Edgar Filing: TOTAL ENTERTAINMENT RESTAURANT CORP

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 14, 2002

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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TOTAL ENTERTAINMENT RESTAURANT CORP.
(Exact name of registrant as specified in its charter)

DELAWARE 52-2016614
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

9300 E. CENTRAL AVE., SUITE 100
WICHITA, KS 67206
(316) 634-0505
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

STEVEN M. JOHNSON
CHIEF EXECUTIVE OFFICER
TOTAL ENTERTAINMENT RESTAURANT CORP.
9300 E. CENTRAL AVE., SUITE 100
WICHITA, KS 67206, (316) 634-0505
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:

WILLIAM R. WOOD, II GREG R. SAMUEL
FOULSTON SIEFKIN LLP HAYNES AND BOONE, LLP
BANK OF AMERICA CENTER 901 MAIN STREET
100 N. BROADWAY, SUITE 700 SUITE 3100
WICHITA, KS 67202 DALLAS, TX 75202
(316) 267-6371 (214) 651-5000

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest investment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
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. [ ]
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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. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE
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Common Stock, par value $0.01......... 2,300,000 $13.40 $30,820,000 $2,836
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(1) Includes 300,000 shares for which the underwriter has the option to purchase
to cover over allotments, if any.
(2) Estimated solely for the purpose of computing the registration fee required
by Section 6(b) of the Securities Act, and computed pursuant to Rule 457(c)
of the Securities Act. The computation was based on the average of the high
and low prices of our common stock as reported by the Nasdaq National Market
on June 12, 2002.
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THE REGISTRANT HEREBY AMENDS THIS 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.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED , 2002

PROSPECTUS

TOTAL ENTERTAINMENT RESTAURANT CORP.

(FOX AND HOUND LOGO)(BAILEY'S LOGO)

2,000,000 SHARES
COMMON STOCK

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Total Entertainment Restaurant Corp. is selling 1,450,000 shares of common stock
and the selling stockholders identified in this prospectus are selling an
additional 550,000 shares. We will not receive any of the proceeds from the sale
of the shares sold by the selling stockholders. We have granted the underwriter
a 30-day option to purchase up to an additional 300,000 shares from us to cover
over-allotments, if any.

Our common stock is listed on the Nasdaq National Market under the symbol
"TENT." The last reported sale price on June 13, 2002 was $14.00 per share.

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INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 5.
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Per Share Total

Public Offering Price $ $
Underwriting Discount $ $
Proceeds, before expenses, to the Company $ $
Proceeds, before expenses, to the selling stockholders $ $

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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THOMAS WEISEL PARTNERS LLC

The date of this prospectus is , 2002

INSIDE FRONT COVER

[Inside front cover consists of three pieces]

FIRST PIECE:

[Map of United States with locations of current restaurants marked, as well
as those restaurants currently under construction as of June 11, 2002, followed
by the caption "With 48 Locations and Growing" and a listing of these locations
as either "Existing Locations" or "Under Construction." The caption "Our
Locations" appears at the top of the page.]

SECOND AND THIRD PIECES:

[Internal pictures of selected restaurants under the caption "Exciting High
Energy Atmosphere" and external pictures of selected restaurants under the
caption "An Upscale, Neighborhood Social Gathering Place."]

TABLE OF CONTENTS

PAGE
----

Prospectus Summary.......................................... 1
Risk Factors................................................ 5
Cautionary Note on Forward-Looking Statements............... 11
Use of Proceeds............................................. 12
Price Range of Common Stock................................. 12
Dividend Policy and Stock Repurchases....................... 13
Capitalization.............................................. 14
Selected Consolidated Financial Data........................ 15
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 17
Business.................................................... 24
Management.................................................. 33
Certain Relationships and Related Transactions.............. 34
Description of Capital Stock................................ 35
Shares Eligible for Future Sale............................. 36
Principal and Selling Stockholders.......................... 36
Underwriting................................................ 39
Legal Matters............................................... 41
Experts..................................................... 41
Changes In and Disagreements with Accountants............... 41
Where You Can Find More Information......................... 42
Incorporation by Reference.................................. 42
Index to Consolidated Financial Statements.................. F-1

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You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of our common stock only in jurisdictions where offers and sales are
permitted.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in the prospectus.
It does not contain all the information you should consider. You should also
read the more detailed information set out in this prospectus including the
"Risk Factors" section and the Consolidated Financial Statements and Notes
before making an investment.

OUR COMPANY

We own and operate 48 restaurants under the "Fox and Hound" and "Bailey's"
brand names that each provide a social gathering place offering high quality
food, drinks and entertainment in an upscale, casual environment. Our
restaurants offer a broad menu of mid-priced appetizers, entrees and desserts
served in generous portions. In addition, each location features a full-service
bar and offers a wide selection of major domestic, imported and specialty beers.
Each restaurant emphasizes a high energy environment with multiple billiard
tables and satellite and cable coverage of a variety of sporting events and
music videos. In addition to our food, we believe our customers are attracted to
our elegant yet comfortable atmosphere of polished brass, embroidered chairs and
booths, hunter green and burgundy walls and etched glass. Our Fox and Hound and
Bailey's restaurants share identical design and operational principles and
menus. As of June 11, 2002, we owned and operated 32 Fox and Hound restaurants
and 16 Bailey's restaurants in 19 states.

We believe the design of our restaurants plays an essential role in our
success. We strive to create a distinctive, highly entertaining and unique
atmosphere at each of our restaurants by featuring warm lighting, high ceilings
and rich wood-finished interiors. Our restaurants average approximately 9,500
square feet in size and are typically divided into three large rooms. The bar
and primary dining room are centrally located while the two side rooms are
partitioned from the bar and dining area by etched glass, and each hold
approximately four to six billiard tables as well as numerous cocktail tables.
This layout provides customers with an open view of the main dining room, bar
and billiard areas. These side rooms are equipped with state-of-the-art audio
and video technology for displaying various sporting events and music videos and
can be readily configured into a comfortable "arena" for viewing national,
regional and local sporting and other televised events. All locations also can
be arranged to dedicate areas to accommodate business and social organizations
for special events.

In January 1999, we hired Steven Johnson as our Chief Executive Officer.
Shortly thereafter, we suspended new restaurant development in order to focus on
developing our service-oriented culture and improving the operations and
profitability of our existing restaurants. In addition, we implemented a number
of initiatives, including recruiting a new Chief Operating Officer, increasing
the number of district managers, restructuring our board of directors and
closing three underperforming restaurants. As a result of these and other
initiatives, we increased our annualized average weekly restaurant sales from
$1.6 million in fiscal year 1999 to $1.8 million in fiscal year 2001 and
expanded restaurant-level operating profit margins (before preopening costs and
provision for asset impairment and restaurant closing) from 14.8% in fiscal year
1999 to 17.3% in fiscal year 2001. In addition, since early 1999 we have
achieved 13 consecutive quarters of positive comparable restaurant sales growth.
Beginning in mid-2000, we initiated a disciplined growth plan, opening three
restaurants in fiscal year 2000, five restaurants in fiscal year 2001 and six
restaurants during fiscal year 2002 to date.

OUR CONCEPT

We believe our restaurants offer customers a unique and exciting upscale
destination for socializing, eating and drinking. We believe our restaurants are
differentiated from our competitors by offering all of the following features in
a single location:

female customers through an inviting, clean and comfortable atmosphere.
In order to achieve the feeling of an upscale atmosphere for these
customers, we emphasize decor, lighting and cleanliness.

- State-of-the-Art Audio and Visual Technology. Our restaurants create an
exciting, high-energy atmosphere through state-of-the-art audio and video
systems for viewing sporting events and music videos from our customized
playlist. Each location typically has more than 35 televisions (including
several big-screen televisions) with satellite and cable coverage of
concurrent national, regional and local sporting events. We believe the
entertainment aspect of our restaurants encourages repeat visits,
increases the average length of customer stay and attracts customers
outside of peak hours.

- Late-Night Destination. Our restaurants are generally open from 11:00
a.m. to 2:00 a.m., seven days a week, depending upon local law. We
provide customers with an upscale entertainment and dining alternative by
offering our full menu during our increasingly popular late-night
segment. We believe customers have difficulty finding comparable
late-night destinations that offer a clean, upscale atmosphere and that
serve high quality food after 10:00 p.m.

OUR GROWTH STRATEGIES

Our goal is to become the leading neighborhood destination for socializing,
eating and drinking. We anticipate our primary source of revenue growth in the
near term will be the addition of new restaurants and increased sales at
existing locations.

New Unit Growth. We anticipate that the addition of new restaurants in
both existing and new markets will be a major source of growth for us. We
carefully select new locations based on a variety of factors including local
market demographics, site visibility, traffic count, nature of the surrounding
retail environment and accessibility and proximity to major retail centers,
office complexes, hotels and entertainment centers (e.g., stadiums, arenas and
theaters). We plan to open 10 to 12 locations in both fiscal year 2002 and
fiscal year 2003.

Increase Sales at Existing Locations. We seek to increase sales at our
existing restaurants by continuing to implement the following strategies:

- Best Practice Initiatives. We allow our restaurant-level managers
significant latitude to test and implement restaurant-level initiatives
intended to increase sales or efficiency or improve the overall customer
experience. We actively monitor these initiatives at a corporate level
and seek to implement successful single-restaurant initiatives as "best
practice" initiatives company-wide.

- Corporate/Group Events. We believe that our restaurants provide an ideal
gathering place for corporate and private groups. The multi-room design
of our restaurants allows groups of people to socialize without being
interrupted by other customers. Most locations employ event coordinators
responsible for marketing to groups and creating customized corporate and
private events. In addition to contributing to revenue, these events
facilitate the introduction of new customers to our restaurants.

- Menu Updates. We regularly update and introduce new menu segments and
items in order to attract new customers and drive customer frequency,
customer satisfaction and overall restaurant

sales. We continually review our menu based on feedback from our customers and
our secret shopper program.

Many of these strategies were partially implemented in fiscal years 2001
and 2002 and contributed to our strong recent comparable restaurant sales
growth. Because many of these strategies were implemented mid-year or were
recently expanded company-wide, we expect these strategies to continue to
positively impact our sales in fiscal years 2002 and 2003.

RECENT DEVELOPMENTS

Total sales for the second fiscal quarter of fiscal year 2002 were
approximately $21.4 million, which represents approximately a 45% increase over
the same period the previous year. Comparable restaurant sales growth for the
quarter was approximately 10.7%. We anticipate diluted EPS for the quarter to be
in the range of $0.10 to $0.12, compared to $0.04 for the same period in fiscal
year 2001.

THE OFFERING

Common stock offered by the Company... 1,450,000 shares

Common stock offered by the selling
stockholders.......................... 550,000 shares

Common stock to be outstanding after
this offering......................... 10,319,493 shares

Use of proceeds....................... We expect to use our net proceeds
from this offering to repay
approximately $12.8 million
outstanding under our line of credit
and for capital expenditures,
including the opening of additional
restaurants, and working capital and
other general corporate purposes. We
will not receive any proceeds from
the sale of common stock offered by
the selling stockholders.

Nasdaq National Market symbol......... TENT

The common stock to be outstanding after this offering is based on
8,869,493 shares outstanding as of June 12, 2002, which excludes:

- 1,085,844 shares of common stock issuable upon the exercise of
outstanding stock options as of June 12, 2002 issued under our 1997
Incentive and Nonqualified Stock Option Plan (the "Employee Stock Option
Plan") and Directors' Stock Option Plan (the "Director Stock Option Plan"
and, collectively, with the "Employee Stock Option Plan," the "Option
Plans") at a weighted average exercise price of $5.08 per share; and

- 704,434 shares of common stock reserved for future issuance under the
Option Plans as of June 12, 2002.

Except as otherwise indicated, the information in this prospectus assumes
no exercise of the underwriter's over-allotment option.

OTHER INFORMATION

We were formed as a Delaware corporation in 1997. Our executive offices are
located at 9300 E. Central Ave., Suite 100, Wichita, KS 67206, and our telephone
number is (316) 634-0505. Our main website address is http://www.tentcorp.com.
The information contained in our website is not a part of this prospectus. The
transfer agent for our common stock is First Union National Bank.

Our logos are our registered service marks. Other service marks, trademarks
and trade names referred to in this prospectus are the property of their
respective owners.

SUMMARY CONSOLIDATED FINANCIAL DATA

The following table summarizes our consolidated financial data and
operating data. We operate on a 52 or 53 week fiscal year ending the last
Tuesday in December. Our fiscal quarters consist of three accounting periods of
12 weeks each and a final period of 16 or 17 weeks.

52 WEEKS ENDED 12 WEEKS ENDED
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DEC. 28, DEC. 26, DEC. 25, MARCH 20, MARCH 19,
1999 2000 2001 2001 2002
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(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

INCOME STATEMENT DATA:
Net sales......................................... $55,930 $55,990 $70,952 $16,437 $22,104
Costs and expenses:
Cost of sales................................... 15,349 14,790 19,213 4,451 5,804
Operating expenses.............................. 28,632 28,395 35,741 8,025 10,555
Depreciation and amortization................... 3,697 3,592 3,706 816 1,009
Preopening costs................................ 488 501 1,218 72 491
Provision for asset impairment and restaurant
closing...................................... 1,087 2,362 575 -- --
------- ------- ------- ------- -------
Restaurant costs and expenses..................... 49,253 49,640 60,453 13,364 17,859
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Restaurant operating income....................... 6,677 6,350 10,499 3,073 4,245
General and administrative expenses............... 3,900 3,768 3,991 867 1,155
Goodwill amortization............................. 244 244 244 56 0
------- ------- ------- ------- -------
Income from operations............................ 2,533 2,338 6,264 2,150 3,090

Net income (loss)(1).............................. $ (311) $ 848 $ 3,329 $ 1,191 $ 1,897
======= ======= ======= ======= =======
Diluted net income (loss) per share(1)............ $ (0.03) $ 0.09 $ 0.38 $ 0.14 $ 0.21
======= ======= ======= ======= =======
Diluted weighted number of shares outstanding..... 10,352 9,329 8,694 8,699 9,025
OTHER DATA:
Restaurants at end of period...................... 35 38 43 38 47
Comparable restaurant sales increase
(decrease)(2)................................... (0.5)% 3.8% 7.4% 6.1% 9.3%

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(1) Includes a charge of $1,128 ($0.11 per share) in fiscal year 1999 for the
cumulative effect of a change in accounting principle relating to adoption
of a new accounting principle for preopening costs for new restaurants (see
Note 1 of Notes to Consolidated Financial Statements).

(2) In calculating comparable restaurant sales, we include a restaurant in the
comparable restaurant base after it has been in operation for 18 full
months. As of June 11, 2002, there were 35 restaurants in the comparable
restaurant base.

The following table summarizes our balance sheet data and certain operating
data as of March 19, 2002. This balance sheet data is presented on an actual
basis and as adjusted to give effect to the sale of the shares of common stock
in this offering by us at the public offering price of $ per share, after
deducting the underwriting discount and estimated offering expenses payable by
us.

AS OF MARCH 19, 2002
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ACTUAL AS ADJUSTED
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Cash and cash equivalents................................... $ 910 $
Working capital (deficit)................................... (4,595)
Total assets................................................ 47,313
Notes payable, including current portion.................... 12,825
Total stockholders' equity.................................. $26,046

RISK FACTORS

This prospectus contains certain forward-looking statements within the
meaning of the federal securities laws. Actual results and the timing of certain
events could differ materially from those projected in any forward-looking
statements due to the factors set forth below and elsewhere in this prospectus.
See "Cautionary Note on Forward-Looking Statements." Investing in our common
stock will provide you with an interest in us. You should carefully consider the
following factors and other information in this prospectus before deciding to
invest in shares of our common stock. We have included a discussion of each
material risk that we have identified as of the date of this prospectus. If any
of the following risks actually occur, our business, financial condition,
operating results and cash flows could suffer. As a result, our common stock's
trading price could decline, and you could lose all or part of the money you
paid to buy our common stock.

WE MAY NOT BE ABLE TO MANAGE OUR PLANNED EXPANSION, WHICH MAY LEAD TO HIGHER
COSTS OR A FAILURE TO REALIZE ANTICIPATED REVENUES OR OPERATING PROFITS.

We face business risks commonly associated with rapidly growing companies,
including the risk that existing management, information systems and financial
controls may be inadequate to support our planned expansion. We experienced
difficulty managing our rapid expansion following our initial public offering in
1997 and, as a result, temporarily suspended development of new restaurants in
the second fiscal quarter of 1999. We cannot predict whether we will be able to
respond on a timely basis to all of the changing demands that our planned
expansion will impose on management and our systems and controls. If we fail to
adapt management, information systems and financial controls or encounter
unexpected difficulties during expansion, our business, financial condition,
operating results or cash flows could be materially adversely affected. In
addition, we anticipate entering new geographic markets in which we have no
operating experience. These new markets may have different demographic
characteristics, competitive conditions, consumer tastes and discretionary
spending patterns than our existing markets, which may cause new restaurants to
be less successful than restaurants in our existing markets.

IF WE ARE UNABLE TO OPEN NEW RESTAURANTS IN A TIMELY AND PROFITABLE MANNER, OUR
BUSINESS COULD BE MATERIALLY ADVERSELY AFFECTED.

To continue to expand our business, we must open new restaurants on a
timely and profitable basis. We have experienced occasional delays in opening
restaurants and may experience delays in the future. Delays in opening, or
failures to open, new restaurants could materially adversely affect our
business, financial condition, operating results and cash flows. We expanded
from 38 restaurants as of March 20, 2001 to 48 restaurants as of June 11, 2002.
We expect to open a total of 10 to 12 new restaurants during fiscal year 2002
(of which six restaurants have been opened, four restaurants are currently under
construction and an additional two leases for new restaurants have been
executed), and an additional 10 to 12 restaurants in fiscal year 2003. Our
ability to expand successfully may depend on a number of factors, some of which
are beyond our control, including:

- Identification and availability of suitable restaurant sites;

- Competition for restaurant sites;

- Negotiation of favorable leases;

- Timely development in certain cases of commercial, residential, street or
highway construction near our restaurants;

- Management of construction and development costs of new restaurants;

- Securing of required governmental approvals and permits;

- Availability, staffing, training and retention of qualified management
and hourly personnel, particularly district, general and assistant
managers;

- Competition in new markets; and

- General economic conditions.

There can be no assurance that we will be able to complete our planned
expansion or that new restaurants, if completed, will perform in a manner
consistent with our most recently opened restaurants or make a positive
contribution to our operating results. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

THE PRICE OF OUR COMMON STOCK HAS BEEN HIGHLY VOLATILE AND MAY CONTINUE TO BE
HIGHLY VOLATILE, WHICH MAY ADVERSELY AFFECT YOUR ABILITY TO SELL YOUR SHARES AND
OUR ABILITY TO RAISE ADDITIONAL CAPITAL.

A public market for our common stock has existed since 1997. The price of
our common stock has been highly volatile and may continue to be highly
volatile. For instance, since January 1, 2001, our common stock has traded from
a low of $1.13 to a high of $15.95 per share. The price of our common stock may
experience significant volatility after this offering in response to many
factors, some of which are beyond our control and may not even be directly
related to us, including:

- Changes in financial estimates or recommendations by securities analysts
regarding us or our common stock;

- Our performance and the performance of our competitors and other
companies in the restaurant industry;

- Quarterly fluctuations in our operating results or the operating results
of other companies in the restaurant industry;

- Additions or departures of key personnel;

- The trading volume of our common stock;

- General economic conditions and their effect on the casual dining
industry in general; and

- Competition, natural disasters, acts of war or terrorism or other
developments affecting us or our competitors.

In addition, in recent years the stock market has experienced extreme price
and volume fluctuations, which have often been unrelated or disproportionate to
the operating performance of particular companies. This volatility has
significantly affected, and may continue to affect, the price of our common
stock and may adversely affect your ability to sell your shares and our ability
to raise additional capital. See "Price Range of Common Stock."

OUR OPERATING RESULTS COULD BE MATERIALLY ADVERSELY AFFECTED BY THE NEGATIVE
PERFORMANCE OF A SMALL NUMBER OF RESTAURANTS BECAUSE OF OUR SMALL RESTAURANT
BASE.

As of June 11, 2002, we operated only 48 restaurants, nine of which opened
in the last 12 months. Due to the small number of restaurants, poor operating
results at any one or more new or existing restaurants could materially
adversely affect our profitability. Factors that could adversely affect the
operating results of any new or existing restaurant include local competition,
consumer preference, development of the area in which the restaurant is located
and access to the restaurant, including construction of highways that provide,
or in some cases prevent, access to the restaurant. The operating results of
certain existing restaurants have been, and may continue to be, affected by any
one or more of these factors. The business, financial condition, operating
results and cash flows or the lack of success of one or more new or existing
restaurants may have a more significant effect on our overall results of
operations than would be the case in a larger company with a significantly
larger restaurant base.

WE MAY BE UNABLE TO FUND OUR SIGNIFICANT FUTURE CAPITAL NEEDS AND WE MAY REQUIRE
ADDITIONAL FUNDING SOONER THAN ANTICIPATED.

We plan to expend $14.0 million to $18.0 million over the next 12 months in
connection with new restaurant openings and expect that similar expenditures for
planned expansion in fiscal year 2003 will equal or exceed these amounts. The
capital resources required to develop each new restaurant are significant. Our
restaurants opened during the last 12 months have required an average initial
cash investment of $1.3 million per restaurant including improvements and
furniture, fixtures and equipment, but excluding preopening expenses. We believe
that the net proceeds from this offering, funds anticipated to be available from
our existing line of credit and anticipated cash flow from our operations will
be sufficient to satisfy our working capital and capital expenditure
requirements for at least the next 12 months. There can be no assurance,
however, that changes in our operating plans, the acceleration or modification
of our expansion plans, lower than anticipated revenues, increased expenses,
potential acquisitions or other events will not cause us to seek additional
financing, prevent us from achieving the goals of our expansion strategy or
prevent any newly opened restaurants from operating profitably. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

BECAUSE OUR BUSINESS IS FOCUSED ON A SINGLE CONCEPT AND LACKS DIVERSIFICATION,
OUR CONTINUED SUCCESS COULD SUFFER IF CONSUMER PREFERENCES CHANGE.

Our restaurant concept features a combination of casual dining and
entertainment, and our continued success depends, to a large degree, upon the
popularity of casual dining and the types of entertainment offered in our
restaurants. Changes in consumer tastes and preferences away from our concept,
dining style or entertainment options may have a disproportionate and materially
adverse impact on our business, financial condition, operating results, cash
flows and prospects.

CHANGES IN DISCRETIONARY SPENDING COULD NEGATIVELY IMPACT OUR OPERATING RESULTS.

The success of our business and its operating results are dependent on
discretionary spending by consumers, particularly by consumers living in the
communities in which our restaurants are located. A decline in discretionary
spending could adversely affect our business, financial condition, operating
results and cash flows. Our business could also be adversely affected by general
economic conditions, terrorist attacks and the resulting cancellation or delay
of national sporting events, demographic trends, consumer confidence in the
economy and changes in disposable consumer income.

BECAUSE WE ARE SIGNIFICANTLY SMALLER AND LESS ESTABLISHED THAN THE MAJORITY OF
OUR NATIONAL COMPETITORS, WE MAY LACK THE FINANCIAL RESOURCES NEEDED TO COMPETE
EFFECTIVELY AND SUSTAIN PROFITABILITY.

Due to the nature of our business, we compete with competitors in both the
restaurant and entertainment industries. A great number of restaurants and
entertainment businesses compete directly and indirectly with us. Many of these
entities have a greater number of locations, are more established, and have
significantly greater financial (based on total assets and annual revenues),
marketing and other resources than us. Although there are only a few other
competing companies presently combining restaurant and entertainment operations
in a manner similar to us, we may encounter increased competition in the future.
This increased competition may have an adverse effect on our business, financial
condition, operating results and cash flows. See "Business -- Competition."

WE DEPEND ON THE EXPERTISE OF KEY PERSONNEL. IF ANY OF THESE INDIVIDUALS LEAVE
OR CHANGE THEIR ROLE WITH US, OUR OPERATIONS MAY SUFFER.

Our success and the results of operations are dependent to a large degree
on the efforts and abilities of our existing management, including Steven M.
Johnson, Chief Executive Officer; Gary M. Judd, President; Kenneth C. Syvarth,
Chief Operating Officer; and James K. Zielke, Chief Financial Officer, Secretary
and Treasurer. Messrs. Johnson, Judd, Syvarth and Zielke are employed by us
pursuant to

employment agreements, each of which will expire as of June 30, 2004, and are
also subject to non-competition, confidentiality and non-solicitation agreements
with us. If any of Messrs. Johnson, Judd, Syvarth or Zielke were to leave us,
our business, financial condition, results of operations, cash flows and growth
could suffer. Our growth will also continue to depend, to a large degree, upon
our ability to attract and retain additional skilled management personnel. See
"Management."

QUARTERLY FLUCTUATIONS AND SEASONALITY IN OUR OPERATING RESULTS COULD CAUSE OUR
STOCK PRICE TO FALL.

Our operating results may fluctuate significantly from period to period and
the results for one period may not be indicative of results for other periods.
Our operating results may also fluctuate significantly because of several
factors, including the timing of new restaurant openings and related expenses,
seasonality, profitability of new restaurants, increases or decreases in
comparable restaurant sales, general economic conditions, consumer confidence in
the economy, changes in consumer preferences, competitive factors and weather
conditions.

The timing of new restaurant openings may result in significant
fluctuations in quarterly results as a result of the revenues and expenses
associated with each new restaurant location. We typically incur most preopening
costs for a new restaurant within the two months immediately preceding, and the
month of, the restaurant's opening. In addition, the labor and operating costs
for a newly opened restaurant during the first three to six months of operation
are materially greater than what can be expected after that time, both in
aggregate dollars and as a percentage of restaurant sales. Our growth, operating
results and profitability will depend to a large degree on our ability to
increase the number of our restaurants.

We also expect seasonality to continue to be a factor in our results of
operations. Historically, our revenues have been moderately higher in the first
and fourth quarters due to weather conditions, major sporting events and the
year-end holidays. Our revenues in most of our restaurants have been lower
during the summer months of each year, and we expect lower second and third
quarter revenues to continue in the future. In addition, for accounting
purposes, the first, second and third quarters of each fiscal year consist of 12
weeks and the fourth quarter consists of 16 weeks. As a result, some of the
variations in our operating results may be attributable to the different lengths
of the fiscal quarters. These quarterly fluctuations and seasonality may cause
our operating results to fall below the expectations of securities analysts and
investors, which could cause our stock price to fall. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Quarterly Fluctuations, Seasonality and Inflation."

OUR OPERATIONS DEPEND ON GOVERNMENTAL LICENSES AND REGULATION.

We are subject to numerous federal, state and local laws affecting our
business. Each restaurant location is subject to licensing and regulation by a
number of governmental authorities, which may include alcoholic beverage
control, amusement and state and municipality health and safety and fire
agencies. Our business depends, in particular, on obtaining and maintaining
required food service and liquor licenses for each of its restaurants. If we
fail to obtain and maintain all necessary licenses or if government regulation
of our business changes, we may be forced to delay or cancel new restaurant
openings and close or reduce operations at existing locations, which could
materially adversely affect our operating results and profitability.

Our operations are particularly dependent on holding the proper
governmental licenses concerning the sale of alcohol. In fiscal year 2001, 59.5%
of our sales were derived from alcoholic beverages. Each restaurant is required
to obtain, directly or indirectly, a license to sell alcoholic beverages on the
premises from a state authority and, in certain locations, county and municipal
authorities. Typically, licenses must be renewed annually and may be revoked or
suspended for cause at any time. Alcoholic beverage control regulations govern
numerous aspects of the daily operations of each restaurant location, including
the minimum age of patrons and employees, hours of operation, advertising
practices, wholesale purchasing, inventory control and handling, and storage and
dispensing of alcoholic beverages. Although we have not encountered any material
problems relating to alcoholic beverage licenses or alcoholic beverage control

regulations to date, the failure to receive or retain a liquor license in a
particular location could adversely affect our ability to obtain such a license
elsewhere and could materially adversely affect our operating results. See
"Business -- Government Regulation."

WE MAY FACE LIABILITY UNDER "DRAM-SHOP" STATUTES.

The sale of alcoholic beverages subjects us to "dram-shop" statutes in 16
of the 19 states in which our restaurants are located. These statutes generally
provide a person injured by an intoxicated person with the right to recover
damages from an establishment that wrongfully served alcoholic beverages to the
intoxicated individual. We carry liquor liability coverage as part of our
existing comprehensive general liability insurance, which coverage we believe is
consistent with that carried by other entities serving alcoholic beverages.
Significant exposure to liquor liability claims may result in our experiencing
higher costs than expected as a result of higher insurance premiums and
deductible claims. If we sustain significant adverse liquor liability claims in
the future, liquor liability insurance may become difficult or impossible to
obtain. If we fail to maintain our insurance coverage or if a judgment against
us is rendered under a dram-shop statute in excess of our liability coverage, we
could suffer a material adverse effect on our business, financial condition,
operating results and cash flows. See "Business -- Government Regulation."

FEDERAL AND STATE MINIMUM WAGE LAWS APPLY TO A NUMBER OF OUR EMPLOYEES AND MAY
INCREASE OUR COSTS.

Various federal, state and local labor laws and license and permit
requirements govern and affect our relationship with our employees, including
such matters as minimum wage requirements, overtime and other working
conditions. A significant number of hourly personnel at our restaurants are paid
at rates related to the federal minimum wage and, accordingly, legislated
increases in the minimum wage will increase labor costs at our restaurants.
Significant additional government-imposed increases in minimum wages, paid
leaves of absence, mandated health benefits or increased tax reporting and tax
payment requirements for employees who receive gratuities could be detrimental
to the economic viability of our operations. In addition, we are subject to
extensive rules and regulations with respect to discriminatory practices and
accommodation of persons with disabilities. See "Business -- Government
Regulation."

ADVERSE PUBLICITY CONCERNING CUSTOMER COMPLAINTS OR LITIGATION MAY HARM OUR
BUSINESS.

We may be from time to time the subject of complaints or litigation from
customers alleging beverage and food-related illness, injuries suffered on our
premises, or other quality, health or operational concerns. Adverse publicity
resulting from these allegations may materially affect us, regardless of whether
such allegations are true or whether we are ultimately held liable. These
allegations may also divert financial and management resources that would
otherwise be used to benefit the future performance of our operations.

INCREASED FOOD AND ALCOHOL COSTS COULD MATERIALLY ADVERSELY AFFECT OUR OPERATING
RESULTS.

Among other factors, the success of our business and our operating results
are dependent in part upon our ability to anticipate and react to changes in
food and alcohol costs and the mix between our food and liquor revenues. Various
factors beyond our control, such as adverse weather conditions; increases in
federal, state or local taxes, or other governmental regulation; or war, may
affect food and liquor costs. We may not be able to anticipate and react to
changing food and liquor costs by adjusting purchasing practices and
implementing menu changes and price adjustments, and a failure to do so could
materially adversely affect our business, financial condition, operating results
and cash flows. There can be no assurance that changes in our sales mix will not
adversely affect our profitability.

IF WE ARE UNABLE TO SECURE THE EXCLUSIVE USE OF OUR TRADEMARKS, OUR BUSINESS MAY
BE ADVERSELY AFFECTED.

We are aware of names and marks similar to our service marks that are used
by other persons in certain geographic areas. We believe such uses will not have
a material adverse effect on us, as either the

Bailey's or Fox and Hound tradenames may be used if the other name is
unavailable, but there can be no assurance that such marks will be available for
use by us in all locations or that we will be able to secure the exclusive use
of such marks. If we are unable to secure and maintain the exclusive use of our
trademarks and tradenames, our business may be adversely affected. See
"Business -- Trademarks."

THERE MAY BE SALES OF SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK IN THE NEAR
FUTURE, WHICH COULD CAUSE OUR STOCK PRICE TO FALL AND COULD IMPAIR OUR ABILITY
TO RAISE ADDITIONAL CAPITAL, EVEN IF OUR BUSINESS IS DOING WELL.

After this offering, we will have 10,319,493 shares of common stock
outstanding. The 2,000,000 shares (or 19.4% of the total outstanding common
stock) sold pursuant to this offering and all of our currently outstanding
shares of common stock, other than those shares held by our "affiliates" as such
term is defined in the Securities Act of 1933, will be freely tradeable without
restriction or registration under the Securities Act. Sales of a substantial
number of shares of our common stock, or the perception that these sales may
occur, could cause our stock price to fall and could impair our ability to raise
additional capital, even if our business is doing well.

As of June 11, 2002, we estimate that approximately 4,941,702 shares of our
common stock are held by our affiliates (which generally include our directors
and executive officers and persons owning 10% or more of our common stock). In
connection with this offering, we and our directors and executive officers and
the selling stockholders have entered into lock-up agreements (covering
2,255,035 outstanding shares of our common stock) and have agreed, subject to
certain exceptions, not to dispose of any shares of common stock without the
consent of Thomas Weisel Partners LLC, on behalf of the underwriters, until the
90th day after the date of this prospectus. However, Thomas Weisel Partners LLC
can waive this restriction and allow these stockholders to sell their shares at
any time. Upon expiration of this 90-day lock-up period, substantially all of
the shares of our common stock held by persons who entered into these lock-up
agreements will be eligible for sale in the public market, subject to compliance
with the volume limitations and other restrictions of Rule 144 under the
Securities Act.

OUR DIRECTORS AND EXECUTIVE OFFICERS AND AN EXISTING STOCKHOLDER HAVE
CONSIDERABLE CONTROL OVER OUR COMPANY, WHICH MAY LEAD TO CONFLICTS WITH OTHER
STOCKHOLDERS OVER CORPORATE GOVERNANCE.

After this offering, our directors and executive officers and Mr. Jamie B.
Coulter will beneficially own collectively approximately 44.6% of our
outstanding common stock (or 43.3% if the underwriter's over-allotment option is
exercised in full). As a result, these persons, acting alone or together, will
be able to significantly influence all matters requiring stockholder approval,
including the election of directors and the approval of mergers and other
business combination transactions, and they may exercise this ability in a
manner that advances their best interests and not necessarily those of other
stockholders. See "Management" and "Principal and Selling Stockholders."

WE HAVE IMPLEMENTED ANTI-TAKEOVER PROVISIONS WHICH COULD DISCOURAGE OR PREVENT A
TAKEOVER, EVEN IF AN ACQUISITION WOULD BE BENEFICIAL TO OUR STOCKHOLDERS.

Provisions of our certificate of incorporation, as amended, and bylaws, as
well as provisions of Delaware law, could make it more difficult for a third
party to acquire us, even if doing so would be beneficial to our stockholders.
These provisions include provisions:

- Establishing a classified board of directors requiring that members of
our board of directors be elected in different years;

- Authorizing the issuance of "blank check" preferred stock that could be
issued by our board of directors to increase the number of outstanding
shares, facilitate implementation of a stockholder rights plan (or
"poison pill") or change the balance of voting control and thwart a
takeover attempt;

- Prohibiting cumulative voting in the election of directors, which would
otherwise allow less than a majority of our stockholders to elect
director candidates;

- Limiting the ability of our stockholders to call special meetings of our
stockholders; and

- Establishing advance notice requirements for nominations for election to
our board of directors and for proposing matters that can be acted upon
by our stockholders at stockholder meetings.

In addition, Section 203 of the General Corporation Law of the State of
Delaware and the terms of our employment agreements and Option Plans may
discourage, delay or prevent a change in control. See "Description of Capital
Stock -- Preferred Stock," "Description of Capital Stock -- Certain
Anti-Takeover Provisions," "Management" and "Principal and Selling
Stockholders."

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

Some of the matters discussed under the captions "Prospectus Summary,"
"Risk Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business" and elsewhere in this prospectus include
forward-looking statements within the meaning of Section 27A of the Securities
Act. We have based these forward-looking statements on our current expectations
and projections about future events, including, among other things:

- Implementing our business strategy;

- Attracting and retaining customers;

- Establishing and expanding our market presence in new geographic regions;
and

- Competition in our market.

In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "could," "predicts," "potential," "continue,"
"expects," "anticipates," "future," "intends," "plans," "believes," "estimates"
and similar expressions (or the negative of such expressions). These statements
are based on our current beliefs, expectations and assumptions and are subject
to a number of risks and uncertainties. Actual results, levels of activity,
performance, achievements and events may vary significantly from those implied
by the forward-looking statements. A description of risks that could cause our
results to vary appears under the caption "Risk Factors" and elsewhere in this
prospectus.

USE OF PROCEEDS

We estimate that we will receive net proceeds from the sale of shares of
our common stock in this offering of approximately $ million, or
$ million if the underwriter exercises its over-allotment option in
full, based upon the public offering price of $ per share and after
deducting the underwriting discount and estimated offering expenses payable by
us. We will not receive any proceeds from the sale of common stock offered by
the selling stockholders. We expect to use the net proceeds from this offering:

- For the repayment of approximately $12.8 million outstanding under our
line of credit;

- For capital expenditures for the opening of an additional four to six new
restaurants in the remainder of fiscal year 2002 and the opening of an
additional 10 to 12 new restaurants in fiscal year 2003; and

- For working capital and other general corporate purposes.

Following the proposed repayment of our line of credit, we will have the
ability to reborrow such monies in the future, subject to the provisions of our
agreement with our lender. The interest rate on the line of credit is a floating
rate equal to the prime rate as reported in The Wall Street Journal minus 0.5%
per annum. This line of credit matures on October 1, 2007. We may use a portion
of the net proceeds to acquire complementary businesses; however, we currently
have no commitments or agreements relating to any acquisition. We will have
significant discretion in the use of the net proceeds of this offering.
Investors will be relying on the judgment of our management regarding the
application of the proceeds of this offering. Pending use of the net proceeds as
discussed above, we intend to invest these funds in short-term,
interest-bearing, investment-grade obligations.

PRICE RANGE OF COMMON STOCK

Our common stock has traded on the Nasdaq National Market under the symbol
"TENT" since our initial public offering on July 17, 1997. The following table
sets forth, for the periods indicated, the high and low closing prices per share
for our common stock as reported by the Nasdaq National Market.

FISCAL YEAR ENDED DECEMBER 26, 2000 HIGH LOW
----------------------------------- ------ ------

First Fiscal Quarter........................................ $ 1.75 $ 1.38
Second Fiscal Quarter....................................... 2.50 1.50
Third Fiscal Quarter........................................ 2.31 2.19
Fourth Fiscal Quarter....................................... 2.38 1.41

FISCAL YEAR ENDED DECEMBER 25, 2001
-----------------------------------

First Fiscal Quarter........................................ $ 3.31 $ 1.34
Second Fiscal Quarter....................................... 3.20 2.10
Third Fiscal Quarter........................................ 3.32 2.50
Fourth Fiscal Quarter....................................... 3.20 2.19

FISCAL YEAR ENDING DECEMBER 31, 2002
------------------------------------

First Fiscal Quarter........................................ $ 8.50 $ 3.31
Second Fiscal Quarter....................................... 15.94 7.62
Third Fiscal Quarter (through June 13, 2002)................ 14.00 13.60

On June 13, 2002, the last reported sale price of our common stock as
reported on the Nasdaq National Market was $14.00 per share. As of June 11,
2002, there were approximately 60 holders of record of our common stock. Because
many of our shares of common stock are held by brokers and other institutions on
behalf of stockholders, we are unable to estimate the total number of
stockholders represented by these record holders.

DIVIDEND POLICY AND STOCK REPURCHASES

We have not declared or paid any dividends on our capital stock. We expect
to retain any future earnings to fund the development and expansion of our
business. Therefore, we do not anticipate paying cash dividends on our common
stock in the foreseeable future. Our current line of credit restricts our
ability to pay dividends. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources" for
additional information concerning our line of credit.

STOCK REPURCHASES

In October 1999, we announced the authorization of an open market stock
repurchase program. This program resulted in our repurchasing approximately 1.7
million shares of our common stock for approximately $3.5 million through
February 21, 2001. We have not repurchased any shares under the program since
February 21, 2001, and formally terminated this program as of June 12, 2002.

CAPITALIZATION

The following table summarizes our balance sheet data as of March 19, 2002.
This balance sheet data is presented on an actual basis and as adjusted to give
effect to the sale of 1,450,000 shares of common stock by us in this offering at
the public offering price of $ per share, after deducting the underwriting
discount and estimated offering expenses payable by us.

MARCH 19, 2002
-----------------------
ACTUAL AS ADJUSTED
-------- ------------
(DOLLARS IN THOUSANDS)

Cash and cash equivalents................................... $ 910 $
======= ====
Notes payable............................................... $12,825 $
Stockholders' equity:
Preferred stock, $0.10 par value; 2,000,000 shares
authorized; none issued................................ --
Common stock, $0.01 par value; 20,000,000 shares
authorized; issued and outstanding: actual, 8,665,611;
as adjusted, 10,115,611................................ 87
Additional paid in capital................................ 17,135
Retained earnings......................................... 8,824
------- ----
Total stockholders' equity........................... 26,046
------- ----
Total capitalization.............................. $38,871 $
======= ====

The shares of common stock outstanding exclude shares of common stock
issuable and reserved for future issuance under our Option Plans. The previous
information should be read together with our Consolidated Financial Statements
and the related Notes thereto and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" appearing elsewhere in this
prospectus.

SELECTED CONSOLIDATED FINANCIAL DATA

The table below shows selected consolidated income statement data for (i)
us for (a) the period from February 20, 1997 through December 30, 1997, (b) our
last four fiscal years and (c) the first fiscal quarter of each of fiscal 2001
and 2002; (ii) F&H Restaurant Corp. ("FHRC") for the period from January 1, 1997
through February 20, 1997; and (iii) balance sheet data for us as of the end of
our last five fiscal years and the first fiscal quarter of fiscal year 2002. The
income statement data, except for the data for the first fiscal quarter of each
of fiscal years 2001 and 2002, and the balance sheet data, except for the data
as of the end of our first fiscal quarter of fiscal year 2002, is derived from
our and FHRC's respective audited financial statements. The data for the first
fiscal quarter of each of fiscal years 2001 and 2002 is derived from unaudited
Consolidated Financial Statements appearing elsewhere in this prospectus. The
unaudited Consolidated Financial Statements have been prepared on the same basis
as our audited Consolidated Financial Statements and, in the opinion of
management, include all adjustments, consisting of normal recurring accruals and
adjustments necessary for a fair presentation of the information set forth
therein. We operate on a 52 or 53 week fiscal year ending the last Tuesday in
December. Fiscal years 1997, 1998, 1999, 2000 and 2001 each consisted of 52
weeks. Our fiscal quarters consist of three accounting periods of 12 weeks each
and a final period of 16 or 17 weeks. Operating results for the twelve weeks
ended March 19, 2002 are not necessarily indicative of operating results to be
expected for the full year. The following selected consolidated financial data
should be read in conjunction with our Consolidated Financial Statements and
related Notes and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," included elsewhere in this prospectus.

FHRC(1) THE COMPANY(1)
-------- ------------------------------------------------------------------------------
46 WEEKS
51 DAYS AND 5 DAYS 52 WEEKS ENDED 12 WEEKS ENDED
ENDED ENDED ----------------------------------------- ---------------------
FEB. 20, DEC. 30, DEC. 29, DEC. 28, DEC. 26, DEC. 25, MARCH 20, MARCH 19,
1997 1997 1998 1999 2000 2001 2001 2002
-------- ---------- -------- -------- -------- -------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

INCOME STATEMENT DATA:
Net sales............................ $858 $16,163 $34,114 $55,930 $55,990 $70,952 $16,437 $22,104
Costs and expenses:
Cost of sales................... 245 4,287 9,429 15,349 14,790 19,213 4,451 5,804
Operating expenses.............. 393 7,142 15,586 28,632 28,395 35,741 8,025 10,555
Depreciation and amortization... 35 939 2,875 3,697 3,592 3,706 816 1,009
Preopening costs................ -- -- -- 488 501 1,218 72 491
Provision for asset impairment
and restaurant closing........ -- -- -- 1,087 2,362 575 -- --
---- ------- ------- ------- ------- ------- ------- -------
Restaurant costs and expenses........ 673 12,368 27,890 49,253 49,640 60,453 13,364 17,859
---- ------- ------- ------- ------- ------- ------- -------
Restaurant operating income.......... 185 3,795 6,224 6,677 6,350 10,499 3,073 4,245
General and administrative
expenses........................... 36 1,794 2,609 3,900 3,768 3,991 867 1,155
Goodwill amortization................ 24 210 244 244 244 244 56 0
---- ------- ------- ------- ------- ------- ------- -------
Income from operations............... 125 1,791 3,371 2,533 2,338 6,264 2,150 3,090
Other income (expense)............... (63) (266) (70) (1,298) (1,148) (997) (278) (125)
---- ------- ------- ------- ------- ------- ------- -------
Income before provision for income
taxes.............................. 62 1,525 3,301 1,235 1,190 5,267 1,872 2,965
Provision for income taxes........... 11 545 1,221 418 342 1,938 681 1,068
Minority interest.................... 34 -- -- -- -- -- -- --
---- ------- ------- ------- ------- ------- ------- -------
Income before cumulative effect of
change in accounting principle..... 17 980 2,080 817 848 3,329 1,191 1,897
Cumulative effect of a change in
accounting principle(2)............ -- -- -- (1,128) -- -- -- --
---- ------- ------- ------- ------- ------- ------- -------
Net income (loss).................... $ 17 $ 980 $ 2,080 $ (311) $ 848 $ 3,329 $ 1,191 $ 1,897
==== ======= ======= ======= ======= ======= ======= =======

Earnings (loss) per share:
Basic
Net income before cumulative effect
of accounting change............ $ 0.11 $ 0.20 $ 0.08 $ 0.09 $ 0.38 $ 0.14 $ 0.22
Cumulative effect of accounting
change, net of tax(2)........... -- -- (0.11) -- -- -- --
------- ------- ------- ------- ------- ------- -------
Net income (loss).................. $ 0.11 $ 0.20 $ (0.03) $ 0.09 $ 0.38 $ 0.14 $ 0.22
======= ======= ======= ======= ======= ======= =======
Weighted average number of common
shares outstanding.............. 9,182 10,415 10,348 9,323 8,670 8,683 8,666
Diluted
Net income before cumulative effect
of accounting change............ $ 0.11 $ 0.20 $ 0.08 $ 0.09 $ 0.38 $ 0.14 $ 0.21
Cumulative effect of accounting
change, net of tax(2)........... -- -- (0.11) -- -- -- --
------- ------- ------- ------- ------- ------- -------
Net income (loss).................. $ 0.11 $ 0.20 $ (0.03) $ 0.09 $ 0.38 $ 0.14 $ 0.21
======= ======= ======= ======= ======= ======= =======
Weighted average number of common
shares outstanding.............. 9,182 10,436 10,352 9,329 8,694 8,699 9,025

THE COMPANY
------------------------------------------------------------------------------------
DECEMBER 30, DECEMBER 29, DECEMBER 28, DECEMBER 26, DECEMBER 25, MARCH 19,
1997 1998 1999 2000 2001 2002
------------ ------------ ------------ ------------ ------------ ---------
(DOLLARS IN THOUSANDS)

BALANCE SHEET DATA:
Cash and cash equivalents............ $ 1,221 $ 946 $ 2,550 $ 2,245 $ 1,346 $ 910
Working capital (deficit)............ 4,579 (947) (489) (3,435) (5,160) (4,595)
Total assets......................... 23,224 41,284 41,352 40,128 43,150 47,313
Notes payable, including current
portion............................ -- 11,815 14,395 11,980 10,350 12,825
Stockholders' equity................. 21,665 23,736 22,232 20,987 24,149 26,046

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

(1) We were formed on February 7, 1997. On February 20, 1997, we completed an
exchange with the stockholders of four corporations and certain limited
partners of four limited partnerships, pursuant to which we acquired 11
restaurants in exchange for the issuance of 8 million shares of our common
stock. For accounting purposes, FHRC, one of the participants in the
exchange, is treated as our predecessor.

(2) Cumulative effect of a change in accounting principle relates to adoption of
a new accounting principle for preopening costs for new restaurants (see
Note 1 of Notes to Consolidated Financial Statements).

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

You should read the following discussion and analysis in conjunction with
our Consolidated Financial Statements and related Notes thereto included
elsewhere in this prospectus. Except for historical information, the discussion
in this prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act that involve risks and
uncertainties. The principal factors that could cause or contribute to
differences in our actual results are discussed under the caption "Risk
Factors."

COMPANY OVERVIEW

We began operations February 20, 1997 with three Fox and Hound and eight
Bailey's restaurants. We have opened and closed restaurants since that date as
follows:

FISCAL YEAR
---------------------------------------------
1997(1) 1998 1999 2000 2001 2002(2)
------- ---- ---- ---- ---- -------

Open at beginning of period................ 11 16 32 35 38 43
Opened during period....................... 5 16 5 3 5 6
Closed during period....................... 0 0 2 0 0 1
-- -- -- -- -- --
Open at end of period...................... 16 32 35 38 43 48
== == == == == ==

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

(1) From February 20, 1997 through December 30, 1997.
(2) From December 26, 2001 through June 11, 2002.

The components of our net sales are food and non-alcoholic beverages,
alcoholic beverages, and entertainment and other (principally billiard table
rental fees). For fiscal year 2001 and the twelve weeks ended March 20, 2001 and
March 19, 2002, the components of net sales were as follows: (i) food and
non-alcoholic beverages: 31.4%, 31.5% and 31.9%, respectively; (ii) alcoholic
beverages: 59.5%, 59.6% and 59.1%, respectively; and (iii) entertainment and
other: 9.1%, 9.3% and 9.0%, respectively.

The components of our cost of sales primarily include direct costs of food,
non-alcoholic beverages and alcoholic beverages. These costs are generally
variable and will fluctuate with changes in sales volume and sales mix.

Components of restaurant operating expenses include operating payroll and
fringe benefits, and occupancy, maintenance and utilities. All but one of our
locations are leased and provide for a minimum annual rent, with some leases
calling for additional rent based on sales volume at the particular location in
excess of specified minimum sales levels.

Depreciation and amortization costs primarily include depreciation and
amortization of capital expenditures for restaurants.

Prior to December 30, 1998, preopening costs, which include labor costs,
costs of hiring and training personnel and certain other costs relating to
opening new restaurants, were capitalized and amortized over a 12 month period,
beginning in the period that the restaurant opened. Effective December 30, 1998,
preopening costs are expensed as incurred.

The provision for asset impairment reflects the charges made for the write
down of certain underperforming restaurant assets. We periodically review our
long lived assets that are held and used in our restaurant operations for
indications of impairment (see Note 1 of Notes to Consolidated Financial
Statements). The provision for restaurant closing primarily includes the
remaining lease obligation for closed restaurants.

General and administrative expenses include all corporate and
administrative functions that support existing operations and provide an
infrastructure to support future growth. Management, supervisory and staff
salaries, employee benefits, travel, information systems, training, rent and
office supplies, as well as accounting services fees, are major items of costs
in this category.

In calculating comparable restaurant sales, we include a restaurant in the
comparable restaurant base after it has been in operation for 18 full months. As
of June 11, 2002, there were 35 restaurants in the comparable restaurant base.
Annualized average weekly sales are computed by dividing net sales during the
period by the number of store operating weeks and multiplying the result by
fifty-two.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We consider determination of impairment of long-lived assets as a critical
accounting policy because the determination as to whether the long-lived assets
of a restaurant are impaired and, if impaired, the fair value of such assets,
requires the use of judgment, particularly as it relates to projecting whether
the sum of expected undiscounted future cash flows for the restaurant over an
extended period of time will equal or exceed the carrying value of such assets.
We use the best information available to make the determination; however, actual
future cash flows for a restaurant may vary significantly from the cash flows
projected in conjunction with the impairment assessment. The potential impact on
our financial statements of incorrect judgments regarding impairment of
long-lived assets is that a provision for impairment could be needlessly
recorded if projected future cash flows for a restaurant are significantly
under-estimated or a provision for impairment could be deferred until later
determined necessary in a future period if initial projected cash flows are
over-estimated. See Note 1 of Notes to Consolidated Financial Statements for a
description of our accounting policy for impairment of long-lived assets.

RESULTS OF OPERATIONS

The following discussion of results of operations should be read in
conjunction with the information under the caption "Selected Consolidated
Financial Data," our Consolidated Financial Statements and accompanying Notes
and the other financial data included elsewhere in this prospectus. We operate
on a 52 or 53 week fiscal year ending the last Tuesday in December. Fiscal years
1999, 2000 and 2001 each consisted of 52 weeks. Our fiscal quarters consist of
three accounting periods of 12 weeks each and a final period of 16 or 17 weeks.

The following table sets forth certain financial data as a percentage of
net sales for the periods indicated.

FISCAL YEAR ENDED 12 WEEKS ENDED
--------------------------------------------- ---------------------
DEC. 28, DEC. 26, DEC. 25, MARCH 20, MARCH 19,
1999 2000 2001 2001 2002
------------- ------------- ------------- --------- ---------

Net sales..................... 100.0% 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Cost of sales............... 27.4 26.4 27.1 27.1 26.3
Operating expenses.......... 51.2 50.7 50.4 48.8 47.8
Depreciation and
amortization............. 6.6 6.4 5.2 5.0 4.6
Preopening costs............ 1.0 1.0 1.7 0.4 2.1
Provision for asset
impairment and restaurant
closing.................. 1.9 4.2 0.8 -- --
----- ----- ----- ----- -----
Restaurant costs and
expenses.................... 88.1 88.7 85.2 81.3 80.8
----- ----- ----- ----- -----
Restaurant operating income... 11.9 11.3 14.8 18.7 19.2
General and administrative
expenses.................... 7.0 6.7 5.6 5.3 5.2
Goodwill amortization......... 0.4 0.4 0.4 0.3 0.0
----- ----- ----- ----- -----
Income from operations........ 4.5 4.2 8.8 13.1 14.0

Net income (loss)............. (0.5)% 1.5% 4.7% 7.2% 8.6%
===== ===== ===== ===== =====

TWELVE WEEKS ENDED MARCH 19, 2002 COMPARED TO TWELVE WEEKS ENDED MARCH 20, 2001

Net sales increased $5.7 million (34.5%) for the twelve weeks ended March
19, 2002 to $22.1 million from $16.4 million for the twelve weeks ended March
20, 2001. This increase was due to an 18.3% increase in restaurant operating
weeks (539 versus 456) as a result of nine restaurants opened since March 20,
2001 and a 13.7% increase in annualized average weekly sales. Comparable
restaurant sales increased 9.3% for the quarter ended March 19, 2002.

Costs of sales increased $1.3 million (30.4%) for the twelve weeks ended
March 19, 2002 to $5.8 million from $4.5 million for the twelve weeks ended
March 20, 2001, and decreased as a percentage of net sales to 26.3% from 27.1%.
This decrease as a percentage of net sales was principally attributable to lower
food costs associated with our new barbecue menu items and price increases on
selected menu items implemented in the fourth quarter of fiscal year 2001.

Restaurant operating expenses increased $2.6 million (31.5%) for the twelve
weeks ended March 19, 2002 to $10.6 million from $8.0 million for the twelve
weeks ended March 20, 2001, and decreased as a percentage of net sales to 47.8%
from 48.8%. This decrease as a percentage of net sales was attributable to the
leveraging of fixed costs against higher average unit volumes.

Depreciation and amortization increased $0.2 million (23.7%) for the twelve
weeks ended March 19, 2002 to $1.0 million from $0.8 million for the twelve
weeks ended March 20, 2001. This increase was due to additional depreciation on
nine restaurants opened since March 20, 2001.

Preopening costs increased $0.4 million for the twelve weeks ended March
19, 2002 to $0.5 million from $71,000 for the twelve weeks ended March 20, 2001.
This increase was attributable to the costs incurred for four restaurants that
opened during the twelve weeks ended March 19, 2002 and partial preopening
expenses for two restaurants which have yet to open. No new restaurants were
opened in the twelve weeks ended March 20, 2001.

General and administrative expenses increased $0.3 million (33.3%) for the
twelve weeks ended March 19, 2002 to $1.2 million from $0.9 million for the
twelve weeks ended March 20, 2001, due to an increase in corporate
infrastructure to support our expansion. General and administrative expenses

decreased as a percentage of net sales to 5.2% from 5.3%, due to our ability to
leverage our infrastructure expense against a higher sales volume.

Other expense decreased $0.2 million (58.0%) for the twelve weeks ended
March 19, 2002 to $0.1 million from $0.3 million for the twelve weeks ended
March 20, 2001 primarily related to decreased interest expense. This decrease
was due to both a lower interest rate and lower average balance applicable to
our line of credit for the twelve weeks ended March 19, 2002 compared with the
twelve weeks ended March 20, 2001.

Our effective income tax rate was 36.0% for the twelve weeks ended March
19, 2002 and 36.4% for the twelve weeks ended March 20, 2001.

FIFTY-TWO WEEKS ENDED DECEMBER 25, 2001 COMPARED TO FIFTY-TWO WEEKS ENDED
DECEMBER 26, 2000

Net sales increased $15.0 million (26.7%) for the fifty-two weeks ended
December 25, 2001 to $71.0 million from $56.0 million for the fifty-two weeks
ended December 26, 2000, which was attributable to a 13.1% increase in
restaurant operating weeks (2,071 versus 1,831) as a result of new restaurants
opened and a 11.9% increase in annualized average weekly sales ($1.8 million
versus $1.6 million). Comparable restaurant sales increased 7.4% for the
fifty-two weeks ended December 25, 2001.

Costs of sales increased $4.4 million (29.9%) for the fifty-two weeks ended
December 25, 2001 to $19.2 million from $14.8 million for the fifty-two weeks
ended December 26, 2000, and increased as a percentage of net sales to 27.1%
from 26.4%. This increase as a percentage of net sales was principally
attributable to higher food costs associated with a new menu implemented in the
first quarter of fiscal year 2001 and an increase in pork and poultry costs.

Restaurant operating expenses increased $7.3 million (25.9%) for the
fifty-two weeks ended December 25, 2001 to $35.7 million from $28.4 million for
the fifty-two weeks ended December 26, 2000, and decreased as a percentage of
net sales to 50.4% from 50.7%. This decrease as a percentage of net sales was
principally attributable to the effect of leveraging fixed expenses against
higher unit volumes.

Depreciation and amortization increased $0.1 million (3.2%) for the
fifty-two weeks ended December 25, 2001 to $3.7 million from $3.6 million. This
net increase was due principally to depreciation incurred during fiscal year
2001 on eight restaurants opened since September 5, 2000 offset by the
elimination of depreciation in fiscal year 2001 on (i) assets in two restaurants
for which an impairment charge was taken in the fourth quarter of fiscal year
2000 and (ii) certain assets, principally capitalized smallwares, with a
two-year life that were added in 1998.

Preopening costs increased $0.7 million (142.9%) for the fifty-two weeks
ended December 25, 2001 to $1.2 million from $0.5 million for the fifty-two
weeks ended December 26, 2000. Preopening costs for fiscal year 2001 were
related to the opening of five restaurants in fiscal year 2001 and partial
preopening costs related to restaurants that opened in fiscal year 2002.
Preopening costs for fiscal year 2000 were related to the opening of three
restaurants in fiscal year 2000 and costs related to restaurants that opened in
fiscal year 2001.

Provision for asset impairment and restaurant closing decreased $1.8
million (75.7%) for the fifty-two weeks ended December 25, 2001 to $0.6 million
from $2.4 million for the fifty-two weeks ended December 26, 2000.

General and administrative expenses increased $0.2 million (5.9%) for the
fifty-two weeks ended December 25, 2001 to $4.0 million from $3.8 million for
the fifty-two weeks ended December 26, 2000, due to an increase in corporate
infrastructure to support our expansion. General and administrative expenses
decreased as a percentage of net sales to 5.6% from 6.7%, due to our ability to
leverage our infrastructure against a higher sales volume.

Other expense decreased $0.2 million (13.1%) for the fifty-two weeks ended
December 25, 2001 to $0.9 million from $1.1 million for the fifty-two weeks
ended December 26, 2000 primarily related to decreased interest expense. This
decrease was due to a lower interest rate applicable to our line of credit
offset by a higher average balance on the line of credit.

Our effective income tax rate was 36.8% for the fifty-two weeks ended
December 25, 2001 as compared to 28.7% for the fifty-two weeks ended December
26, 2000. This increase was primarily due to the impact of the credit for social
security taxes paid on tips in excess of minimum wage relative to the amount of
income before taxes.

FIFTY-TWO WEEKS ENDED DECEMBER 26, 2000 COMPARED TO FIFTY-TWO WEEKS ENDED
DECEMBER 28, 1999

Net sales increased $0.1 million (0.1%) for the fifty-two weeks ended
December 26, 2000 to $56.0 million from $55.9 million for the fifty-two weeks
ended December 28, 1999 which was attributable to a 0.8% increase in annualized
average weekly sales offset by a 0.7% decrease in restaurant operating weeks
(1,831 versus 1,843). Comparable restaurant sales increased 3.8% for the
fifty-two weeks ended December 26, 2000.

Costs of sales, primarily food and beverages, decreased $0.5 million (3.6%)
for the fifty-two weeks ended December 26, 2000 to $14.8 million from $15.3
million for the fifty-two weeks ended December 28, 1999, and decreased as a
percentage of net sales to 26.4% from 27.4%. This decrease was attributable to
better food and beverage controls.

Restaurant operating expenses decreased $0.2 million (0.8%) for the
fifty-two weeks ended December 26, 2000 to $28.4 million from $28.6 million for
the fifty-two weeks ended December 28, 1999, and decreased as a percentage of
net sales to 50.7% from 51.2%. This decrease was primarily attributable to lower
hourly labor costs resulting from better labor controls, offset by higher other
operating expenses, including maintenance costs and live music costs.

Depreciation and amortization decreased $0.1 million (2.8%) for the
fifty-two weeks ended December 26, 2000 to $3.6 million from $3.7 million for
the fifty-two weeks ended December 28, 1999. This decrease was due to the
closing of two restaurants in 1999 offset by three new restaurants opened in the
fourth quarter of fiscal year 2000.

Preopening costs were $0.5 million for both the fifty-two weeks ended
December 26, 2000 and the fifty-two weeks ended December 28, 1999. Preopening
costs for fiscal year 2000 were related to the opening of three restaurants in
fiscal year 2000 and costs related to restaurants that opened in fiscal year
2001. Preopening costs for fiscal year 1999 were related to the opening of five
restaurants in fiscal year 1999.

Provision for asset impairment and restaurant closing increased $1.3
million (117.3%) for the fifty-two weeks ended December 26, 2000 to $2.4 million
from $1.1 million in the fifty-two weeks ended December 28, 1999. The provision
in fiscal year 1999 represents the estimated costs associated with closing the
restaurant in Davenport, Iowa. The provision included $0.4 million of future
lease costs, $0.6 million in abandoned leasehold improvements and $0.1 million
in abandoned furniture, fixtures and equipment.

General and administrative expenses decreased $0.1 million (3.4%) for the
fifty-two weeks ended December 26, 2000 to $3.8 million from $3.9 million for
the fifty-two weeks ended December 28, 1999, and decreased as a percentage of
net sales to 6.7% from 7.0%. The decrease reflected the realignment of certain
executive positions during fiscal year 2000.

Other expense decreased $0.2 million (11.6%) for the fifty-two weeks ended
December 26, 2000 to $1.1 million from $1.3 million primarily related to
decreased interest expense. This decrease reflected a decrease in the average
debt balance of our line of credit offset by an increase in the average interest
rate applicable to our line of credit.

Our effective income tax rate was 28.7% for the fifty-two weeks ended
December 26, 2000 as compared to 44.0% for the fifty-two weeks ended December
28, 1999. This decrease was primarily due to the impact of the credit for social
security taxes paid on tips in excess of minimum wage relative to the amount of
income before taxes.

QUARTERLY FINANCIAL AND RESTAURANT OPERATING DATA

The following is a summary of certain unaudited quarterly results of
operations data for each of the last two fiscal years and for the twelve weeks
ended March 19, 2002. For accounting purposes, the first, second and third
quarters of each fiscal year presented each consist of 12 weeks and the fourth
quarter consists of 16 weeks. As a result, some of the variations reflected in
the following table may be attributed to the different lengths of the fiscal
quarters. The fourth quarter of fiscal year 2002 will consist of 17 weeks,
because fiscal year 2002 is a 53-week year.

12 WEEKS 12 WEEKS 12 WEEKS 16 WEEKS 12 WEEKS
ENDED ENDED ENDED ENDED ENDED
MARCH 21, JUNE 13, SEPTEMBER 5, DECEMBER 26, MARCH 20,
2000 2000 2000 2000 2001
--------- -------- ------------ ------------ ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Net sales................... $13,650 $12,006 $11,283 $19,051 $16,437
Restaurant operating
income.................... 2,831 1,677 1,213 629 3,073
Operating income............ 1,817 717 306 (503) 2,150
Net income(1)............... 971 295 20 (438) 1,191
Diluted earnings (loss) per
share..................... 0.10 0.03 0.00 (0.05) 0.14
Restaurants, end of
quarter................... 35 35 35 38 38
Restaurant operating
weeks..................... 420 420 420 570 456
Comparable restaurant sales
increase.................. 2.5% 1.7% 1.0% 7.1% 6.1%

12 WEEKS 12 WEEKS 16 WEEKS 12 WEEKS
ENDED ENDED ENDED ENDED
JUNE 12, SEPTEMBER 4, DECEMBER 25, MARCH 19,
2001 2001 2001 2002
-------- ------------ ------------ ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Net sales................... $14,725 $14,551 $25,240 $22,104
Restaurant operating
income.................... 1,789 1,508 4,128 4,245
Operating income............ 822 554 2,738 3,090
Net income(1)............... 362 220 1,556 1,897
Diluted earnings (loss) per
share..................... 0.04 0.03 0.18 0.21
Restaurants, end of
quarter................... 40 41 43 47
Restaurant operating
weeks..................... 471 481 663 539
Comparable restaurant sales
increase.................. 5.5% 9.5% 8.2% 9.3%

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

(1) The fourth quarter of fiscal year 2000 includes a charge to earnings of $2.4
million ($1.5 million net of income tax) related to the provision for asset
impairment in the quarter. The fourth quarter of fiscal year 2001 includes a
charge to earnings of $0.6 million ($0.4 million net of income tax) related
to the provision for asset impairment in the quarter.

QUARTERLY FLUCTUATIONS, SEASONALITY AND INFLATION

We also expect seasonality to continue to be a factor in our results of
operations. Historically, our revenues have been moderately higher in the first
and fourth quarters due to weather conditions, major sporting events and the
year-end holidays. Our revenues in most of our restaurants have been lower
during the summer months of each year, and we expect lower second and third
quarter revenues to continue in the future. In addition, for accounting
purposes, the first, second and third quarters of each fiscal year consist of 12
weeks and the fourth quarter consists of 16 or 17 weeks. As a result, some of
the variations in our operating results may be attributable to the different
lengths of the fiscal quarters. These quarterly fluctuations and seasonality may
cause our operating results to fall below the expectations of securities
analysts and investors, which could cause our stock price to fall.

LIQUIDITY AND CAPITAL RESOURCES

As is customary in the restaurant industry, we operate with negative
working capital. Negative working capital decreased $0.6 million to $4.6 million
as of March 19, 2002 from $5.2 million as of December 25, 2001. This decrease is
attributable primarily to an excess of working capital provided by operations
and net proceeds from the line of credit in excess of the cost of purchases of
property and equipment. Cash decreased $0.4 million at March 19, 2002 compared
to the balance at December 25, 2001. We do not have significant receivables or
inventory, and we receive trade credit based upon negotiated terms in purchasing
food and supplies. Because funds available from cash sales are not needed
immediately to pay for food and supplies or to finance inventory, they may be
considered as a source of financing for noncurrent capital expenditures.

On September 1, 1998, we entered into a loan agreement with Intrust Bank,
N.A. that provides for a line of credit of $20.0 million, subject to certain
limitations based on earnings before interest, taxes, depreciation and
amortization of the past fifty-two weeks and the amount of capital lease
obligations on personal property. The line of credit is secured by substantially
all our assets. The line of credit requires monthly payments of interest only
until October 1, 2003, at which time equal monthly installments of principal and
interest are required as necessary to fully amortize the outstanding
indebtedness plus future interest over a period of four years. Interest is
accrued at 0.5% below the prime rate as reported in The Wall Street Journal.
Proceeds from the line of credit are being used for restaurant development. As
of March 19, 2002, we had borrowed approximately $12.8 million under the line of
credit. We are currently in compliance with all debt covenants under the line of
credit.

Cash flows from operations were $1.8 million for the twelve weeks ended
March 19, 2002, compared to $1.5 million for the twelve weeks ended March 20,
2001. Purchases of property and equipment were $4.7 million for the twelve weeks
ended March 19, 2002 compared to $2.2 million for the twelve weeks ended March
20, 2001. Net advances under the line of credit were $2.5 million for the twelve
week period ending March 19, 2002 compared to $1.6 million for the twelve week
period ending March 20, 2001. At March 19, 2002, we had $0.9 million in cash and
cash equivalents.

We intend to open 10 to 12 new restaurants in both fiscal year 2002 and
fiscal year 2003. Six restaurants have been opened in fiscal year 2002, four
restaurants are currently under construction and an additional two leases have
been executed. We are currently evaluating locations in markets familiar to our
management team. However, the number of restaurants actually opened and the
timing thereof may vary depending upon our ability to locate suitable sites and
negotiate favorable leases. We expect to expend approximately $14.0 to $18.0
million to open new restaurants over the next twelve months.

We believe that the net proceeds from this offering, the funds available
from our line of credit and cash flow from our operations will be sufficient to
satisfy our working capital and capital expenditure requirements for at least
the next 12 months. There can be no assurance, however, that changes in our
operating plans, the acceleration or modification of our expansion plans, lower
than anticipated revenues, increased expenses, potential acquisitions or other
events will not cause us to seek additional financing sooner than anticipated,
prevent us from achieving the goals of our expansion strategy or prevent any
newly opened restaurants from operating profitably. There can be no assurance
that additional financing will be available on terms acceptable to us or at all.

BUSINESS

OVERVIEW

We own and operate 48 restaurants under the "Fox and Hound" and "Bailey's"
brand names that each provide a social gathering place offering high quality
food, drinks and entertainment in an upscale, casual environment. Our
restaurants offer a broad menu of mid-priced appetizers, entrees and desserts
served in generous portions. In addition, each location features a full-service
bar and offers a wide selection of major domestic, imported and specialty beers.
Each restaurant emphasizes a high energy environment with multiple billiard
tables and satellite and cable coverage of a variety of sporting events and
music videos. In addition to our food, we believe our customers are attracted to
our elegant yet comfortable atmosphere of polished brass, embroidered chairs and
booths, hunter green and burgundy walls, and etched glass. Our Fox and Hound and
Bailey's restaurants share identical design and operational principles and
menus. As of June 11, 2002, we owned and operated 32 Fox and Hound restaurants
and 16 Bailey's restaurants in 19 states.

OUR HISTORY

The first Fox and Hound restaurant opened in August 1994 and the first
Bailey's restaurant opened in November 1989. In February 1997, the two companies
were combined to form Total Entertainment Restaurant Corp. In July 1997 we
completed our initial public offering. From July 1997 to March 1999, we expanded
rapidly from 12 units to 37 units. In January 1999, we hired Steven Johnson as
our Chief Executive Officer. Shortly thereafter, we suspended new restaurant
development in order to focus on developing our service-oriented culture and
improving the operations and profitability of our existing restaurants. In
addition, we implemented a number of initiatives, including recruiting a new
Chief Operating Officer, increasing the number of district managers,
restructuring our board of directors and closing three underperforming
restaurants.

As a result of these and other initiatives, we increased our annualized
average weekly restaurant sales from $1.6 million in fiscal year 1999 to $1.8
million in fiscal year 2001 and expanded restaurant-level operating profit
margins (before preopening costs and provision for asset impairment and
restaurant closing) from 14.8% in fiscal year 1999 to 17.3% in fiscal year 2001.
In addition, since early 1999 we have achieved 13 consecutive quarters of
positive comparable restaurant sales growth. Beginning in mid-2000, we initiated
a disciplined growth plan, opening three restaurants in fiscal year 2000, five
restaurants in fiscal year 2001 and six restaurants during fiscal year 2002. We
intend to open four to six additional restaurants during the remainder of fiscal
year 2002 and 10 to 12 restaurants in fiscal year 2003.

THE FOX AND HOUND/BAILEY'S CONCEPT

- An Upscale, Neighborhood Social Gathering Place. Our restaurants provide
a destination where friends and acquaintances can gather regularly for
food, drinks and entertainment in an upscale yet casual environment. We
strive to offer a unique setting with a broad appeal to both male and
female customers through an inviting, clean and comfortable atmosphere.
In order to achieve the feeling of an upscale atmosphere for these
customers, we emphasize decor, lighting and cleanliness. For example, we
recycle fresh filtered air throughout our restaurants several times an
hour and place fresh-cut flowers in our restrooms. Each of our locations
feature dedicated areas for viewing sporting events or music videos. To
maximize the broad appeal of the atmosphere in our restaurants, the sound
in each room is carefully monitored to balance the desire among our
customers for lively entertainment versus quieter socializing. In
addition, our locations generally offer multiple tournament-quality
billiard tables and darts and popular interactive games to further
enhance our appeal as a social destination.

- High Quality Food and Beverage. Our restaurants offer a broad menu of
mid-priced appetizers, salads, desserts and entrees featuring beef,
chicken, fish and barbecue, all served in generous portions. Our menu
features over 50 items, with entrees typically priced between $5.99 and
$16.99, the majority of which are priced under $10.00. A strong emphasis
is placed on the presentation of each of these menu items, increasing the
quality and satisfaction of our customers' overall dining experience.
Each location features a full service bar and most of our restaurants
offer over 100 brands of ales, lagers, stouts and specialty beers from
around the world, with an average of 30 beers on tap. To maximize the
appeal of each area of our restaurants, sit-down food and beverage
service is available in every room.

- State-of-the-Art Audio and Visual Technology. Our restaurants create an
exciting, high-energy atmosphere through state-of-the-art audio and video
systems for viewing sporting events and music videos from our customized
playlist. Each location typically has more than 35 televisions (including
several big-screen televisions) with satellite and cable coverage of
concurrent national, regional and local sporting events. This broad
sports coverage further reinforces our positioning as a social gathering
place by attracting to our destination alumni groups and others
interested in specific teams or sporting events. We believe the
entertainment aspect of our restaurants encourages repeat visits,
increases the average length of customer stay and attracts customers
outside of peak hours.

GROWTH STRATEGIES

New Unit Growth. We intend to develop new restaurants both in our existing
and in new markets. We plan to open 10 to 12 locations in both fiscal year 2002
and fiscal year 2003. We have opened six restaurants during fiscal year 2002,
currently have four restaurants under construction and have executed leases for
two additional proposed restaurant locations. We continually evaluate locations
in various markets and negotiate proposed additional leases at desired sites.

Increase Sales at Existing Locations. We seek to increase sales at our
existing restaurants by continuing to implement the following strategies:

- Best Practice Initiatives. We allow our restaurant-level managers
significant latitude to test and implement restaurant-level initiatives
intended to increase sales or efficiency or improve the overall customer
experience. We encourage the exchange of ideas through weekly management
meetings. We actively monitor these initiatives at a corporate level and
seek to implement successful single-restaurant initiatives as "best
practice" initiatives company-wide.

- Promotional Events. We attempt to increase sales at our restaurants by
building brand awareness through word-of-mouth and promotional events in
our restaurants. These promotions are intended to increase both the
frequency of existing customers and attract new customers to our
restaurants. For example, one of our restaurants initiated a branded
promotion targeting professional women. After success at a single
restaurant, we introduced this promotion to an additional 35 restaurants.
We have also initiated promotions targeting hospitality industry
professionals in all of our restaurants during fiscal year 2002. We
believe both of these promotions have contributed to our strong recent
comparable store revenue growth.

- Menu Updates. We regularly update and introduce new menu segments and
items in order to attract new customers and drive customer frequency,
customer satisfaction and overall restaurant sales. We continually review
our menu based on feedback from our customers and our secret shopper
program. For example, beginning in August 2001, we successfully expanded
our menu to include a broad selection of barbecue sandwiches and entrees.

RESTAURANT LOCATIONS

Our restaurants range in size from 6,500 square feet to 15,300 square feet
with an average restaurant size of approximately 9,500 square feet. The
following table sets forth as of June 11, 2002 the location, opening date and
approximate square footage of our existing restaurant locations:

APPROXIMATE
LOCATION BRAND NAME MONTH OPENED SQUARE FOOTAGE
-------- ---------- ------------ --------------

Richmond, VA Bailey's May 2002 8,500
Denver #2, CO Fox and Hound April 2002 10,300
Charlotte #3, NC Fox and Hound March 2002 7,200
Ft. Worth #2, TX Fox and Hound February 2002 14,000
Phoenix, AZ Fox and Hound January 2002 11,600
Denver #1, CO Fox and Hound January 2002 10,500
Dallas #4, TX Fox and Hound December 2001 13,360
Atlanta #2, GA Bailey's November 2001 10,500
Charlotte #2, NC Fox and Hound August 2001 15,300
Nashville #3, TN Bailey's May 2001 11,400
Ft. Worth #1, TX Fox and Hound April 2001 9,900
Dallas #3, TX Fox and Hound December 2000 7,600
Detroit #2, MI Bailey's December 2000 8,450
Cleveland #2, OH Fox and Hound October 2000 13,500
Baton Rouge, LA Fox and Hound March 1999 11,500
Houston, TX Fox and Hound February 1999 9,100
Indianapolis, IN Fox and Hound February 1999 8,400
Winston-Salem, NC Fox and Hound January 1999 9,400
Pittsburgh, PA Fox and Hound January 1999 10,500
New Orleans, LA Fox and Hound December 1998 9,200
Chapel Hill, NC Bailey's December 1998 9,000
Canton, OH Fox and Hound November 1998 9,700
Kansas City, KS Fox and Hound November 1998 9,100
Memphis #2, TN Fox and Hound November 1998 7,600
Detroit #1, MI Bailey's November 1998 9,100
Dayton, OH Fox and Hound October 1998 8,700
Lubbock, TX Fox and Hound October 1998 10,600
Atlanta #1, GA Bailey's October 1998 8,500
Erie, PA Fox and Hound August 1998 10,400
San Antonio, TX Fox and Hound August 1998 8,400
Springfield, MO Fox and Hound August 1998 9,100
Evansville, IN Fox and Hound July 1998 8,600
Cleveland #1, OH Fox and Hound May 1998 8,500
Montgomery, AL Fox and Hound January 1998 7,700
Chicago, IL Fox and Hound December 1997 10,100
Omaha, NE Fox and Hound December 1997 9,000
Nashville #2, TN Bailey's October 1997 7,500
Memphis #1, TN Fox and Hound September 1997 8,400
Columbia, SC Bailey's October 1996 10,000
Johnson City, TN Bailey's May 1996 8,250
Knoxville, TN Bailey's December 1995 9,400
Dallas #2, TX Fox and Hound December 1995 9,600
Nashville #1, TN Bailey's April 1995 9,400
Greenville, SC Bailey's September 1994 7,000
College Station, TX Fox and Hound September 1994 7,700
Dallas #1, TX Fox and Hound August 1994 6,500
Little Rock, AR Bailey's February 1994 8,400
Charlotte #1, NC Bailey's October 1990 7,600

Our restaurants operate under the complete names of "Fox and Hound English
Pub & Grille," "Fox and Hound Smokehouse & Tavern," "Bailey's Sports Grille" and
"Bailey's Pub & Grille" and "Bailey's Smokehouse & Tavern." While the majority
of our future development is planned using the "Fox and Hound" brand name, we
will continue to occasionally use the "Bailey's" brand name in certain markets
where Bailey's restaurants are already located or where we are unable to use the
Fox and Hound brand

name due to conflicting pre-existing local use. We have one licensee which
operates a Fox and Hound restaurant in Lincoln, Nebraska.

SITE SELECTION CRITERIA AND RESTAURANT DEVELOPMENT

We believe the site selection process is critical in determining the
potential success of each restaurant location. Senior management devotes
significant time and resources in analyzing each prospective site and inspects
and approves each location prior to final lease execution. A variety of factors
are considered in the site selection process, including local market
demographics (e.g., average income levels and age), site visibility, traffic
count, nature of the surrounding retail environment and accessibility and
proximity to major retail centers, office complexes, hotels and entertainment
centers (e.g., stadiums, arenas and theaters).

We lease all locations, with the exception of one Bailey's restaurant in
Columbia, South Carolina, which is owned by us. Most of the restaurants are
located in shopping centers. Leases are generally negotiated with initial terms
of five to 10 years, with multiple renewal options. We are generally required to
complete construction and open a new location approximately 90 to 120 days after
the later of signing of a lease and obtaining required permits. Additional time
is sometimes required to obtain certain government approvals and licenses, such
as liquor licenses. In the future, we anticipate leasing our locations, although
we may consider purchasing free-standing sites where it is cost-effective to do
so.

The cost to construct a typical new restaurant upon leased real estate is
approximately $1.0 to $1.5 million (excluding preopening costs). The 47 leased
restaurants open at June 11, 2002 had an average cash investment of
approximately $1.2 million (excluding preopening costs). Preopening expenses
typically range from $125,000 to $175,000 for each new restaurant. Preopening
expenses include costs incurred prior to the date of opening for management
salaries, staff wages during training and costs incurred during training.

Our restaurants offer a single menu for lunch, dinner and late-night
dining. The menu features a broad selection of appealing appetizers (including
quesadillas, chicken wings and nachos) and soups and salads (including caesar
salads, chili and soups of the day), typically ranging in price from $3.49 to
$6.99. The menu includes over 25 entrees typically priced between $5.99 to
$16.99 such as sandwiches, pizzas, ribs, burgers and a selection of grilled and
smoked barbecued entrees. Most entrees are priced under $10.00. A strong
emphasis is placed on the presentation of each of these menu items, increasing
the quality and satisfaction of our customer's overall dining experience. Each
location features a full service bar and most restaurants offer over 100 brands
of ales, lagers, stouts and specialty beers from around the world, with an
average of 30 beers on tap.

MARKETING

We believe our restaurant concept attracts a loyal clientele and we rely
primarily on word-of-mouth and group events to attract new business. We do,
however, advertise on a limited basis through traditional marketing and
advertising media in selected markets, including billboard signage, radio and
print advertising and local restaurant marketing. We have engaged a national
marketing firm to assist us with our in-store advertising and food and beverage
promotion. In addition, we seek to increase both customer awareness and
frequency with promotions, such as those targeting professional working women
and hospitality industry professionals. Our marketing efforts also seek to focus
on national, regional and local sporting events, such as the Super Bowl and the
NCAA basketball tournament, which attract locally active groups of fans,
supporters or alumni.

We aggressively market our restaurant concept to local businesses and other
groups for social events. With a range of entertainment offerings, our
restaurants offer a place where companies can take their employees for parties
and encourage relaxed, casual social interaction with each other in an informal,
comfortable setting. We market our group business by employing an events
coordinator at most
28

restaurants. These events coordinators are incentivized through a combination of
base pay and sales commissions. In addition, we employ a national events
coordinator who oversees the training of, and monitors the performance of, each
of our local event coordinators.

OPERATIONS AND MANAGEMENT

Our operations and management systems are based upon systems and controls
that were developed by our senior management and have been successfully used to
manage a large number of restaurants located in numerous states. We strive to
maintain quality and consistency in our restaurant locations through the careful
training and supervision of personnel and the establishment of standards
relating to food and beverage preparation, maintenance of locations and conduct
of personnel.

We staff our restaurants with management that has experience in the
restaurant industry. We believe our strong team-oriented culture helps us
attract highly motivated employees who provide customers with a superior level
of service. We train our kitchen employees and wait staff to take great pride in
preparing and serving food in accordance with our high standards. Restaurant
managers and staff are trained to be courteous and attentive to customer needs,
and our managers, in particular, are instructed to visit each table. Senior
corporate management hosts weekly meetings with district managers to discuss
staffing, marketing, individual restaurant performance and customer comments.
Moreover, we require our general managers to hold daily shift meetings at their
individual restaurants. Senior management regularly visits the Fox and Hound and
Bailey's locations and meets with the respective management teams to ensure
compliance with our strategies and standards of quality.

Management. The management of a typical restaurant consists of one general
manager and three or four assistant managers depending upon restaurant revenue
and hours of operation. The assistant managers are responsible for their own
operational units, including a kitchen manager, bar manager and service manager,
but all have been trained to support and manage each operational unit of the
restaurant. Each general manager is responsible for the restaurant's day-to-day
operations and is required to follow our established operating procedures and
standards. Each location also employs a staff of hourly employees, many of whom
are part-time personnel. We currently employ nine district managers, each of
which oversees between four and seven restaurants. Our district managers,
general managers and assistant managers participate in incentive cash bonus
programs. These employees typically earn between 10% and 30% of their total cash
compensation under this program. Awards under the incentive plans are tied to
achievement of specified operating targets, including achievement of specific
unit objectives and control of operating expense budgets. In addition, the
district managers and general managers participate in our Employee Stock Option
Plan.

Financial Controls. We maintain financial and accounting controls for each
of our restaurants through the use of centralized accounting and management
information systems. Sales and labor information are collected daily from each
restaurant, and general managers are provided with operating statements for
their restaurants. Cash is controlled through daily deposits of sales proceeds
in local operating accounts, the balances of which are wire-transferred daily or
weekly to our principal operating account. We utilize a comprehensive peer
review reporting system for our general managers. Within 10 days after the close
of each 28-day accounting period, profit and loss statements are produced and,
subsequently, the general managers of each restaurant meet in person with their
respective district managers to review the profit and loss statements. The
participants offer each other feedback on their respective performances and
suggest ways of improving profitability. The district managers also meet in
person with the senior management team to review the performance for the past
accounting period as well as set the operating agenda for the next period. We
believe the peer review system enables each general manager and district manager
to benefit from the collective experience of all of our management.

Customer Service. We believe customer service and satisfaction are keys to
the success of our operations. In addition to customer evaluations, we use
secret shopper visits to independently evaluate customer satisfaction. A
national restaurant evaluation firm performs these visits, three times per
month, to test our food and beverage service in a discrete manner without the
knowledge of the restaurant personnel.

In addition, we encourage frequent visits by restaurant management to customers'
tables, active involvement of management in responding to customer comments and
assigning wait persons so as to ensure customer satisfaction.

Training. Management strives to instill enthusiasm and dedication in its
employees and to create a stimulating and rewarding working environment where
employees know what is expected of them in measurable terms. Each of our new
restaurant employees participates in a training program during which the
employee works under the close supervision of a manager. Restaurant management
personnel participate in an eight-week training program that focuses on various
aspects of the restaurant's operations and customer service. Management
continuously solicits employee feedback concerning restaurant operations and
strives to be responsive to the employees' concerns.

We promote a safe drinking environment through the use of certain internal
procedures in addition to extensive alcohol awareness training. It is mandatory
for all service employees and managers, regardless of a lack of state
regulation, to complete a third-party alcohol awareness-training program. We
have also established internal measures to promote a safe drinking environment,
such as a four-drink log (which is reviewed by the restaurant's district
manager).

PURCHASING

We strive to obtain consistent, quality items at competitive prices from
reliable sources. We continually search for and test various products in order
to serve the highest quality products possible and to be responsive to changing
customer tastes. We engage a purchasing consultant to assist in the negotiation
of purchasing agreements with suppliers. Food and supplies are shipped directly
to the restaurant locations, although invoices for purchases are forwarded to a
central location for payment. Due to the experience of our senior management in
the restaurant business, we have been and expect to continue to be able to
purchase most of our restaurant equipment directly from equipment manufacturers.
We have not experienced any significant delays in receiving supplies or
equipment.

MANAGEMENT INFORMATION SYSTEMS

We utilize a computer-based management support system which is designed to
improve labor scheduling and food and beverage cost management, provide
corporate management quick access to financial data and reduce the general
manager's administrative time. Each general manager uses the system for
production planning, labor scheduling and food and beverage cost variance
analysis. The system generates daily reports on sales, bank deposits and
variance data. We generate weekly consolidated sales reports and food, beverage
and labor-cost variance reports, as well as detailed profit and loss statements
for each restaurant location every four weeks. Additionally, we monitor sales
growth, labor variances and other sales trends on a daily basis.

COMPETITION

The entertainment and restaurant industries are highly competitive. There
are a large number of restaurants and entertainment businesses that compete
directly and indirectly with us. We compete with restaurants primarily on the
basis of quality of food and service, ambiance and location and compete with
sports bars and entertainment complexes on the basis of entertainment quality,
ambiance and location. Competition for sales in the entertainment and restaurant
industries is intense. Many of our existing and potential competitors are well
established and have significantly greater financial, marketing and other
resources than we do. In addition to other entertainment and restaurant
companies, we compete with numerous businesses for suitable locations for our
restaurants.

GOVERNMENT REGULATION

Our restaurants are subject to numerous federal, state and local laws
affecting health, sanitation, safety and Americans with Disabilities Act
accessibility standards, as well as to state and local regulation of the sale of
alcoholic beverages. Each restaurant has appropriate licenses from regulatory
authorities
30

allowing it to sell liquor, beer and wine, and each restaurant has food service
licenses from local health authorities. Our licenses to sell alcoholic beverages
must be renewed annually and may be suspended or revoked at any time for cause,
including violation by us or our employees of any law or regulation pertaining
to alcoholic beverage control, such as those regulating the minimum age of
patrons or employees, advertising, wholesale purchasing and inventory control.
The failure of a restaurant to obtain or retain liquor or food service licenses
would have a material adverse effect on our operations. In order to reduce this
risk, each restaurant is operated in accordance with standardized procedures
designed to ensure compliance with all applicable laws and regulations.

The development and construction of additional restaurants are subject to
compliance with applicable zoning, land use and environmental regulations. Our
operations are also subject to federal and state minimum wage laws governing
such matters as working conditions, overtime and tip credits and other employee
matters. Significant numbers of our personnel are paid at rates related to the
federal minimum wage, which is currently $5.15 per hour. Accordingly, increases
in the minimum wage will increase our labor costs.

TRADEMARKS

We have federally registered our "Fox & Hound(R)", "Bailey's Sports
Grille(R)" and "Quality Is Our Passion(R)" service marks. Our "7 Bailey's Sports
Grille(R)" and "Serious Fun 7 Bailey's Sports Grille(R)"design marks are also
federally registered. We regard our service and design marks as having
significant value and as being an important factor in the marketing of our
restaurant concept. We are aware of names and marks similar to our service marks
that are used by other persons in certain geographic areas. We believe such uses
will not have a material adverse effect on us, as either the Bailey's or Fox and
Hound tradenames may be used if the other name is unavailable. Our policy is to
pursue registration of our marks whenever possible and to oppose vigorously any
infringement of our marks.

EMPLOYEES AND ACCOUNTING AND ADMINISTRATIVE SERVICES

As of June 11, 2001, we employed approximately 2,500 people, 268 of whom
are executive officers, district managers and restaurant management personnel
and the remainder of whom are hourly restaurant personnel and corporate support
staff. None of our employees is covered by a collective bargaining agreement. We
believe our employee relations are satisfactory.

On March 1, 2002, we renewed our services agreement with the Franchise
Services Company for certain accounting and administrative services for an
additional three-year period. We pay a per restaurant per 28-day fixed fee with
no annual charge.

LITIGATION

Occasionally, we are a defendant in litigation arising in the ordinary
course of our business, including claims resulting from "slip and fall"
accidents, employment-related claims and claims from customers or employees
alleging illness, injury or other food quality, health or operational concerns.
In addition, we are subjected in certain states to claims under "dram-shop"
statutes, which generally provide a person injured by an intoxicated person the
right to recover damages from an establishment that wrongfully served alcoholic
beverages to the intoxicated person. To date, none of these types of litigation
has had a material effect on us. We have and continue to insure against these
types of claims.

On February 28, 2001, Patrick O'Shea, David W. Faber, Ann Swanson, Stacy
Gregory, Wes L. Patterson, Dale Sproat, Mark Thagard and Patrick Wilson filed a
complaint on their own behalf and on behalf of other similarly situated persons
against us; Fox & Hound of Indiana, Inc., our subsidiary; Gary Judd, our
President; Steven M. Johnson, our Chief Executive Officer; J.C. Weinberg, our
former Chief Operating Officer; and Kenneth Syvarth, our former Vice
President -- Operations and current Chief Operating Officer, in the United
States District Court for the Southern District of Indiana.

The plaintiffs allege that they were employed by the defendants with the
titles of manager-in-training, assistant manager and/or general manager, and
that we and the other defendants willfully and in bad faith failed to pay the
defendants overtime pay for hours worked in excess of forty hours per week in
violation of the provisions of the Fair Labor Standards Act. The plaintiffs'
complaint seeks (1) a declaratory judgment that we and other defendants violated
the plaintiffs' legal rights; (2) an accounting of compensation to which the
defendants are owed; (3) monetary damages in the form of back pay compensation
and benefits, unpaid entitlements, liquidated damages and pre-judgment and
post-judgment interest; and (4) attorneys' fees and costs. We and other
defendants have filed answers to the plaintiffs' complaint.

On June 4, 2002, the court entered an order allowing the plaintiffs to send
a notice to all persons who have worked for us under the above employee-manager
titles since February 29, 1998, so that such persons may decide whether to
opt-in to the collective action. The court specifically excluded from the
collective action those employees who have arbitration agreements with us (which
we estimate to be approximately 40% of the persons alleged by the plaintiffs to
be similarly situated) and those employees whose claims are barred by the
statute of limitations. Persons receiving notice will have a period of 120 days
after the notice is sent to opt into the action. The trial of the case is
currently scheduled for March 2003.

On October 2, 2000, R&A Bailey & Company of Dublin, Ireland, filed a notice
of opposition with the Trademark Trial and Appeal Board of the U.S. Patent and
Trademark Office to our U.S. service mark applications for "BAILEY'S PUB &
GRILLE" (color), "BAILEY'S PUB & GRILLE" (stylized), and "BAILEY'S PUB &
GRILLE." Additionally, on November 14, 2000, R&A Bailey & Company filed a
petition with the Trademark Trial and Appeal Board of the U.S. Patent and
Trademark Office to cancel our U.S. service mark registrations for "7 BAILEY'S
SPORTS GRILLE" (+ Design), "SERIOUS FUN 7 BAILEY'S SPORTS GRILLE" (+ Design),
and "BAILEY'S SPORTS GRILLE."

R&A Bailey & Company claims to be the owner of several U.S. trademark
registrations, including "BAILEYS ORIGINAL IRISH CREAM" (+ Design), "BAILEYS,"
"BAILEYS THE ORIGINAL LIGHT CREAM," "BAILEYS" (+ Design), and "BAILEYS YUM,"
that are claimed to be used in association with liqueurs, distilled spirits, ice
cream, coffee cups and other ceramic accessories. R&A Bailey & Company has
alleged that our cited registrations and applications cause it damage, are
likely to create a likelihood of confusion, mistake or deception, and would
likely dilute and lessen its "famous" marks in violation of the Lanham Act. R&A
Bailey & Company seeks cancellation of our registrations and opposes the
registration of our applications for registration of the above-listed marks.

On December 29, 2000, we filed an answer to R&A Bailey & Company's notice
of opposition, denying its allegations. One February 16, 2001, we filed a
Stipulated Motion to Extend Answer to Petition in response to the petition to
cancel by R&A Bailey & Company. The actions have been suspended by the Trademark
Trial and Appeal Board to allow the parties time to negotiate for possible
settlement of these pending actions. We are actively pursuing settlement, and we
are of the opinion that any resulting liability should not have a material
adverse effect on our financial performance.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information concerning our executive
officers and directors:

NAME POSITION AGE
---- -------- ---

Steven M. Johnson..................... Chief Executive Officer and Director 43
Gary M. Judd.......................... President and Director 43
James K. Zielke....................... Chief Financial Officer, Treasurer, Secretary 38
and Director
Kenneth C. Syvarth.................... Chief Operating Officer 41
Dennis L. Thompson.................... Co-Chairman of the Board 58
Stephen P. Hartnett................... Co-Chairman of the Board 53
Thomas A. Hager....................... Director 53
C. Wells Hall, III.................... Director 57
E. Gene Street........................ Director 61
John D. Harkey, Jr. .................. Director 41

Steven M. Johnson has served as our Chief Executive Officer since January
1999 and as a director since October 1998. From March 1992 until December 1998,
Mr. Johnson was chief operating officer for Coulter Enterprises, Inc., a Pizza
Hut franchisee, with primary responsibility for the operations of 100 Pizza Hut
restaurants. From May 1985 until June 1991, Mr. Johnson was controller for
Fugate Enterprises, Inc., a Pizza Hut, Taco Bell and Blockbuster Video
franchisee. Prior to his employment at Fugate Enterprises, Inc., Mr. Johnson was
employed by Ernst & Young LLP. Mr. Johnson is also a C.P.A.

Gary M. Judd has served as our President and as a director since June 1997
and served as Chief Executive Officer and Chief Operating Officer from June 1997
until January 1999. Mr. Judd served as vice president of special projects with
Coulter Enterprises, Inc. from October 1993 to May 1997. From March 1989 to
September 1993, Mr. Judd was employed by Western Sizzlin, Inc. in various
capacities, most recently as director of franchise operations. From March 1984
to February 1989, Mr. Judd served as a director of operations with Coulter
Enterprises, Inc.

James K. Zielke has served as our Chief Financial Officer, Treasurer and
Secretary since April 1997 and as a director since January 1999. From January
1997 until April 1997, Mr. Zielke was the senior director-tax for PepsiCo
Restaurant Services Group, Inc. Mr. Zielke was employed by Pizza Hut, Inc. from
March 1993 until January 1997, most recently as director-tax from March 1995
until January 1997. Prior to his employment by Pizza Hut, Inc., Mr. Zielke was
employed by Ernst & Young LLP from June 1986 until March 1993. Mr. Zielke is
also a C.P.A.

Kenneth C. Syvarth has served as our Chief Operating Officer since May
2002. Mr. Syvarth served as Vice President of Operations from July 2000 until
April 2002. Prior to joining us, Mr. Syvarth was managing operating partner for
Restaurant Management Company, a Pizza Hut franchisee, from October 1998 to May
2000. Prior to his employment with Restaurant Management Company, Mr. Syvarth
was employed as regional manager for Lone Star Steakhouse & Saloon, Inc. from
June 1997 to October 1998. From September 1986 to June 1997, Mr. Syvarth was
employed by Coulter Enterprises, Inc., in various capacities, most recently as
vice president of operations.

Dennis L. Thompson has served as a Co-Chairman of our board of directors
since January 1999 and has been a director since February 1997 and from 1989 to
1997 was an investor with Bailey Sports Grille, Inc., of which he was
co-founder. Mr. Thompson served as senior vice president of real estate of Lone
Star Steakhouse & Saloon, Inc. from 1992 to 1997 and as a director from 1992 to
1998. Mr. Thompson, co-founder of Lone Star Steakhouse & Saloon, was also an
executive officer and a director of various

subsidiaries of Lone Star Steakhouse & Saloon from 1989 to 1997. From 1985 to
August 1995, he was an executive officer, director and stockholder of Creative
Culinary Concepts, Inc., a company that owned and operated Lone Star Steakhouse
and Saloon restaurants and certain other restaurants.

Stephen P. Hartnett has served as a Co-Chairman of our board of directors
and as a director since January 1999. Mr. Hartnett was the founder of the Fox
and Hound English Pub & Grille in 1994 and served in various executive
capacities until the sale of 75% of its ownership interests to one of our
subsidiaries in December 1996. Mr. Hartnett has also served as vice chairman of
Consolidated Restaurant Companies, Inc. and as a principal in Cracken, Harkey,
Street & Hartnett, LLC, since September 1998, and as chairman, president and
chief executive officer of Energy Alchemy, Inc. and The Hartnett Group, Ltd.,
and as majority shareholder of Summers Investments, Inc. since 1982.

Thomas A. Hager has been a director since July 1997. Mr. Hager was a
co-founder of Bailey's Sports Grille, Inc. and served as its president from
inception in November 1989 until February 1997. Prior to founding Bailey's
Sports Grille, Inc., Mr. Hager owned and operated a restaurant in Charlotte,
North Carolina. Mr. Hager is also the founder of Thomas Advertising, Inc., a
national billboard advertising agency, where he has served as president since
its inception in 1983.

C. Wells Hall, III has been a director since January 1999. Since June 2000,
Mr. Hall has been a corporate tax partner with the law firm of Mayer, Brown &
Platt. From October 1984 to June 2000, Mr. Hall was a corporate tax partner with
Moore & Van Allen.

E. Gene Street has been a director since January 1999. Since 1998, Mr.
Street has served as vice chairman of Consolidated Restaurant Companies, Inc.,
and as a principal in Cracken, Harkey, Street & Hartnett, LLC. Mr. Street was
the founder of Black Eyed Pea and served as president and chief executive
officer of Prufrock Restaurants, Inc., the company which owned and operated
Black Eyed Pea restaurants. Mr. Street was also the founder of Good Eats
restaurants and served as chairman and chief executive officer of Good Eats
Holding Company, Inc. from 1986 until its sale to Consolidated Restaurant
Companies, Inc. in 1998.

John D. Harkey, Jr. has been a director since January 1999. Since 1998, Mr.
Harkey has served as chairman of Consolidated Restaurant Companies, Inc. and has
been a principal in Cracken, Harkey, Street & Hartnett since 1997. Since 1992,
Mr. Harkey has also been a partner with the law firm Cracken & Harkey, LLP. Mr.
Harkey was founder and managing director of Capstone Capital Corporation and
Capstone Partners, Inc. from 1989 until 1992.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We lease two of our restaurants, the College Station and Dallas (Midway)
locations, from limited partnerships controlled by Stephen P. Hartnett, a
Co-Chairman of our board of directors. The annual rent and maintenance expense
paid to the limited partnerships for the College Station, Texas location was
$226,000, $232,000 and $254,000 in fiscal years 1999, 2000 and 2001,
respectively. The annual rent and maintenance expense paid to the limited
partnerships for the Dallas (Midway), Texas location was $69,000, $69,000 and
$69,000 in fiscal years 1999, 2000 and 2001, respectively.

Our restaurant in Littleton, Colorado, scheduled to open in the third
quarter of fiscal year 2002, is owned 40% by us and 30% each by Gary Judd and
James Zielke, our officers and directors. This ownership structure was adopted
in response to local liquor license regulations in Jefferson County, Colorado.
Because of such arrangement and significant restrictions upon the
transferability of the shares in the Littleton restaurant, Messrs. Judd and
Zielke will be unable to derive any financial benefit from this agreement. We
will manage the restaurant under contract terms giving us the financial benefits
and risks of operating the restaurant.

In February 2002, we purchased the assets of a seafood restaurant in
Richmond, Virginia, from BMR Restaurants, LLC, which has been converted to a
Bailey's restaurant. Our Co-Chairman, Dennis Thompson, is the manager and 70.1%
owner of BMR, which had owned the restaurant assets for more

than two years. We paid a total of $300,000 for these assets, which included a
real estate lease, leasehold improvements, furniture and equipment. The price
was based on the parties' estimates of market rates for leasehold rents and
equivalent property and is believed to be equivalent to the price that would
have been paid in an arm's length transaction with an unaffiliated party.

In April 2000 and February 2001, we invested an aggregate of $200,000 for
limited partnership interests in limited partnerships formed to develop and
operate Cool River Restaurants. John D. Harkey, Jr. and E. Gene Street, two of
our directors, and Steven P. Hartnett, our Co-Chairman, are the majority owners
of the managing general partner of these partnerships, Cracken, Harkey, Street &
Hartnett, L.L.C.

During the first three months of fiscal year 1999, we had a contract with
Lone Star Steakhouse & Saloon, Inc. to provide us with accounting and
administrative services. We paid approximately $60,000 to Lone Star for these
services. Jamie B. Coulter, a substantial stockholder and our former Chairman,
was then chairman, chief executive officer and a substantial stockholder of Lone
Star. See "Principal and Selling Stockholders."

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 20,000,000 shares of common stock,
$0.01 par value, and 2,000,000 shares of preferred stock, $0.10 par value. The
following summary of certain terms of the common stock and preferred stock does
not purport to be complete and is subject to, and qualified in its entirety by,
the provisions of our certificate of incorporation and bylaws, which are
included as exhibits to the registration statement of which this prospectus is a
part, and the provisions of applicable law.

COMMON STOCK

As of June 11, 2002, there were 8,869,493 shares of common stock
outstanding held by 60 stockholders of record. Immediately following this
offering, there will be 10,319,493 shares of common stock outstanding. Holders
of common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of the stockholders. Subject to preferences that may
be applicable to any then outstanding preferred stock, holders of common stock
are entitled to receive ratably such dividends as may be declared by the board
of directors out of funds legally available therefor. See "Dividend Policy." If
we are subject to a liquidation, dissolution, or winding up, holders of common
stock are entitled to share ratably in all assets remaining after payment of
liabilities and the liquidation preference of any then outstanding preferred
stock. Holders of common stock have no right to convert their common stock into
any other securities. The common stock has no preemptive or other subscription
right. There are no redemption or sinking fund provisions applicable to the
common stock. All outstanding shares of common stock are, and the shares of
common stock to be issued in this offering will be, fully paid and
nonassessable.

PREFERRED STOCK

The board of directors has the authority, without further action by our
stockholders, to issue up to 2,000,000 shares of preferred stock in one or more
series and to fix the rights, preferences, privileges and restrictions thereof,
including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences and the number of shares constituting any
series or the designation of such series. The issuance of preferred stock could
adversely affect the voting power of holders of common stock and could have the
effect of delaying or preventing a change in our control. We have no present
plan to issue any shares of preferred stock.

CERTAIN ANTI-TAKEOVER PROVISIONS

Our bylaws provide that the number of directors that constitutes the board
of directors shall be fixed by resolution of the board of directors but in no
event shall the number be greater than 10. The board of

directors may change the numbers of directors by a majority vote. The
certificate of incorporation provides that the board of directors shall be
divided into three classes, with the classes to be as nearly equal in number as
possible, and that one class shall be elected each year and serve for a
three-year term. Our certificate of incorporation does not provide for
cumulative voting in the election of directors. The certificate of incorporation
provides that a director may be removed only for "cause" by the affirmative vote
of a majority of the outstanding shares of our common stock.

The classification of directors and the provisions of the certificate of
incorporation that limit the ability of stockholders to change the size of the
board of directors will have the effect of making it more difficult for
stockholders to change the composition of the board of directors. As a result,
at least two annual meetings of our stockholders may be required for our
stockholders to change a majority of the directors, whether or not a change in
the board of directors would be beneficial to us and our stockholders and
whether nor not a majority of our stockholders believes that such change would
be desirable.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is First Union
National Bank.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have outstanding 10,319,493
shares of common stock. The 2,000,000 shares of common stock being sold hereby
and all of our currently outstanding shares of common stock, other than those
shares held by our "affiliates," as such term is defined in the Securities Act,
will be freely tradeable without restriction or registration under the
Securities Act.

Shares held by our affiliates (which generally include our directors and
executive officers and persons owning 10% or more of our common stock) are
subject to restrictions on resale in accordance with Rule 144 under the
Securities Act. As of June 11, 2002, we estimate that approximately 4,941,702
shares of our common stock were held by our affiliates of which 550,000 shares
are being sold in this offering. In general, under Rule 144 as currently in
effect, an affiliate would be entitled to sell within any three-month period a
number of shares that does not exceed the greater of one percent of the then
outstanding shares of common stock or the average weekly trading volume of the
common stock in the over-the-counter market during the four calendar weeks
preceding the date on which notice of the sale is filed with the Securities and
Exchange Commission. Sales under Rule 144 are subject to certain manner of sale
provisions, notice requirements and the availability of current public
information about us.

Our executive officers, directors and selling stockholders who hold an
aggregate of 2,255,035 shares of common stock, have agreed that they will not
sell or otherwise transfer any common stock owned by them without the prior
written consent of Thomas Weisel Partners LLC for a period of 90 days from the
date of this prospectus (the "Lockup Period"). However, Thomas Weisel Partners
LLC can waive this restriction and allow these stockholders to sell their shares
at any time. Upon expiration of the Lockup Period, substantially all of the
shares of our common stock will be eligible for sale into the public market,
subject to compliance by our affiliates with the volume limitations and other
restrictions of Rule 144.

PRINCIPAL AND SELLING STOCKHOLDERS

The following table indicates information as of June 11, 2002 regarding the
beneficial ownership of our common stock by:

- The selling stockholders;

- Each of our officers and directors;

- All of our directors and executive officers as a group; and

- Each person known to us to own beneficially 5% or more of our common
stock.

The information has been adjusted to reflect the sale of our common stock
in this offering. The information assumes no exercise of the underwriter's
over-allotment option. All of the selling stockholders have been our directors
during the past three years.

Information with respect to beneficial ownership has been furnished by each
director, officer or 5% or more stockholder, as the case may be. Except as
otherwise noted below, the address for each person listed in the table is c/o
Total Entertainment Restaurant Corp., 9300 E. Central Ave., Suite 100, Wichita,
KS 67206.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power or
investment power with respect to those securities and includes shares of common
stock issuable pursuant to the exercise of stock options or warrants that are
immediately exercisable or exercisable within 60 days of June 11, 2002. These
shares are deemed to be outstanding and to be beneficially owned by the person
holding those options or warrants for the purpose of computing the percentage
ownership of that person, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person. Unless otherwise
indicated, the persons or entities identified in this table have sole voting and
investment power with respect to all shares shown as beneficially owned by them,
subject to applicable community property laws.

PRE-OFFERING POST-OFFERING
------------------------- -------------------------
NUMBER OF NUMBER OF
SHARES SHARES
BENEFICIALLY PERCENT OF SHARES BENEFICIALLY PERCENT OF
NAME OF BENEFICIAL OWNER: OWNED TOTAL OFFERED OWNED TOTAL
------------------------- ------------ ---------- ------- ------------ ----------

DIRECTORS AND EXECUTIVE OFFICERS:
Dennis L. Thompson(1).................. 795,445 9.0% 200,000 595,445 5.8%
Stephen P. Hartnett(2)................. 783,240 8.8 175,000 608,240 5.9
Steven M. Johnson(3)................... 223,017 2.5 223,017 2.1
Gary M. Judd(4)........................ 256,667 2.8 256,667 2.5
James K. Zielke(5)..................... 160,583 1.8 160,583 1.5
Thomas A. Hager(6)..................... 780,250 8.8 150,000 630,250 6.1
C. Wells Hall, III(7).................. 77,600 * 25,000 52,600 *
E. Gene Street(8)...................... 32,000 * 32,000 *
John D. Harkey, Jr.(9)................. 43,800 * 43,800 *
Kenneth C. Syvarth(10)................. 23,850 * 23,850 *
All directors and executive officers as
a group (10 persons) (11)............ 3,176,452 34.4 550,000 2,626,452 24.6
OTHER 5% STOCKHOLDERS:
Jamie B. Coulter (12)
2808 McKinney Ave., Apt 636
Dallas, TX 75204..................... 2,136,667 24.1 2,136,667 20.7
Straus Capital Management, LLC (13)
Melville Straus
605 Third Avenue
New York, NY 10158................... 475,300 5.4 475,300 4.6

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

* Less than 1%

(1) Includes (a) presently exercisable options to purchase 3,000 shares of
common stock, (b) 242,795 shares held by Mr. Thompson's wife, Sharon K.
Thompson, of which Mr. Thompson disclaims beneficial ownership, and (c)
80,000 shares held by Thompson Family, LLC, of which Mr. Thompson is the
managing member, and as to which shares Mr. Thompson disclaims beneficial

ownership, except to the extent of his equity interest therein. Twenty
thousand of the 200,000 shares listed as being offered by Mr. Thompson are
held by Thompson Family, LLC.

(2) Includes 349,400 shares held by Organized Capital II, Ltd. Mr. Hartnett is
a trading advisor to this entity and is the sole stockholder of its
corporate general partner. Mr. Hartnett holds 3.7% and Mr. Hartnett's wife,
Sandra Hartnett, holds 25.6% of the partnership interests of such company.
One hundred thousand of the 175,000 shares listed as being offered by Mr.
Hartnett are held by Organized Capital II, Ltd.

(3) Includes (a) presently exercisable options to purchase 66,667 shares of
common stock and (b) 5,250 shares held by Mr. Johnson as custodian for the
benefit of his three minor children.

(4) Includes presently exercisable options to purchase 136,667 shares of common
stock.

(5) Includes (a) presently exercisable options to purchase 103,333 shares of
common stock and (b) 46,000 shares held by Mr. Zielke's wife, Patti J.
Zielke, of which Mr. Zielke disclaims beneficial ownership.

(6) Includes (a) presently exercisable options to purchase 19,000 shares of
common stock, (b) 72,000 shares held by Mr. Hager as custodian for the
benefit of his two children and (c) 326,600 shares of common stock held by
Mr. Hager's wife, of which Mr. Hager disclaims beneficial ownership.

(7) Includes presently exercisable options to purchase 13,000 shares of common
stock.

(8) Includes presently exercisable options to purchase 13,000 shares of common
stock.

(9) Includes presently exercisable options to purchase 13,000 shares of common
stock.

(10) Includes presently exercisable options to purchase 3,750 shares of common
stock.

(11) Includes the shares deemed to be beneficially owned by our directors and
executive officers (see footnotes (1) through (10) to this table).

(12) Based upon information contained in an Amendment No. 1 to Schedule 13D
filed with the Securities and Exchange Commission on April 22, 2002.

(13) Based upon information contained in a Schedule 13G filed with the
Securities and Exchange Commission on January 31, 2002. Straus Capital
Management, LLC and Mr. Melville Straus share voting power and dispositive
power with respect to these shares. Mr. Straus is the Managing Principal of
Straus Capital Management, LLC.

UNDERWRITING

GENERAL

Subject to the terms and conditions set forth in an underwriting agreement,
the underwriter named below has agreed to purchase from us and the selling
stockholders the aggregate number of shares of common stock set forth opposite
its name below:

UNDERWRITER NUMBER OF SHARES
----------- ----------------

Thomas Weisel Partners LLC..................................

---------
Total....................................................... 2,000,000
=========

Of the 2,000,000 shares to be purchased by the underwriter, 1,450,000
shares will be purchased from us and 550,000 will be purchased from the selling
stockholders.

The underwriting agreement provides that the obligations of the underwriter
are subject to various conditions, including approval of legal matters by
counsel. The nature of the underwriter's obligations commits it to purchase and
pay for all of the shares of common stock listed above if any are purchased.

The underwriting agreement provides that we and the selling stockholders
will indemnify the underwriter against liabilities specified in the underwriting
agreement under the Securities Act of 1933, as amended, or will contribute to
payments that the underwriter may be required to make relating to these
liabilities.

Thomas Weisel Partners LLC expects to deliver the shares of common stock to
purchasers on or about , 2002.

OVER-ALLOTMENT OPTION

We have granted a 30-day over-allotment option to the underwriter to
purchase up to a total of 300,000 additional shares of our common stock from us
at the public offering price, less the underwriting discount payable by us, as
set forth on the cover page of this prospectus.

COMMISSIONS AND DISCOUNTS

The underwriter proposes to offer the shares of common stock directly to
the public at the public offering price set forth on the cover page of this
prospectus, and at this price less a concession not in excess of $ per share
of common stock to other dealers specified in a master agreement among
underwriters who are members of the National Association of Securities Dealers,
Inc. The underwriter may allow, and the other dealers specified may reallow,
concessions not in excess of $ per share of common stock to these other
dealers. After this offering, the offering price, concessions and other selling
terms may be changed by the underwriter. Our common stock is offered subject to
receipt and acceptance by the underwriter and to the other conditions, including
the right to reject orders in whole or in part.

The following table summarizes the compensation to be paid to the
underwriter by us and the proceeds, before expenses, payable to us and the
selling stockholders:

TOTAL
--------------------------------------------
PER SHARE WITHOUT OVER-ALLOTMENT WITH OVER-ALLOTMENT
--------- ---------------------- -------------------

Public offering price........................ $ $ $
Underwriting discount........................
Proceeds, before expenses, to us.............
Proceeds, before expenses, to selling
stockholders...............................

INDEMNIFICATION OF UNDERWRITER

We and the selling stockholders will indemnify the underwriter against some
civil liabilities, including liabilities under the Securities Act, as amended,
and liabilities arising from breaches of our representations and warranties
contained in the underwriting agreement. If we or the selling stockholders are
unable to provide this indemnification, we and the selling stockholders will
contribute to payments the underwriter may be required to make in respect of
those liabilities.

NO SALES OF SIMILAR SECURITIES

The underwriter will require all of our directors and officers and the
selling stockholders to agree not to offer, sell, agree to sell, directly or
indirectly, or otherwise dispose of any shares of common stock or any securities
convertible into or exchangeable for shares of common stock except for the
shares of common stock offered in this offering without the prior written
consent of Thomas Weisel Partners LLC for a period of 90 days after the date of
this prospectus.

We have agreed that for a period of 90 days after the date of this
prospectus, we will not, without the prior written consent of Thomas Weisel
Partners LLC, offer, sell or otherwise dispose of any shares of common stock,
except for the shares of common stock offered in this offering, the shares of
common stock issuable upon exercise of outstanding options on the date of this
prospectus and the shares of our common stock that are issued under the Option
Plans.

NASDAQ NATIONAL MARKET LISTING

Our common stock is quoted on the Nasdaq National Market under the symbol
"TENT."

SHORT SALES, STABILIZING TRANSACTIONS AND PENALTY BIDS

In order to facilitate this offering, persons participating in this
offering may engage in transactions that stabilize, maintain or otherwise affect
the price of our common stock during and after this offering. Specifically, the
underwriter may engage in the following activities in accordance with the rules
of the Securities and Exchange Commission.

Short sales. Short sales involve the sales by the underwriter of a greater
number of shares than it is required to purchase in the offering. Covered short
sales are short sales made in an amount not greater than the underwriter's
over-allotment option to purchase additional shares from us in this offering.
The underwriter may close out any covered short position by either exercising
its over-allotment option to purchase shares or purchasing shares in the open
market. In determining the source of shares to close out the covered short
position, the underwriter will consider, among other things, the price of shares
available for purchase in the open market as compared to the price at which they
may purchase shares through the over-allotment option. Naked short sales are any
short sales in excess of such over-allotment option. The underwriter must close
out any naked short position by purchasing shares in the open market. A naked
short position is more likely to be created if the underwriter is concerned that
there may be downward pressure on the price of the common stock in the open
market after pricing that could adversely affect investors who purchase in this
offering.

Stabilizing transactions. The underwriter may make bids for or purchases
of the shares for the purpose of pegging, fixing or maintaining the price of the
shares, so long as stabilizing bids do not exceed a specified maximum.

Penalty bids. If the underwriter purchases shares in the open market in a
stabilizing transaction or syndicate covering transaction, they may reclaim a
selling concession from the underwriter and selling group members who sold those
shares as part of this offering. Stabilization and syndicate covering
transactions may cause the price of the shares to be higher than it would be in
the absence of these transactions. The imposition of a penalty bid might also
have an effect on the price of the shares if it discourages presales of the
shares.

The transactions above may occur on the Nasdaq National Market or
otherwise. Neither we nor the underwriter make any representation or prediction
as to the effect that the transactions described above may have on the price of
the shares. If these transactions are commenced, they may be discontinued
without notice at any time.

LEGAL MATTERS

Foulston Siefkin LLP, Wichita, Kansas, will pass upon the validity of the
shares of common stock being offered hereby for us. Haynes and Boone, LLP,
Dallas, Texas, will pass upon certain legal matters in connection with this
offering for the underwriter.

EXPERTS

The Consolidated Financial Statements of Total Entertainment Restaurant
Corp. and subsidiaries as of December 25, 2001 and December 26, 2000, and for
each of the two years in the period ended December 25, 2001, have been included
and incorporated by reference herein in reliance upon the report of KPMG LLP
appearing elsewhere in this prospectus and incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.

The consolidated statement of income, stockholders' equity and cash flows
of Total Entertainment Restaurant Corp. and subsidiaries for the year ended
December 28, 1999 have been included and incorporated by reference herein in
reliance upon the report of Grant Thornton LLP appearing elsewhere in this
prospectus and incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

We changed certifying accountants from Grant Thornton LLP to KPMG LLP
effective December 18, 2000. The following sets forth the information required
by Item 304(a) of Regulation S-K: (i) On November 9, 2000, Grant Thornton LLP
was dismissed as our principal accountant; (ii) Grant Thornton LLP's reports on
the financial statements for the past fiscal year did not contain an adverse
opinion or a disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope or accounting principles; (iii) the decision to change
accountants was approved by our board of directors; (iv) during our most recent
fiscal year and subsequent interim periods prior to such change in accountants,
there were no disagreements with Grant Thornton LLP on any matter of accounting
principles or practices, financial statement disclosures or auditing scope or
procedure; (v) during our two most recent fiscal years and subsequent interim
periods prior to such change in accountants, there have occurred none of the
"reportable events" listed in Item 304(a)(1)(v)(A-D) of Regulation S-K; and (vi)
we have requested and received from Grant Thornton LLP the letter required by
Item 304(a)(3) of Regulation S-K (and filed the same as Exhibit 16.1 to our
report on Form 8-K filed on November 14, 2000), and we state that Grant Thornton
LLP agrees with the statements made by us in this prospectus in response to Item
304(a)(1) of Regulation S-K.

WHERE YOU CAN FIND MORE INFORMATION

We file reports, proxy statements and other information with the Securities
and Exchange Commission in accordance with the Securities Exchange Act of 1934,
as amended. You may read and copy our reports, proxy statements and other
information filed by us at the public reference facilities maintained by the
Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information about the public reference rooms. Our reports, proxy
statements and other information filed with the Securities and Exchange
Commission are also available to the public over the internet at the Securities
and Exchange Commission's website at http://www.sec.gov. Our web site on the
internet is at http://www.tentcorp.com.

INCORPORATION BY REFERENCE

The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and information that we file later with the Securities and Exchange
Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
by us with the Securities and Exchange Commission under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act until we have completed our offering described
in this prospectus:

- Our Annual Report on Form 10-K for the year ended December 25, 2001; and

- Our Quarterly Report on Form 10-Q filed for the period ended March 19,
2002.

Any statement contained in a document that is incorporated by reference
will be modified or superseded for all purposes to the extent that a statement
contained in this prospectus (or in any other document that is subsequently
filed with the Commission and incorporated by reference) modifies or is contrary
to that previous statement. Any statement so modified or superseded will not be
deemed a part of this prospectus except as so modified or superseded.

You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: Investor Relations, Total Entertainment
Restaurant Corp., ATTN: Mr. James K. Zielke, 9300 E. Central Ave., Suite 100,
Wichita, KS 67206; (316) 634-0505.

TOTAL ENTERTAINMENT RESTAURANT CORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE
----

Independent Auditors' Report................................ F-2
Report of Independent Certified Public Accountants.......... F-3
Consolidated Balance Sheets as of December 26, 2000,
December 25, 2001, and March 19, 2002 (unaudited)......... F-4
Consolidated Statements of Income for the years ended
December 28, 1999, December 26, 2000, and December 25,
2001 and the twelve weeks ended March 20, 2001 (unaudited)
and March 19, 2002 (unaudited)............................ F-5
Consolidated Statements of Stockholders' Equity for the
years ended December 28, 1999, December 26, 2000, and
December 25, 2001 and the twelve weeks ended March 19,
2002 (unaudited).......................................... F-6
Consolidated Statements of Cash Flows for the years ended
December 28, 1999, December 26, 2000, and December 25,
2001 and the twelve weeks ended March 20, 2001 (unaudited)
and March 19, 2002 (unaudited)............................ F-7
Notes to Consolidated Financial Statements.................. F-8

F-1

INDEPENDENT AUDITORS' REPORT

The Stockholders
Total Entertainment Restaurant Corp.

We have audited the accompanying consolidated balance sheets of Total
Entertainment Restaurant Corp. and subsidiaries as of December 26, 2000 and
December 25, 2001 and the related consolidated statements of income,
stockholders' equity and cash flows for the 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 auditing standards generally
accepted in the United States of America. 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Total
Entertainment Restaurant Corp. and subsidiaries as of December 26, 2000 and
December 25, 2001, and the results of their operations and their cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.

KPMG LLP

Wichita, Kansas
February 1, 2002, except as
to note 11 which is as
of June 4, 2002.

F-2

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Stockholders
Total Entertainment Restaurant Corp.

We have audited the accompanying consolidated statements of income,
stockholders' equity and cash flows of Total Entertainment Restaurant Corp. for
the year ended December 28, 1999. 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 audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. 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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated results of operations and
consolidated cash flows of Total Entertainment Restaurant Corp. for the year
ended December 28, 1999, in conformity with accounting principles generally
accepted in the United States of America.

As described in Note 1 to the financial statements, on December 30, 1998,
the Company changed its method of accounting for pre-opening costs.

GRANT THORNTON LLP

Wichita, Kansas
January 28, 2000

F-3

TOTAL ENTERTAINMENT RESTAURANT CORP.

CONSOLIDATED BALANCE SHEETS

DECEMBER 26, DECEMBER 25, MARCH 19,
2000 2001 2002
------------ ------------ -----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents................................. $ 2,244,606 $ 1,346,495 $ 909,915
Inventories............................................... 1,028,975 1,230,636 1,363,211
Deferred income taxes..................................... 161,206 223,742 238,770
Other current assets...................................... 579,594 586,967 1,238,077
----------- ----------- -----------
Total current assets........................................ 4,014,381 3,387,840 3,749,973
Property and equipment:
Land...................................................... 600,000 600,000 600,000
Buildings................................................. 670,629 670,629 670,629
Leasehold improvements.................................... 21,851,941 26,336,678 28,938,323
Equipment................................................. 13,397,524 15,284,124 16,993,556
Furniture and fixtures.................................... 3,265,386 3,890,170 4,329,688
----------- ----------- -----------
39,785,480 46,781,601 51,532,196
Less accumulated depreciation and amortization............ 9,022,781 12,249,339 13,240,026
----------- ----------- -----------
Net property and equipment.................................. 30,762,699 34,532,262 38,292,170
Other assets:
Goodwill, net of accumulated amortization of $977,959,
$1,222,121, and $1,222,121 at December 26, 2000,
December 25, 2001, and March 19, 2002, respectively.... 3,905,296 3,661,134 3,661,134
Deferred income taxes..................................... 1,059,839 982,875 945,897
Other assets.............................................. 385,385 586,048 664,012
----------- ----------- -----------
Total other assets.......................................... 5,350,520 5,230,057 5,271,043
----------- ----------- -----------
Total assets................................................ $40,127,600 $43,150,159 $47,313,186
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion notes payable............................. $ 418,108 $ -- $ --
Accounts payable.......................................... 3,520,542 3,741,281 3,279,294
Sales tax payable......................................... 442,297 529,852 863,131
Accrued payroll........................................... 775,012 873,765 740,973
Accrued payroll taxes..................................... 242,134 23,258 464,520
Accrued income taxes...................................... 1,009,592 2,155,170 1,490,086
Lease obligation for closed store......................... 263,924 158,342 131,946
Other accrued liabilities................................. 777,504 1,065,734 1,374,939
----------- ----------- -----------
Total current liabilities................................... 7,449,113 8,547,402 8,344,889
Note payable................................................ 11,561,892 10,350,000 12,825,000
Deferred revenue............................................ 129,549 103,875 96,952
Stockholders' equity:
Preferred stock, $.10 par value, 2,000,000 shares
authorized; none issued................................ -- -- --
Common stock, $.01 par value; 20,000,000 shares
authorized; 8,741,411, 8,665,611, and 8,665,611 shares
issued and outstanding at December 26, 2000, December
25, 2001, and March 19, 2002, respectively............. 87,414 86,656 86,656
Additional paid-in capital................................ 17,301,511 17,134,953 17,134,953
Retained earnings......................................... 3,598,121 6,927,273 8,824,736
----------- ----------- -----------
Total stockholders' equity.................................. 20,987,046 24,148,882 26,046,345
----------- ----------- -----------
Total liabilities and stockholders' equity.................. $40,127,600 $43,150,159 $47,313,186
=========== =========== ===========

See notes to consolidated financial statements.
F-4

TOTAL ENTERTAINMENT RESTAURANT CORP.

CONSOLIDATED STATEMENTS OF INCOME

YEAR ENDED TWELVE WEEKS ENDED
------------------------------------------ -------------------------
DECEMBER 28, DECEMBER 26, DECEMBER 25, MARCH 20, MARCH 19,
1999 2000 2001 2001 2002
------------ ------------ ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)

Sales:
Food and beverage...................... $50,525,221 $50,837,163 $64,504,884 $14,906,505 $20,117,978
Entertainment and other................ 5,404,628 5,152,660 6,447,603 1,530,512 1,986,217
----------- ----------- ----------- ----------- -----------
Total net sales...................... 55,929,849 55,989,823 70,952,487 16,437,017 22,104,195
Cost and expenses:
Cost of sales.......................... 15,349,274 14,789,948 19,213,441 4,450,827 5,803,724
Restaurant operating expenses.......... 28,631,590 28,394,610 35,741,386 8,024,978 10,555,263
Depreciation and amortization.......... 3,697,083 3,592,299 3,706,054 816,399 1,009,618
Preopening costs....................... 487,475 500,739 1,217,455 71,407 490,641
Provision for asset impairment and
store closing........................ 1,086,785 2,361,840 575,098 -- --
----------- ----------- ----------- ----------- -----------
Restaurant costs and expenses............ 49,252,207 49,639,436 60,453,434 13,363,611 17,859,246
----------- ----------- ----------- ----------- -----------
Restaurant operating income.............. 6,677,642 6,350,387 10,499,053 3,073,406 4,244,949
General and administrative expenses:
Related parties........................ 60,563 -- -- -- --
Other.................................. 3,839,623 3,768,774 3,990,827 866,848 1,155,265
Goodwill amortization.................... 244,163 244,163 244,163 56,345 --
----------- ----------- ----------- ----------- -----------
Income from operations................... 2,533,293 2,337,450 6,264,063 2,150,213 3,089,684
Other income (expense):
Loss on disposal of assets............. (123,648) (66,902) (133,825) (23,290) (18,239)
Other income (principally interest
income).............................. 126 404 1,484 40 6
Interest expense....................... (1,174,739) (1,080,919) (864,375) (254,639) (106,665)
----------- ----------- ----------- ----------- -----------
Income before provision for income
taxes.................................. 1,235,032 1,190,033 5,267,347 1,872,324 2,964,786
Provision for income taxes............... 418,211 341,646 1,938,195 681,115 1,067,323
----------- ----------- ----------- ----------- -----------
Income before cumulative effect of a
change in accounting principle......... 816,821 848,387 3,329,152 1,191,209 1,897,463
Cumulative effect of a change in
accounting principle................... (1,127,536) -- -- -- --
----------- ----------- ----------- ----------- -----------
Net income (loss)........................ $ (310,715) $ 848,387 $ 3,329,152 $ 1,191,209 $ 1,897,463
=========== =========== =========== =========== ===========
Basic earnings (loss) per share:
Earnings before cumulative effect of a
change in accounting principle....... $ 0.08 $ 0.09 $ 0.38 $ 0.14 $ 0.22
Cumulative effect of a change in
accounting principle................. (0.11) -- -- -- --
----------- ----------- ----------- ----------- -----------
Basic earnings (loss) per share........ $ (0.03) $ 0.09 $ 0.38 $ 0.14 $ 0.22
=========== =========== =========== =========== ===========
Diluted earnings (loss) per share:
Earnings before cumulative effect of a
change in accounting principle....... $ 0.08 $ 0.09 $ 0.38 $ 0.14 $ 0.21
Cumulative effect of a change in
accounting principle................. (0.11) -- -- -- --
----------- ----------- ----------- ----------- -----------
Diluted earnings (loss) per share...... $ (0.03) $ 0.09 $ 0.38 $ 0.14 $ 0.21
=========== =========== =========== =========== ===========

See notes to consolidated financial statements.
F-5

TOTAL ENTERTAINMENT RESTAURANT CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

COMMON STOCK ADDITIONAL
--------------------- PAID-IN RETAINED
NUMBER AMOUNT CAPITAL EARNINGS TOTAL
---------- -------- ----------- ---------- -----------

Balance at December 29, 1998........ 10,415,000 $104,150 $20,571,178 $3,060,449 $23,735,777
Purchase and retirement of shares
of common stock................ (733,729) (7,337) (1,185,949) -- (1,193,286)
Net loss.......................... -- -- -- (310,715) (310,715)
---------- -------- ----------- ---------- -----------
Balance at December 28, 1999........ 9,681,271 96,813 19,385,229 2,749,734 22,231,776
Purchase and retirement of shares
of common stock................ (939,860) (9,399) (2,083,718) -- (2,093,117)
Net income........................ -- -- -- 848,387 848,387
---------- -------- ----------- ---------- -----------
Balance at December 26, 2000........ 8,741,411 87,414 17,301,511 3,598,121 20,987,046
Purchase and retirement of shares
of common stock................ (75,800) (758) (166,558) -- (167,316)
Net income........................ -- -- -- 3,329,152 3,329,152
---------- -------- ----------- ---------- -----------
Balance at December 25, 2001........ 8,665,611 86,656 17,134,953 6,927,273 24,148,882
Net income (unaudited)............ -- -- -- 1,897,463 1,897,463
---------- -------- ----------- ---------- -----------
Balance at March 19, 2002
(unaudited)....................... 8,665,611 $ 86,656 $17,134,953 $8,824,736 $26,046,345
========== ======== =========== ========== ===========

See notes to consolidated financial statements.
F-6

TOTAL ENTERTAINMENT RESTAURANT CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED TWELVE WEEKS ENDED
------------------------------------------ --------------------------
DECEMBER 28, DECEMBER 26, DECEMBER 25, MARCH 20, MARCH 19,
1999 2000 2001 2001 2002
------------ ------------ ------------ ------------ -----------
(UNAUDITED) (UNAUDITED)

OPERATING ACTIVITIES
Net income (loss)......................... $ (310,715) $ 848,387 $ 3,329,152 $ 1,191,209 $ 1,897,463
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Cumulative effect of a change in
accounting principle............... 1,127,536 -- -- -- --
Write off of property and equipment
related to asset impairment and
store closure...................... 692,746 2,361,840 575,098 -- --
Loss on disposal of assets............ 123,648 66,902 133,825 23,290 18,239
Depreciation.......................... 3,725,240 3,611,878 3,725,337 821,359 1,015,321
Amortization.......................... 287,744 269,413 272,952 63,678 8,872
Deferred taxes........................ (286,212) (593,759) 14,428 39,669 21,950
Net change in operating assets and
liabilities:
Inventories........................ (118,470) (55,819) (201,661) (84,386) (132,575)
Other current assets............... 227,108 (143,955) (7,373) (143,447) (651,110)
Other assets....................... 14,514 (122,368) (229,453) (132,760) (86,836)
Accounts payable................... (2,005,717) 934,011 1,505,297 (206,966) (585,450)
Accounts payable -- affiliates..... (11,451) -- -- -- --
Accrued liabilities................ 927,396 70,639 1,401,240 (16,016) 285,870
Deferred revenue................... 140,769 (11,220) (25,674) (6,923) (6,923)
Lease obligation for closed
store............................ 368,476 (104,552) (105,582) (26,396) (26,396)
------------ ------------ ------------ ------------ -----------
Net cash provided by operating activities... 4,902,612 7,131,397 10,387,586 1,522,311 1,758,425
INVESTING ACTIVITIES
Purchases of property and equipment....... (4,694,718) (3,005,492) (9,540,231) (2,186,493) (4,676,400)
Proceeds from disposal of assets.......... 10,000 76,349 51,850 8,000 6,395
------------ ------------ ------------ ------------ -----------
Net cash used in investing activities....... (4,684,718) (2,929,143) (9,488,381) (2,178,493) (4,670,005)
FINANCING ACTIVITIES
Proceeds from note payable................ 41,200,000 38,480,000 41,945,000 13,500,000 7,860,000
Payments of note payable.................. (38,620,000) (40,895,000) (43,575,000) (11,865,000) (5,385,000)
Purchase of common stock.................. (1,193,286) (2,093,117) (167,316) (167,316) --
------------ ------------ ------------ ------------ -----------
Net cash (used in) provided by financing
activities................................ 1,386,714 (4,508,117) (1,797,316) 1,467,684 2,475,000
Net (decrease) increase in cash and cash
equivalents............................... 1,604,608 (305,863) (898,111) 811,502 (436,580)
Cash and cash equivalents at beginning of
year...................................... 945,861 2,550,469 2,244,606 2,244,606 1,346,495
------------ ------------ ------------ ------------ -----------
Cash and cash equivalents at end of year.... $ 2,550,469 $ 2,244,606 $ 1,346,495 $ 3,056,108 $ 909,915
============ ============ ============ ============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid for interest...................... $ 1,171,349 $ 1,208,313 $ 885,206 $ 273,420 $ 114,717
Cash paid for income taxes.................. 190,668 802,650 778,189 740,547 1,710,457
SUPPLEMENTAL DISCLOSURE OF NON CASH ACTIVITY
Additions to property and equipment in
accounts payable at year end.............. $ -- $ 1,546,083 $ 261,525 $ 1,087,173 $ 123,463

See notes to consolidated financial statements.
F-7

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES

BACKGROUND

Total Entertainment Restaurant Corp. (the Company) owns and operates a
chain of restaurant locations under the Fox and Hound English Pub & Grille and
Fox and Hound Smokehouse & Tavern (Fox and Hound), Bailey's Sports Grille,
Bailey's Pub & Grille, and Bailey's Smokehouse & Tavern (Bailey's) brand names.
As of December 25, 2001, the Company owned and operated 29 Fox & Hounds and 14
Bailey's in Alabama, Arkansas, Georgia, Illinois, Indiana, Kansas, Louisiana,
Michigan, Missouri, Nebraska, North Carolina, Ohio, Pennsylvania, South
Carolina, Tennessee and Texas. The Company operates in one business segment.

The Company has a 52/53 week fiscal year ending on the last Tuesday in
December.

PRINCIPLES OF CONSOLIDATION

The accompanying financial statements include the accounts of Total
Entertainment Restaurant Corp. and its wholly-owned subsidiaries. All
significant intercompany accounts have been eliminated.

CASH AND CASH EQUIVALENTS

The Company considers cash and cash equivalents to include currency on
hand, demand deposits with banks or financial institutions, and short-term
investments with maturities of three months or less when purchased. Cash and
cash equivalents are carried at cost, which approximates fair value.

CONCENTRATION OF CREDIT RISK

The Company's financial instruments exposed to credit risk consist
primarily of cash. The Company places its cash with high credit financial
institutions and, at times, such cash may be in excess of the Federal Depository
insurance limit.

INVENTORIES

Inventories consist of food and beverages and are stated at the lower of
cost (first-in, first-out) or market.

PREOPENING COSTS

In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 98-5, Reporting on the Costs of Start-Up
Activities, which requires costs related to preopening activities be expensed as
incurred. Prior to fiscal year 1999, the Company capitalized substantially all
costs incurred prior to the opening of new restaurants, excluding those costs
capitalized as property and equipment, and amortized such pre-opening costs over
a one-year period. The Company adopted the provisions of SOP 98-5 effective
December 30, 1998. The effect of adoption of SOP 98-5 was to increase income
from continuing operations in 1999 by $1,064,401 ($0.10 per share), net of tax
expense of $625,125, and to record a charge for the cumulative effect of an
accounting change of $1,127,536, net of tax benefits of $662,204, to expense
costs that had been capitalized prior to 1999.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Maintenance repairs and renewals
which do not enhance the value of or increase the life of the assets are
expensed as incurred.

F-8

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Buildings and leasehold improvements are amortized on the straight-line
method over the lesser of the life of the lease, including renewal options, or
the estimated useful lives of the assets, which range from 5 to 30 years.
Equipment and furniture and fixtures are depreciated using the straight-line
method over the estimated useful lives of the assets, which range from two to
seven years.

GOODWILL

Goodwill represents the excess of the cost of companies acquired over the
fair value of the net assets at the date of acquisition and was being amortized
over 20 years until December 25, 2001 (see note 12).

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets and certain intangibles, including goodwill, are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company reviews
applicable intangible assets and long-lived assets related to each restaurant on
a periodic basis. When events or changes in circumstances indicate an asset may
not be recoverable, the Company estimates the future cash flows expected to
result from the use of the asset. If the sum of the expected undiscounted cash
flows is less than the carrying value of the asset, an impairment loss is
recognized. The impairment loss is recognized by measuring the difference
between the carrying value of the asset and the fair value of the asset. The
Company's estimates of fair values are based on the best information available
and require the use of estimates, judgments and projections as considered
necessary. The actual results may vary significantly. A provision for impairment
amounting to $2,361,840 and $575,098 has been recorded for the years ended
December 26, 2000 and December 25, 2001, respectively.

INCOME TAXES

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Valuation allowances are established when necessary to reduce deferred
tax assets to the amounts expected to be realized. Deferred tax assets and
liabilities are measured using enacted tax rates. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising expense for the
years ended December 28, 1999, December 26, 2000, and December 25, 2001 were
$622,555, $696,364 and $536,342, respectively.

ACCOUNTING FOR STOCK-BASED COMPENSATION

In accordance with Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, the Company uses the intrinsic
value-based method for measuring stock-based compensation cost which measures
compensation cost as the excess, if any, of the quoted market price of Company's
common stock at the grant date over the amount the employee must pay for the
stock. The Company's policy is to grant stock options with grant prices equal to
the fair value of the Company's common stock at the date of grant. Proceeds from
the exercise of common stock options issued to officers, directors and key
employees under the Company's stock option plans are credited to common stock to
the extent of par value and to additional paid-in capital for the excess.
Required pro forma disclosures of compensation expense determined under the fair
value method of Statement of Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock-Based Compensation, are presented in Note 4.

F-9

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from estimates.

EARNINGS PER SHARE

Basic earnings per common share is calculated by dividing net income by the
average number of common shares outstanding during the year. Diluted earnings
per common share is calculated by adjusting outstanding shares, assuming
conversion of all potentially dilutive stock options.

INTERIM FINANCIAL DATA (UNAUDITED)

The accompanying balance sheet as of March 19, 2002 and the accompanying
statements of income, stockholders' equity, and cash flows for the twelve weeks
ended March 20, 2001 and March 19, 2002 have been prepared by the Company
without an audit. In the opinion of management, all adjustments, consisting only
of normal recurring adjustments, considered necessary for a fair presentation
for such periods have been made. Results for interim periods should not be
considered as indicative of results for a full year.

Footnote disclosures normally included in annual financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been omitted herein with respect to the interim
financial data. The interim information herein should be read in conjunction
with the annual financial information presented herein.

2. PREFERRED STOCK

The Company's board of directors has the authority to issue up to 2,000,000
shares of preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preference
and the number of shares constituting any series or the designation of such
series.

3. NOTE PAYABLE

On September 1, 1998 the Company entered into a line of credit agreement
with Intrust Bank, N.A. (the line of credit) which provides for a line of credit
of $20,000,000 subject to certain limitations based on earnings before interest,
income taxes, depreciation and amortization of the past fifty-two weeks. The
line of credit is secured by substantially all assets of the Company. The line
of credit restricts the ability of the Company to pay dividends. The line of
credit requires monthly payments of interest only until October 1, 2003, at
which time equal monthly installments of principal and interest are required as
necessary to fully amortize the outstanding indebtedness plus future interest
over a period of four years. Interest is accrued at a rate of 0.5% below the
prime rate as published in The Wall Street Journal (9.00% and 4.50% at December
26, 2000 and December 25, 2001, respectively). Proceeds from the line of credit
were used for restaurant development and acquisition of treasury stock. As of
December 26, 2000 and December 25, 2001, the Company had borrowed $11,980,000
and $10,350,000, respectively, under the line of credit. The Company had
additional borrowings available at December 25, 2001 under the line of credit of
$9,650,000.

F-10

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following represents future maturities of the note as of December 25,
2001:

2002........................................................ $ --
2003........................................................ 395,147
2004........................................................ 2,434,019
2005........................................................ 2,545,838
2006........................................................ 2,662,793
Thereafter.................................................. 2,312,203
-----------
Total....................................................... $10,350,000
===========

4. STOCK OPTIONS

The Company has elected to follow APB Opinion No. 25, Accounting for Stock
Issued to Employees and related interpretations in accounting for its employee
stock options because, as described below, the alternative fair value accounting
provided for under SFAS No. 123, Accounting for Stock-Based Compensation,
requires the use of option valuation models that were not developed for use in
valuing employee stock options. Under APB Opinion No. 25, because the exercise
price of the Company's employee stock options equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

The Company's stock option plans are as follows:

1997 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN

In March 1997, the Board of Directors adopted a stock option plan
providing for incentive and nonqualified stock options pursuant to which up
to 1,500,000 shares of common stock will be available for issuance. The
Plan was amended in May 1999 to increase the number of authorized shares
reserved for issuance to 1,600,000 shares from 1,500,000 shares. The Plan
covers the former Chairman of the Board, certain officers and key
employees. Options granted have a vesting period of three to five years and
a life of ten years.

DIRECTORS' STOCK OPTION PLAN

In March 1997, the Board of Directors adopted a stock option plan
providing for nondiscretionary grants to nonemployee directors pursuant to
which up to 150,000 shares of common stock will be available for issuance.

Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, which also requires the information be determined as
if the Company has accounted for its employee stock options granted under the
fair value of that Statement. The fair value method for these options were
estimated at the date of grant using a Black-Scholes option pricing model with
the following weighted-average assumptions: risk-free interest rate ranging from
4.1% to 5.3%; no dividend yields; volatility factor ranging from 0.281 to 0.800;
and a weighted-average expected life of the option of 5 years.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions, including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

F-11

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the option's vesting period. The Company's
pro forma information is as follows:

DECEMBER 28, DECEMBER 26, DECEMBER 25,
1999 2000 2001
------------ ------------ ------------

Pro forma net income (loss)..................... $(524,264) $645,479 $2,979,754
Pro forma earnings (loss) per share -- basic and
diluted....................................... $ (0.05) $ 0.07 $ 0.34
Weighted-average fair value per share of options
granted during the year....................... $ 3.05 $ 1.23 $ 1.24

A summary of the Company's stock option activity and related information
for the years ended December 28, 1999, December 26, 2000, and December 25, 2001
follows:

DECEMBER 28, 1999 DECEMBER 26, 2000 DECEMBER 25, 2001
-------------------- -------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
PRICE OPTIONS PRICE OPTIONS PRICE OPTIONS
-------- --------- -------- --------- -------- ---------

Outstanding beginning
of year.............. $7.19 1,129,401 $5.57 1,180,903 $5.60 980,069
Granted.............. 4.02 638,292 1.92 58,000 2.49 278,000
Exercised............ -- -- -- -- -- --
Canceled............. (6.05) (586,790) (4.45) (258,834) (3.71) (114,724)
--------- --------- ---------
Outstanding end of
year................. $5.57 1,180,903 $5.60 980,069 $5.10 1,143,345
========= ========= =========

As of December 25, 2001, the Company's outstanding options have a
weighted-average remaining contract life of 6.6 years and exercise prices
ranging from $1.63 to $9.00. There were 417,113 options exercisable at December
26, 2000 and 546,379 options exercisable at December 25, 2001.

For options outstanding as of December 25, 2001, the number of options,
weighted-average exercise price and weighted-average remaining contract life for
each group of options are as follows:

OPTIONS OUTSTANDING
-----------------------------------------------------------------------
NUMBER
OUTSTANDING AT WEIGHTED-AVERAGE
DECEMBER 25, WEIGHTED-AVERAGE REMAINING
RANGE OF PRICES 2001 EXERCISE PRICE CONTRACT LIFE
--------------- -------------- ---------------- ----------------

$1.63 to $4.00 695,248 3.04 7.40 years
$4.13 to $5.25 65,175 4.39 5.39 years
$7.00 to $9.00 382,922 8.96 5.32 years
---------
Total 1,143,345 5.10 6.59 years
=========

F-12

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The number of shares and weighted-average exercise price of options
exercisable at December 25, 2001 are as follows:

OPTIONS EXERCISABLE
----------------------------------------------------
NUMBER
EXERCISABLE AT
DECEMBER 25, WEIGHTED-AVERAGE
RANGE OF PRICES 2001 EXERCISE PRICE
--------------- -------------- ----------------

$1.63 to $4.00 176,771 3.35
$4.13 to $5.25 30,036 4.41
$7.00 to $9.00 339,572 8.98
---------
Total 546,379 6.91
=========

5. RELATED PARTY TRANSACTIONS

The Company utilized an affiliate to provide certain accounting, computer,
and administrative services during 1999. The Company incurred fees of $60,563
related to these services for the year ended December 28, 1999.

6. LEASES

The Company leases many of its facilities under noncancelable operating
leases having terms expiring between 2002 and 2017. The leases have renewal
clauses of 3 to 5 years, exercisable at the option of the lessee. In addition,
certain leases contain escalation clauses based on a fixed percentage increase
and provisions for contingent rentals based on a percentage of gross revenues,
as defined by the lease. Total rental expense for the years ended December 28,
1999, December 26, 2000, and December 25, 2001 was $3,196,886, $3,246,774, and
$3,898,642, respectively, of which $241,892, $243,409, and $267,686,
respectively, was paid to a related party. There were no contingent rentals
during 1999 or 2000. Contingent rentals for the year ended December 25, 2001
were $10,107.

The following presents the future minimum lease payments under
noncancelable operating leases with initial terms in excess of one year for each
of the next five years and thereafter as of December 25, 2001:

2002........................................................ $ 4,950,171
2003........................................................ 4,648,272
2004........................................................ 2,929,736
2005........................................................ 2,713,873
2006........................................................ 2,368,964
Thereafter.................................................. 11,647,782
-----------
Total....................................................... $29,258,798
===========

It is expected that in the normal course of business leases will be renewed
as they expire.

F-13

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted
earnings per share:

FISCAL YEAR ENDED TWELVE WEEKS ENDED
------------------------------------------ -------------------------
DECEMBER 28, DECEMBER 26, DECEMBER 25, MARCH 20, MARCH 19,
1999 2000 2001 2001 2002
------------ ------------ ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)

Numerator
Net income (loss)........... $ (310,715) $ 848,387 $3,329,152 $1,191,209 $1,897,463
=========== ========== ========== ========== ==========
Denominator
Denominator for basic
earnings (loss) per
share -- weighted-average
shares................. 10,348,324 9,323,913 8,669,545 8,682,868 8,665,611
Effect of dilutive
securities:
Employee stock options.... 3,915 5,884 24,435 15,726 359,866
----------- ---------- ---------- ---------- ----------
Dilutive potential common
shares
Denominator for diluted
earnings (loss) per
share -- adjusted
weighted-average shares
and assumed conversions... 10,352,239 9,328,797 8,693,980 8,698,594 9,025,477
=========== ========== ========== ========== ==========
Basic earnings (loss) per
common share.............. $ (0.03) $ 0.09 $ 0.38 $ 0.14 $ 0.22
=========== ========== ========== ========== ==========
Diluted earnings (loss) per
common share.............. $ (0.03) $ 0.09 $ 0.38 $ 0.14 $ 0.21
=========== ========== ========== ========== ==========

8. INCOME TAXES

The Company's provision for income taxes consists of the following:

DECEMBER 28, DECEMBER 26, DECEMBER 25,
1999 2000 2001
------------ ------------ ------------

Current:
Federal....................................... $ 534,938 $ 786,663 $1,427,641
State......................................... 49,953 148,742 496,126
--------- --------- ----------
Total Current................................... 584,891 935,405 1,923,767
Deferred:
Federal....................................... (777,401) (546,984) 11,951
State......................................... (51,483) (46,775) 2,477
--------- --------- ----------
Total Deferred.................................. (828,884) (593,759) 14,428
--------- --------- ----------
Total income tax expense (benefit).............. $(243,993) $ 341,646 $1,938,195
========= ========= ==========

F-14

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The income tax effects of temporary differences that give rise to
significant portions of deferred income tax assets and liabilities at December
26, 2000 and December 25, 2001 are as follows:

DECEMBER 26, DECEMBER 25,
2000 2001
------------ ------------

Deferred tax assets:
Preopening and organization costs......................... $ 527,423 $ 545,788
Store closure costs....................................... 387,452 289,370
Asset impairment costs.................................... 956,545 1,023,695
Deferred revenue.......................................... 52,467 33,847
State income taxes........................................ 47,003 211,486
Vacation.................................................. 43,403 39,809
Federal tax credit carryovers............................. 913,641 426,764
Other..................................................... 3,253 2,101
---------- ----------
Total deferred tax assets................................. 2,931,187 2,572,860
---------- ----------
Deferred tax liabilities:
Property and equipment.................................... 1,486,054 1,209,568
Goodwill.................................................. 167,442 154,621
Other..................................................... 56,646 2,054
---------- ----------
Total deferred tax liabilities.............................. 1,710,142 1,366,243
---------- ----------
Net deferred tax asset...................................... $1,221,045 $1,206,617
========== ==========

The federal tax credit carryovers consist of credits for social security
taxes paid on tips in excess of minimum wage of $658,119 and $171,242 at
December 26, 2000 and December 25, 2001, respectively, which expire in 2021 and
credits for alternative minimum tax of $255,522 and $255,522 at December 26,
2000 and December 25, 2001, respectively, which have no expiration date. A
valuation allowance for deferred tax assets was not considered necessary at
December 25, 2001.

A reconciliation between the reported provision for income taxes and tax
determined by applying the applicable U.S. Federal Statutory income tax rate to
income before taxes follows:

DECEMBER 28, 1999 DECEMBER 26, 2000 DECEMBER 25, 2001
----------------- ----------------- -----------------
AMOUNT RATE AMOUNT RATE AMOUNT RATE
--------- ----- --------- ----- ---------- ----

Income tax expense (benefit)
at federal statutory
rate...................... $(188,601) 34.0% $ 404,611 34.0% $1,790,898 34.0%
State income taxes, net of
federal benefit
(provision)............... (15,217) 2.7 41,199 3.5 281,307 5.3
Tax credits................. (126,615) 22.8 (177,591) (14.9) (200,227) (3.8)
Other items, net............ 86,440 (15.5) 73,427 6.1 66,217 1.3
--------- ----- --------- ----- ---------- ----
Actual income tax expense
(benefit)................. $(243,993) 44.0% $ 341,646 28.7% $1,938,195 36.8%
========= ===== ========= ===== ========== ====

9. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amount reported in the balance sheet for all financial
instruments, including cash and cash equivalents, certain payables, and debt
instruments, approximates their fair value.

F-15

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table summarizes the unaudited consolidated quarterly results
of operations for fiscal years 2000 and 2001:

1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
(12 WEEKS) (12 WEEKS) (12 WEEKS) (16 WEEKS)
----------- ----------- ----------- -----------

2000
Net sales...................... $13,649,790 $12,006,223 $11,282,667 $19,051,143
Restaurant operating
income(a)................... 2,831,044 1,676,877 1,213,162 629,304
Net income (loss)(a)........... 971,316 294,971 20,221 (438,121)
Basic and diluted earnings
(loss) per share............ $ 0.10 $ 0.03 $ 0.00 $ (0.05)

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

(a) The fourth quarter of fiscal year 2000 includes a charge to earnings of
$2,361,840 ($1,457,491 net of income tax) related to the provision for
asset impairment in the quarter.

1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
(12 WEEKS) (12 WEEKS) (12 WEEKS) (16 WEEKS)
----------- ----------- ----------- -----------

2001
Net sales........................ $16,437,017 $14,725,028 $14,550,685 $25,239,757
Restaurant operating income(a)... 3,073,406 1,789,149 1,508,109 4,128,389
Net income(a).................... 1,191,209 362,051 219,984 1,555,908
Basic and diluted earnings per
share.......................... $ 0.14 $ 0.04 $ 0.03 $ 0.18

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

(a) The fourth quarter of fiscal year 2001 includes a charge to earnings of
$575,098 ($354,430 net of income tax) related to the provision for asset
impairment in the quarter.

11. LEGAL PROCEEDINGS

On February 28, 2001, eight former employees filed a complaint on their own
behalf and on behalf of other similarly situated persons against the Company,
Fox & Hound of Indiana, Inc., a subsidiary of the Company, and several Company
officers, in the United States District Court for the Southern District of
Indiana.

The plaintiffs alleged that the Company and the other defendants willfully
and in bad faith failed to pay the defendants overtime pay for hours worked in
excess of forty hours per week in violation of the provisions of the Fair Labor
Standards Act. The plaintiffs' complaint seeks (1) a declaratory judgment that
the Company and other defendants violated the plaintiffs' legal rights, (2) an
accounting of compensation to which the defendants are owed, (3) monetary
damages in the form of back pay compensation and benefits, unpaid entitlements,
liquidated damages, and pre-judgment and post-judgment interest, and (4)
attorneys' fees and costs. Defendants including the Company have filed their
answer to the plaintiffs' complaint. On June 4, 2002, the court entered an order
allowing the plaintiffs to send a notice to all persons who have worked for the
Company under certain employee-manager titles since February 29, 1998, so that
such persons may decide whether to opt-in to the collective action. The court
specifically excluded from the collective action those employees who have
arbitration agreements with the Company (which the Company estimates to be
approximately 40% of the persons alleged by the plaintiffs to be similarly
situated) and those employees whose claims are barred by the statute of
limitations. Persons receiving notice will have a period of 120 days after the
notice is sent to opt into the action. The trial of the case is currently
scheduled for March 2003.

F-16

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

It is not possible at this time for the Company to evaluate the merits of
this claim, the Company's likelihood of success or the range of potential loss.

On October 2, 2000, R&A Bailey & Company of Dublin, Ireland, filed a notice
of opposition in the Trademark Trial and Appeal Board of the U.S. Patent and
Trademark Office to certain of the Company's U.S. service mark applications.
Additionally, on November 14, 2000, R&A Bailey & Company filed a petition in the
Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office to
cancel certain of the Company's U.S. service mark registrations. In both
instances, the service marks involved in the actions included the word
"Bailey's".

On December 29, 2000, the Company through its trademark counsel filed an
answer to R&A Bailey & Company's notice of opposition, denying its allegations.
On February 16, 2001, the Company filed a Stipulated Motion to Extend Answer to
Petition in response to the petition to cancel by R&A Bailey & Company. The
actions have been suspended by the Trademark Trial & Appeal Board to allow the
parties time to negotiate for possible settlement of these pending actions. The
Company is actively pursuing settlement, and is of the opinion that any
resulting liability should not have a material adverse effect on the Company's
financial statements.

12. NEW ACCOUNTING STANDARDS

The Company adopted the provisions of SFAS No. 142, Goodwill and Other
Intangible Assets, effective December 26, 2001. SFAS No. 142 requires that
goodwill no longer be amortized, but instead tested for impairment annually, or
more frequently if circumstances indicate potential impairment through a
comparison of fair value to its carrying value. No impairment losses were
recorded upon the initial adoption of SFAS No. 142.

The effect of the adoption of SFAS No. 142 on net income and earnings per
share is as follows:

TWELVE WEEKS ENDED
-------------------------
MARCH 20, MARCH 19,
2001 2002
----------- -----------
(UNAUDITED) (UNAUDITED)

Net income, as reported..................................... $1,191,209 $1,897,463
Goodwill amortization (net of income taxes)................. 42,135 --
---------- ----------
Net income, as adjusted..................................... $1,233,344 $1,897,463
========== ==========
Basic earnings per share, as reported....................... $ .14 $ .22
Goodwill amortization (net of income taxes)................. -- --
---------- ----------
Basic earnings per share, as adjusted....................... $ .14 $ .22
========== ==========
Diluted earnings per share, as reported..................... $ .14 $ .21
Goodwill amortization (net of income taxes)................. -- --
---------- ----------
Diluted earnings per share, as adjusted..................... $ .14 $ .21
========== ==========

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS No. 144 addresses significant issues
relating to the implementation of SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and develops a
single accounting method under which long-lived assets that are to be disposed
of by sale are measured at the lower of book value or fair value less cost to
sell. Additionally, SFAS No. 144 expands the scope of discontinued operations to
include all components of an entity with operations that (1) can be
distinguished from the rest of the entity and (2) will be eliminated from the
ongoing operations of the entity in a disposal transaction. SFAS No. 144 is
effective for financial statements issued for fiscal years beginning after
December 15, 2001 and its provisions are to be applied prospectively. Management
believes that the adoption of SFAS No. 144 will not have a significant impact on
the financial statements.

F-17

INSIDE BACK COVER

[Inside back cover consists of three pieces]

FIRST PIECE:

[Pictures of our food under the caption "Broad Menu with High Quality
Food"]

SECOND AND THIRD PIECES:

[Pictures of our menu]

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

[Inside back cover consists of three pieces]

FIRST PIECE:

[Pictures of our food]

SECOND AND THIRD PIECES:

[Pictures of our menu]

PROSPECTUS

TOTAL ENTERTAINMENT RESTAURANT CORP.

(FOX AND HOUND LOGO)(BAILEY'S LOGO)

2,000,000 SHARES
COMMON STOCK

THOMAS WEISEL PARTNERS LLC

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

Neither we nor our underwriter have authorized anyone to provide information
different from that contained in this prospectus. When you make a decision about
whether to invest in our common stock, you should not rely upon any information
other than the information in this prospectus. Neither the delivery of this
prospectus nor the sale of our common stock means that information contained in
this prospectus is correct after the date of this prospectus. This prospectus is
not an offer to sell or solicitation of an offer to buy these shares of common
stock in any circumstances under which the offer or solicitation is unlawful.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses (other than selling
commissions and other fees paid to the underwriters) which will be paid by us in
connection with the issuance and distribution of the securities being
registered. With the exception of the registration fee and the NASD filing fee,
all amounts shown are estimates.

Registration fee............................................ $ 2,835
NASD filing fee............................................. $ 3,582
Nasdaq listing expenses..................................... $ *
Blue sky fees and expenses (including legal and filing
fees)..................................................... $ *
Printing expenses (other than stock certificates)........... $ *
Legal fees and expenses (other than Blue sky)............... $ *
Accounting fees and expenses................................ $ *
Transfer Agent and Registrar fees and expenses.............. $ *
Miscellaneous expenses...................................... $ *
-------
Total....................................................... $
=======

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

* To be filed by amendment.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our certificate of incorporation provides that we shall indemnify to the
extent permitted by Delaware law any person whom we may indemnify thereunder,
including our directors, officers, employees and agents. Our bylaws provide such
indemnification (other than an order by a court) shall be made by us only upon a
determination that indemnification is proper in the circumstances because the
individual met the applicable standard of conduct. Advances for such
indemnification may be made pending such determination. Such determination shall
be made by a majority vote of a quorum consisting of disinterested directors, by
independent legal counsel or by the stockholders. In addition, our certificate
of incorporation eliminates, to the extent permitted by Delaware law, personal
liability of directors to us and our stockholders for monetary damages for
breach of fiduciary duty as directors.

Our authority to indemnify our directors and officers is governed by the
provisions of Section 145 of the Delaware General Corporation Law, as follows:

(a) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person 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, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
the person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.

II-1

(b) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the person 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, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.

(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.

(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the present or former director, officer, employee or agent is proper in
the circumstances because the person has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (4) by the
stockholders.

(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the corporation deems appropriate.

(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in such person's official capacity and as to action in another capacity
while holding such office.

(g) A corporation shall have power to purchase and maintain insurance
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, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by such person in
any such capacity, or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify such person
against such liability under this section.

(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of
II-2

another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this section with respect to the
resulting or surviving corporation as such person would have with respect
to such constituent corporation if its separate existence had continued.

(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.

(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.

Pursuant to the Underwriting Agreement filed as Exhibit 1.1 to this
Registration Statement, we have agreed to indemnify the underwriters and the
underwriters have agreed to indemnify us and our directors, officers and
controlling persons against certain civil liabilities that may be incurred in
connection with the Offering, including certain liabilities under the Securities
Act of 1933, as amended (the "Securities Act").

We have entered into Indemnification Agreements with four of our current
and certain of our former directors and officers whereby we have agreed to
indemnify them from and against any and all expenses, losses, claims, damages
and liability incurred by such director or officer for or as a result of action
taken or not taken while such director or officer was acting in his capacity as
our director, officer, employee or agent. We have also agreed to use our best
efforts to obtain officers and directors' liability insurance for such officers
and directors.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS

(a) Exhibits:

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

II-3

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

*10.6.2 Amendment to Lease by and between Real Alchemy I, L.P. and
Midway Entertainment, Ltd., dated December 6, 1996.
*10.7 Lease by and between 505 Center, L.P. and 505 Entertainment,
Ltd., dated January 31, 1994.
*10.7.1 Amendment to Lease by and between 505 Center, L.P. and 505
Entertainment, Ltd., dated December 6, 1996.
10.8 Loan Agreement by and among Intrust Bank, N.A., TENT
Finance, Inc., the Registrant, and various subsidiaries of
Registrant, as "Guarantors," dated September 1, 1998.
10.8.1 First Amendment to Loan Agreement by and among Intrust Bank,
N.A., TENT Finance, Inc., the Registrant, and various
subsidiaries of Registrant, as "Guarantors," dated October
30, 2001.
10.8.2 Second Amendment to Loan Agreement by and among Intrust
Bank, N.A., TENT Finance, Inc., the Registrant, and various
subsidiaries of Registrant, as "Guarantors," dated June 14,
2002.
*10.9 Form of Services Agreement between the Registrant and
Coulter Enterprises, Inc.
***10.9.1 Amendment to Services Agreement between the Registrant and
Coulter Enterprises, Inc., dated February 8, 1998.
10.10 Agreement for Sale and Purchase of Asset's between BMR
Restaurants, LLC and Fox & Hound of Virginia, Inc., dated
February 6, 2002.
10.11 Subscription Agreement between Fox & Hound of Colorado, Inc.
and Cool River Restaurant Denver, L.P., dated April 27,
2000.
10.12 Subscription Agreement between Fox & Hound of Texas, Inc.
and Cool River Restaurant Austin, L.P., dated April 27,
2000.
10.13 Subscription Agreement between TENT Finance, Inc. and Cool
River Restaurant Development, L.P., dated February 27, 2001.
10.14 Employment Agreement between the Registrant and Steven M.
Johnson, dated June 12, 2002.
10.15 Employment Agreement between the Registrant and Kenneth C.
Syvarth, dated June 12, 2002.
10.16 Amended and Restated Employment Agreement between the
Registrant and James K. Zielke, dated June 12, 2002.
10.17 Amended and Restated Employment Agreement between the
Registrant and Gary M. Judd, dated June 12, 2002.
****16.1 Letter Regarding Change in Certifying Accountant.
23.1 Consent of KPMG LLP.
**23.2 Consent of Foulston Siefkin LLP (contained in Exhibit 5.1).
23.3 Consent of Grant Thornton LLP.
24.1 Powers of Attorney (included on the signature page of this
Registration Statement).
99.1 Promotional Agreement between the Registrant and Patrick
Henry Creative Promotions, Inc., dated January 21, 2002.
99.2 Bookkeeping Services Agreement between F&H Restaurant Corp.
and Franchise Services Company, LLC, dated March 1, 1999.
99.2.1 Letter Agreement between F&H Restaurant Corp. and Franchise
Services Company, LLC, dated as of February 28, 2002.

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

* Incorporated by reference to our Registration Statement on Form S-1, as
amended (Commission File No. 333-23343).

** To be filed by amendment.

*** Incorporated by reference to our Form 10-K for the fiscal period ended
December 30, 1997 (Commission File No. 000-22753).

**** Incorporated by reference to our Form 8-K of November 9, 2000 (Commission
File No. 000-22753).

(b) Financial Statement Schedules: None.

II-4

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant 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 registrant 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 of 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.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

The undersigned registrant undertakes to provide to the underwriters at the
closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized in the City of Wichita, State of Kansas, on the 14th day of June,
2002.

TOTAL ENTERTAINMENT RESTAURANT CORP.

By: /s/ STEVEN M. JOHNSON
------------------------------------
Steven M. Johnson,
Chief Executive Officer/Principal
Executive Officer

Know all men by these presents, that each person whose signature appears
below hereby constitutes and appoints Steven M. Johnson, Gary M. Judd, James K.
Zielke, and each of them his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any related
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and to
authorize, approve, sign and cause to be filed such other documents as may be
necessary or appropriate to qualify the securities which are the subject of the
Registration Statement for offer and sale under the Blue Sky and other
applicable laws of each jurisdiction in which such securities may be offered and
sold, granting unto said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or either of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1933, this
Registration Statement has been signed below by the following persons and in the
capacities and on the date indicated.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ DENNIS L. THOMPSON Co-Chairman of the Board June 14, 2002
------------------------------------------------
Dennis L. Thompson

/s/ STEPHEN P. HARTNETT Co-Chairman of the Board June 14, 2002
------------------------------------------------
Stephen P. Hartnett

/s/ STEVEN M. JOHNSON Chief Executive Officer and June 14, 2002
------------------------------------------------ Director (principal executive
Steven M. Johnson officer)

/s/ GARY M. JUDD President and Director June 14, 2002
------------------------------------------------
Gary M. Judd

/s/ JAMES K. ZIELKE Chief Financial Officer, Treasurer, June 14, 2002
------------------------------------------------ Secretary and Director
James K. Zielke (principal financial and principal
accounting officer)

/s/ THOMAS A. HAGER Director June 14, 2002
------------------------------------------------
Thomas A. Hager

II-6

SIGNATURE TITLE DATE
--------- ----- ----

/s/ C. WELLS HALL, III Director June 14, 2002
------------------------------------------------
C. Wells Hall, III

/s/ E. GENE STREET Director June 14, 2002
------------------------------------------------
E. Gene Street

/s/ JOHN D. HARKEY, JR. Director June 14, 2002
------------------------------------------------
John D. Harkey, Jr.

II-7

INDEX TO EXHIBITS

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

1.1 Form of Underwriting Agreement.
*2.1 Form of Stock for Stock Exchange Agreement between the
Registrant, the Shareholders of F&H Restaurant Corp., Fox &
Hound, Inc., Fox & Hound II, Inc. and Bailey's Sports
Grille, Inc. and Certain Limited Partners of N. Collins
Entertainment, Ltd., 505 Entertainment, Ltd., Midway
Entertainment, Ltd. and F&H Dallas, L.P., dated February 20,
1997.
*3.1 Certificate of Incorporation of the Registrant.
*3.1.1 Amendment to the Certificate of Incorporation of the
Registrant.
*3.2 By-laws of the Registrant.
*4.1 Specimen Certificate of the Registrant's Common Stock.
**5.1 Opinion of Foulston Siefkin LLP.
*10.1 Form of 1997 Incentive and Nonqualified Stock Option Plan of
the Registrant.
*10.2 Form of 1997 Directors' Stock Option Plan of the Registrant.
*10.3 Form of Indemnification Agreement for certain of the
officers and directors of the Registrant.
*10.4 Non-Competition, Confidentiality and Non-Solicitation
Agreement between the Registrant and Dennis L. Thompson,
dated February 20, 1997.
*10.5 Non-Competition, Confidentiality and Non-Solicitation
Agreement between the Registrant and Thomas A. Hager, dated
February 20, 1997.
*10.6 Lease by and between Real Alchemy, I, L.P. and Midway
Entertainment, Ltd., dated June 1, 1995.
*10.6.1 First Amendment to Lease by and between Real Alchemy I, L.P.
and Midway Entertainment, Ltd., dated February 20, 1996.
*10.6.2 Amendment to Lease by and between Real Alchemy I, L.P. and
Midway Entertainment, Ltd., dated December 6, 1996.
*10.7 Lease by and between 505 Center, L.P. and 505 Entertainment,
Ltd., dated January 31, 1994.
*10.7.1 Amendment to Lease by and between 505 Center, L.P. and 505
Entertainment, Ltd., dated December 6, 1996.
10.8 Loan Agreement by and among Intrust Bank, N.A., TENT
Finance, Inc., the Registrant, and various subsidiaries of
Registrant, as "Guarantors," dated September 1, 1998.
10.8.1 First Amendment to Loan Agreement by and among Intrust Bank,
N.A., TENT Finance, Inc., the Registrant, and various
subsidiaries of Registrant, as "Guarantors," dated October
30, 2001.
10.8.2 Second Amendment to Loan Agreement by and among Intrust
Bank, N.A., TENT Finance, Inc., the Registrant, and various
subsidiaries of Registrant, as "Guarantors," dated June 14,
2002.
*10.9 Form of Services Agreement between the Registrant and
Coulter Enterprises, Inc.
***10.9.1 Amendment to Services Agreement between the Registrant and
Coulter Enterprises, Inc., dated February 8, 1998.
10.10 Agreement for Sale and Purchase of Asset's between BMR
Restaurants, LLC and Fox & Hound of Virginia, Inc., dated
February 6, 2002.
10.11 Subscription Agreement between Fox & Hound of Colorado, Inc.
and Cool River Restaurant Denver, L.P., dated April 27,
2000.
10.12 Subscription Agreement between Fox & Hound of Texas, Inc.
and Cool River Restaurant Austin, L.P., dated April 27,
2000.
10.13 Subscription Agreement between TENT Finance, Inc. and Cool
River Restaurant Development, L.P., dated February 27, 2001.
10.14 Employment Agreement between the Registrant and Steven M.
Johnson, dated June 12, 2002.
10.15 Employment Agreement between the Registrant and Kenneth C.
Syvarth, dated June 12, 2002.
10.16 Amended and Restated Employment Agreement between the
Registrant and James K. Zielke, dated June 12, 2002.
10.17 Amended and Restated Employment Agreement between the
Registrant and Gary M. Judd, dated June 12, 2002.
****16.1 Letter Regarding Change in Certifying Accountant.

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

23.1 Consent of KPMG LLP.
**23.2 Consent of Foulston Siefkin LLP (contained in Exhibit 5.1).
23.3 Consent of Grant Thornton LLP.
24.1 Powers of Attorney (included on the signature page of this
Registration Statement).
99.1 Promotional Agreement between the Registrant and Patrick
Henry Creative Promotions, Inc., dated January 21, 2002.
99.2 Bookkeeping Services Agreement between F&H Restaurant Corp.
and Franchise Services Company, LLC, dated March 1, 1999.
99.2.1 Letter Agreement between F&H Restaurant Corp. and Franchise
Services Company, LLC, dated as of February 28, 2002.

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

* Incorporated by reference to our Registration Statement on Form S-1, as
amended (Commission File No. 333-23343).

** To be filed by amendment.

*** Incorporated by reference to our Form 10-K for the fiscal period ended
December 30, 1997 (Commission File No. 000-22753).

**** Incorporated by reference to our Form 8-K of November 9, 2000 (Commission
File No. 000-22753).