certain Transactions."

Costs and Expenses. Cost of food and paper were 46.4% of restaurant
revenues for 1996, as compared to 36.3% in 1995. The increase in food and paper
costs resulted primarily from food usage for recipe development for the
Company's expanded Harvest Rotisserie menu, and the opening of an additional
restaurant in November 1996, which typically has higher costs during the initial
periods after opening.

Restaurant salaries, benefits, occupancy and related expenses, and
operating expenses include all other restaurant level operating expenses, the
major components of which are direct and indirect labor, payroll taxes and
benefits, operating supplies, rent, advertising, repairs and maintenance,
utilities, and other occupancy costs. The combined total of these expenses was
$257,806, or 97.7% of restaurant revenue for 1996, as compared to $277,646 or
122% in 1995. A substantial portion of these costs are fixed or indirectly
variable and therefore were disproportionate to revenues for both periods due to
low sales volumes.

General and administrative expenses increased $693,593, or 122%, in 1996 as
compared to 1995. The increase resulted from the establishment of the Company's
corporate offices in 1996 and expenses associated with the Company's financing,
franchising, and expansion activities. In 1996, these expenses included
salaries, benefits and contract services (25%), professional fees and offering
expenses (37%), travel-related expenses (10%), advertising and promotion (11%),
and other general and administrative expenses (17%).

Preopening expenses increased by $71,711 in 1996 as compared to the same
period in 1995. A substantial portion of the increase relates to initial costs
associated with the development of a new Harvest Rotisserie restaurant which
opened in November 1996.

Interest and Debt Discount Expense. Interest and debt discount expense
increased to $454,818 for 1996 as compared to $140,497 for 1995. The significant
increase relates to the issuance of $1,684,000 face amount of 10% Bridge Notes
from December 1994 to March 1996. The total amount of amortized debt discount in
1996 was $367,153. The Bridge Notes were repaid in full in July 1996 from
proceeds of the Company's IPO.

Net Loss. The Company incurred a net loss of $2,011,254 for 1996 as
compared to $924,483 for 1995. The increase in net loss for 1996 was primarily
the result of significantly higher interest, debt discount expenses and general
and administrative expenses. The Company expects to incur significant losses in
future periods until it generates sufficient revenues from expanded restaurant
operations or from franchising activities to offset ongoing operating and
expansion costs.

18
<PAGE>

Results of Operations-Fiscal Year 1995 Compared to Fiscal Year 1994

Revenues. Revenues for 1995 were comprised of $226,678 from restaurant
operations and $50,000 for an area development fee from a stockholder of the
Company. Revenues from restaurant operations were derived entirely from the San
Antonio Cluckers restaurant, which opened in January 1994. Restaurant revenues
for 1995 decreased 7.1% as compared to 1994, which only included 11 months of
restaurant operations. Annualized restaurant sales volumes for 1995 were 14.8%
below 1994 levels, and were approximately 30% of capacity for the restaurant and
below the restaurant's operating costs for both periods. The decrease in
revenues is due in part to a reduction in the restaurant operating hours which
was implemented during the third quarter of 1995. The restaurant is currently
open five days each week from 11 a.m. to 2 p.m. and is also being used as a
training facility. Management attributes the low sales volume to the partial use
of the restaurant as a training facility and the lack of a drive-thru window at
the restaurant, which is located in a shopping center. The Company expects that
most new restaurants will be in free-standing facilities with drive-thru
windows.

Costs and Expenses. Cost of food and paper improved to 36.3% of restaurant
revenues for 1995, as compared to 43.3% for 1994. The improvement in gross
margins resulted primarily from efficiencies in food preparation as the
restaurant matured following the initial opening in January 1994.

Restaurant salaries, benefits, occupancy and related expenses, and
operating expenses include all other restaurant level operating expenses, the
major components of which are direct and indirect labor, payroll taxes and
benefits, operating supplies, rent, advertising, repairs and maintenance,
utilities and other occupancy costs. The combined total of these expenses was
$277,646, or 122% of restaurant revenues, and $320,935, or 132% of restaurant
revenues for 1995 and 1994, respectively. A substantial portion of these costs
is fixed or indirectly variable and therefore were disproportionate to
restaurant revenues for both periods. The decrease in these expenses as a
percentage of restaurant revenues was due to improved cost controls implemented
during the fourth quarter of 1994.

General and administrative expenses increased $369,964, or 187%, in 1995 as
compared to 1994 primarily due to the establishment of the Company's corporate
offices and expenses associated with the Company's financing, franchising and
expansion activities. In 1995, these expenses included salaries, benefits and
contract services (29%), professional fees and public offering expenses (39%),
travel related expenses (15%), advertising and promotion (6%), and other general
and administrative expenses (11%).

Preopening expenses of $59,363 in 1995 consisted primarily of lease costs
for maintaining a restaurant site for future development in Houston, Texas.
Preopening expenses of $25,783 in 1994 consisted of certain expenses incurred in
connection with the opening of the San Antonio restaurant.

Interest and Debt Discount Expense. Interest and debt discount expense of
$140,497 for 1995 relates to the issuance of $1,074,500 face amount of 10%
Bridge Notes from December 1994 to November 1995 and included $87,659 of
amortized debt discount. Interest expense of $29,063 in 1994 relates to a note
payable with an affiliate.

Net Loss. The Company incurred a net loss of $924,483 for 1995 as compared
to $494,024 for 1994. The increase in net loss in 1995 was primarily the result
of significantly higher general and administrative expenses and interest
expense, which offset an area development fee and slightly improved restaurant
operating results.

Liquidity and Capital Resources

The Company has incurred losses from operations since inception, and as of
April 20, 1997, had an accumulated deficit of $4,374,354 and working capital of
only $5,330. The Company is not currently generating sufficient revenues from
operations to meet its cash requirements and requires proceeds of the Offering
or other debt or equity financings to maintain its current and proposed levels
of operations. There can be no assurance that any such financing will be
available to the Company. Management anticipates that the Company must increase
revenues from existing Restaurants, open at least four additional Restaurants
and realize revenues from its franchise program to generate a positive cash flow
from operations, although there can be no such assurance. The Company estimates
it will require up to six months to realize such increases in revenues from
operations. The ability of the Company to fund costs associated with its
operations and expansion plans is dependent upon the successful development of
its Restaurants, its franchising activities, and its ability to obtain
additional capital through future debt or equity placements.

19
<PAGE>

The Company requires capital principally for the expansion of its
Restaurant operations, to fund costs associated with the promotion of its
franchise program, and for the continual development of a corporate
infrastructure to support the planned expansion in operations. During 1996 and
for the first sixteen weeks of 1997, the Company invested $1,614,675 in property
and equipment, of which approximately $1,451,703 was for the development of
three restaurants including the purchase of land and building for a restaurant
at a cost of $400,000. These restaurants opened in November 1996, January 1997,
and February 1997. To date, the Company has funded its operations and capital
needs with funds provided from the sale of its securities, including its IPO,
which raised net proceeds of approximately $4,700,000. The Company does not have
a working capital line of credit with any financial institution. Future sources
of liquidity will be limited to the Company's ability to obtain additional debt
or equity financing, which will be difficult to obtain until and unless the
Company begins to generate earnings. Management's plan is to move the Company
toward profitable operations in fiscal 1997 and to seek additional capital to
fund further expansion of its operations. There can be no assurance that the
Company will be successful in either regard.

Between December 1994 and March 1996, the Company issued a total of
$1,684,500 of 10% unsecured Bridge Notes. Proceeds from the Bridge Notes were
used for working capital purposes, development of the Company's initial
franchising program and to pay certain costs associated with the Company's IPO.
The Bridge Notes were repaid on July 15, 1996 using a portion of the proceeds
from the IPO.

The Company intends to use a substantial portion of the proceeds of the
Offering to acquire restaurants properties for resale to area developers for
conversion to Harvest Rotisserie restaurants and to be operated as franchised
units. In February 1997 the Company entered into two separate agreements for the
purchase of nine restaurant properties in Florida, Indiana, and North Carolina,
which it intends to resell to area developers. The transactions do not meet the
50% test outlined in Item 310 (c) of Regulation SB to provide financial
statements for these acquired properties. The purchase of the nine restaurant
properties limits the availability of such funds for other corporate purposes.
Moreover, should future operating results from the acquired restaurant
properties result in losses, the Company's working capital and liquidity would
be further reduced. See "Use Of Proceeds". The Company also intends to utilize
$600,000 of the proceeds of the Offering to open three additional Company-owned
restaurants.

Sources of capital are limited to the Company achieving profitable
operations in future periods or raising additional capital from investors. The
Company anticipates that its existing capital resources together with the
proceeds of the Offering and projected cash flows from planned operations will
be sufficient to maintain its operations through 1997; however, implementation
of the Company's plans to develop additional restaurants is dependent upon the
completion of the Offering. If it does not complete the Offering, the Company's
operations will be significantly curtailed. See "Risk Factors-Need for
Additional Capital" and "Business-Properties."

BUSINESS

Introduction

20
<PAGE>

as well as area development agreements, although it has not yet executed any
franchise agreements and currently has no area development agreements in effect.
Area development agreements require the area developer to develop a specified
number of Restaurants within a delineated territory in accordance with a
development schedule. Management believes that area development agreements allow
for the more rapid development of a target market area by generally more
experienced restaurant operators who are able to realize economies of scale
resulting from opening a number of Restaurants in a given area. These operators
often require less management supervision by Company personnel and provide the
Company with higher franchise fee income in a shorter period of time.

History

The Company was incorporated in Texas in June 1993 under the name Clucker's
Tex-Mex Venture, Inc. and changed its name to CluckCorp International, Inc. in
April 1995. Prior to November 1994, the Company was an area developer for
Cluckers Wood Roasted Chicken, Inc. ("CWRC"), the developer and franchisor of
the original "Cluckers" restaurant concept. The Company acquired from WaterMarc
Food Management, Inc. ("WaterMarc"), formerly Billy Blues Food Corporation and
an affiliate of the Company, the Cluckers franchise development rights for
Texas, Mexico and certain Central American countries. After CWRC had opened ten
company-owned restaurants between 1991 and 1994 in Florida, Georgia and New York
and had sold franchises for an additional 165 restaurants, controlling interest
in CWRC was purchased by Kenny Rogers Roasters, Inc. ("Roasters") in November
1994. The Company then exchanged its Cluckers area development agreement with
CWRC for systems, franchising materials, signage and the exclusive right to use
the Cluckers name, trademark and service mark solely in Texas. The Company did
not acquire international rights to the Cluckers name because neither CWRC nor
anyone else had obtained any international rights, other than the Mexican and
Central American rights described above. However, the Company subsequently
registered the Cluckers name in Mexico and applied for trademarks to use the
Cluckers name and logos in the United Kingdom, Canada, Singapore and Malaysia.

The Company is licensed to use the Cluckers name only in Texas, and is
obligated to pay a license fee of 2% of gross sales applicable only to its
Cluckers restaurants in Texas for the first 10 years and 1% of gross sales
thereafter. No such license fees are required for Restaurants outside the United
States. In February 1995 and July 1995, the Company formed Cluckers Restaurants,
Inc. and Harvest Restaurants, Inc., wholly-owned Texas corporate subsidiaries,
to act as franchisors for the Company's Cluckers and Harvest Rotisserie
restaurants. The Company is not required to pay a license fee for its Harvest
Rotisserie restaurants because it developed and owns the rights to the Harvest
Rotisserie name and concept.

In February 1996, the Company decided to concentrate on the development,
operation and franchising of Harvest Rotisserie restaurants, which the Company
believes are an improvement over the original Cluckers concept because Harvest
Rotisserie restaurants offer an expanded menu which includes a number of
additional homestyle entrees offering lower fat foods. Accordingly, it converted
its one Cluckers restaurant in San Antonio, Texas to a Harvest Rotisserie
restaurant.

Strategy

The Company seeks to participate in what it perceives as an emerging food
service category consisting of fresh, convenient, homestyle replacement meals.
This category combines the fresh, high quality and flavorful meals generally
associated with traditional home cooking with the convenience and value
associated with fast-food restaurants. In order to promote this category, the
Company will continue to employ the following strategies it adopted in
connection with the development of its Harvest Rotisserie restaurants.

Fresh, High Quality, Convenient Homestyle Meals. The Company will focus on
its Harvest Rotisserie concept of rotisserie oak-roasted chicken, oak roasted
turkey breast, roast ham, meatloaf, sandwiches and a variety of freshly prepared
side dishes by promoting (i) take-home prepared foods, (ii) the expanding
interest in low fat freshly prepared meals, and (iii) the consumer's desire for
homestyle, complete meals, reminiscent of home cooking. Chicken, turkey and ham
are delivered to the Company's Restaurants several times each week in order to
allow for the fresh preparation of these food products. Cooked food items are
prepared with the use of ovens and steamers, rather than the fryers, grills, and
microwaves used by many other fast-food establishments. The Company maintains
strict quality standards in purchasing, storing, preparing and serving its
entrees, fresh side dishes, desserts and other products. All visible fat is
removed from poultry and ham prior to preparation. The chickens are marinated
for 24 hours in a blend of citrus juices, fresh garlic and natural herbs and
spices and roasted over hardwood flames in a custom built rotisserie at
temperatures as high as 1,200 degrees for ninety minutes. The self-basting
characteristic of rotisserie cooking is believed to reduce fat and result in
moister meat and crispier skin.

21
<PAGE>

Complete Meal Value. The Company emphasizes complete, reasonably-priced
meals rather than focusing on discounting individual items or an a la carte
pricing system. Restaurant meals include a variety of entrees such as rotisserie
oak-roasted chicken, oak-roasted turkey, roast ham and meatloaf
customer-selected side dishes and desserts. Complete meals begin at
approximately $3.99, and menu combinations provide convenient multiple meal
selections for couples, families or larger groups. The Company's operating
philosophy is to provide high quality, healthful, quick service food rather than
the food often associated with the fast food industry. The Restaurants offer
large food portions, lunch specials and entree combinations at lower prices in
order to create a competitive "price to value" concept.

Distinctive Appearance and Casual Atmosphere. The Company has established
what it considers to be an easily replicable prototype Harvest Rotisserie
restaurant, featuring an efficient operating layout, standardized equipment and
tasteful and distinctive trade dress. The Company believes its Restaurant store
furnishings create an attractive and casual environment for both take-out and
dine-in customers.

Visible, High Traffic Store Locations. The Company emphasizes free-standing
pad sites or end-cap locations with drive-thru windows, ample parking and easy
access to and from high traffic roads. Highly visible signage consistent with
trade dress and local requirements is pursued.

Customer Service Commitment. The Company seeks friendly, customer-oriented,
and highly motivated employees at all positions to help ensure that its
customers have a pleasant dining experience, including a friendly greeting and
individual attention to all aspects of their order. Customers unfamiliar with
particular side dishes are encouraged to taste a sample.

Application of Offering Proceeds

The Company intends to use a substantial portion of the proceeds of the
Offering to acquire restaurant properties in certain metropolitan markets, sell
the assets and sublease the properties to area developers who will operate the
properties as Harvest Rotisserie restaurants. The Company may require the area
developers to execute promissory notes to the Company representing the purchase
price of the assets advanced by the Company and may also advance funds to area
developers for costs incurred to convert properties to Harvest Rotisserie
restaurants and for working capital. The Company will then seek to recoup its
costs through franchise fee payments and repayments of any promissory notes
issued by the area developers who will also be responsible to tender restaurant
property lease payments directly to the owners of the properties. See "Use of
Proceeds." The Company will not have any financial or ownership interest in the
Restaurants subleased to the area developers other than the right to obtain
repayment of any funds advanced to them. See "Area Development Agreements" for a
discussion of the obligations of area developers to develop specified numbers of
Restaurants in defined territories and their obligation to pay area development
fees and franchise fees to the Company.

If the Company is unable to locate area developers willing to purchase the
restaurant assets and sublease the restaurant properties or if the area
developers are unsuccessful in the operation of the restaurant properties, the
Company may be unable to recoup its investments in the properties and would be
liable for any leases it executed with the owners of the properties. If the
Company is unable to recoup such investments, its financial condition and
results of operations will be severely adversely affected. See "Use of
Proceeds."

In evaluating and selecting restaurant properties for assignment and
sublease to prospective area developers, the Company will apply the same
criteria it uses to select its own restaurant properties. Specifically, the
Company will limit restaurant properties to a small number of metropolitan areas
which the Company believes currently offer long range growth potential for its
Harvest Rotisserie concept. Each metropolitan area must offer the Company the
opportunity to promptly acquire at least three properties so that the Company
can take advantage of advertising and marketing economies of scale. The Company
will give priority to metropolitan areas in which it has already located a
prospective area developer and which contain identifiable properties which meet
the Company's demographic and population requirements. The Company does not have

22
<PAGE>

specific population criteria for metropolitan areas, but rather evaluates the
population of the metropolitan area in comparison to the number of Restaurants
it believes its prospective area developer is capable of developing within a
24-month period. The ratio of potential Restaurants to population determines the
Company's ability to realize economies of scale. In terms of demographics, the
Company favors high employment and recreational population concentrations of
middle class white collar workers generally above the age of 30. Individual
properties within a target metropolitan area will be selected based upon the
terms of the underlying property leases, anticipated costs of conversion to
Harvest Rotisserie restaurants, the ability of the Company to refinance any debt
associated with the property and the ability of the Company to sublease the
property to an area developer. The Company has not entered into any acquisition
agreements for restaurant properties or sublease agreements with prospective
area developers and there can be no assurance it will do so in the future. The
Company may also elect to enter into agreements for the conversion of restaurant
properties (to be developed as Company-owned restaurants) which are
significantly different than the prospective agreements described herein. To
date, no such agreements have been entered into and the Company does not have a
format for any such agreements.

Current Operations

The Company's Restaurants prominently display a rotisserie within customer
view. The location of the rotisserie, coupled with the flames emanating from the
hardwood, creates a focal point for the Restaurants. Chicken, turkey and other
entrees may be purchased in varying quantities or in combination with a choice
of side dishes. Most Restaurants offer inside seating and takeout service, range
in size from approximately 1,800 to 3,500 square feet and have drive-through
windows and seating capacities for approximately 45 to 70 diners. Generally,
restaurant hours are from 11 A.M. to 11 P.M., seven days a week.

The Company considers the location of a Restaurant to be critical to its
long-term success and therefore devotes significant efforts to the evaluation of
potential Restaurant sites regardless of whether such sites are intended as
Company owned, franchised, area developed or resale Restaurants. The site
selection process involves consideration of a variety of factors including (i)
demographics, such as target population density and household income levels,
(ii) specific site characteristics such as visibility, accessibility and traffic
volume, (iii) proximity to activity centers such as prime urban office or retail
shopping districts, suburban shopping areas and hotel and office complexes, (iv)
parking availability and (v) potential competition in the area. The Company's
executive officers inspect and approve Restaurant sites prior to the execution
of a lease. The opening of new Restaurants is contingent upon, among other
things, locating satisfactory sites, negotiating favorable leases or purchase
agreements, completing construction and securing appropriate government permits
and approvals. Once a site is available to the Company and necessary approvals
and permits have been obtained approximately 60 to 180 days are required to
complete construction and open the Restaurant.

The design of the Restaurants is flexible and may be adapted to local
architectural styles and existing buildings with varying floor plans and
configurations. The Company intends to continue to purchase most of its
restaurant equipment, such as rotisseries, furniture and fixtures, from the same
suppliers, in order to promote uniformity of style and format and reduce costs.
The Restaurants are operated under standards set forth in the Company's
operating manuals, including specifications relating to food quality and
preparation, design and decor and day-to-day operations. The standards also
govern the administration, training and conduct of Restaurant personnel.

A typical Restaurant will employ between fifteen and twenty people daily,
generally on a staggered basis designed to match employee work hours to customer
traffic. Restaurant personnel generally include a manager, assistant manager,
cooks, counter personnel and kitchen workers.

The Company believes that the training and development of Restaurant
management personnel are a critical part of its operations. Restaurant
management personnel are trained by the Company for a 30-day period and until
each participant can demonstrate the management skills required to operate a
Restaurant at levels satisfactory to the Company. Restaurant managers are
responsible for day-to-day operations, including food preparation, customer
relations, maintenance, cost control and personnel relations. In addition,
Restaurant managers are responsible for selecting and training new employees who
will generally undergo an on-the-job training period under the supervision of an
experienced employee. Ongoing employee training is the responsibility of the
Restaurant manager.

<PAGE>

Restaurant Expansion

The Company intends to open as many Restaurants as its capital will permit,
although the proceeds from the Offering (except for the working capital
allocation) will be used primarily to acquire Restaurants properties for resale
to area developers or for area developer financing. See "Use of Proceeds." The
amount of capital required will depend in part on whether the developed
Restaurants are Company-owned or franchised and whether the Restaurant buildings
are leased or constructed by the Company. The number of Restaurants opened will
also depend upon, among other things, market acceptance of the Company's
Restaurant concept, the hiring of skilled management and other personnel, the
availability of suitable locations, the general ability to successfully manage
growth (including monitoring restaurants, controlling costs and maintaining
effective quality controls), the availability of adequate financing, and its
ability to attract and retain qualified franchisees. To date the Company has
opened four Restaurants, has five other Restaurants subject to leases but has
not entered into any franchise agreements and has no area development agreements
in effect. The Company requires the proceeds of the Offering to develop three of
the five Restaurants and will be unable to develop the remaining two Restaurants
without additional financing. See "Properties".

The Company estimates that the average cost of opening a Harvest Rotisserie
restaurant in a leased facility, including site selection costs, leasehold
improvements, acquisition of furniture, fixtures and equipment, opening
inventories and certain preopening expenses (including salaries, training,
travel, advertising and promotion), will range from $175,000 to $450,000 per
Restaurant (depending upon the size and location of the Restaurant and the
amount of leasehold improvements required) and will average approximately
$325,000 per Restaurant. If the Company elects to purchase the land and/or
purchase or construct the building, the development costs will be significantly
higher, will range from $500,000 to $850,000 per restaurant, and will average
$650,000 per Restaurant.

The Company previously sought to enter into joint venture agreements and
development arrangements to finance a portion of Restaurant development costs
but was unable to attract joint venture partners upon terms acceptable to it and
has therefore terminated any such arrangements.

Franchise Agreements

The Company has completed a Uniform Franchise Offering Circular ("UFOC")
and related franchise documents for its Harvest Rotisserie restaurant but has
not sold any franchises. The Harvest Rotisserie franchise agreement provides for
(i) a $35,000 per Restaurant franchise fee (except for take-out only stores
which require a $15,000 franchise fee), (ii) a 5% royalty on the Restaurant's
gross revenue and (iii) a reserve for a national and local advertising fund
contribution aggregating up to 3% of gross revenues per Restaurant. The
franchise agreement also provides for a limited area of exclusivity surrounding
the franchised Restaurant in which the Company may neither develop nor grant to
others the right to develop additional Restaurants.

The Company's franchise agreement requires that the Restaurant be operated
in accordance with the operating procedures and menus established by the
Company. The Company conducts regular inspections of its Restaurants to
determine whether they meet applicable quality, service and cleanliness
standards and will work with franchisees to improve substandard performance or
any items of non-compliance revealed in the course of its inspection. The
Company may terminate any franchisee who does not comply with such standards.
The Company believes that maintaining superior food quality, a clean and
pleasing environment and excellent customer service are critical to the
reputation and success of its Restaurants and intends to act aggressively to
enforce applicable contractual requirements. Franchisees could contest such
terminations, which would cause the Company to incur potentially significant
legal expenses.

Area Development Agreements

The Company's Harvest Rotisserie area development agreement requires the
development of a specified number of Restaurants within a delineated territory
in accordance with a development schedule. The development schedule will
generally cover three to six years and will have Restaurant operation benchmarks
for the number of Restaurants to be opened and in operation at certain yearly
intervals. It is anticipated that area developers will pay a nonrefundable fee
of $5,000 per Restaurant to be developed and a per Restaurant franchise fee as
each Restaurant is opened. Area development agreements will provide that the
area developer has the exclusive right to open Restaurants within the specified

24
<PAGE>

territory during the term of the development schedule. Once an acceptable lease
for an approved Restaurant site has been fully executed and the Company has
approved design and construction specifications, the Company and the area
developer would enter into a franchise agreement under which the area developer
would become the franchisee for the specific Restaurant to be developed at the
site. The Company has no obligations under its area development agreements
beyond its contractual agreement not to sell franchises to anyone within the
area developer's territory.

Failure to meet development schedules or other breaches of the area
development agreement would lead to termination of the limited exclusivity
provided by the agreement, loss of any deposits paid to the Company,
renegotiation of development and franchise provisions or termination of the
right to build future Restaurants, although such termination would not
necessarily affect the area developer's existing franchise agreements for
developed locations.

In March 1995, prior to defining certain uniform area development agreement
terms, the Company entered into an area development agreement with a stockholder
and former director of the Company, providing for the development of up to ten
Cluckers restaurants in Singapore over a 20-year period. In February 1996,
consistent with the Company's plan to develop solely Harvest Rotisserie
restaurants, the agreement was modified to provide for the development of
Harvest Rotisserie restaurants. The fee under the area development agreement was
$50,000, of which the Company received $20,000 as a deposit in cash and a
$30,000 non-interest bearing unsecured promissory note. In October 1996, the
Company refunded $10,000 of the deposit, cancelled the $30,000 promissory note
and reduced the number of Restaurants anticipated to be developed under the
agreement from ten Restaurants to two Restaurants. The developer is under no
obligation to develop any Restaurants in Singapore and, accordingly, the Company
no longer considers its agreement with the developer to constitute an area
development agreement.

No area development agreements are currently in effect, and there can be no
assurance that any Restaurants will be developed under area development
agreements. Negotiations with parties who previously expressed an interest in
area development agreements for Restaurants to be located in McAllen, Texas and
San Francisco, California were terminated. Although the Company continues to
negotiate with a number of entities for area developments in such markets as
Austin, Texas, Baltimore, Maryland, New York, New York, Indianapolis, Indiana,
Tampa, Florida and Northern California, there can be no assurance that the
Company will execute any such area development agreements in the future.

Marketing

The Company currently markets four Restaurants on a limited basis primarily
through print media, restaurant signage, direct mail and in-store displays which
emphasize the healthfulness, quality and homestyle nature of the food products
and otherwise promote the rotisserie concept. The Company intends to expand its
advertising efforts (using working capital generated from its IPO and from
revenues from existing Restaurant operations) to include additional use of print
media, together with radio and television commercials. The Company's advertising
efforts also seek to promote value through the purchase of complete meals or
meal combinations, as opposed to a la carte selection or pricing. Company-owned
and any future franchise Restaurants will contribute to a national advertising
fund to pay for the development of national advertising material and to a
separate fund to pay for advertising in local markets.

Competition

The food service industry is intensely competitive with respect to food
quality, concept, location, service and price. There are many well-established
food service competitors with substantially greater financial and other
resources than the Company and with substantially longer operating histories.
The Company competes with take-out food service companies, fast-food
restaurants, casual full-service dine-in restaurants, delicatessens,
cafeteria-style buffets and prepared food stores, as well as with supermarkets
and convenience stores. Competitors include national, regional and local pizza
restaurants, Chinese food restaurants, other purveyors of carry-out food and
convenience dining establishments, including such chains as Pizza Hut,
McDonald's and others. Other rotisserie roasted chicken concepts and homestyle
food concepts, such as Boston Market and Kenny Rogers' Roasters, provide direct
and intensive competition. This intense competition has resulted in the sale or
closing of a number of rotisserie-roasted chicken restaurants including
establishments operated by some of the larger franchise chains. The inclusion of
roasted or baked chicken at many large, national food service chains, such as
KFC and Roy Rogers, and in supermarkets and convenience stores, creates
significant additional competition for customers. Moreover, other national food
service chains or companies could introduce new rotisserie-roasted or baked

25
<PAGE>

chicken restaurants. The Company believes that its Harvest Rotisserie
restaurants will compete favorably in terms of taste, food quality, convenience,
customer service and value, which the Company believes are the important factors
to the segments of the population the Company currently targets.

Competition in the food service business is often affected by changes in
consumer tastes, national, regional and local economic and real estate
conditions, demographic trends, traffic patterns, the cost and availability of
labor, purchasing power, availability of product and local competitive factors.
Some or all of these factors could cause the Company and future franchisees to
be adversely affected.

The Company also competes for franchisees with multinational fast food
chains, national and regional restaurant chains and other regional and local
restaurant franchisors. Most restaurant franchisors have greater market
recognition and greater financial, marketing and human resources than the
Company.

Trademarks and Service Marks

The Company has registered with the United States Patent and Trademark
Office ("PTO") its "Harvest Rotisserie" name, and service mark ("Mark"). There
can be no assurance that the Company will obtain sufficient protection for its
Harvest Rotisserie Mark or, that it will have the financial resources to enforce
or defend its Mark. The Company has the exclusive right in Texas to use the
Cluckers name, trademark and service mark, which have been registered with the
PTO. In addition, the Company has registered the Cluckers name in Mexico and has
applied to register the Cluckers name (or, in certain cases, the name in
connection with additional words or graphics) in the United Kingdom, Canada,
Singapore and Malaysia. The Company has no plans to use the Cluckers name or
trademark as it is currently concentrating its efforts on its Harvest Rotisserie
restaurant concept. See "Prospectus Summary."

Regulation

The Company's Restaurants must comply with federal, state and local
government regulations applicable to consumer food service businesses generally,
including those relating to the preparation and sale of food, minimum wage
requirements, overtime, working and safety conditions, mandated health insurance
coverage and citizenship requirements, as well as regulations relating to
zoning, construction, health, business licensing and employment. The Company
believes that it is in material compliance with these provisions.

Certain states and the Federal Trade Commission require a franchisor to
provide specified disclosure statements to potential franchisees before granting
a franchise. Additionally, many states require the franchisor to register its
Uniform Franchise Offering Circular ("UFOC") with the state before it may offer
a franchise. The Company believes that its Harvest Rotisserie UFOC (together
with any applicable state versions or supplements) complies with both the
Federal Trade Commission guidelines and all applicable state laws regulating
franchising in those states in which the Company intends to offer franchises.

Insurance

The Company carries general liability, product liability and commercial
insurance of up to $2,000,000, which it believes is adequate for businesses of
its size and type. However, there can be no assurance that the Company's
insurance coverage will remain adequate or that insurance will continue to be
available to the Company at reasonable rates. In the event coverage is
inadequate or becomes unavailable, the Company could be materially adversely
affected. The Company has carried workers' compensation insurance since August
1995.

Franchisees will be required to maintain certain minimum standards of
insurance pursuant to their franchise agreements including commercial general
liability insurance, worker's compensation insurance and all risk property and
casualty insurance. The Company requires that it be named as an additional
insured on any such policies.

Employees

The Company employs four executive officers, six salaried corporate
employees and approximately 100 Restaurant employees. The Company's employees
are not represented by a union and the Company believes that its relations with
employees are satisfactory.

26
<PAGE>

Properties

The Company leases 2,500 square feet of space for its executive offices in
San Antonio, Texas under a 12 month lease expiring June 30, 1997 for $2,500 per
month. The Company believes its executive office facilities are adequate for its
needs in the foreseeable future and that additional space is available at
reasonable rates.

The Company has four Harvest Rotisserie restaurants in operation which were
opened in January 1994, November 1996, January 1997 and February 1997. Following
its IPO, the Company canceled three proposed Restaurant property leases and
substituted three of the leases set forth below. The lease substitutions were
made because the Company concluded that the new leases offered superior
locations to the original leases. Details concerning the Company's four current
and five planned Restaurants are described below. The Company expects that all
five planned Restaurants will be Company-owned and operated and three such
Restaurants will be opened in 1997 using proceeds from the Offering. The
Company's ability to open the remaining two Restaurants is contingent upon the
Company obtaining construction financing and equipment lease financing. If the
Company is unable to obtain this financing, it will not have sufficient funds to
open the remaining two Restaurants.

<TABLE>

Form of Lease Monthly
Location Ownership Expiration Rent(3)
-------- --------- ---------- --------------
<S> <C> <C> <C>

Fredericksburg Road ....... Building Lease August 1998 $2,554
San Antonio, TX

Walzem Road ............... Building Lease February 2006 $2,700
San Antonio, TX

Tezel Road (1) ............ Real Estate Owned Not Applicable Not Applicable
San Antonio, TX

Hwy 281/Loop 1604(1)(4) ... Ground Lease February $4,500
San Antonio, TX

DeZavala Road(1)(4) ....... Ground Lease May 2027 $5,000
San Antonio, TX

South Braeswood Road (5) .. Building Lease January 2004 Greater of $3,000
Houston, TX or 5% of gross sales

4620 Broadway (5) ......... Building Lease January 2002 $4,900
San Antonio, TX

South Padre Island Drive(2) Building Lease November 1999 $5,000
Corpus Christi, TX

11730 West Avenue (5) ..... Building Lease May 2002 $4,500
San Antonio, TX

<FN>
- -----------------
(1) Sites substituted for previous sites.

(2) In January 1997, the Company purchased the furniture, fixtures and
equipment of an existing restaurant property (through the assumption of
$100,000 of debt in connection with the property) and converted the
property to a Harvest Rotisserie restaurant.

(3) Monthly rents are subject to customary escalation clauses in future periods
generally tied to a consumer price index or increases in the landlord's
operating expenses on the property.

(4) These two Restaurants require construction of buildings to house the
Restaurant facilities. The Company must obtain construction and equipment
lease financing in order to complete development of the properties.

(5) These three Restaurants will be opened by the Company in 1997 using
proceeds from the Offering. If the Offering is not completed, the Company
will be unable to open these Restaurants.
[/FN]

</TABLE>

27
<PAGE>

Restaurant Purchase Agreements

On February 3, 1997, the Company entered into an agreement, which was
subsequently modified in June 1997, (the "Multi-Restaurant Agreement") to
purchase all of the assets of eight restaurant properties located in Florida,
Indiana and North Carolina. The assets include all leasehold interests,
leasehold improvements, restaurant equipment and signage for a purchase price of
$1,000,000 in cash and the assumption of debt in the amount of $484,907, plus
the assumption of certain existing lease obligations. The Company tendered an
earnest money deposit of $75,000 and expects to close the transaction by June
20, 1997. However, the Company is still in the due diligence period and may
elect to purchase none or less than all of the properties. Therefore, there can
be no assurance that the Company will acquire the eight restaurant properties.
Moreover, the Company will be unable to close the transaction unless the
Offering is completed.

On February 7, 1997, the Company entered into an agreement (the "Tampa
Agreement") to purchase all of the assets of a single restaurant property
located in Tampa, Florida. The assets include real estate and improvements,
restaurant equipment and signage for a purchase price of $1,150,000 including
the assumption of debt in the amount of $880,000 and $270,000 in cash. The
Company tendered an earnest money deposit of $25,000, with closing to occur the
earlier of June 20, 1997 or five days after the Offering is completed. The
Company will be unable to close the transaction unless the Offering is
completed.

The Multi-Restaurant Agreement and the Tampa Agreement do not meet the 50%
test outlined in item 310 (c) of Regulation SB to provide financial statements
for these acquired properties.

The following chart sets forth the restaurant properties included in the
Multi-Restaurant Agreement and Tampa Agreement:

Location Lease Expiration Monthly Rent
-------- ---------------- ------------

6148 14th Street................April 2018 $5,518
Bradenton, FL

855 S. Tamiami Trail............June 2016 $6,335
Sarasota, FL

1360 N. Tamiami Trail...........January 2024 $6,311 plus 1%
Port Charlotte, FL over $1.5 million

401 North Dale Mabry............Not Applicable Not Applicable
Tampa, FL (1)

3225 Eastway Drive..............August 2019 $3,845
Charlotte, NC

2004 East 7th Street............May 2019 $3,896
Charlotte, NC

3832 Eagleview Drive............September 2025 $7,472
Indianapolis, IN

10099 East Washington...........October 2019 $4,167
Indianapolis, IN

2518 E. County Line South.......September 2019 $6,104
Indianapolis, IN
- ---------------------
(1) The Tampa Agreement calls for purchase of the real estate and improvements
comprising the restaurant property.

28
<PAGE>

The Company intends to resell the restaurant properties acquired under the
Multi-Restaurant Agreement and Tampa Agreement to area developers, by selling
the assets and assigning the real estate leases as described in "Use of
Proceeds" and "-- Application of Offering Proceeds." However, the Company has
not entered into any agreements, understandings or arrangements with any such
prospective area developers, and there can be no assurance it will be able to do
so in the future. See also "Risk Factors - Dependence Upon Area Developers."

The Company has also entered into an agreement to develop one additional
restaurant property in St. Petersburg, Florida contingent upon certain due
diligence and inspections to be conducted by the Company. If the property is
acquired, it will be offered for resale to area developers along with the other
properties listed above in the Tampa, Florida area.

MANAGEMENT

Executive Officers and Directors

The following table sets forth certain information regarding the Company's
executive officers and directors:

<TABLE>

Officer or
Name Age Office Director Since
---- --- ------ --------------
<S> <C> <C> <C>

William J. Gallagher(1)(2) .......................... 57 Chairman of the Board of June 1993
Directors and Chief Executive Officer

Larry F. Harris 38 .................................. President, Chief Operating October 1996
Officer and Director

Sam Bell Steves Rosser .............................. 33 Vice President - Development, June 1993
Treasurer and Director

Michael M. Hogan(1)(2) .............................. 48 Director August 1996

Theodore M. Heesch(1)(2) ............................ 60 Director August 1996

Joseph Fazzone ...................................... 36 Chief Financial Officer January 1997
- -------------------

<FN>

(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.

</FN>

</TABLE>

On August 12, 1996, Jeffrey M. Morehouse resigned as a director and on
November 25, 1996, Henry H. Salzarulo resigned as a director. On December 9,
1996, D.W. Gibbs resigned as Chief Executive Officer and a director. On December
9, 1996, William J. Gallagher, the Company's Chairman, assumed the duties of
Chief Executive Officer and on the same date Larry F. Harris, the Company's
Executive Vice President, was appointed President and a director.

Directors hold office for a period of one year from their election at the
annual meeting of stockholders and until their successors are duly elected and
qualified. Officers of the Company are elected by, and serve at the discretion
of, the Board of Directors. None of the above individuals has any family
relationship with any other except Mr. Rosser who is Mr. Gallagher's son-in-law.
Directors not employed by the Company receive $750 each for attending Board of
Directors' meetings and are reimbursed for out-of-pocket expenses.

29
<PAGE>

Background

The following is a summary of the business experience of each executive
officer and director of the Company for at least the last five years:

William J. Gallagher joined the Company in 1993 as its Chairman and
Director of Franchising. In December 1996 he was appointed Chief Executive
Officer. Mr. Gallagher has also been President of Jagbanc Capital Ltd., a
merchant bank headquartered in San Antonio, Texas since September 1994. From
February 1991 to September 1994, Mr. Gallagher was the founder and then Chairman
and CEO of WaterMarc Food Management, Inc., which operated 32 Marcos Mexican
Restaurants, Billy Blues Barbecue Grills, Longhorn Cafes and BBQ Pete's
restaurants and sold Chris' Pitts and Billy Blues Bar-B-Q sauce. From February
1990 until September 1992, Mr. Gallagher was a Vice President at Kemper
Securities. Prior to 1990, Mr. Gallagher founded or co-founded several companies
including Sunny's National Stores (a 150-unit convenience store chain in Texas),
American Drive-Inn (an 18-unit drive-in restaurant chain in Houston, Texas) and
the Guadalupe Valley Winery in New Braunfels, Texas. Mr. Gallagher also served
as a director of CWRC from June 1993 to November 1994. He is the Company's
Chairman and Chief Executive Officer for which he devotes approximately 90% of
his time to the Company's affairs.

Larry F. Harris joined the Company in October 1996 as its Executive Vice
President and Chief Operating Officer and was appointed its President in
December 1996. From December 1994 to September 1996, he was Chief Operating
Officer for a Monterey Pasta Company franchisee. From June 1994 to December
1994, he was director of operations for a Boston Market area developer and from
1984 to 1992, he was employed by Pizza Hut, Inc. in various capacities including
National Director of Operations for Mexico.

Sam Bell Steves Rosser joined the Company in June 1993, as its President
and assumed the duties of Vice President-Development in March 1995. He was
employed by Olive Garden restaurants as a member of the store operating staff
from March 1992 until May 1993. From October 1988 until December 1991, he was
employed by Dwight L. Lieb, a real estate developer, as a commercial property
manager and leasing agent.

Michael M. Hogan received his BBA degree in accounting from the University
of Texas at Austin in 1972 and has been engaged in the private practice of
accounting since 1975. His practice emphasizes restaurant formation, operation
and financing. From 1987 to 1989, he was a co-founder and Chief Financial
Officer of the 18 unit American Drive-Inns restaurants in Houston, Texas and in
1990 was one of the founders of two Tejas Grill restaurants in Austin, Texas.
Mr. Hogan has provided consulting services to the Company from time to time
amounting to less than $5,000 for the year ended December 29, 1996.

Theodore M. Heesch has been a registered architect specializing in
restaurant and hotel design since 1967. From 1981 to 1987, he was employed by
McFaddin Kendrick, Inc., an entertainment club developer, as Executive Vice
President. In 1988, Mr. Heesch formed TMHI to offer consulting services to the
hospitality industry, specializing in the design and development of food and
beverage facilities. In June 1994, Mr. Heesch became Senior Vice President of
Development for McFaddin Partners, a restaurant developer.

Joseph Fazzone has provided accounting and financial consulting services in
San Antonio, Texas as a sole practitioner since November 1994. From December
1991 to November 1994, he served as Chief Financial Officer of WaterMarc Food
Management, Inc., a restaurant operator and franchisor founded by Mr. Gallagher.
From 1990 to 1991, he served as Corporate Controller of TI-IN Network, Inc., a
San Antonio based educational satellite broadcasting network. From 1989 to 1990,
he served as Manager-Corporate Planning and Financial Analysis of Intelogic
Trace, Inc., a nationwide computer service provider. From 1984 to 1989, Mr.
Fazzone served as an Audit Manager with the San Antonio office of Ernst & Young.
Mr. Fazzone devotes approximately 60% of his time to the Company's affairs. Mr.
Fazzone is a certified public accountant, having received a B.B.A. degree in
accounting from Southwest Texas State University and an M.B.A. degree from the
University of Texas at San Antonio.

30
<PAGE>

Significant Employees

Manuel P. Ortiz has been the Company's Director of Operations since
November 1996. He managed and co-owned Country Fair restaurant from 1990 to
1992, and was a managing partner of the Boston Market area developer in Dallas,
Texas where he was involved in the development of several Boston Market
restaurants from 1992 to 1994. From 1994 until he joined the Company in November
1996, he was the General Manager in Texas for Red Robin International.

Richard N. Trimble has been the Company's Vice President of Operations
since May 1995 and its Director of Franchise Operations since November 1996. Mr.
Trimble joined Church's Fried Chicken ("Church's") in 1971, and was its District
Manager for East Texas from 1973 to 1982 and its Director of Operations for St.
Louis, Missouri from 1982 to 1986. From 1986 to 1989, Mr. Trimble was Regional
Vice President of Church's for southeast U.S. operations, directing the
operations of approximately 250 restaurants. From February 1989 to December
1993, he was a Church's franchisee in East Texas, operating two restaurants, and
from December 1993 until he joined the Company in May 1995, he was an
independent restaurant consultant.

Executive Compensation

The following table sets forth certain information concerning compensation
paid to the Company's executive officers for the fiscal years ended December 29,
1996, December 31, 1995 and December 31, 1994.

<TABLE>

Summary Compensation Table

Annual Long-Term
Compensation Compensation
------------ ------------
Name and Other Annual Awards All Other
Principal Position Year Salary Bonus Compensation Options Compensation
------------------ ---- ------ ----- ------------ ------- ------------

Sam Bell Steves Rosser .... 1995 $49,500 $ 0 $ 0 $ 0 $ 0
Vice President,
Treasurer and ......... 1994 49,800 0 0 0 0
Director

D.W. Gibbs ................ 1996 73,214 0 0 0 0
Chief Executive
Officer, President .... 1995 30,750 0 0 0 0
and Director

William J. Gallagher ...... 1996 79,209 0 3,640 0 0
Chairman of the
Board and ............. 1995 59,211 0 0 0 0
Chief Executive Officer

</TABLE>

On March 17, 1995, the Company entered into an employment agreement through
December 31, 1995 and monthly thereafter, with D.W. Gibbs, the Company's former
Chief Executive Officer and a director, pursuant to which the Company agreed to
pay Mr. Gibbs $3,000 per month through December 31, 1995 and $6,250 per month
thereafter and issue to him options to purchase 80,000 shares of the Company's
Common Stock at $2.50 per share exercisable until March 31, 2000. The stock
options vest at the rate of 16,000 shares per year commencing with the year
ending March 31, 1996. Mr. Gibbs resigned on December 9, 1996 at which time he
earned options to purchase a total of 16,000 shares. Mr. Gibbs advised the
Company that he might seek legal counsel if the Company and he could not
negotiate separation compensation. Mr. Gibbs did not have an employment
agreement with the Company at the time of his resignation and accordingly, the
Company did not negotiate separation compensation.

31
<PAGE>

In August 1995, the Company entered into a five-year employment agreement
with William J. Gallagher, its Chairman, to act as its franchise sales director
based upon a salary equal to the greater of $75,000 per year or 20% of all
franchise and area development fees paid to the Company, together with 5% of all
royalty fees received by the Company under any franchise agreements and area
development agreements which were executed during the time of Mr. Gallagher's
employment agreement. Mr. Gallagher was appointed Chief Executive Officer of the
Company in December 1996 and continues to be responsible for franchise and area
development sales. In September 1996, Mr. Gallagher's employment agreement was
amended to increase his base salary from $75,000 to $90,000 per year.

Larry F. Harris, the Company's President, is paid a base salary of $90,000
per year and is entitled to incentive bonuses aggregating up to an additional
$90,000 computed under a formula based upon the number of Company operated
Restaurants in operation and gross revenues in connection with the Restaurants.

Stock Option Plan

In July 1994, the Company adopted its 1994 Stock Option Plan (the "Plan"),
which provides for the grant to employees, officers, directors and consultants
of options to purchase up to 250,000 shares of Common Stock, consisting of both
"incentive stock options" within the meaning of Section 422A of the United
States Internal Revenue Code of 1986 (the "Code") and "non-qualified" options.
Incentive stock options are issuable only to employees of the Company, while
non-qualified options may be issued to non-employee directors, consultants and
others, as well as to employees of the Company.

The Plan is administered by the Board of Directors, which determines those
individuals who shall receive options, the time period during which the options
may be partially or fully exercised, the number of shares of Common Stock that
may be purchased under each option and the option price.

The per share exercise price of the Common Stock subject to an incentive
stock option may not be less than the fair market value of the Common Stock on
the date the option is granted. The per share exercise price of the Common Stock
subject to a non-qualified option is established by the Board of Directors. The
aggregate fair market value (determined as of the date the option is granted) of
the Common Stock that any employee may purchase in any calendar year pursuant to
the exercise of incentive stock options may not exceed $100,000. No person who
owns, directly or indirectly, at the time of the granting of an incentive stock
option to him, more than 10% of the total combined voting power of all classes
of stock of the Company is eligible to receive any incentive stock options under
the Plan unless the option price is at least 110% of the fair market value of
the Common Stock subject to the option, determined on the date of grant.
Non-qualified options are not subject to these limitations.

No incentive stock option may be transferred by an optionee other than by
will or the laws of descent and distribution, and during the lifetime of an
optionee, the option will be exercisable only by him or her. In the event of
termination of employment other than by death or disability, the optionee will
have three months after such termination during which he or she can exercise the
option. Upon termination of employment of an optionee by reason of death or
permanent total disability, his or her option remains exercisable for one year
thereafter to the extent it was exercisable on the date of such termination. No
similar limitation applies to non-qualified options.

Options under the Plan must be granted within ten years from the effective
date of the Plan. The incentive stock options granted under the Plan cannot be
exercised more than ten years from the date of grant except that incentive stock
options issued to 10% or greater stockholders are limited to five year terms.
All options granted under the Plan provide for the payment of the exercise price
in cash or by delivery to the Company of shares of Common Stock already owned by
the optionee having a fair market value equal to the exercise price of the
options being exercised, or by a combination of such methods of payment.
Therefore, an optionee may be able to tender shares of Common Stock to purchase
additional shares of Common Stock and may theoretically exercise all of his
stock options with no additional investment other than his original shares. Any
unexercised options that expire or that terminate upon an optionee ceasing to be
an officer, director or an employee of the Company become available once again
for issuance.

<PAGE>

As of the date of this Prospectus, options to purchase 237,000 shares have
been granted under the Plan of which 215,000 options have been granted to the
Company's executive officers and directors as follows. No such options have
vested or have been exercised.

Number of Exercise
Name Options Granted Price Expiration Date
---- --------------- ----- ---------------
William J. Gallagher............ 100,000 $6.00 September 2001
Larry F. Harris ....................40,000 6.00 September 2001
Theodore M. Heesch .................25,000 6.00 September 2001
Michael M. Hogan ...................25,000 6.00 September 2001
Joseph Fazzone .....................25,000 6.00 January 2002

Totals ......... 215,000
=======

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information as of April 20, 1997
concerning stock ownership of the Company's Common Stock by all persons known to
the Company to own beneficially 5% or more of the outstanding shares of Common
Stock, by each director and by all directors and officers as a group. There are
no shares of Preferred Stock outstanding.

Except as otherwise noted, the persons named in the table own the shares
beneficially and of record and have sole voting and investment power with
respect to all shares of Common Stock shown as owned by them, subject to
community property laws, where applicable. Each stockholder's address is in care
of the Company at 1250 N.E. Loop 410, Suite 335, San Antonio, Texas 78209. The
table also reflects all shares of Common Stock which each individual has the
right to acquire within 60 days from the date hereof upon exercise of stock
options or common stock purchase warrants.

Number of Shares of
Common Stock Percent of
Owned of Record Common Stock
Name and Beneficially Owned
---- ---------------- -----
William J. Gallagher(1)(2) ........... 146,667 5.9%
Larry F. Harris(3) ................... -0- -0-
Sam Bell Steves Rosser(1) ............ 66,666 2.8%
Joseph Fazzone (5).................... 25,000 1.0%
Michael M. Hogan(4) .................. 265,000 11.1%
Theodore M. Heesch(5) ................ 25,000 1.0%
Watermarc Food Management, Inc.(6) ... 240,000 10.1%
All officers and directors
as a group (6 persons)(2)(4)(5)(6) 528,333 20.8%
- --------------------

(1) Messrs. Gallagher and Rosser may be deemed to be "promoters" and "founders"
of the Company as those terms are defined under the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.

(2) Includes stock options, which vest in July 1997, to purchase up to 100,000
shares of Common Stock at $6.00 per share.

(3) Mr. Harris has been granted options, which vest in August 1997, to purchase
40,000 shares at $6.00 per share.

(4) Represents 240,000 shares owned by JEB Investment Company ("JEB"), of which
Mr. Hogan is the President and a principal stockholder, and stock options
to purchase up to 25,000 shares of Common Stock at $6.00 per share.

(5) Represents stock options granted to both Mr. Fazzone and Mr. Heesch, which
vest in July 1997, to purchase up to 25,000 shares of Common Stock each at
$6.00 per share.

(6) The following individuals, whose addresses are in care of WaterMarc Food
Management, Inc. 11111 Wilcrest Green, Suite 350, Houston, Texas 77042 are
officers, directors and/or 10% or greater stockholders of WaterMarc: Ghulam
M. Bombaywala - Principal Stockholder, Chief Executive Officer and
Director, Angelo Pitillo - President and Director, Thomas J. Buckley -
Chief Financial Officer and Director, Michael S. Chadwick - Director, Nico
B. Letschert - Director, Philip M. Mount - Director, Sarosh J. Collector -
Director. WaterMarc acquired the 240,000 shares through foreclosure of a
promissory note issued by JEB, collateralized by the 240,000 shares. For a
discussion of the issuance of the promissory note by JEB and the subsequent
foreclosure of the 240,000 shares, see "Certain Transactions."

<PAGE>
CERTAIN TRANSACTIONS

William J. Gallagher, the Company's Chairman and Chief Executive Officer,
along with certain other stockholders and directors of the Company, are or were
stockholders, officers and/or directors of WaterMarc Food Management, Inc.
("WaterMarc") during the time the transactions described in the next following
paragraph occurred. Mr. Gallagher continues to be a stockholder of WaterMarc,
although not a principal stockholder. The Company believes that the transactions
described below were fair, reasonable and consistent with the terms of
transactions which the Company could have entered into with nonaffiliated third
parties. All future transactions with affiliates will be approved by a majority
of the Company's disinterested directors.

In June 1993, WaterMarc assigned to the Company all of the development
rights it had obtained for Cluckers restaurants at an original cost to WaterMarc
of 47,000 shares of its common stock. On June 18, 1993, these shares were
tendered by WaterMarc to Cluckers Wood Roasted Chicken, Inc. ("CWRC"), the
Cluckers franchisor, and valued at $8.50 per WaterMarc share, or a total of
$399,500. The development rights consisted of Cluckers' franchise rights in
Houston, Galveston, Dallas and San Antonio, Texas, and area development rights
in Mexico and Central America. In consideration of this assignment, the Company
issued to WaterMarc a convertible promissory note ("Note") due June 30, 1998 in
the amount of $800,000 payable at the option of the Company, in whole or in
part, in cash or Common Stock of the Company. The Note bore interest at 8% per
annum and was secured by all the assets of the Company and the stockholdings of
Messrs. Gallagher, Coleman and Rosser. The substantial increase in the Note
above the $399,500 of consideration paid by WaterMarc for the area development
rights was attributable to the rights to the Mexico and Central America markets,
which WaterMarc and the Company believed to have more value and market
development potential than had been assigned by CWRC. During 1994, the Company
repaid $315,000 of the Note, and the Company and WaterMarc agreed to convert the
remaining portion of the Note and other advances to the Company from WaterMarc
totaling approximately $42,000, and $63,430 of accrued interest, into 240,000
shares of the Company's Common Stock, (valued at $2.50 per share by the
Company's Board of Directors), which shares were subsequently sold by WaterMarc
to JEB Investment Company ("JEB") for $1,800,000 payable by JEB in the form of a
promissory note secured by the 240,000 shares, bearing interest at 9% per annum
and payable June 30, 1996. In May 1997, WaterMarc foreclosed upon the 240,000
shares held by JEB and has advised the Company it intends to sell the shares as
soon as possible. Michael M. Hogan, a director of the Company, is the President
and a principal (and the controlling) stockholder of JEB. See "Shares Eligible
for Future Sale."

In June 1993, the Company issued 200,000 shares of its Common Stock to
Messrs. Gallagher, Coleman and Rosser, officers and directors of the Company,
for services rendered valued at $5,000, or $.025 per share, which was the par
value of the Common Stock at the time of issuance. During the same month, the
Company issued 100,000 shares of its Common Stock to two investors for services
rendered valued at $12,500, or $.125 per share, an increase of $.10 per share,
which was acceptable to the two investors because they were not founders of the
Company and provided services rather than cash.

In August 1993, the Company sold 240,000 shares of its Common Stock to a
seven member investor group which included Bruce T. McGill, Henry H. Salzarulo,
and Jeffrey M. Morehouse, then directors of the Company, for $300,000, or $1.25
per share, in order to finance the development of the Company's first Cluckers
restaurant in San Antonio, Texas.

In April 1994, the Company sold 100,000 units of its securities at $2.50
per unit to a seven member investor group which included Henry H. Salzarulo and
Jeffrey M. Morehouse, then directors of the Company. Each unit consisted of one
share of Common Stock and a warrant to purchase an additional share at $2.50 per
share at any time until April 1996. In March 1996, the expiration date of the
warrant was extended to December 1997.

In August 1994, the Company sold 110,000 shares of its Common Stock at
$2.50 per share to an investor group, none of whom were officers, directors or
principal stockholders of the Company.

The sales of Common Stock described in the three prior paragraphs reflect
an increase in price from $1.25 to $2.50 per share and were the result of
negotiations between the Company and the named investors. The Company believes
it was able to realize a higher price per share in later transactions because
the Company's business had matured and the perceived risk associated with the
business had lessened.

In March 1995, the Company entered into an employment agreement with D.W.
Gibbs, its then Chief Executive Officer and a director, and in August 1995, the
Company entered into an employment agreement with Mr. Gallagher, the Chairman
and Chief Executive Officer of the Company, which was subsequently amended in
September 1996. See "Management-Executive Compensation."

<PAGE>

In March 1995, the Company executed an agreement with Bruce T. McGill, then
a director of the Company, to develop up to ten Cluckers restaurants in
Singapore over a 20-year period. Mr. McGill agreed to pay a $50,000 license fee
(including $20,000 in cash and a promissory note for $30,000), a 5% royalty and
a 4% advertising fee on gross revenues generated from the Cluckers restaurants.
The license was converted to apply to Harvest Rotisserie restaurants in March
1996. In October 1996, the Company refunded $10,000 of the deposit, canceled the
$30,000 promissory note and reduced the number of Restaurants under the
agreement from ten Restaurants to two Restaurants. Under the agreement, Mr.
McGill also has a right of first refusal until March 30, 1997, to match the
terms of any license the Company agrees to sell to develop Harvest Rotisserie
restaurants in Malaysia.

DESCRIPTION OF SECURITIES

Common Stock

The Company is authorized to issue 10,000,000 shares of $.01 par value
Common Stock. At April 20, 1997, there were 2,366,030 shares of Common Stock
outstanding, and an additional __________ shares of Common Stock are issuable
upon exercise of the Existing Options. See "Capitalization." The holders of
Common Stock are entitled to one vote for each share held of record on all
matters submitted to a vote of stockholders, including the election of
directors. There is no right to cumulate votes in the election of directors. The
holders of Common Stock are entitled to any dividends that may be declared by
the Board of Directors out of funds legally available therefor subject to any
prior rights of holders of Preferred Stock. In the event of liquidation or
dissolution of the Company, holders of Common Stock are entitled to share
ratably in all assets remaining after payment of liabilities and the liquidation
preferences of any outstanding shares of Preferred Stock.

Holders of Common Stock have no preemptive rights and have no right to
convert their Common Stock into any other securities. All of the outstanding
shares of Common Stock are fully paid and non-assessable.

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock,
$1.00 par value (the "Preferred Stock"). The Preferred Stock may, without action
by the stockholders of the Company, be issued by the Board of Directors from
time to time in one or more series for such consideration and with such relative
rights, privileges and preferences as the Board may determine. Accordingly, the
Board has the power to fix the dividend rate and to establish the provisions, if
any, relating to voting rights, redemption rate, sinking fund, liquidation
preferences and conversion rights for any series of Preferred Stock issued in
the future.

The Series A Redeemable Convertible Preferred Stock ("Preferred Stock") has
been authorized by the Board of Directors of the Company as a new series of the
Company's Preferred Stock, $1.00 par value, consisting of up to 3,000,000
shares. The shares of Preferred Stock when issued will be fully paid and
non-assessable under Texas law.

Dividends. Holders of shares of Preferred Stock will be entitled to
receive, out of funds at the time legally available therefor, dividends at the
quarterly rate of $.30 per share, payable in cash or in the Company's Common
Stock at the sole discretion of the Company and payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year beginning September
30, 1997. Dividends will accrue and are cumulative from the date of first
issuance of the Preferred Stock and will be payable to holders of record as they
appear on the stock books of the Company on such record dates as are fixed by
the Board of Directors. The value of the Common Stock to be issued as a dividend
will be the last reported sales price of the Common Stock on The NASDAQ SmallCap
Market. Any fractional shares of Common Stock will be rounded to the nearest
whole share on the last day of the calendar quarter. This Prospectus covers any
Common Stock issued as a Common Stock dividend on the Preferred Stock.

35
<PAGE>

Redemption. The Preferred Stock may not be redeemed by the Company until
nine months from the date hereof. Any shares of Preferred Stock outstanding
thereafter are redeemable for cash or in Common Stock of the Company in its sole
discretion, in whole or in part, at any time, at 110% of the bid price per share
of the Preferred Stock on The NASDAQ SmallCap Market for the 20 trading days
prior to the redemption date. This Prospectus covers any shares of Common Stock
issued to redeem the Preferred Stock.

Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Stock to
be redeemed at the holder's address shown on the stock transfer books of the
Company. After the redemption date, unless there shall have been a default in
payment of the redemption price, dividends will cease to accrue on the shares of
Preferred Stock called for redemption, and all rights of the holders of such
Preferred Stock will terminate except the right to receive the redemption price
without interest.

Conversion

Automatic Conversion. If at any time after nine months from the date
hereof, the closing price for the Preferred Stock, as quoted on The NASDAQ
SmallCap Market or any national securities exchange, exceeds $20.00 per share
for ten consecutive trading days, then the Preferred Stock will be automatically
converted into Common Stock.

Optional Conversion. The holder of Preferred Stock has the right, at the
holder's option, at any time after nine months from the date hereof, to convert
any or all such shares of Preferred Stock into Common Stock. The number of
shares of Common Stock issuable upon conversion of a share of Preferred Stock
(the "Conversion Rate") is equal to $10.00, plus accrued and unpaid dividends
through the date of conversion (to the extent unpaid within 15 business days
following the date of conversion), divided by $_____ (the "Conversion Price").
Although the Conversion Price is subject to adjustment for stock splits, reverse
stock splits and other similar capitalizations, the Preferred Stock does not
contain provisions protecting against dilution resulting from the sale of Common
Stock at a price below the Conversion Price or the then current market price of
the Company's securities. Assuming no accrued and unpaid dividends, the initial
Conversion Rate will be __________ shares of Common Stock per share of Preferred
Stock. Fractional shares of Common Stock will be rounded to the nearest whole
share.

Liquidation Rights. In the event of any liquidation, dissolution or winding
up of the Company, holders of shares of Preferred Stock are entitled to receive,
out of legally available assets, a liquidation preference of $10.00 per share,
plus an amount equal to any accrued and unpaid dividends to the payment date,
before any payment or distribution is made to the holders of Common Stock or any
series or class of the Company's stock hereafter issued that ranks junior as to
liquidation rights to the Preferred Stock, but the holders of the shares of the
Preferred Stock will not be entitled to receive the liquidation preference on
such shares until the liquidation preference of any other series or class of the
Company's stock previously or hereafter issued that ranks senior as to
liquidation rights to the Preferred Stock has been paid in full.

Voting Rights. The holders of the Preferred Stock will have no voting
rights except as to matters affecting the rights of Preferred Stockholders or as
to matters that all stockholders are entitled to vote on as a matter of law,
such as mergers or acquisitions. In connection with any such vote, each
outstanding share of Preferred Stock will be entitled to one vote, excluding any
shares held by the Company or any entity controlled by the Company, which shares
shall have no voting rights.

It is not possible to state the actual effect of any other authorization of
Preferred Stock upon the rights of holders of Common Stock until the Board
determines the specific rights of the holders of any other series of Preferred
Stock. The Board's authority to issue Preferred Stock also provides a convenient
vehicle in connection with possible acquisitions and other corporate purposes,
but could have the effect of making it more difficult for a third party to
acquire a majority of the outstanding voting stock. Accordingly, the issuance of
Preferred Stock may be used as an "anti-takeover" device without further action
on the part of the stockholders of the Company, and may adversely affect the
holders of the Common Stock.

36
<PAGE>

Redeemable Preferred Stock Purchase Warrants

Each Warrant represents the right to purchase one share of Preferred Stock
at an initial exercise price of $10.50 per share for a period of five years from
the date hereof commencing six months from the date hereof. The exercise price
and the number of shares issuable upon exercise of the Warrants are subject to
adjustment in certain events, including subdivisions or combinations of the
Preferred Stock or similar events. The Warrants to do not contain provisions
protecting against dilution resulting from the sale of additional shares of
Preferred Stock for less than the exercise price of the Warrants or the current
market price of the Preferred Stock.

Warrants may be redeemed, in whole or in part, at the option of the
Company, upon 30 days' notice, at a redemption price equal to $.01 per Warrant
at any time after nine months from the date hereof if the closing price of the
Company's Preferred Stock on the NASDAQ SmallCap Market averages at least $11.00
per share for a period of 20 consecutive trading days or if the Company redeems
the Preferred Stock.

Holders of Warrants may exercise their Warrants for the purchase of shares
of Preferred Stock only if a current prospectus relating to such shares is then
in effect and only if such shares are qualified for sale, or deemed to be exempt
from qualification, under applicable state securities laws. The Company is
required to use its best effort to maintain a current Prospectus relating to
such shares of Preferred Stock at all times when the market price of the
Preferred Stock exceeds the exercise price of the Warrants until the expiration
date of the Warrants, although there can be no assurance that the Company will
be able to do so.

The shares of Preferred Stock issuable upon exercise of the Warrants will
be, when issued in accordance with the Warrants, fully paid and non-assessable.
The holders of the Warrants have no rights as stockholders until they exercise
their Warrants.

For the life of the Warrants, the holders thereof have the opportunity to
profit from a rise in the market for the Company's Preferred Stock, with a
resulting dilution in the interest of all other stockholders. So long as the
Warrants are outstanding, the terms on which the Company could obtain additional
capital may be adversely affected. The holders of such Warrants might be
expected to exercise them at a time when the Company would, in all likelihood,
be able to obtain any needed capital by a new offering of securities on terms
more favorable than those provided by such Warrants.

IPO Warrants.

There are 2,300,000 IPO Warrants outstanding (each of which entitles the
holder to purchase one share of Common Stock at $4.00 per share until July 9,
2001). The exercise price and the number of shares issuable upon exercise of the
IPO Warrants are subject to adjustment in certain events, including the issuance
of Common Stock as a dividend on shares of Common Stock, subdivisions or
combinations of the Common Stock or similar events. The IPO Warrants do not
contain provisions protecting against dilution resulting from the sale of
additional shares of Common Stock for less than the exercise price of the IPO
Warrants or the then current market price of the Company's Common Stock.

IPO Warrants may be redeemed, in whole or in part, at the option of the
Company, upon 30 days' notice, at a redemption price equal to $.01 per IPO
Warrant at any time after July 9, 1997 if the closing price of the Company's
Common Stock on the NASDAQ SmallCap Market averages at least $8.00 per share for
a period of 20 consecutive trading days.

Holders of IPO Warrants may exercise their IPO Warrants for the purchase of
shares of Common Stock only if a current prospectus relating to such shares is
then in effect and only if such shares are qualified for sale, or deemed to be
exempt from qualification, under applicable state securities laws. The Company
is required to use its best efforts to maintain a current prospectus relating to
such shares of Common Stock at all times when the market price of the Common
Stock exceeds the exercise price of the IPO Warrants until the expiration date
of the IPO Warrants, although there can be no assurance that the Company will be
able to do so.

The shares of Common Stock issuable upon exercise of the IPO Warrants will
be, when issued in accordance with the IPO Warrants, fully paid and
non-assessable. The holders of the IPO Warrants have no rights as stockholders
until they exercise their IPO Warrants.

Other Outstanding Common Stock Purchase Warrants

The Company has 72,000 common stock purchase warrants outstanding as of
April 20, 1997, each exercisable at $2.50 per share, until December 1997.

Stock Transfer and Warrant Agent

Corporate Stock Transfer, Inc., Denver, Colorado, is the stock transfer
agent and warrant agent for the Company's securities.

37
<PAGE>

LIMITATIONS ON LIABILITY AND INDEMNIFICATION

The Company's Articles of Incorporation provide that no director of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for an act or omission in the director's capacity as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for any transaction from which the director derived an improper
personal benefit or (iv) for an act or omission for which the liability of the
director is expressly provided by an applicable statute. The effect of this
provision in the Articles of Incorporation is to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages from a director for breach of the
fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (iv) above. In addition, the Articles of Incorporation
provide that any repeal or modification of this provision by the Company's
stockholders or by Texas law will not adversely affect any right or protection
of a director of the Company existing at the time of such repeal or modification
with respect to acts or omissions occurring prior to such repeal or
modification. Moreover, any further elimination of director liability under
Texas law will further limit the directors' liability under this provision. This
provision does not limit or eliminate the rights of the Company or any
stockholder to seek non-monetary relief such as an injunction or rescission in
the event of a breach of a director's duty of care.

The Company's Articles of Incorporation also require the Company to
indemnify its directors and officers against expenses and certain other
liabilities arising out of their conduct on behalf of the Company to the maximum
extent and under all circumstances permitted by law, including liabilities
arising out of legal actions brought or threatened against them for their
conduct on behalf of the Company, provided that each such person acted in good
faith and in a manner he or she reasonably believed was in or not opposed to the
Company's best interests.

In the case of an action by or in the right of the Company, indemnification
is available if such person acted in good faith and in a manner that he or she
reasonably believed was in or not opposed to the Company's best interests,
except as concerning a person adjudged to be liable to the Company, unless a
court shall determine that such person is fairly and reasonably entitled to
indemnity for certain expenses.

Insofar as the indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company, the Company has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.

SHARES ELIGIBLE FOR FUTURE SALE

The Company had 2,366,030 shares of Common Stock outstanding as of April
20, 1997 and has reserved for issuance an aggregate of __________ shares of
Common Stock upon exercise of the Existing Options. An aggregate of 1,000,000
shares issued in the IPO, 2,300,000 shares underlying the IPO Warrants and
__________ shares issuable upon conversion of the Preferred Stock and Preferred
Stock issuable upon exercise of the Warrants have been previously registered or
are being registered hereby. Additionally, 300,000 shares issuable upon exercise
of the Representative's IPO Warrants and __________ shares issuable upon
conversion of the Representative's Warrants are subject to demand registration
rights, and 257,280 shares underlying common stock purchase warrants which have
been exercised, must be registered by the Company by August 10, 1997. Finally, a
total of 990,000 shares of the Company's Common Stock outstanding have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
are "restricted securities" but may be sold from time to time under Rule 144 of
the Securities Act, subject to lock up agreements restricting the sale of
750,000 of such shares until August 1997 except with the written consent of the
Representative. In general, under Rule 144, a person (or persons whose shares
are aggregated) who has satisfied a one-year holding period, subject to certain
requirements concerning the availability of public information, and the manner
and notice of sale, may sell within any three-month period, a number of shares
which does not exceed the greater of one percent of the then outstanding common
shares or the average weekly trading volume during the four calendar weeks prior
to such sale. Rule 144 also permits, under certain circumstances, the sale of
shares by a person without any quantity limitation, as long as such person is
not an affiliate of the Company, has not been an affiliate for three months
prior to the sale and has beneficially owned the shares for at least two years.

38
<PAGE>

The remaining 240,000 shares are also subject to a lock-up agreement restricting
sale through August 1997 executed by JEB Investment Company ("JEB"). However, in
May 1997 the shares were foreclosed upon by WaterMarc, and the JEB lock-up
agreement may not be effective against WaterMarc, in which event the 240,000
shares may be sold prior to the end of the lock-up period in August 1997.
Exercise of the Existing Options could dilute the Company's net tangible book
value and/or prove to be a hindrance to future financing. The holders of
Existing Options may exercise them at a time when the Company might otherwise be
able to obtain additional equity capital on terms more favorable to the Company.
Exercise of registration rights and maintenance of a current prospectus in
connection with the IPO Warrants, the shares issuable upon conversion of the
Preferred Stock and the Representative's Warrants could involve substantial
expense to the Company at a time when it could not afford such expenditures and
may adversely affect the terms upon which the Company could obtain additional
financing.

UNDERWRITING

The Underwriters named below, acting through Global Equities Group, Inc. as
the lead managing underwriter (the "Representative") and Suncoast Capital Corp.
as the co-managing underwriter, have agreed, severally and not jointly, subject
to the terms and conditions contained in an Underwriting Agreement dated the
date of the commencement of the Offering contemplated hereby, to purchase the
Preferred Stock and Warrants from the Company in the amounts set forth below:

Underwriter Shares of Preferred Stock Number of Warrants
----------- -------------------------- ------------------
<S> <C> <C>
Global Equities Group, Inc. _______ _______
Suncoast Capital Corp. _______ _______
Total 500,000 1,500,000
</TABLE>

The Underwriting Agreement provides that the Underwriters are obligated to
purchase all of the securities offered hereby, if any are purchased. The Company
has been advised by the Representative that the Underwriters propose to offer
the securities to the public initially at the Offering prices set forth on the
cover page of this Prospectus, and to selected dealers, including Underwriters,
at such prices less a concession in an amount to be determined by the
Representative. The Underwriters will purchase the securities (including the
securities subject to the Overallotment Option) offered hereby at a discount
equal to 10% of the public Offering price, or $9.00 per share of Preferred Stock
and $.09 per Warrant.

The Company has granted the Representative an Overallotment Option,
exercisable during the 45-day period after the date of this Prospectus, to
purchase up to 75,000 shares of Preferred Stock and/or 225,000 Warrants on the
same terms as the securities being purchased by the Underwriters from the
Company. The Representative may exercise the Overallotment Option only to cover
overallotments in the sale of the securities that the Underwriters agreed to
purchase.

The Company has agreed to issue to the Representative warrants
(collectively the "Representative's Warrants") to purchase up to 50,000 shares
of Preferred Stock at $16.00 per share and 150,000 Warrants at $.13 per Warrant.
The Representative's Warrants are exercisable for a period of four years
beginning one year from the date of this Prospectus. The Representative's
Warrants are restricted from sale, transfer or hypothecation for a period of one
year following the date of this Prospectus, except to any of the Underwriters or
to any individual who is either a partner or an officer of an Underwriter or by
operation of law or by will or the laws of descent and distribution. The holders
of the Representative's Warrants will have, in that capacity, no voting,
dividend or other shareholder rights. Any profit realized by the Representative
on the sale of the securities issuable upon exercise of the Representative's
Warrants may be deemed to be additional underwriting compensation.

The Company has granted the holders of the Representative's Warrants and
the underlying Preferred Stock and Warrants certain rights with respect to the
registration of the Preferred Stock and Warrants underlying the Representative's
Warrants under the Securities Act of 1933, as amended (the "Securities Act").

39
<PAGE>

The Company has agreed, for a period of four years commencing one year following
the effective date of the Registration Statement of which this Prospectus is a
part, at the request of any holder of the securities issued or issuable upon
exercise of the Representative's Warrants, to use its best efforts to effect at
the Company's expense a maximum of one registration under the Securities Act
(the "Demand Registration") with respect to the securities underlying the
Representative's Warrants. Subject to certain limitations, in the event the
Company proposes to register any of its securities under the Securities Act
during the five-year period following the effective date of the Registration
Statement of which this Prospectus is a part, the holders of the
Representative's Warrants and underlying securities are entitled to notice of
such registration and may elect to include ("piggyback") the securities
underlying the Representative's Warrants held by them in such registration. In
connection with the above registrations, the Company is required to pay all
fees, disbursements and out-of-pocket expenses associated with the Demand
Registration and any piggyback registrations, except for the brokerage fees,
commissions and, in the case of any piggyback registrations, legal fees of the
holders of the Representative's Warrants or the underlying securities.

The Representative will also receive a nonaccountable expense allowance of
3% of the aggregate initial public Offering price of the securities sold in this
Offering, of which $60,000 has been paid to date.

By virtue of holding the Representative's Warrants, the Representative
possesses the opportunity to profit from a rise in the market price of the
Company's securities. Furthermore, the exercise of the Representative's Warrants
could dilute the interests of the Company's Common Stockholders. The existence
of the Representative's Warrants may make it more difficult for the Company to
raise additional equity capital. Although the Company will obtain additional
equity capital upon exercise of the Representative's Warrants, it is likely that
the Company could then raise additional capital on more favorable terms than
those of the Representative's Warrants.

The Company paid the Representative a commission of $40,000 in connection
with the Company's sale of $400,000 of Bridge Notes in March 1996. In July 1996
the Representative acted as the Company's representative in connection with its
IPO sale of 1,000,000 shares of Common Stock at $5.50 per share and 2,300,000
IPO Warrants at $.125 per warrant. In November 1996, the Company entered into a
one-year consulting agreement with the Representative pursuant to which the
Representative agreed to provide financial consulting services to the Company,
consider the feasibility of secondary public offerings, implement strategic
planning, evaluate strategic alliances and prospective mergers and provide other
financial services. The Company agreed to pay to the Representative for such
consulting services a fee of $40,000, all of which has been paid.

The Company has agreed (i) to allow the Representative to designate one
director to the Company's Board of Directors for a period of five years from the
date hereof and (ii) not to offer Common Stock or Preferred Stock or grant
options or warrants to purchase Common Stock without the prior written consent
of the Representative for a period of two years from the date hereof.

The Company has agreed to indemnify the Underwriters against certain
liabilities including liabilities under the Securities Act and to contribute in
certain events to liabilities incurred by the Underwriters in connection with
the sale of the Preferred Stock. In the opinion of the Commission,
indemnification against liabilities under the Securities Act is against public
policy and is therefore unenforceable.

Prior to the Offering, there has been no public market for the Preferred
Stock and Warrants. The Preferred Stock price and Warrant exercise price were
arbitrarily determined through negotiations between the Company and the
Representative. The principal factors considered in pricing the securities were
the current price of the Common Stock, the Company's current and anticipated
revenues and earnings, its overall business prospects and the general condition
of the securities markets at the time of the Offering.

The Representative does not intend to sell the securities to any accounts
over which it exercises discretionary authority.

Although it has no obligation to do so, the Representative intends to
engage in market-making activities or soliciting brokerage activities with
respect to the purchase or sale of the Common Stock, Preferred Stock, the IPO
Warrants, and the Warrants in the NASDAQ SmallCap Market or other

40
<PAGE>

over-the-counter market where such securities may trade. However, no assurance
can be given that the Representative will continue to participate as a market
maker for the securities of the Company or that other broker/dealers will make a
market in such securities. In connection with its IPO, the Company granted the
Representative the right to act as the Company's exclusive agent in connection
with any future solicitation of holders of the IPO Warrants to exercise their
IPO Warrants. Unless granted an exemption by the Commission from Regulation M
under the Exchange Act, the Representative will be prohibited from engaging in
any market-making activities or solicited brokerage activities with regard to
the Company's securities during a period prescribed by Regulation M before the
solicitation of the exercise of any IPO Warrants until the latter of the
termination of such solicitation activities or the termination by waiver or
otherwise of any right the Representative may have to receive a fee for the
exercise of the IPO Warrants following such solicitation. As a result, the
Underwriter and soliciting broker/dealers may be unable to continue to make a
market for the Company's securities during certain periods while the IPO
Warrants are exercisable. Such a limitation, while in effect, could impair the
liquidity and market prices of the Company's securities.

In connection with the Offering, the Underwriters and selling group members
(if any) and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Preferred Stock
and Warrants. Such transactions may include stabilization transactions effected
in accordance with Rule 104 of Regulation M, pursuant to which such persons may
bid for or purchase Preferred Stock or Warrants for the purpose of stabilizing
their market prices. The Underwriters may also create a short position for the
account of the Underwriters by selling more securities in connection with the
Offering than they are committed to purchase from the Company and in such case
may purchase securities in the open market following completion of the Offering
to cover all or a portion of such short position. The Underwriters may also
cover all or a portion of such short position, up to 75,000 additional shares of
Preferred Stock and 225,000 Warrants, by exercising the Overallotment Option.
Any of the transactions described in this paragraph may result in the
maintenance of the securities at a level above that which might otherwise
prevail in the open market. None of the transactions described in this paragraph
is required, and, if they are undertaken, they may be discontinued at any time.

In connection with the Offering the Underwriters and selling group members
(if any) and their respective affiliates may also engage in passive market
making transactions in the Preferred Stock and Warrants on The NASDAQ SmallCap
Market immediately prior to the commencement of sales in this Offering, in
accordance with Rule 103 under Regulation M. Passive market making consists of
displaying bids on The NASDAQ SmallCap Market limited by the bid prices of
independent market makers for a security and making purchases of a security
which are limited by such prices and effected in response to order flow. Net
purchases by a passive market maker on each day are limited to a specified
percentage of the passive market maker's average trading volume in the
securities during a specified prior period and must be discontinued when such
limit is reached. Passive market making may stabilize the market price of the
securities at a level above that which might otherwise prevail and, if
commenced, may be discontinued at any time.

LEGAL MATTERS

Gary A. Agron, Esq., Englewood, Colorado, has represented the Company in
connection with the Offering. Mound, Cotton & Wollan, New York, New York, has
acted as counsel for the Representative in connection with the Offering.

EXPERTS

The financial statements of the Company for the years ended December 29,
1996 and December 31, 1995, included herein, have been audited by Akin, Doherty,
Klein & Feuge, P.C., independent certified public accountants. The financial
statements have been so included in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
SB-2 under the Securities Act, with respect to the securities offered by this
Prospectus. As permitted by the rules and regulations of the Commission, this
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto. For further information with respect to the

41
<PAGE>

Company and the securities offered hereby, reference is made to the Registration
Statement and the exhibits thereto, which may be examined without charge at the
public reference section of the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at the regional offices of the
Commission located at 7 World Trade Center, New York, New York 10048 and at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of all or any portion of the Registration Statement may
be obtained from the Public Reference Section of the Commission, upon payment of
prescribed fees.

42
<PAGE>

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

TABLE OF CONTENTS
Page

Available Information ..................................................... 2
Prospectus Summary ........................................................ 3
Risk Factors .............................................................. 8
Price Range of Common Stock ............................................... 13
Use of Proceeds ........................................................... 14
Capitalization ............................................................ 15
Dividend Policy ........................................................... 15
Selected Financial Data ................................................... 16
Management's Discussion and Analysis of Financial Condition and
Results of Operations ................................................. 17
Business .................................................................. 20
Management ................................................................ 29
Principal Stockholders .................................................... 33
Certain Transactions ...................................................... 33
Description of Securities ................................................. 35
Shares Eligible for Future Sale ........................................... 38
Underwriting .............................................................. 39
Legal Matters ............................................................. 41
Experts ................................................................... 41
Additional Information .................................................... 41
Financial Statements ...................................................... F-1

Until __________, 1997 (25 days from the date of this Prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.

<PAGE>

CLUCKCORP
INTERNATIONAL,
INC.

500,000 Shares of
Convertible Redeemable Preferred Stock
and
1,500,000 Redeemable Preferred Stock Purchase Warrants

PROSPECTUS

GLOBAL EQUITIES GROUP, INC.

SUNCOAST CAPITAL CORP.

__________, 1997
<PAGE>

CluckCorp International, Inc.
Contents
December 29, 1996

Audited Financial Statements Page

Report of Independent Certified Public Accountants...........................F-2

Balance Sheets...............................................................F-3

Statements of Operations.....................................................F-4

Statements of Stockholders' Equity...........................................F-5

Statements of Cash Flows.....................................................F-6

Statements...................................................................F-7

F-1

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors
CluckCorp International, Inc.
San Antonio, Texas

We have audited the accompanying balance sheets of CluckCorp International,
Inc. as of December 29, 1996 and December 31, 1995, and the related statements
of operations, stockholders' equity, and cash flows for the fiscal years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of CluckCorp International,
Inc. as of December 29, 1996 and December 31, 1995, and the results of its
operations and its cash flows for the fiscal years then ended, in conformity
with generally accepted accounting principles.

/s/ Akin, Doherty, Klein & Feuge, P.C.
- --------------------------------------
Akin, Doherty, Klein & Feuge, P.C.
San Antonio, Texas

February 6, 1997
(except for Note I, third paragraph, and Note K, second paragraph, third
sentence, as to which the date is May 12,1997)

F-2

CluckCorp International, Inc.
Balance Sheets

April 20, December 29, December 31,
1997 1996 1995
---------- ---------- ----------
(Unaudited)
<S> <C> <C> <C>

ASSETS
Current Assets
Cash ......................................... $517,186 $1,271,443 $ 126,447
Cash, restricted ............................. 200,000 220,000 --
Inventories .................................. 23,783 8,658 5,044
Deferred financing costs ..................... -- -- 144,074
Other current assets ......................... 39,646 10,590 --
Note receivable from stockholder ............. -- -- 40,000
--------- ---------- -----------
Total Current Assets ................. 780,615 1,510,691 315,565

Property and Equipment, net ...................... 1,732,381 1,156,362 150,868

Other Assets
Intangible property rights, net of accumulated
amortization of $152,117, $139,825 and
$99,875 .................................. 247,383 259,675 299,625
Deposits ..................................... 230,279 83,257 25,007
Other assets ................................. 188,886 127,727 34,780
---------- ---------- -----------
666,548 470,659 359,412
---------- ---------- -----------
$3,179,544 $3,137,712 $ 825,845
========== ========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Bridge notes payable, net of unamortized
discount of $-0-, -0-, and $133,523 ......... $ -- $ -- $ 940,977
Accounts payable, trade ....................... 337,627 134,204 161,642
Accrued liabilities ........................... 226,634 220,406 89,043
Notes payable to bank, current ................. 211,004 200,000 --
------- ---------- -----------
Total Current Liabilities .............. 775,265 554,610 1,191,662

Note payable to bank, less current portion.......... 49,860 -- --
Commitments and contingencies

Common stock subject to rescission, 0 shares
in 1997, 0 shares in 1996 and 57,750 shares
in 1995 ......................................... -- -- 195,818

Stockholders' Equity
Preferred stock .............................. -- -- --
Common stock - $.01 par value; 10,000,000 shares
authorized, 2,366,030 shares issued and
outstanding in 1997, 2,112,750 in 1996,
and 990,000 in 1995 ....................... 23,660 21,128 9,900
Additional paid - in capital ................ 6,705,113 6,138,770 994,007
Accumulated deficit ......................... (4,374,354) (3,576,796) (1,565,542)
--------- ---------- -----------
Total Stockholders' Equity (Deficit) .... 2,354,419 2,583,102 (561,635)
---------- ---------- -----------
$3,179,544 $ 3,137,712 $ 825,845
========== =========== ===========

See notes to financial statements.

F-3

<PAGE>

CluckCorp International, Inc.
Statements of Operations

Sixteen Weeks Ended Fiscal Years Ended
---------------------- -------------------------
April 20, April 21, December 29, December 31,
1997 1996 1996 1995
-------- -------- ---------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues
Restaurant operations .................. $446,994 $ 63,138 $ 263,892 $ 226,678
Area development fee, stockholder ...... -- -- -- 50,000
-------- -------- ---------- -----------
446,994 63,138 263,892 276,678

Costs and Expenses
Cost of food and paper ................. 230,248 23,734 122,530 82,171
Restaurant salaries and benefits ....... 234,685 23,854 125,954 127,400
Occupancy and related expenses ......... 65,012 16,747 58,191 63,605
Operating expenses ..................... 140,219 20,242 73,661 86,641
Preopening expenses .................... 86,314 9,493 131,074 59,363
General and administrative expenses .... 436,505 169,945 1,261,198 567,605
Depreciation and amortization .......... 60,635 30,824 104,467 73,879
--------- ------- ---------- -----------
Total costs and expenses ....... 1,253,618 294,839 1,877,075 1,060,664
--------- ------- ---------- -----------

Loss from operations ....................... (806,624) (231,701) (1,613,183) (783,986)

Other income (expense)
Interest income ........................ 16,882 -- 56,747 --
Interest expense and debt discount ..... (7,816) (177,319) (454,818) (140,497)
---------- -------- ---------- -----------
9,066 (177,319) (398,071) (140,497)

Net Loss .................................. $ (797,558) $ (409,020) $(2,011,254) $ (924,483)
========== ========== =========== ===========

Net loss per common share .................. $ ( .34) $ ( .32) $ (1.29) $ (.75)
========== ========== =========== ===========

Weighted average number of common
and common equivalent shares outstanding 2,316,279 1,285,699 1,553,824 1,224,531
========== ========== =========== ===========

See notes to financial statements.

F-4

<PAGE>

CluckCorp International, Inc.
Statements of Stockholders' Equity

Total
Common Stock Additional Stockholders'
------------------------ Paid-In Accumulated Equity
Shares Amount Capital Deficit (Deficit)
--------- ---------- ----------- ---------- -----------

Balance at January 1, 1995 .... 990,000 $ 9,900 $ 994,007 $ (641,059) $ 362,848

Net loss for the year ......... -- -- -- (924,483) (924,483)
---------- ----------- ----------- ----------- -----------

Balance at December 31, 1995 .. 990,000 9,900 994,007 (1,565,542) (561,635)

Issuance of common stock in
initial public offering ... 1,000,000 10,000 4,730,290 -- 4,740,290
Other issuances of common stock 65,000 650 219,233 -- 219,883
Common stock no longer subject
to rescission ............. 57,750 578 195,240 -- 195,818

Net loss for the year ......... -- -- -- (2,011,254) (2,011,254)
---------- ----------- ----------- ----------- -----------

Balance at December 29, 1996 .. 2,112,750 21,128 6,138,770 (3,576,796) 2,583,102

Issuance of common stock
(unaudited).................. 253,280 2,532 566,343 -- 568,875

Net loss for the period
(unaudited).................. -- -- -- (797,558) (797,558)
---------- ----------- ----------- ----------- -----------
Balance at April 20, 1997
(unaudited).................. 2,366,030 $ 23,660 $ 6,705,113 $(4,374,354) $ 2,354,419
========== =========== =========== =========== ===========

See notes to financial statements.

F-5
<PAGE>

CluckCorp International, Inc.
Statements of Cash Flows
<CAPTION>

Sixteen Weeks Ended Fiscal Years Ended
---------------------- --------------------------
April 20, April 21, December 29, December 31,
1997 1996 1996 1995
---------- --------- ------------ -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Operating Activities
Net loss for the year ........................................... $(797,558) $(409,020) $(2,011,254) $ (924,483)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization ............................... 60,635 30,824 94,109 73,879

Amortization of bridge note discount ........................ -- -- 367,154 87,659

Loss on forfeited deposits .................................. -- 136,855 -- 17,338
Changes in operating assets and liabilities:
Cash, restricted ........................................ 20,000 -- (20,000) --
Inventories ............................................. (15,125) (1,875) (3,614) (2,046)
Deferred financing costs ................................ -- (10,701) 144,074 (142,429)
Other current assets .................................... (29,056) 10,000 (10,590) (40,000)
Accounts payable and accrued expenses ................... 209,651 81,060 103,925 133,037
---------- -------- ----------- -----------

Net cash (used) by operating activities ............................. (551,453) (162,857) (1,336,196) (797,045)

Investing Activities
Purchases of property and equipment ............................. (555,021) (73,255) (1,059,654) (5,071)
Increase in deposits and other assets ........................... (212,522) (81,927) (151,197) (57,395)
---------- -------- ----------- -----------

Net cash (used) by investing activities ............................. (767,543) (155,182) (1,210,851) (62,466)

Financing Activities
Net proceeds from sale of common stock and warrants ............. 568,875 -- 4,960,173 --
Net proceeds from sale of common stock subject to rescission .... -- 209,884 -- 195,818
Proceeds from issuance of bridge notes payable .................. -- 376,370 376,370 764,318
Proceeds from bank borrowings ................................... -- -- 200,000 --
Restricted cash for note payable ................................ -- -- (200,000) --
Repayments of stockholder advances .............................. -- -- 40,000 (16,889)
Repayments of bridge notes payable .............................. -- -- (1,684,500) --

Repayments of bank borrowings.................................... (4,136) -- -- --
--------- -------- ----------- -----------

Net cash provided by financing activities ........................... 564,739 586,254 3,692,043 943,247
--------- -------- ----------- -----------

Net increase (decrease) in cash ..................................... (754,257) 268,215 1,144,996 83,736

Cash at beginning of period ......................................... 1,271,443 126,447 126,447 42,711
--------- -------- ----------- -----------

Cash at End of Period ............................................... $ 517,186 $ 394,662 $ 1,271,443 $ 126,447
========== ========= =========== ===========

</TABLE>

See notes to financial statements.

F-6
<PAGE>
CluckCorp International, Inc.
Notes to Financial Statements
December 29, 1996 and December 31, 1995

NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization: CluckCorp International, Inc. ("CluckCorp" or the "Company")
was organized in the State of Texas on June 18, 1993, and is an operator and
developer of a quick service restaurant concept. The Company currently operates
three restaurants in San Antonio and one restaurant in Corpus Christi, Texas.
The restaurants provide high quality, quick service food featuring marinated
oak-roasted rotisserie chicken with a variety of homemade side dishes.

The Company incorporated two wholly-owned subsidiaries during 1995,
Cluckers Restaurants, Inc. and Harvest Restaurants, Inc., to act as franchisors
for the Company's restaurants. Neither subsidiary conducted operations during
1996.

Fiscal Year: In 1996, the Company adopted a 52/53 - week fiscal year ending
on the last Sunday in December. The fiscal year is divided into thirteen
four-week periods. The first quarter consists of four periods and each of the
remaining three quarters consist of three periods, with the first, second and
third quarters ending 16 weeks, 28 weeks and 40 weeks respectively, into the
fiscal year.

Cash and Cash Equivalents: The Company considers all highly liquid debt
instruments purchased with an original maturity of three months or less to be
cash equivalents. At December 29, 1996, the Company had deposits of $218,795 in
a financial institution which exceeded the FDIC insured amount.

Inventories: Inventories are stated at the lower of cost (first-in,
first-out method) or market and consist primarily of restaurant food and paper.

Property and Equipment: Property and equipment are stated at cost.
Depreciation is provided using the straight-line method over the estimated
useful lives of the respective assets (generally seven years for furniture,
fixtures and equipment and 15 to 20 years for leasehold improvements), or
applicable lease terms, if less. Maintenance and repairs are charged to expense
as incurred, while improvements which increase the value of the property and
extend the useful lives are capitalized.

Intangible Property Rights: The Company obtained under an agreement with
Cluckers Wood Roasted Chicken, Inc. (CWRC), an unaffiliated Florida corporation,
an exclusive license to use all of CWRC's intangible property rights in the
State of Texas. Intangible property rights acquired from CWRC are stated at
original acquired cost and amortized over a ten year period. The Company
periodically assesses the valuation of the rights in light of projected
operating results and economic conditions and impairments are recognized when
the expected future undiscounted operating cash flows derived from such rights
are less than their carrying value. No impairments have been recognized to date.
Amortization expense of $39,950 is included in the accompanying statements of
operations for each of the last two fiscal years.

Deferred Offering and Financing Costs: Deferred offering costs are netted
against the equity offering to which they apply when the proceeds are received.
Deferred financing costs are amortized over the life of the respective notes
payable.

Revenue Recognition: Revenue from restaurant and product sales are
recognized in the period in which food and beverage products are sold. Revenue
from nonrefundable area development fees is recognized when all material
services or conditions relating to the area development sale have been
substantially performed or satisfied by the Company.

Preopening Costs: Preopening costs, which consist primarily of salaries and
other direct expenses relating to the set up, initial stocking, training, and
general management activities incurred prior to the opening of new stores, are
charged to expense as incurred.

Advertising Costs: Advertising costs of $133,366 and $35,820 during the
fiscal years ended December 29, 1996 and December 31, 1995, respectively, were
charged to expense as incurred.

F-7
<PAGE>

NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - Continued

Income Taxes: In accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes", deferred tax assets and
liabilities are recognized for temporary differences between the tax basis of
assets and liabilities and their reported amounts in the financial statements. A
valuation allowance is provided against net deferred tax assets when realization
during the next fiscal year is uncertain.

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

Interim Financial Statements: The unaudited financial statements as of
April 20, 1997 and for the sixteen weeks ended April 20, 1997 and April 21, 1996
include all adjustments (consisting only of normal recurring accruals) necessary
for a fair presentation of the results for such interim periods. The results for
these interim periods are not necessarily indicative of the results for a full
year.

NOTE B - NOTES PAYABLE

At December 29, 1996, the Company had outstanding a $200,000 note payable
to a financial institution. The note, which is collateralized by a $200,000
certificate of deposit, bears interest at the rate of 6.50% and is payable in
monthly installments of interest only. The principal and accrued interest is due
at the maturity date of November 3, 1997.

At December 31, 1995, the Company had bridge notes payable outstanding of
$940,977, net of unamortized discount of $133,523. The notes were issued to
individuals in four separate private offerings from May, 1995 through March,
1996, and were paid off in full with the proceeds from the Company's initial
public offering completed in July 1996. During the fiscal years ended in 1996
and 1995, $367,153 and $87,659 of discount applicable to the bridge notes was
amortized to interest expense.

The Company's weighted-average interest rate on it short-term borrowings,
before amortization of debt discount, was 9.8% in 1996 and 10.5% in 1995. After
considering amortization of debt discount, the weighted-average interest rate
was 50.6% in 1996 and 28.1% in 1995.

NOTE C - SUPPLEMENTAL FINANCIAL STATEMENT DATA

Property and equipment consists of the following:

December 29, December 31,
1996 1995
----------- -----------

Land ............................ $ 160,000 $ --
Buildings ....................... 240,400 --
Furniture, fixtures and equipment 365,719 78,150
Leasehold improvements .......... 487,515 115,830
----------- -----------
1,253,634 193,980
Less accumulated depreciation ... (97,272) (43,112)
----------- -----------
Property and equipment, net .... $ 1,156,362 $ 150,868
=========== ===========

Accrued liabilities consists of the following at:

December 29, December 31,
1996 1995
-------- --------

Accrued payroll and related liabilities $ 21,416 $ 6,874
Accrued interest payable .............. -- 51,758
Accrued reporting costs ............... 94,900 --
Accrued property lease payments ....... 100,000 29,500
Other accrued liabilities ............. 4,090 911
-------- --------
$220,406 $ 89,043
======== ========

F-8
<PAGE>

NOTE D - OPERATING LEASES

The Company currently conducts all its operations and maintains its
administrative offices in leased facilities. The Company also has entered into
lease agreements for facilities in San Antonio, Texas which the Company intends
to develop as restaurants in the future. Lease terms generally are ten years
with two or three five-year renewal options. Most of the leases contain
escalation clauses and require payment of common area maintenance charges or
taxes, insurance and other expenses. The Company also leases certain equipment
under non-cancelable operating leases having terms expiring at various dates
through 2001. Rental expense under operating lease agreements, including common
area maintenance charges, was $156,393 and $120,262 for the periods ended
December 29, 1996 and December 31, 1995, respectively.

Future minimum lease payments which are required under operating leases
that have initial or remaining non-cancelable lease terms in excess of one year
are as follows:

Years Ended December: Amount
- --------------------- -----------
1997 $ 297,710
1998 283,285
1999 258,331
2000 257,121
2001 256,435
Thereafter 1,592,780
-----------
Total future minimum payments $ 2,945,662
===========

NOTE E - FEDERAL INCOME TAXES

Deferred income taxes resulted from the following temporary differences and
loss carryforwards at:

December 29, December 31,
1996 1995
----------- -----------
Deferred tax asset - loss carryforwards $ 3,400,000 $ 1,565,542
=========== ===========

Net deferred tax asset at expected rates $ 1,156,000 $ 532,284
Less valuation allowance ............... (1,156,000) (532,284)
----------- -----------
Deferred tax asset allowed ............. $ -- $ --
=========== ===========

The Company has not recorded any income tax expense (benefit) since its
inception. The Company's tax operating loss carryforwards are available for
utilization against taxable income and expire in various amounts from 2008
through 2011.

NOTE F - STOCKHOLDERS' EQUITY

Initial Public Offering: In July 1996, the Company sold 1,000,000 shares of
common stock and 2,300,000 warrants to purchase common stock in an initial
public offering of its securities. The Company realized net proceeds of
$4,740,290 from the offering based upon the sale of the common stock at $5.50
per share and the warrants at $.125 per warrant.

Reverse Common Stock Split: On July 17, 1995, the Board of Directors
authorized a five-for-two reverse common stock split. All references to number
of shares and to stock warrants as well as per share information have been
adjusted to reflect the stock split on a retroactive basis.

F-9
<PAGE>

NOTE F - STOCKHOLDERS' EQUITY - Continued

Preferred Stock: The Company has authorized 5,000,000 shares of $1 par
value preferred stock, none of which is issued or outstanding. Dividend rates,
conversion rights, redemption and voting rights and liquidation rates have not
been set by the Board of Directors. See Note K.

Common Stock Subject to Rescission: At December 31, 1995, the Company had
classified 118,750 shares of common stock issued between August 1995 and March
1996 in connection with the sale of $1,197,500 of bridge notes as temporary
equity due to the uncertainty as to whether the private placement exemption
could be claimed since these securities were sold after the filing of the
Registration Statement. Without the exemption, the transactions could be
considered integrated with the offering, subjecting the Company to potential
liability for sales of unregistered securities. All bridge note holders were
repaid their investment upon the closing of the initial public offering in July
1996. However, the possibility exists the Company could be liable for a claim by
the bridge lenders in connection with the issuance of the 118,750 shares of
common stock to them at a rate of $3.83 per share (or an aggregate of $454,812),
which is the per share value, before offering costs, attributed to the common
stock. Management considers the likelihood of a claim being filed to be remote
and has reclassified these shares as equity at December 29, 1996.

Stock Option Plan: In July 1994, the Company adopted a stock option plan
which provides for the granting of either incentive stock options or
non-qualified stock options. Options can be issued to officers, employees,
directors and outside consultants; however, incentive stock options are issuable
only to eligible officers and employees. The Company has reserved a total of
250,000 shares of common stock for the plan. All options granted under the plan
for 1996 and 1995 were at fair market value as of the date of grant and vest
over various periods beginning in 1997 through 2000.

The Company applies APB Opinion 25 and related interpretations in
accounting for this plan, and has adopted the disclosure only provisions of SFAS
No. 123. Accordingly, no compensation cost has been recognized in 1996 or 1995.
Had the Company accounted for its employee stock options based on the fair value
at the date of grant consistent with the provisions of SFAS No. 123, the
Company's net loss and net loss per common share on a proforma basis would have
been as follows:

1996 1995
----------- ----------
Net loss - as reported $(2,011,254) $(924,483)
Net loss - proforma (2,082,678) (924,483)
Net loss per common share as reported (1.29) (.75)
Net loss per common share proforma (1.34) (.75)

A summary of the status of the Company's stock option plan as of December
29, 1996 and December 31, 1995, and changes during the fiscal years ending on
those dates is presented below:
<TABLE>

1996 1995
------------------------------ ---------------------------
Weighted-Average Weighted-Average
Shares Exercise Price Shares Exercise Price
------ -------------- ------ --------------
<S> <C> <C> <C> <C>

Outstanding options at beginning of year 80,000 $ 2.50 -- $ --
Granted ............................ 206,000 5.94 80,000 2.50
Exercised .......................... -- -- -- --
Forfeited .......................... (80,000) 2.50 -- --
------- ------

Outstanding options at end of year ..... 206,000 5.94 80,000 2.50
======= ======

Options exercisable at year end -- ..... -- 16,000
======= ======

Weighted-average fair value of
options granted during the year ....... $ 1.62 --

</TABLE>

F-10
<PAGE>
NOTE F - STOCKHOLDERS' EQUITY - Continued

The following table summarizes information about the options outstanding at
December 29, 1996:

<TABLE>

Options Outstanding Options Exercisable
------------------------------------------------- -------------------------------

Number Weighted-Average Number
Outstanding Remaining Weighted-Average Exercisable Weighted-Average
Exercise Price at 12/29/96 Contractual Life Exercise Price at 12/29/96 Exercise Price
-------------- ----------- ---------------- --------------- ------------ ---------------

$ 3.85 6,000 4.6 years $ 3.85 -- $ 3.85
6.00 200,000 4.8 years 6.00 -- 6.00
------- ------
206,000 4.8 years 5.94 -- 5.92
======= ======

Warrants: The following is a summary of warrant activity, after giving
effect to the July 17, 1995 reverse stock split:

Warrants/ Exercise
Issue Date Purpose Options Price Expiration
- ----------- --------------------------- ---------- ------ -----------------
<S> <C> <C> <C> <C>

April 1994 Private sale of common stock 100,000 $ 2.50 December 31, 1997
August 1994 Private sale of common stock 30,480 2.50 December 31, 1997
December 1994 Bridge notes 35,600 2.50 December 31, 1997
May 1995 Bridge notes 159,200 2.50 December 31, 1997
July 1996 Initial public offering 2,300,000 4.00 July 9, 2001
July 1996 Initial public offering 100,000 6.60 July 9, 2001
July 1996 Initial public offering 200,000 4.15 July 9, 2001
---------

Outstanding at December 29, 1996 2,925,280
=========

</TABLE>

NOTE G - RELATED PARTY TRANSACTIONS

In March 1995, the Company entered into an area development agreement with
a stockholder of the Company for the exclusive license to develop up to ten
restaurants in Singapore over a 20-year period. The fee under the area
development agreement was $50,000, of which the Company had received $20,000. A
non-interest bearing unsecured promissory note initially due March 30, 1996 was
extended to September 30, 1996. In December 1996, the area development agreement
was modified to reduce the number of restaurants that can be developed from ten
to two and reduce the fee from $50,000 to $10,000. The stockholder was refunded
$10,000 and the balance of the note was charged to expense.

On August 10, 1995, the Company entered into a five year employment
agreement with its Chairman and Chief Executive Officer. Annual compensation is
fixed at the larger of $75,000 or 20% of all franchise and area development fees
paid to the Company, together with 5% of all royalty fees received by the
Company under any franchise agreements and area development agreements executed
during the Chairman's employment. In September 1996, the employment agreement
was amended to increase his salary from $75,000 to $90,000 per year.

During 1996, the Company paid its Chairman and Chief Executive Officer
$29,800 for certain fixed assets used in the operations of the Company.

The Company has a $20,000 certificate of deposit which collateralizes a
personal loan for an officer of the Company.

F-11
<PAGE>

NOTE H - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

The Company paid interest of $139,423 during the fiscal year ended December
29, 1996. No interest was paid during the fiscal year ended December 31, 1995,
and no federal or state taxes were paid during fiscal years ended December 31,
1996 and 1995.

NOTE I - LOSS PER SHARE

Loss per common share is computed by dividing net loss by the weighted
average number of shares outstanding during each period plus, when their effect
is dilutive, common stock equivalents consisting of certain shares subject to
stock options and warrants. In 1996, the inclusion of additional shares assuming
the exercise of the stock options and warrants would have been antidilutive.

Loss per common share is calculated as follows:

Fiscal Year Ended
--------------------------
December 29, December 31,
1996 1995
----------- -----------
Net loss ....................................... $(2,011,254) $ (924,483)
=========== ===========

Weighted average number of shares outstanding .. 1,553,824 1,001,287

Common stock equivalents due to assumed exercise
of options and warrants .................... -- 223,244
----------- ----------

1,553,824 1,224,531

Net loss per common share ...................... $ (1.29) $ (.75)
=========== ===========

The Financial Accounting Standards Board in February, 1997 issued Statement
No, 128, Earnings Per Share, effective for fiscal years ending after December
31, 1997. Implementation of this Statement is not expected to have a significant
impact on the earnings per share calculation of the Company.

NOTE J - FAIR VALUE OF FINANCIAL INSTRUMENTS

The only financial instruments of the Company at December 29, 1996, are
cash and notes payable. The carrying amount of the financial instruments
approximate fair value.

NOTE K - SUBSEQUENT EVENTS

In January 1997, warrants to purchase 253,280 shares of common stock were
exercised, resulting in proceeds to the Company of $633,200.

In February, 1997, the Company filed a Registration Statement on Form SB-2
covering the sale of 500,000 shares of the Company's Convertible Redeemable
Preferred Stock. The stock is being offered at $10 per share and is convertible
into common stock, at a to be determined conversion price. In May 1997, the
Registration Statement was amended to also include the sale of 1,500,000
Preferred Stock Purchase Warrants at $.10 per Warrant. There is no assurance
that the Registration Statement will be declared effective by the Securities and
Exchange Commission, or that the Company will be successful in selling the
Preferred Stock.

F-12
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. Indemnification of Directors and Officers.

Article Eleven of the Registrant's Articles of Incorporation provide as
follows:

"Section 1. Mandatory Indemnification and Advancement of Expenses. Each
person who was or is made a party or is threatened to be made a party to or is
involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, arbitrative or investigative, any
appeal in such action, suit or proceeding, and any inquiry or investigation that
could lead to such an action, suit or proceeding ("Proceeding"), by reason of
the fact that he is or was a Director or Officer of the Corporation, or who,
while a Director or Officer of the Corporation, is or was serving at the request
of the Corporation as a director, officer, partner, venturer, proprietor,
trustee, employee, agent, or similar functionary of another corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit plan or
other enterprise, shall be indemnified and held harmless by the Corporation to
the fullest extent permitted by the Act against all judgments, penalties
(including excise and similar taxes), fines, settlements, and reasonable
expenses (including attorneys' fees) actually incurred by such person in
connection with such Proceeding. Such right shall be a contract right and shall
include the right to require advancement by the Corporation of reasonable
expenses (including attorneys' fees) incurred in defending any such Proceeding
in advance of its final disposition; provided, however, that the payment of such
expenses in advance of the final disposition of such Proceeding shall be made by
the Corporation only upon delivery to the Corporation of a written affirmation
by such person of his good faith belief that he has met the standard of conduct
necessary for indemnification under the Act and a written undertaking, by or on
behalf of such person, to repay all amounts so advanced if it should be
ultimately determined that such person has not satisfied such requirements.

Section 2. Nature of Indemnification. The indemnification and advancement
of expenses provided for herein shall not be deemed exclusive of any other
rights permitted by law to which a person seeking indemnification may be
entitled under any Bylaw, agreement, vote of Shareholders or disinterested
Directors or otherwise, and shall continue as to a person who has ceased to be a
Director or Officer of the Corporation and shall inure to the benefit of the
heirs, executors and administrators of such a person.

Section 3. Insurance. The Corporation shall have power to purchase and
maintain insurance or other arrangements on behalf of any person who is or was a
director, Officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article Eleven or the Act."

II-1
<PAGE>

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to officers, directors or persons
controlling the Company, the Company has been advised that, in the opinion of
the Securities and Exchange Commission, Washington, D.C. 20549, such
indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by an officer, director or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
officer, director or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in such Act and will be governed by the final adjudication
of such issue.

ITEM 25. Other Expenses of Issuance and Distribution.(1)

SEC Registration Fee..................... $ 16,694
NASD Filing Fee.......................... 6,008
Blue Sky Filing Fees..................... 15,000
Blue Sky Legal Fees...................... 30,000
Printing Expenses........................ 60,000
Legal Fees and Expenses.................. 120,000
Accounting Fees.......................... 40,000
NASDAQ SmallCap Application.............. 10,000
Transfer Agent and Certificates.......... 2,000
Miscellaneous Expenses................... 50,298
--------
TOTAL.................................... $350,000

(1) Does not include the Representative's commissions and fees of $669,500
($769,925 if the over-allotment is exercised). All expenses are estimated
except SEC and NASD registration and filing fees.

ITEM 26. Recent Sales of Unregistered Securities

During the last three years, the Registrant sold the following shares of
its Common Stock which were not registered under the Securities Act of 1933, as
amended (the "1933 Act").

II-2
<PAGE>

at any time until December 1997. The Private Placement Agent, World Equities,
Inc., received 19,480 warrants identical in terms to the warrants issued to the
investors as additional compensation for acting as the Company's selling agent
in connection with the loan.

(v) In August and November 1995, the Registrant borrowed $577,500 from a
group of 20 investors (all of whom were "accredited investors" as that term is
defined under Regulation D of the 1933 Act), evidenced by promissory notes
("Notes") bearing interest at 10% per annum. As additional consideration for
purchase of the Notes, the investors received an aggregate of 57,750 shares of
Common Stock for no additional consideration, which shares were registered as a
part of the Registrant's Registration Statement on Form SB-2, File No. 33-95796
declared effective July 9, 1996.

(vi) In March 1996, the Registrant borrowed $610,000 from three investors
(all of whom were "accredited investors" as that term is defined under
Regulation D of the 1933 Act), evidenced by promissory notes ("Notes") bearing
interest at 10% per annum. As additional consideration for purchase of the
Notes, the investors received an aggregate of 61,000 shares of Common Stock for
no additional consideration, which shares were registered as a part of the
Registrant's Registration Statement on Form SB-2, File No. 33-95796 declared
effective July 9, 1996.

With respect to the above sales, the Registrant relied on Section 4(2)
and/or Regulation D of the 1933 Act. No advertising or general solicitation was
employed in Offering the securities. The securities were offered to a limited
number of individuals all of whom purchased as an investment and not with a view
to distribution or resale and the transfer thereof was appropriately restricted
by the Registrant. No advertising or general solicitation was employed in any of
the sales. All security holders were sophisticated investors capable of
analyzing the merits and risks of their investment and realizing a loss of their
entire investment.

ITEM 27. Exhibits.

Exhibit No. Title

1.17 Form of Underwriting Agreement (2)

1.18 Form of Selling Group Agreement (2)

1.19 Form of Representatives' Warrant (2)

1.20 Form of Agreement Among Underwriters (2)

1.21 Form of Amended Underwriting Agreement (2)

1.22 Form of Amended Underwriting Agreement

1.23 Form of Amended Selling Group Agreement

1.24 Form of Amended Representatives' Warrant

1.25 Form of Amended Agreement Among Underwriters

II-3
<PAGE>

2.01 Articles of Incorporation of the Registrant, as
amended(1)

2.02 Bylaws of the Registrant(1)

2.03 Articles of Incorporation of Harvest Restaurants,
Inc.(1)

2.04 Bylaws of Harvest Restaurants, Inc.(1)

2.05 Articles of Incorporation of Cluckers
Restaurants, Inc.(1)

2.06 Bylaws of Cluckers Restaurants, Inc.(1)

5.02 Opinion of Gary A. Agron, Esq., regarding
legality of the Preferred Stock (includes
Consent)(2)

5.03 Amended Opinion of Gary A. Agron, Esq.

10.01 Incentive Stock Option Plan(1)

10.02 Settlement Agreement with Cluckers Wood Roasted
Chicken, Inc.(1)

10.12 Uniform Franchise Offering Circular (Cluckers)(1)

10.13 Form of Franchise Agreement (Cluckers)(1)

10.14 Form of Area Development Agreement (Cluckers)(1)

10.15 Employment Agreement with Mr. Gallagher(1)

10.16 Employment Agreement with Mr. Gibbs(1)

10.17 Area Development Agreement with Mr. McGill(1)

10.20 Uniform Franchise Offering Circular (Harvest
Rotisserie)(1)

10.21 Form of Area Development Agreement (Harvest
Rotisserie)(1)

10.22 Form of Franchise Agreement (Harvest Rotisserie)
(1)

10.23 License Agreement(1)

II-4
<PAGE>

10.24 License Agreement(1)

10.25 Amendment to Area Development Agreement with
Mr. McGill(2)

10.27 Ground Lease (Harvest Rotisserie - Dezavala)(2)

10.28 Ground Lease (Harvest Rotisserie - Herzberg)(2)

10.29 Consulting Agreement with the Representative(2)

10.30 Building Lease (Harvest Rotisserie - Corpus
Christi (2)

10.31 Building Lease (Harvest Rotisserie - San
Antonio)(2)

10.32 Agreement with Roasters Corp. (2)

10.33 Agreement with Pollo Operators, Inc.(2)

10.34 Building Lease (Harvest Rotisserie - 11730 West
Avenue, San Antonio) (2)

10.35 Land Contract (St. Petersburg)(2)

23.09 Consent of Akin, Doherty, Klein & Feuge, P.C.(2)

23.10 Consent of Gary A. Agron, Esq., (See 5.02,
above)(2)

23.11 Consent of Akin, Doherty, Klein & Feuge, P.C. (2)

23.12 Consent of Akin, Doherty, Klein & Feuge, P.C. (2)

23.13 Consent of Akin, Doherty, Klein & Feuge, P.C.

(1) Incorporated by reference to the Registrant's definitive Registration
Statement on Form SB-2 File No. 33-95796 declared effective on July 9,
1996.

(2) Previously Filed

ITEM 28. Undertakings.

The Registrant hereby undertakes that:

(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

(b) Subject to the terms and conditions of Section 13(a) of the Securities
Exchange Act of 1934, it will file with the Securities and Exchange Commission

II-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in San Antonio, Texas, on June 4, 1997.

CLUCKCORP INTERNATIONAL, INC.

By: /s/ William J. Gallagher
----------------------------
William J. Gallagher
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
the dates indicated.

Signature Title Date

By: /s/ William J. Gallagher Chairman of the Board of June 4, 1997
- ------------------------------ Directors and Chief Executive
William J. Gallagher Officer

By: /s/ Larry F. Harris President and Director June 4, 1997
- ------------------------------
Larry F. Harris

By: /s/ Sam Bell Steves Rosser Vice President - Development, June 4, 1997
- ------------------------------ Treasurer and Director
Sam Bell Steves Rosser

By: /s/ Michael M. Hogan Director June 4, 1997
- ------------------------------
Michael M. Hogan

By: /s/ Theodore M. Heesch Director June 4, 1997
- ------------------------------
Theodore M. Heesch

By: /s/ Joseph Fazzone Chief Financial Officer and June 4, 1997
- ------------------------------ Principal Accounting Officer
Joseph Fazzone
<PAGE>

CLUCKCORP INTERNATIONAL, INC.
EXHIBIT INDEX

Exhibit No. Title

23.13 Consent of Akin, Doherty, Klein & Feuge, P.C.

EXHIBIT 23.13
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

CluckCorp International, Inc.

We hereby consent to the use in this Registration Statement on Form SB-2 of our
report dated February 6, 1997, relating to the Financial Statements of CluckCorp
International, Inc. and to the references to our firm under the caption
"Experts" in the Prospectus.

Akin, Doherty, Klein & Feuge, P.C.
San Antonio, Texas
June 5, 1997