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<table cellspacing="0" cellpadding="0" height="794">
  <tr>
    <td colspan="5" align="center" valign="top" height="21"><b>UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION</b></td>
  </tr>
  <tr>
    <td colspan="5" align="center" valign="top" height="21"><b>WASHINGTON, D.C. 20549</b></td>
  </tr>
  <tr>
    <td colspan="5" align="center" valign="top" height="21"><b>FORM 10-Q</b></td>
  </tr>
  <tr>
    <td width="53" align="center" valign="top" height="21"></td>
    <td width="193" align="center" valign="top" height="21"></td>
    <td width="258" align="center" valign="top" height="21"></td>
    <td width="21" align="center" valign="top" height="21"></td>
    <td width="245" align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td colspan="2" align="center" valign="top" height="21"><p align="left">(Mark One)</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" style="border-bottom: 1px solid" height="21"
    bordercolor="#000000"><p align="left">X</td>
    <td colspan="4" align="center" valign="top" height="21"><p align="left">QUARTERLY REPORT
    PURSUANT TO SECTION 13 OR 15(d) OF THE</td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td colspan="3" align="center" valign="top" height="21"><p align="left">SECURITIES
    EXCHANGE ACT OF 1934</td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td colspan="2" align="center" valign="top" height="21"><p align="left">For the quarterly
    period ended</td>
    <td align="center" valign="top" style="border-bottom: 1px solid" height="21"
    bordercolor="#000000">February 27, 2000</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left">OR</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" style="border-bottom: 1px solid" height="21"
    bordercolor="#000000"></td>
    <td colspan="4" align="center" valign="top" height="21"><p align="left">TRANSITION REPORT
    PURSUANT TO SECTION 13 OR 15(d) OF THE </td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td colspan="3" align="center" valign="top" height="21"><p align="left">SECURITIES
    EXCHANGE ACT OF 1934</td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td colspan="2" align="center" valign="top" height="21"><p align="left">For the transition
    period from</td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)" height="21"> </td>
    <td align="center" valign="top" height="21"><p align="left">to</td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)"> </td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td colspan="2" align="center" valign="top" height="21"><p align="left">Commission file
    number</td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid"
    bordercolor="#000000"><p align="left">1-10046</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td colspan="5" align="center" valign="top" height="21" style="border-bottom: 1px solid"
    bordercolor="#000000">TCBY ENTERPRISES, INC.</td>
  </tr>
  <tr>
    <td colspan="3" align="center" valign="top" height="21"><p align="left">(Exact name of
    registrant as specified in its charter)</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td colspan="2" align="center" valign="top" height="21" style="border-bottom: 1px solid"
    bordercolor="#000000">Delaware</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid"
    bordercolor="#000000">71-0552115</td>
  </tr>
  <tr>
    <td colspan="2" align="center" valign="top" height="21">(State or other jurisdiction of</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21">(I.R.S. Employer </td>
  </tr>
  <tr>
    <td colspan="2" align="center" valign="top" height="21">incorporation or organization)</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21">Identification No.)</td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td colspan="2" align="center" valign="top" height="21"
    style="border-bottom: 0px none rgb(0,0,0)" bordercolor="#000000">
    <u>425 West Capitol Avenue</u></td>
    <td align="center" valign="top" height="21" style="border-bottom: 0px none rgb(0,0,0)"
    bordercolor="#000000"><u>Little Rock,
    Arkansas</u></td>
    <td align="center" valign="top" height="21" style="border-bottom: 0px none rgb(0,0,0)"
    bordercolor="#000000"><u> </u></td>
    <td align="center" valign="top" height="21" style="border-bottom: 0px none rgb(0,0,0)"
    bordercolor="#000000"><u>72201</u></td>
  </tr>
  <tr>
    <td colspan="3" align="center" valign="top" height="21"><p align="left">(Address of
    principal executive offices)</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21">(Zip Code)</td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">(501)
    688-8229</td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)"></td>
  </tr>
  <tr>
    <td colspan="3" align="center" valign="top" height="21"><p align="left">(Registrant's
    telephone number, including area code)</td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td colspan="5" align="center" valign="top" height="59"><p align="left">Indicate by check
    mark whether the registrant (1) has filed all reports required to be filed by Section 13
    of the Securities Exchange Act of 1934 during the preceding 12 months, (or for such
    shorter period that the registrant was required to file such reports) and (2) has been
    subject to such filing requirements for the past 90 days.</td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td colspan="2" align="center" valign="top" height="21"><p align="left">Yes <u>  X
      </u>   No <u>      </u></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td colspan="5" align="center" valign="top" height="21"><p align="left">On March 31, 2000
    there were 22,896,137 shares of the registrant's common stock outstanding.</td>
  </tr>
</TABLE>

<p align="center">Sequential Page No. 1 </p>

<p align="center"><b>TABLE OF CONTENTS</b> </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="135" align="left" valign="top"><b>PART I.</b></td>
    <td width="38" align="left" valign="top"></td>
    <td width="506" align="left" valign="top"><b>FINANCIAL INFORMATION</b></td>
    <td width="38" align="left" valign="top"></td>
    <td width="50" align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="center" valign="top">Page</td>
  </tr>
  <tr>
    <td align="left" valign="top">Item 1.</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Financial Statements (Unaudited)</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Consolidated Balance Sheets</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">February 27, 2000 and November 28, 1999</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">3</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Consolidated Statements of Operations</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Quarter ended February 27, 2000 and February 28, 1999</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">5</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Consolidated Statements of Cash Flows</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Quarter ended February 27, 2000 and February 28, 1999</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">6</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Notes to Consolidated Financial Statements</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">February 27, 2000</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">7</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">Item 2.</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Management's Discussion and Analysis of Financial</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Condition and Results of Operations</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">10</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">Item 3.</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Quantitative and Qualitative Disclosures About Market Risk</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">15</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"><b>PART II.</b></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><b>OTHER INFORMATION</b></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">Item 1.</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Legal Proceedings</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">16</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">Item 5.</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Other Information</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">16</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">Item 6.</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Exhibits and Reports on Form 8-K</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">16</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">SIGNATURES</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"><p align="right">17</td>
  </tr>
</TABLE>

<p align="center">Sequential Page No. 2 </p>

<p align="center"><font size="3">PART 1</font> </p>

<p align="center"><font size="3">FINANCIAL INFORMATION</font> </p>

<p><font size="3">ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)</font> </p>

<p><font size="3">TCBY ENTERPRISES, INC.</font> </p>

<p><font size="3">CONSOLIDATED BALANCE SHEETS (UNAUDITED)</font> </p>

<table cellspacing="0" cellpadding="0" height="910"
style="border-bottom: 1px solid rgb(0,0,0)">
  <tr>
    <td width="435" align="left" valign="top" height="59"></td>
    <td width="11" align="left" valign="top" height="59"></td>
    <td width="98" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"
    height="59"><font size="3">February 27, 2000</font></td>
    <td width="86" align="center" valign="top" height="59"></td>
    <td width="11" align="center" valign="top" height="59"></td>
    <td width="96" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"
    height="59"><font size="3">November 28,<br>
    1999</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><b><font size="3">ASSETS</font></b></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3"><b>CURRENT
    ASSETS</b>:</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Cash and cash
    equivalents</font></td>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">$</font></td>
    <td align="right" valign="top" height="21"><p align="right"><font size="3">11,320,467</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">13,414,015</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Short-term
    investments</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"><p align="right"><font size="3">5,566,207</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">6,854,945</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Receivables:</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Trade accounts</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"><p align="right"><font size="3">11,581,793</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">8,668,846</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="11"><p align="left"><font size="3">Notes</font></td>
    <td align="center" valign="top" height="11"></td>
    <td align="right" valign="top" height="11"><p align="right"><font size="3">1,371,940</font></td>
    <td align="center" valign="top" height="11"></td>
    <td align="center" valign="top" height="11"></td>
    <td align="center" valign="top" height="11"><p align="right"><font size="3">1,586,394</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Allowance for
    doubtful accounts </font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">and impaired
    notes</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21" style="border-bottom: 1px dashed rgb(0,0,0)">
    <p align="right"><font size="3">(3,221,464)</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(353,965)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"><p align="right"><font size="3">9,732,269</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">9,901,275</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Refundable
    income taxes</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"><p align="right"><font size="3">973,929</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">225,244</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Deferred income
    taxes</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"><p align="right"><font size="3">256,820</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">256,820</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Inventories</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"><p align="right"><font size="3">14,984,259</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">12,186,195</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Prepaid
    expenses and other assets</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">1,004,863</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">818,824</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><b><font size="3">TOTAL
    CURRENT ASSETS</font></b></td>
    <td align="center" valign="top" height="21"></td>
    <td align="right" valign="top" height="21"><p align="right"><font size="3">43,838,814</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">43,657,318</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3"><b>PROPERTY,
    PLANT, AND EQUIPMENT</b>:</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Land</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">2,732,552</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">2,732,552</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Buildings</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">20,906,935</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">20,524,449</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Furniture,
    vehicles, and equipment</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">48,208,712</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">48,185,247</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Leasehold
    improvements</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">3,313,912</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">3,312,134</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Allowance for
    depreciation and amortization</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(42,196,274)</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(41,290,944)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><b><font size="3">NET
    PROPERTY, PLANT, AND EQUIPMENT</font></b></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">32,965,837</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">33,463,438</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3"><b>OTHER ASSETS</b>:</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Notes
    receivable, less current portion (less allowance</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">for doubtful
    and impaired notes of $7,460,867 in 2000</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">and $7,435,701
    in 1999)</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">3,112,239</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">4,028,947</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Intangibles
    (less amortization of $2,068,133 in 2000</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">and $2,007,183
    in 1999)</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">4,021,155</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="right"><font size="3">4,067,813</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">Other</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">5,459,578</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">5,927,353</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><b><font size="3">TOTAL OTHER
    ASSETS</font></b></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">12,592,972</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">14,024,113</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><b><font size="3">TOTAL ASSETS</font></b></td>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" height="21" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">89,397,623</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" height="21" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">91,144,869</font></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
  <tr>
    <td align="center" valign="top" height="21"><p align="left"><font size="3">See notes to
    consolidated financial statements.</font></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
    <td align="center" valign="top" height="21"></td>
  </tr>
</TABLE>

<p align="center">Sequential Page No. 3 </p>

<p>TCBY ENTERPRISES, INC. </p>

<p>CONSOLIDATED BALANCE SHEETS (UNAUDITED) </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="423" align="left" valign="top"></td>
    <td width="11" align="left" valign="top"></td>
    <td width="93" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="3">February 27,<br>
    2000</font></td>
    <td width="73" align="center" valign="top"></td>
    <td width="13" align="center" valign="top"></td>
    <td width="95" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="3">November 28,<br>
    1999</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3"><b>LIABILITIES AND
    STOCKHOLDERS' </b></font></p>
    <p align="left"><b><font size="3">EQUITY</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3"><b>CURRENT LIABILITIES</b>:</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Accounts payable</font></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top"><p align="right"><font size="3">4,404,383</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top"><p align="right"><font size="3">2,644,419</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Accrued expenses</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">3,270,249</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">3,653,365</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Current portion of
    long-term debt</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">1,597,161</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">1,949,490</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">TOTAL CURRENT
    LIABILITIES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">9,271,793</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">8,247,274</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3"><b>LONG-TERM DEBT</b>, less
    current portion</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">727,581</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">994,188</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">DEFERRED INCOME TAXES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">3,334,081</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">3,334,081</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">COMMITMENTS AND
    CONTINGENCIES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">STOCKHOLDERS' EQUITY</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Preferred stock, par value
    $.10 per share; </font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">authorized 2,000,000 shares</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="center"><font size="3">-</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="center"><font size="3">-</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Common stock, par value
    $.10 per share;</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">authorized 50,000,000
    shares; issued </font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">27,908,646 shares in 2000
    and 1999</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">2,790,865</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">2,790,865</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Additional paid-in capital</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">30,895,862</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">30,895,862</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Retained earnings</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">74,913,503</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">77,418,661</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">108,600,230</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">111,105,388</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Less treasury stock, at
    cost (5,012,509 shares </font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">in 2000 and 1999)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(32,536,062)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(32,536,062)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">TOTAL STOCKHOLDERS'
    EQUITY</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">76,064,168</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">78,569,326</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">TOTAL LIABILITIES AND </font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">STOCKHOLDERS' EQUITY</font></b></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">89,397,623</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">91,144,869</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">See notes to consolidated
    financial statements.</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
</TABLE>

<p align="center">Sequential Page No. 4 </p>

<p><font size="3">TCBY ENTERPRISES, INC.</font> </p>

<p><font size="3">CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)</font> </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="356" align="left" valign="top"></td>
    <td width="41" align="left" valign="top"></td>
    <td colspan="5" align="center" valign="top"><font size="3">Quarter Ended</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td width="11" align="center" valign="top"></td>
    <td width="98" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="3">February 27,<br>
    2000</font></td>
    <td width="16" align="center" valign="top"></td>
    <td width="13" align="center" valign="top"></td>
    <td width="95" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="3">February 28,<br>
    1999</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Sales</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top"><p align="right"><font size="3">17,141,525</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top"><p align="right"><font size="3">18,276,284</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Cost of Sales</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">12,499,580</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">13,248,891</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">GROSS PROFIT</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">4,641,945</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">5,027,393</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Franchising revenues:</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Initial franchise and
    license fees</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">233,583</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">858,581</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Royalty income</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">1,630,386</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">1,871,138</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">1,863,969</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">2,729,719</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">6,505,914</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">7,757,112</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Provision for doubtful
    accounts and impaired notes</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">2,892,663</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">17,684</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Selling, general, and
    administrative expenses</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">6,048,835</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">7,032,655</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">8,941,498</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">7,050,339</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">(LOSS) INCOME FROM </font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">OPERATIONS</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(2,435,584)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">706,773</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Other income (expense):</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Interest expense</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(43,984)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(105,410)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Interest income</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">304,612</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">250,740</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Other income</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">82,106</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">68,761</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">342,734</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">214,091</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">(LOSS) INCOME BEFORE</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">INCOME TAXES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(2,092,850)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">920,864</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Income tax (benefit)
    expense</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(732,499)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">322,301</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">NET (LOSS) INCOME</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">(1,360,351)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">598,563</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3"><b>(Loss) Earnings per
    share</b>:</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Basic</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">(0.06)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">0.03</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Diluted</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">(0.06)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">0.03</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">Weighted Average Shares
    Outstanding:</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Basic</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">22,896,137</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">22,898,535</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Diluted</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">22,913,100</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">23,328,360</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">Cash Dividends Paid Per
    Share</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">0.05</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">0.05 </font></td>
  </tr>
</TABLE>

<p><font size="3">See notes to consolidated financial statements.</font> </p>

<p align="center">Sequential Page No. 5 </p>

<p><font size="3">TCBY ENTERPRISES, INC.</font> </p>

<p><font size="3">CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)</font> </p>

<table cellspacing="0" cellpadding="0" style="border-bottom: 0px none rgb(0,0,0)">
  <tr>
    <td width="470" align="left" valign="top"></td>
    <td colspan="5" align="center" valign="top"><font size="3">Quarter Ended</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td width="11" align="center" valign="top"></td>
    <td width="95" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="3">February 27, <br>
    2000</font></td>
    <td width="53" align="center" valign="top"></td>
    <td width="11" align="center" valign="top"></td>
    <td width="93" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="3">February 28,<br>
    1999</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">OPERATING ACTIVITIES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Net (loss) income</font></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top"><p align="right"><font size="3">(1,360,351)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top"><p align="right"><font size="3">598,563</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Adjustments to reconcile
    net (loss) income to net</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">cash used in operating
    activities:</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Depreciation</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">1,016,159</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">999,603</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Amortization of intangibles</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">88,525</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">65,764</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Provision for doubtful
    accounts and impaired notes</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">2,892,665</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">17,684</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Gain on sales of property
    and equipment</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(5,098)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="center"><font size="3">-</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Changes in operating assets
    and liabilities:</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Receivables</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(2,912,947)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(1,896,919)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Inventories</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(2,798,064)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(2,151,753)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Prepaid expenses</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(186,039)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(759,933)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Intangibles and other
    assets</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">384,742</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(3,022,325)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Accounts payable and
    accrued expenses</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">1,376,848</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">448,980</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Income taxes</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(748,685)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">295,929</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">NET CASH USED IN
    OPERATING ACTIVITIES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(2,252,245)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(5,404,407)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">INVESTING ACTIVITIES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Purchases of property,
    plant, and equipment</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(481,609)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(422,959)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Proceeds from sales of
    property and equipment</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">9,316</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="center">-</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Origination of notes
    receivable</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(129,252)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(28,277)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Principal collected on
    notes receivable</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">1,235,247</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">246,809</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Purchases of short-term
    investments</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(211,000)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(75,669)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Proceeds from maturity of
    short-term investments</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">1,499,738</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">704,961</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">NET CASH PROVIDED BY
    INVESTING ACTIVITIES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">1,922,440</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">424,865</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">FINANCING ACTIVITIES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Proceeds from sale of
    Common Stock options</font></td>
    <td align="center" valign="top"></td>
    <td align="right" valign="top"><p align="center"><font size="3">-</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">10,860</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Dividends paid</font></td>
    <td align="center" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="3">(1,144,807)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(1,145,771)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Treasury stock transactions</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="center"><font size="3">-</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(646,929)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Principal payments on
    long-term debt</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(618,936)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(801,818)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">NET CASH USED IN
    FINANCING ACTIVITIES</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(1,763,743)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">(2,583,658)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="3">DECREASE IN CASH AND
    CASH EQUIVALENTS</font></b></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(2,093,548)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">(7,563,200)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Cash and cash equivalents
    at beginning of period</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">13,414,015</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">16,924,143</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3"><b>CASH AND CASH
    EQUIVALENTS AT END</b> <b>OF PERIOD</b></font></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">11,320,467</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">9,360,943</font></td>
  </tr>
</TABLE>

<p><font size="3">See notes to consolidated financial statements.</font> </p>

<p align="center">Sequential Page No. 6 </p>

<p>TCBY ENTERPRISES, INC. </p>

<p>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) </p>

<p>February 27, 2000 </p>

<p>NOTE A -- FINANCIAL STATEMENT PRESENTATION </p>

<p>The accompanying unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the quarter ended February 27, 2000
are not necessarily indicative of the results that may be expected for the year ended
December 3, 2000. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-K for the year
ended November 28, 1999. </p>

<p>NOTE B -- EARNINGS PER SHARE </p>

<p>The following table sets forth the computation of basic and diluted earnings per share:
</p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="486" align="left" valign="top"></td>
    <td width="16" align="left" valign="top"></td>
    <td colspan="5" align="center" valign="top"><font size="3">Quarter Ended</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td width="21" align="center" valign="top"></td>
    <td width="93" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="3">February 27,<br>
    2000</font></td>
    <td width="31" align="center" valign="top"></td>
    <td width="21" align="center" valign="top"></td>
    <td width="88" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="3">February 28,<br>
    1999</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Numerator:</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Net (Loss) Income</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">(1,360,351)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">598,563</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Denominator:</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Denominator for basic
    earnings per share -- weighted-average shares</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">22,896,137</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="3">22,898,535</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Potential dilutive effect
    of employee stock options</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">16,963</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="3">429,825</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Denominator for diluted
    earnings per share -- weighted-average</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">shares and assumed
    conversions</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">22,913,100</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">23,328,360</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Basic (loss) earnings per
    share</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">(0.06)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">0.03</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Diluted (loss) earnings per
    share</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">(0.06)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left"><font size="3">$</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">0.03</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="3">Anti-dilutive employee
    stock options excluded</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">2,662,474</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="3">439,550</font></td>
  </tr>
</TABLE>

<p align="center">Sequential Page No. 7 </p>

<p>NOTE C -- INVENTORIES </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="390" align="left" valign="top"></td>
    <td colspan="2" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">February
    27,<br>
    2000</td>
    <td width="68" align="center" valign="top"></td>
    <td colspan="2" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">November
    28,<br>
    1999</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Manufacturing materials and supplies</td>
    <td width="16" align="center" valign="top"><p align="left">$</td>
    <td width="100" align="center" valign="top"><p align="right">5,651,909</td>
    <td align="center" valign="top"></td>
    <td width="16" align="center" valign="top"><p align="left">$</td>
    <td width="101" align="center" valign="top"><p align="right">5,074,435</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Finished yogurt and other food products</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">6,563,482</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">4,676,915</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Equipment and other products</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">2,768,868</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">2,434,845</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">14,984,259</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">12,186,195</td>
  </tr>
</TABLE>

<p>NOTE D -- ACCRUED EXPENSES </p>

<p>Accrued expenses consist of the following: </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="335" align="left" valign="top"></td>
    <td colspan="2" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">February
    27,<br>
    2000</td>
    <td width="120" align="center" valign="top"></td>
    <td colspan="2" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">November
    28,<br>
    1999</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Rent</td>
    <td width="16" align="center" valign="top"><p align="left">$</td>
    <td width="100" align="center" valign="top"><p align="right">508,774</td>
    <td align="center" valign="top"></td>
    <td width="16" align="center" valign="top"><p align="left">$</td>
    <td width="98" align="center" valign="top"><p align="right">505,552</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Compensation</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">1,281,255</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">1,374,118</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Other</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">1,480,220</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">1,773,695</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">3,270,249</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">3,653,365</td>
  </tr>
</TABLE>

<p>NOTE E -- SEGMENT INFORMATION </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="225" align="left" valign="top"></td>
    <td width="16" align="right" valign="top"></td>
    <td width="111" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"><b>
    <font size="2">Manufacturing</font></b></td>
    <td width="16" align="right" valign="top"></td>
    <td width="93" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"><b>
    <font size="2">Franchising</font></b></td>
    <td width="16" align="right" valign="top"></td>
    <td width="81" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"><b>
    <font size="2">Equipment</font></b></td>
    <td width="16" align="right" valign="top"></td>
    <td width="81" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"><b>
    <font size="2">All Other</font></b></td>
    <td width="16" align="right" valign="top"></td>
    <td width="90" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"><b>
    <font size="2">Total</font></b></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><b><font size="2">Quarter ended February
    27, 2000</font></b></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left"><font size="2">Revenues from external
    customers</font></td>
    <td align="right" valign="top"><font size="2">$</font></td>
    <td align="right" valign="top"><p align="right"><font size="2">13,768,343</font></td>
    <td align="right" valign="top"><font size="2">$</font></td>
    <td align="right" valign="top"><p align="right"><font size="2">1,863,969</font></td>
    <td align="right" valign="top"><font size="2">$</font></td>
    <td align="right" valign="top"><p align="right"><font size="2">2,838,212</font></td>
    <td align="right" valign="top"><font size="2">$</font></td>
    <td align="right" valign="top"><p align="right"><font size="2">534,970</font></td>
    <td align="right" valign="top"><font size="2">$</font></td>
    <td align="right" valign="top"><p align="right"><font size="2">19,005,494</font></td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left"><font size="2">Intersegment revenues</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><font size="2">220,974</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">675</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">31,732</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">27,416</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">280,797</font></td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left"><font size="2">Pre-tax (loss) profit (1)</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><font size="2">(655,393)</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">(138,066)</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">217,925</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">(1,517,316)</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">(2,092,850)</font></td>
  </tr>
  <tr>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left"><b><font size="2">Quarter ended February
    28, 1999</font></b></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left"><font size="2">Revenues from external
    customers</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">14,603,733</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">2,729,719</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">2,794,299</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">878,252</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">21,006,003</font></td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left"><font size="2">Intersegment revenues</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">292,558</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">890</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">183,232</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">60,031</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">536,711</font></td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left"><font size="2">Pre-tax profit (loss)</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">2,124,931</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">280,843</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">267,663</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">(1,752,573)</font></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"><p align="right"><font size="2">920,864</font></td>
  </tr>
</TABLE>

<p><font size="2">(1) Includes a provision for doubtful accounts and impaired notes of
$2.9 million (Manufacturing - $2.8 million and Franchising - $.1 million) substantially
all due to the bankruptcy filing by AmeriServe.</font> </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="340" align="left" valign="top"></td>
    <td width="36" align="left" valign="top"></td>
    <td width="11" align="right" valign="top"></td>
    <td colspan="4" align="center" valign="top">Quarter ended</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="right" valign="top"></td>
    <td width="155" align="right" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center">February 27, 2000</td>
    <td width="41" align="right" valign="top"></td>
    <td width="11" align="right" valign="top"></td>
    <td width="155" align="right" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center">February 28, 1999</td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left"><b>Pre-tax (Loss) or Profit</b></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left">Total (loss) profit for reportable segments</td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top">$</td>
    <td align="right" valign="top"><p align="right">(575,534)</td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top">$</td>
    <td align="right" valign="top"><p align="right">2,673,437</td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left">Total (loss) profit for "all
    other"</td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">(1,517,316)</td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">(1,752,573)</td>
  </tr>
  <tr>
    <td align="right" valign="top"><p align="left">(Loss) profit before income taxes</td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top">$</td>
    <td align="right" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">(2,092,850)</td>
    <td align="right" valign="top"></td>
    <td align="right" valign="top">$</td>
    <td align="right" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">920,864</td>
  </tr>
</TABLE>

<p align="center">Sequential Page No. 8 </p>

<p>NOTE F -- CONTINGENCIES </p>

<p>On February 15, 2000, the Company was served with papers purporting to initiate two
class actions in Pulaski County, Arkansas, seeking to enjoin the pending merger agreement
with CI Merger Co. and Capricorn Investors III, L.P., which was announced on February 10,
2000. The litigation is styled <u>David A. Marshall vs. TCBY Enterprises, Inc.,</u> and
its directors, 6th Division, Chancery Court, IJ2000706, and <u>Alan Braus vs. TCBY
Enterprises, Inc.,</u> and its directors, 5th Division, Chancery Court, IJ2000705. These
cases were the subject of a "Notice of Nonsuit" by the plaintiffs on April 6,
2000, and in a separate filing on April 6, 2000, captioned <u>David A. Marshall vs. TCBY
Enterprises, Inc.,</u> and its directors, U.S. District Court, Eastern District, Western
Division, Arkansas, 4-00CV000251JFF, the plaintiffs now seek substantially the same relief. The Company
and its directors believe the litigation is without merit and will vigorously defend their
rights. </p>

<p>Other than those listed above, there is no material litigation pending against the
Company. Various legal and administrative proceedings are pending against the Company
which are incidental to the business of the Company. The ultimate legal and financial
liability of the Company in connection with such proceedings cannot be estimated with
certainty, but the Company believes, based upon its examination of these matters, its
experience to date, and its discussions with legal counsel, that resolution of these
proceedings will have no material adverse effect upon the Company's financial condition,
either individually or in the aggregate; of course, any substantial loss pursuant to any
litigation might have a material adverse impact upon results of operations in the quarter
or year in which it were to be incurred, but the Company cannot estimate the range of any
reasonably possible loss. </p>

<p align="center">Sequential Page No. 9 </p>

<p>ITEM 2 </p>

<p>MANAGEMENT'S DISCUSSION AND ANALYSIS OF </p>

<p>FINANCIAL CONDITION AND RESULTS OF OPERATIONS </p>

<p>The Company's revenue is derived from three primary segments which include franchising,
manufacturing, and equipment. The franchising segment sells TCBY and Juice Works franchise
agreements, both in the United States and internationally, and performs the operational
support after the opening of these locations. The manufacturing segment produces products
for the TCBY franchise system and third parties. The equipment segment has two divisions,
one that provides equipment needed for the opening and ongoing operations of a TCBY
location, and secondly, a regional foodservice equipment company. The following table sets
forth sales and franchising revenue by category within the Company's originating segments.
Certain sales pass through the Company's Foreign Sales Corporation before title passes to
the ultimate customer. </p>

<p><font size="2">(dollars in thousands)</font> </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="401" align="left" valign="top"></td>
    <td width="16" align="left" valign="top"></td>
    <td colspan="9" align="center" valign="top">Quarter Ended</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td colspan="4" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">February
    27, 2000</td>
    <td width="16" align="center" valign="top"></td>
    <td colspan="4" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">February
    28, 1999</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td width="16" align="center" valign="top"></td>
    <td width="75" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">Sales</td>
    <td width="16" align="center" valign="top"></td>
    <td width="55" align="center" valign="top" style="border-bottom: 1px dashed rgb(0,0,0)">
    <p align="center">%</td>
    <td align="center" valign="top"></td>
    <td width="16" align="center" valign="top"></td>
    <td width="78" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">Sales</td>
    <td width="16" align="center" valign="top"></td>
    <td width="55" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center">%</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Manufacturing:</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">TCBY frozen products sales for
    distribution to</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">TCBY locations</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top"><p align="right">7,093</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">41%</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top"><p align="right">8,311</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">46%</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Sales of specialty products</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">6,897</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">40%</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">6,584</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">36%</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">13,990</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">81%</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">14,895</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">82%</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Equipment:</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Sales by the Company's equipment
    distributor</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">2,870</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">17%</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">2,978</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">16%</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Other </td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">282</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">2%</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">403</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">2%</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Total Sales</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">17,142</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">100%</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">18,276</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">100%</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
</TABLE>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="401" align="left" valign="top"></td>
    <td width="16" align="left" valign="top"></td>
    <td colspan="9" align="center" valign="top">Quarter Ended</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td colspan="4" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">February
    27, 2000</td>
    <td width="16" align="center" valign="top"></td>
    <td colspan="4" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">February
    28, 1999</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td width="16" align="center" valign="top"></td>
    <td width="76" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center">Revenues</td>
    <td width="16" align="center" valign="top"></td>
    <td width="55" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center">%</td>
    <td align="center" valign="top"></td>
    <td width="16" align="center" valign="top"></td>
    <td width="78" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center">Revenues</td>
    <td width="16" align="center" valign="top"></td>
    <td width="55" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center">%</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Franchising:</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Initial franchise and license fees</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top"><p align="right">234</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">13%</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">859</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right">31%</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Royalty income</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">1,630</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">87%</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">1,871</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right">69%</td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Total Franchising Revenues</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">1,864</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">100%</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="left">$</td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">2,730</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right">100%</td>
  </tr>
</TABLE>

<p align="center">Sequential Page No. 10 </p>

<p>Sales from the Company's manufacturing segment include (i) wholesale sales of frozen
yogurt and ice cream products to foodservice distributors (which distribute the frozen
products to TCBY locations in the United States), and sales to international master
franchisees of frozen products and proprietary ingredients for the manufacture of frozen
products in the countries that produce locally, and (ii) sales of TCBY frozen packaged
products and other specialty dairy food products to customers including supermarkets,
convenience stores, dairies, foodservice distributors, club stores, and private label
suppliers. </p>

<p>A significant source of revenue for the manufacturing segment is the wholesale sales of
frozen yogurt and ice cream products for distribution to TCBY locations which decreased 15
percent during the first quarter of 2000. The decrease is primarily due to lower sales to
AmeriServe Food Distribution, Inc. ("AmeriServe") as a result of their filing
for reorganization under Chapter 11 of the Bankruptcy Code on January 31, 2000. Limited
shipments of products from the manufacturing facility were released to AmeriServe during
February while post-reorganization arrangements were negotiated. After negotiations were
completed, the Company released shipments during March to replenish AmeriServe's
inventory. Also, the Company elected to change primary distributors and selected
Multi-Unit Solutions (MUS), a division of Pocahontas Foods USA. The transfer of
distribution to MUS will be completed during the second quarter of 2000. In addition, a
reduction in the number of domestic traditional TCBY stores during 1999 contributed to the
sales decline during the first quarter of 2000. Additional closings of existing locations
may occur, but the Company cannot reasonably estimate the number. The Company is
continuing its effort to improve sales in existing units. These efforts include continued
emphasis on new product introductions, marketing emphasis toward children, neighborhood
store marketing programs and expansion of participation by franchisees, continued focus on
operational standards at TCBY locations, and working with franchisees to relocate marginal
stores or pursue co-branding opportunities to provide additional dayparts. In addition,
the Company has worked with an international design firm to develop enhancements to the
current store format. A prototype location opened late in the third quarter of 1999, and
the unit has experienced improved sales results. Enhancements to the current store format
will be further evaluated during 2000. All of these efforts are intended to improve our
customers' experience and ultimately sales volumes in the TCBY locations. However,
barriers have been encountered in implementing some of the above strategies, including
financial capability and willingness of existing franchisees to participate, lack of
availability of co-branded partners due to existing encroachment problems within their
chains, size of TCBY stores, lease restrictions, and limitations of corporate resources.
The Company is operating in a highly competitive environment where consumers have many
alternatives. Therefore, the future results of any of the above strategies is unknown, and
even with the successful implementation of these programs, store sales may decline and
store closings may continue. The Company will continue to develop additional TCBY
locations as approximately 300 TCBY locations are under agreement for development as of
February 27, 2000; most of those will be co-branded locations with petroleum or other
quick service restaurants. The revenue from new co-branded locations may not offset the
revenue lost from store closings and lower purchases by existing units in future periods. </p>

<p align="center">Sequential Page No. 11 </p>

<p>The following table sets forth TCBY and Juice Works location activity for the first
quarter of 2000 and 1999. </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="151" align="left" valign="top"></td>
    <td width="50" align="left" valign="top"></td>
    <td width="16" align="left" valign="top"></td>
    <td width="50" align="left" valign="top"></td>
    <td width="16" align="left" valign="top"></td>
    <td width="41" align="left" valign="top"></td>
    <td width="16" align="left" valign="top"></td>
    <td width="38" align="left" valign="top"></td>
    <td width="16" align="left" valign="top"></td>
    <td colspan="3" align="center" valign="top"><font size="2">International</font></td>
    <td width="16" align="center" valign="top"></td>
    <td colspan="3" align="center" valign="top"><font size="2">Non-traditional</font></td>
    <td width="20" align="center" valign="top"></td>
    <td colspan="3" align="center" valign="top"><font size="2">Total</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td colspan="3" align="center" valign="top"><font size="2">Franchised Stores</font></td>
    <td align="center" valign="top"></td>
    <td colspan="3" align="center" valign="top"><font size="2">Company Stores</font></td>
    <td align="center" valign="top"></td>
    <td colspan="3" align="center" valign="top"><font size="2">Locations</font></td>
    <td align="center" valign="top"></td>
    <td colspan="3" align="center" valign="top"><font size="2">Locations</font></td>
    <td align="center" valign="top"></td>
    <td colspan="3" align="center" valign="top"><font size="2">Locations</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">2000</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">1999</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">2000</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">1999</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td width="43" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="2">2000</font></td>
    <td width="16" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td width="41" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="2">1999</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td width="48" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="2">2000</font></td>
    <td width="16" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td width="48" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="2">1999</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td width="48" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="2">2000</font></td>
    <td width="16" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td width="46" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <font size="2">1999</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="2">For the first quarter:</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="2">Locations open at</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="2">beginning of period</font></td>
    <td align="center" valign="top"><p align="right"><font size="2">907</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">1,031</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">2</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">2</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">257</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">216</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">1,842</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">1,711</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">3,008</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">2,960</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="2">Opened</font></td>
    <td align="center" valign="top"><p align="right"><font size="2">18</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">8</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><font size="2">-</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="center"><font size="2">-</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">11</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">6</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">50</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">77</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">79</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">91</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="2">Closed</font></td>
    <td align="center" valign="top"><p align="right"><font size="2">(18)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">(38)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="center"><font size="2">-</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="center"><font size="2">-</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">(13)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">(3)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">(42)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">(38)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">(73)</font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"><p align="right"><font size="2">(79)</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="2">Transfers</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="2">(1)</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center"><font size="2">-</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center"><font size="2">-</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center"><font size="2">-</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center"><font size="2">-</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center"><font size="2">-</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="right"><font size="2">1</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center"><font size="2">-</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center"><font size="2">-</font></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">
    <p align="center"><font size="2">-</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="2">Locations open at end </font></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left"><font size="2">of period</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">906</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">1,001</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">2</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">2</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">255</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">219</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">1,851</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">1,750</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">3,014</font></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)"></td>
    <td align="center" valign="top" style="border-bottom: 2px solid rgb(0,0,0)">
    <p align="right"><font size="2">2,972</font></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
  <tr>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top"></td>
  </tr>
</TABLE>

<p>During the first quarter of 2000, significantly more TCBY non-traditional locations
than traditional locations opened. The Company believes this trend will continue during
the remainder of 2000. The non-traditional locations may include sites at airports, travel
plazas, colleges, hospitals, theme parks, stadiums, and also include locations in
conjunction with petroleum stores and quick service restaurants, which are referred to as
co-branded locations as they share space within concepts such as Subway, Exxon, etc. The
majority of the 50 non-traditional openings in the first quarter of 2000 were TCBY
co-branded locations. The rate of development of non-traditional locations is partially
determined by co-branding partners, who must approve each location in a process not
controlled by the Company, and in some cases, delays have been experienced while the
Company and the prospective TCBY franchisee awaited such approval. New development may
also be slowed when existing TCBY franchisees express their concerns regarding new TCBY
locations; and the desire of the Company to maintain good relationships with all TCBY
franchisees in the markets under consideration results in occasional delays in development
while those concerns are addressed. The opening of some locations was delayed during the
first quarter due to distribution challenges related to the bankruptcy filing of
AmeriServe. The units are expected to open after the distribution transfer to MUS is
complete. During the first quarter of 2000, 42 non-traditional locations were closed. Most
of these locations generally purchased low volumes of yogurt from the Company. However,
the cumulative effect of the total closings did have a negative impact on the Company's
profitability. The Company expects that there may be additional closings of low volume
non-traditional locations as they are not efficient for the Company to service or the
franchisee to operate. Included in the non-traditional location information are 26
locations closed for relocation or the season at February 27, 2000. </p>

<p>During the first quarter of 2000, a total of 18 franchised stores were permanently
closed by franchisees. Each store closed may be the result of the franchisee's evaluation
of his or her financial condition, cash flow, lease expiration, profitability, store
operations, or personal motives not related to the store (such as retirement or changing
careers). Of the locations closed, 14 operated for a portion of the first quarter of 2000,
with the remainder having originally closed for relocation in a prior year. Therefore,
some stores shown as closed did not make any contribution to sales during the periods
presented. Included in the franchised store information are 86 and 80 </p>

<p align="center">Sequential Page No. 12 </p>

<p>TCBY stores closed for relocation or for the season at February 27, 2000 and February
28, 1999, respectively. Closings of traditional stores could accelerate as the franchisees
experienced lower unit volumes during 1999. Closings during 1999 are a factor in the
reduction of sales to TCBY locations within the manufacturing segment and royalty income
in the first quarter of 2000. </p>

<p>Sales of specialty products increased five percent during the first quarter of 2000.
The increase is attributed primarily to increased sales of private label products. The
actual sales increase is partially negated due to the pricing structure utilized with most
private label customers which pay the cost of materials plus a fixed rate for the Company
to manufacture their products. Revenues are $1.2 million lower due to the decline in dairy
costs during the first quarter of 2000 compared to 1999. Actual unit production for
private label products increased 47% during the first quarter of 2000. The Company
continues to pursue private label opportunities to utilize the available capacity at its
manufacturing facility in Dallas. The Company has capacity available on certain lines for
additional manufacturing opportunities and the current capacity can be expanded with
capital investments and staffing increases should they be warranted. The time frames
required to make these capital investments and staffing increases could limit the
Company's growth abilities on certain product lines in the short term. </p>

<p>Sales in the Company's equipment segment include sales from the distribution of
equipment to TCBY locations as well as regional distribution to other food operations.
Sales in the equipment segment decreased four percent during the first quarter of 2000.
The decreased sales are due to fewer equipment sales to international franchisees. </p>

<p>As a percent of sales, cost of sales for the first quarter of 2000 and 1999 for the
Company and its manufacturing and equipment segments are presented below: </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="423" align="left" valign="top"></td>
    <td colspan="2" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">First
    Quarter</td>
  </tr>
  <tr>
    <td align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)"> </td>
    <td width="80" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">2000</td>
    <td width="75" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">1999</td>
  </tr>
  <tr>
    <td align="center" valign="top"><ul>
      <p>Manufacturing Segment</p>
    </ul>
    </td>
    <td align="center" valign="top">73%</td>
    <td align="center" valign="top">74%</td>
  </tr>
  <tr>
    <td align="center" valign="top"><ul>
      <p>Equipment Segment</p>
    </ul>
    </td>
    <td align="center" valign="top">76%</td>
    <td align="center" valign="top">75%</td>
  </tr>
  <tr>
    <td align="center" valign="top"><ul>
      <p>Company Total</p>
    </ul>
    </td>
    <td align="center" valign="top">73%</td>
    <td align="center" valign="top">72%</td>
  </tr>
</TABLE>

<p>The change in the manufacturing segment cost of sales percentage is due to improved
margins on certain private label products introduced in 1999. The increase in the
equipment segment cost of sales percentage is due to lower margins on new equipment sold
by the regional equipment distributor. </p>

<p>Franchising revenues consist of initial franchise and license fees and royalty income.
For the first quarter of 2000, initial franchise and license fees decreased 73 percent and
royalty income decreased 13 percent. The fluctuation in initial franchise and license fees
is primarily due to initial international franchise fees being approximately $560,000
lower in the first quarter of 2000. These fees are cyclical and the current international
activity indicates the sale of several master franchise agreements may be completed during
the second quarter of 2000. In addition, certain </p>

<p align="center">Sequential Page No. 13 </p>

<p>domestic store openings have been delayed to the second quarter of 2000 due to the
AmeriServe bankruptcy filing and the process of transferring distribution to Multi-Unit
Solutions. The decrease in royalty income is due primarily to inventory problems at
AmeriServe related to their bankruptcy filing which disrupted sales to the franchisees.
Royalties have also been negatively impacted by fewer traditional TCBY. See previous
discussion on the sales trends of TCBY locations. </p>

<p>Operating expenses increased 27 percent for the first quarter of 2000. The increase is
due to an approximate $2.9 million provision for the AmeriServe receivable required as a
result of AmeriServe's bankruptcy filing. As a percentage of combined sales and
franchising revenues, operating expenses were 47 percent and 34 percent for the first
quarter of 2000 and 1999, respectively. Operating expenses were 32% of combined sales and
franchising revenues for the first quarter of 2000 excluding the provision for the
AmeriServe receivable. </p>

<p>The forward-looking statements included herein are based on certain assumptions
regarding U.S. and foreign economic conditions, no significant disruptions of business
related to the distribution systems for the Company's products, competition, costs of raw
materials, unit openings and closings, sales volumes per unit, other manufacturing
opportunities, no changes in governmental regulation of the food industry, and no material
event which would impact the reputation of the Company's manufacturing facility or the
Company's ability to utilize that facility. Statements regarding the timing and likelihood
of closing of the Company's merger agreement with Capricorn are conditional upon the
satisfaction or waiver of all conditions set forth in the merger agreement, a copy of
which has been filed with the U. S. Securities and Exchange Commission. Such conditions
include receipt of approval for the merger by the Company's shareholders and receipt of
financing by Capricorn. Should the Company's performance differ materially from the
assumptions regarding these areas, actual results could vary significantly from the
performance noted in the forward-looking statements. Thus, the Company cautions readers
not to place undue reliance on any forward-looking statements, which speak only as of the
date made. </p>

<p>LIQUIDITY AND CAPITAL RESOURCES </p>

<p>The Company has historically generated cash from operations sufficient to meet its
normal operating requirements. The Company's cash and short-term investments decreased
approximately $3.4 million during the first quarter of 2000. This decrease resulted
primarily from (i) an increase in trade accounts receivable and inventory attributed to
normal seasonal increases, (ii) cash dividends, and (iii) principal payments of debt. The
Company's foreseeable cash needs for operations and capital expenditures are expected to
be met through cash flows from operations; however, the Company has available a $5 million
unsecured credit line to meet seasonal cash needs. </p>

<p>The following summarizes statistics related to the Company's financial position: </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="316" align="left" valign="top"></td>
    <td width="35" align="left" valign="top"></td>
    <td width="190" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">February
    27, 2000</td>
    <td width="61" align="center" valign="top"></td>
    <td width="175" align="center" valign="top" style="border-bottom: 1px solid rgb(0,0,0)">November
    28, 1999</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Current Ratio</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top">4.7 to 1.0</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top">5.3 to 1.0</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Working Capital (in millions)</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top">$34.6</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top">$35.4</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Long-Term Debt to Equity Ratio</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top">.01 to 1.0</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top">.01 to 1.0</td>
  </tr>
  <tr>
    <td align="center" valign="top"><p align="left">Tangible Net Worth (in millions)</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top">$72.0</td>
    <td align="center" valign="top"></td>
    <td align="center" valign="top">$74.5</td>
  </tr>
  <tr>
    <td colspan="5" align="center" valign="top"> <p>Sequential Page No. 14</td>
  </tr>
</TABLE>

<p>ITEM 3 </p>

<p>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK </p>

<p>There have been no material changes in risk exposure since November 28, 1999. The
Company is exposed to market risk from changes in interest rates and changes in commodity
prices. </p>

<p>The Company's earnings are affected by changes in short-term interest rates due to
cash, cash equivalents, and short-term investments held in interest earning accounts, as
well as interest bearing notes receivable primarily from franchisees. Cash, cash
equivalents, and short-term investments are held in accounts that have interest rates that
are fixed for less than one year. Most of the interest bearing notes receivable reprice
annually and bear interest at market rates. </p>

<p>In addition, earnings are affected due to notes payable to a bank. The notes bear
interest at the bank's base rate less 0.75% or at a match-funding rate of the adjusted
Eurodollar rate plus 1.0%. The Company manages short-term interest rate risk on debt by
tracking projections on interest rate trends when choosing the periodic time-frame (30
days to 180 days) for locking in a certain interest rate on the debt. </p>

<p>The primary commodities purchased by the Company are dairy products. As part of its
risk management strategy, the Company began purchasing exchange traded milk future
contracts during 1999 to manage its exposure to changes in milk prices. Due to the changes
of the USDA's Federal Milk Marketing Order Reform, which became effective on January 1,
2000, the Company closed all its hedging contracts prior to November 28, 1999 and the
Company's ability to hedge against milk prices during 2000 has been and may continue to be
limited in the near term. </p>

<p>This market risk discussion contains forward-looking statements. Actual results may
differ materially from this discussion based upon general market conditions and changes in
domestic and global financial markets. </p>

<p align="center">Sequential Page No. 15 </p>

<p><b>PART II. OTHER INFORMATION</b> </p>

<table cellspacing="0" cellpadding="0">
  <tr>
    <td width="88" align="left" valign="top"><p align="left">ITEM 1.</td>
    <td width="35" align="left" valign="top"></td>
    <td colspan="3" align="left" valign="top"><p align="left">LEGAL PROCEEDINGS</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td width="20" align="left" valign="top"></td>
    <td width="16" align="left" valign="top"></td>
    <td width="611" align="left" valign="top"></td>
  </tr>
  <tr>
    <td colspan="5" align="left" valign="top">On February 15, 2000, the Company was served
    with papers purporting to initiate two class actions in Pulaski County, Arkansas, seeking
    to enjoin the pending merger agreement with CI Merger Co. and Capricorn Investors III,
    L.P., which was announced on February 10, 2000. The litigation is styled <u>David A.
    Marshall vs. TCBY Enterprises, Inc.,</u> and its directors, 6th Division, Chancery Court,
    IJ2000706, and <u>Alan Braus vs. TCBY Enterprises, Inc.,</u> and its directors, 5th
    Division, Chancery Court, IJ2000705. These cases were the subject of a "Notice of
    Nonsuit" by the plaintiffs on April 6, 2000, and in a separate filing on April 6,
    2000, captioned <u>David A. Marshall vs. TCBY Enterprises, Inc.,</u> and its directors,
    U.S. District Court, Eastern District, Western Division, Arkansas, 4-00CV000251JFF, the plaintiffs now
    seek substantially the same relief. The Company and its directors believe the litigation
    is without merit and will vigorously defend their rights.</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">ITEM 5.</td>
    <td align="left" valign="top"></td>
    <td colspan="3" align="left" valign="top">OTHER INFORMATION</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td colspan="5" align="left" valign="top">On February 9, 2000, the Company entered into an
    Agreement and Plan of Merger (the "Merger Agreement") with CI Merger Co., a
    Delaware corporation, and Capricorn Investors III, L.P., a Delaware limited partnership
    ("Capricorn"), providing for, among other things, the merger of CI Merger Co.
    into the Company with the Company becoming a majority-owned subsidiary of Capricorn (the
    "Merger"). Capricorn Investors III, L.P. is a privately-held limited
    partnership. An affiliate of Capricorn is the principal stockholder of Mrs. Fields
    Holdings, Inc., which is one of the largest retailers in the premium snack-food industry,
    with cookies and pretzels as its major product lines. In the Merger, each share of common
    stock of the Company issued and outstanding prior to the effective time of the Merger
    (other than shares as to which dissenters' rights of appraisal are perfected) will be
    converted into the right to receive $6.00 in cash. Consummation of the Merger is subject
    to certain conditions, including the receipt of financing by Capricorn and the approval of
    the Merger by the stockholders of the Company. In connection with the execution of the
    Merger Agreement, Capricorn and Frank D. Hickingbotham, Herren C. Hickingbotham and F.
    Todd Hickingbotham (the "Hickingbotham Family") entered into a letter agreement
    whereby the Hickingbotham Family, among other things, granted to Capricorn a limited proxy
    to vote all shares of TCBY common stock owned by the Hickingbotham Family for approval of
    the Merger Agreement.</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">ITEM 6.</td>
    <td align="left" valign="top"></td>
    <td colspan="3" align="left" valign="top">EXHIBITS AND REPORTS ON FORM 8-K</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">a)</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Exhibits</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">27</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Article 5, Financial Data Schedule for the First Quarter
    2000 Form 10-Q</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top">99(a)</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">Press release, dated March 22, 2000, "TCBY Reports
    Operating Results for First Quarter"</td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
  </tr>
  <tr>
    <td align="left" valign="top"></td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">b)</td>
    <td align="left" valign="top"></td>
    <td align="left" valign="top">The Company did not file any reports on Form 8-K during the
    quarter ended February 27, 2000, but did file a Form 8-K on March 24, 2000 in relation to
    the Company's earnings for the first quarter of 2000.<p align="center">Sequential Page No.
    16</td>
  </tr>
</TABLE>

<p><u>SIGNATURES</u> </p>

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

<p>
                                          
  TCBY
ENTERPRISES, INC. </p>

<p>Date: 4/11/00
                       <u>/s/
Frank D. Hickingbotham</u><br>
                                          
  Frank
D. Hickingbotham,<br>
                                          
  Chairman
of the Board and<br>
                                          
  Chief
Executive Officer </p>

<p>Date: 4/11/00
                       <u>/s/
Gene H. Whisenhunt</u><br>
                                          
  Gene
H. Whisenhunt<br>
                                          
  Executive
Vice President<br>
                                          
  Chief
Financial Officer </p>

<p align="center"> </p>

<p align="center">Sequential Page No. 17 </p>
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