<PAGE>

                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

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

                 For the quarterly period ended April 20, 1997

                                       OR

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

                  For the transition period from ____ to ____

                         Commission file number 0-22802

                              BOSTON CHICKEN, INC.
             (Exact name of registrant as specified in its charter)

                      Delaware                               36-3904053
          (State or other jurisdiction of                   (IRS Employer
          incorporation or organization)                 Identification No.)


                           14103 Denver West Parkway
                                 P. O. Box 4086
                             Golden, CO  80401-4086
          (Address of principal executive offices, including zip code)

                                 (303) 278-9500
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                  Yes  X  No
                                      ---   ---

Number of shares of Common Stock, $.01 par value per share, outstanding as of
May 16, 1997: 65,279,167.
<PAGE>

                              BOSTON CHICKEN, INC.

                                     INDEX




PART I.  FINANCIAL INFORMATION                                          Page No.

         Item 1.  Financial Statements

             Consolidated Balance Sheets as of December 29, 1996 and
             April 20, 1997................................................. 2

             Consolidated Income Statements for the quarters ended
             April 21, 1996 and April 20, 1997.............................. 3

             Consolidated Statements of Cash Flows for the
             quarters ended April 21, 1996 and April 20, 1997............... 4

             Notes to Consolidated Financial Statements..................... 5

         Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations......................12

PART II. OTHER INFORMATION

         Item 6.  Exhibits and Reports on Form 8-K..........................18

         Signature Page.....................................................19

         Exhibit Index...............................................Exhibit-1


                                       1

<PAGE>
 
                     BOSTON CHICKEN, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                       (In thousands, except share data)
<TABLE>
<CAPTION>


                                                                   December 29,   April 20,
                                                                       1996         1997
                                                                   ------------ -----------
  ASSETS                                                                        (unaudited)
  ------
<S>                                                                <C>          <C>
Current Assets:
  Cash and cash equivalents........................................  $  100,800  $    2,443
  Accounts receivable, net.........................................      22,438      18,388
  Due from affiliates..............................................      10,246       9,218
  Inventories......................................................       2,585       4,661
  Prepaid expenses and other current assets........................       1,465       2,106
  Deferred income taxes............................................       8,928      10,248
                                                                     ----------  ----------
      Total current assets...........................................   146,462      47,064
Property and Equipment, net........................................     334,748     398,130
Notes Receivable...................................................     800,519     852,834
Deferred Financing Costs, net......................................      13,361      12,431
Goodwill, net......................................................     190,439     259,585
Other Assets, net..................................................      58,087      65,873
                                                                     ----------  ----------
      Total assets.................................................  $1,543,616  $1,635,917
                                                                     ==========  ==========

  LIABILITIES AND STOCKHOLDERS' EQUITY
  ------------------------------------
Current Liabilities:
  Accounts payable.................................................  $   40,430  $   13,776
  Accrued expenses.................................................      36,547      25,646
  Deferred franchise revenue.......................................      10,656      11,226
                                                                     ----------  ----------
      Total current liabilities....................................      87,633      50,648
Deferred Franchise Revenue.........................................       7,740       6,761
Senior Secured Revolvers...........................................           -      65,300
Convertible Subordinated Debt......................................     129,841     129,520
Liquid Yield Option Notes..........................................     182,613     187,051
Deferred Income Taxes..............................................      40,216      43,053
Other Noncurrent Liabilities.......................................       6,292       9,384
Minority Interests.................................................     153,441     175,211
Commitments and Contingencies
Stockholders' Equity:
  Preferred Stock----$.01 par value; authorized 20,000,000
   shares; no shares issued and outstanding........................           -           -
  Common Stock----$.01 par value; authorized 480,000,000
   shares; issued and outstanding: 64,245,868 in 1996
    and 65,020,051 in 1997.........................................         642         650
  Additional paid-in capital.......................................     827,611     839,304
  Retained earnings................................................     107,587     129,035
                                                                     ----------  ----------
                                                                        935,840     968,989
                                                                     ----------  ----------
      Total liabilities and stockholders' equity...................  $1,543,616  $1,635,917
                                                                     ==========  ==========
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
                           part of these statements.

                                       2
<PAGE>
 
                     BOSTON CHICKEN, INC. AND SUBSIDIARIES
                         CONSOLIDATED INCOME STATEMENTS
                     (In thousands, except per share data)
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                                                     Quarter Ended
                                                                                 ---------------------
                                                                                 April 21,   April 20,
                                                                                   1996        1997
                                                                                 ---------   ---------
<S>                                                                              <C>         <C>
Revenue:
  Company stores...............................................................    $ 1,314    $ 50,092
  Royalties and franchise related fees.........................................     28,046      41,432
  Interest income..............................................................     17,987      25,240
                                                                                   -------    --------
    Total revenue..............................................................     47,347     116,764
Costs and Expenses:
  Cost of products sold........................................................        480      18,744
  Salaries and benefits........................................................      7,509      21,911
  General and administrative...................................................     10,811      30,088
                                                                                   -------    --------
    Total costs and expenses...................................................     18,800      70,743
                                                                                   -------    --------
Income from Operations.........................................................     28,547      46,021
Other Expense:
  Interest expense, net........................................................     (2,900)     (7,229)
  Gain on issuance of subsidiary's stock.......................................          -         701
  Other income (expense), net..................................................        109         (26)
                                                                                   -------    --------
    Total other expense........................................................     (2,791)     (6,554)
                                                                                   -------    --------
Income Before Income Taxes and Minority Interest...............................     25,756      39,467
Income Taxes...................................................................     10,107      15,433
Minority Interest in (Earnings) of Subsidiaries................................          -      (2,586)
                                                                                   -------    --------
Net Income.....................................................................    $15,649    $ 21,448
                                                                                   =======    ========

Net Income Per Common and
  Equivalent Share.............................................................    $  0.24    $   0.32
                                                                                   =======    ========
Weighted Average Number of Common
  and Equivalent Shares Outstanding............................................     64,317      67,966
                                                                                   =======    ========
</TABLE>



The accompanying notes to the consolidated financial statements are an integral
                           part of these statements.

                                       3
<PAGE>
 
                     BOSTON CHICKEN, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                                               Quarter Ended
                                                                          ---------------------
                                                                          April 21,   April 20,
                                                                             1996        1997
                                                                          ---------   ---------
<S>                                                                       <C>         <C>
Cash Flows from Operating Activities:
Net income.......................................................         $  15,649   $  21,448
Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
 Depreciation and amortization...................................             4,214      10,868
 Interest on liquid yield option notes...........................             4,193       4,464
 Deferred income taxes...........................................             1,535       1,517
 Gain on sale of subsidiary's stock..............................                 -        (701)
 Minority interest...............................................                 -       2,586
 Gain on disposal of assets......................................              (157)          -
 Changes in assets and liabilities, excluding effects from
  acquisition:
  Accounts receivable and due from affiliates....................              (684)      5,830
  Accounts payable and accrued expenses..........................             2,383     (56,699)
  Deferred franchise revenue.....................................             2,152        (409)
  Other assets and liabilities...................................            (1,368)     (4,808)
                                                                          ---------   ---------
   Net cash provided by (used in) operating activities...........            27,917     (15,904)
                                                                          ---------   ---------
Cash Flows from Investing Activities:
 Purchase of property and equipment..............................           (27,060)    (28,524)
 Proceeds from the sale of assets................................            16,683       4,659
 Acquisition of other assets.....................................            (5,834)     (4,314)
 Issuance of notes receivable....................................          (508,163)   (425,290)
 Repayments of notes receivable..................................           254,196     295,631
                                                                          ---------   ---------
   Net cash used in investing activities.........................          (270,178)   (157,838)
                                                                          ---------   ---------
Cash Flows from Financing Activities:
 Proceeds from issuance of common stock..........................            87,356       2,285
 Proceeds from issuance of subsidiary's common stock.............                 -       8,206
 Increase in deferred financing costs............................               (48)       (406)
 Proceeds from revolving credit facilities.......................                 -     219,500
 Repayments of revolving credit facilities.......................                 -    (154,200)
                                                                          ---------   ---------
   Net cash provided by financing activities.....................            87,308      75,385
                                                                          ---------   ---------
Net Decrease in Cash and Cash Equivalents........................          (154,953)    (98,357)
Cash and Cash Equivalents, beginning of period...................           310,436     100,800
                                                                          ---------   ---------
Cash and Cash Equivalents, end of period.........................         $ 155,483   $   2,443
                                                                          =========   =========

</TABLE>

The accompanying notes to the consolidated financial statements are an integral
                           part of these statements.

                                       4
<PAGE>
 
                     BOSTON CHICKEN, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  BASIS OF PRESENTATION

     The consolidated financial statements have been prepared by Boston Chicken,
Inc. (the "Company") and are unaudited except for the consolidated balance sheet
at December 29, 1996 and notes related thereto.  The financial statements and
notes thereto have been prepared in accordance with the instructions for Form
10-Q and, therefore, do not necessarily include all information and footnotes
required by generally accepted accounting principles.  In the opinion of the
Company, all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the Company's consolidated financial position,
results of operations and cash flows as of April 20, 1997 and for all periods
presented have been made.  The statements are subject to year-end audit
adjustment.  A description of the Company's accounting policies and other
financial information is included in the audited consolidated financial
statements as filed with the Securities and Exchange Commission in the Company's
Form 10-K/A for the year ended December 29, 1996.  The consolidated results of
operations for the quarter ended April 20, 1997 are not necessarily indicative
of the results expected for the full year.

2.  AREA DEVELOPER FINANCING

     The Company currently offers convertible secured debt financing to certain
Boston Market area developers to partially finance store development and working
capital needs.  Only developers that are developing a significant portion of an
area of dominant influence or metropolitan area of a major city and that meet
all of the Company's requirements are eligible for such financing.  Area
developer financing generally requires the developer to expend at least 75% of
its contributed capital toward developing stores prior to drawing on its
revolving loan facility provided by the Company, with advances permitted during
a two- or three-year draw period (or additional draw period in the event of a
loan amendment) in a predetermined maximum amount, generally equal to three to
four times the amount of the area developer's contributed capital. Upon
expiration of the draw period, the loan converts to an amortizing term loan
payable over four to five years in periodic installments, sometimes with a final
balloon payment. The Company may extend the draw and repayment periods, subject
to the area developer purchasing additional development rights, contributing
additional capital, or in connection with other amendments to the loan
agreement.  Interest is set at the applicable reference rate of Bank of America
Illinois as established from time to time (8.5% at April 20, 1997 and an average
rate of 8.3% for the quarter ended April 20, 1997) plus 1%, and is payable each
four-week period. The loan is secured by a pledge of substantially all of the
assets of the area developer and generally by a pledge of the equity interests
of the owners of the developer.

     Einstein/Noah Bagel Corp. ("ENBC") offers secured debt financings to its
area developers to partially finance store development and working capital needs
on terms similar to those offered by the Company to Boston Market area
developers.

     (a)  LOAN CONVERSION OPTION

     The Company may convert all or any portion of the loan amount after a
moratorium period (generally two years from execution or subsequent amendment of
the loan) and generally after the area developer has completed not less than 80%
of its area developer commitment or in the event of the defaults set forth below
and generally up to the later of full repayment of the loan or a specified date
in the agreement, into equity in the area developer at the conversion price set
forth in the loan agreement negotiated at arm's length with each area developer,
which is at a premium over the per unit price paid by the investors in the area
developer for their equity investment made concurrently with the execution of
the loan agreement or subsequent amendments thereto.  Default provisions
contained in the area developer loans typically include default in payment of
principal and interest, breach of a representation or warranty or of any
covenant contained in the loan agreement or security instruments, bankruptcy or
bankruptcy-related act of the borrower, resignation or termination of key
management personnel, default under the area development agreement, termination
of three or more franchise agreements, dissolution or liquidation, material
adverse change in financial condition, default of other indebtedness, the master
lease, sublease or any real 

                                       5
<PAGE>
 
estate lease, a judgment in excess of $100,000 (not satisfied, vacated or
covered by insurance) and the invalidity or termination of any security
instrument. To the extent such loan is not fully drawn or has been drawn and
repaid, the Company has a corresponding option to acquire, at the loan
conversion price, the amount of additional equity it could have acquired by
conversion of the loan, had the loan been fully drawn. On average, upon
conversion or exercise of the option, the Company would own approximately a 65%
interest in each of its area developers.

     ENBC's loan agreements with its area developers contain conversion and
option features similar to the Company's loan agreements with its Boston Market
area developers. On average, upon conversion or exercise of the option, ENBC
would own approximately an 80% interest in each of its area developers.

     In March 1997, the Company converted its loan to BC New York, L.L.C.
("BCNY") into a majority equity interest in BCNY. Additionally, the Company has
agreed to acquire an additional 11% of the equity of BCNY from the current BCNY
equity holders for approximately $15.0 million. After giving effect to the
conversion, and assuming the Company purchases the additional 11% of the equity
of BCNY, the Company will have an equity interest in BCNY of approximately 84%.
The BCNY transaction added 118 Boston Market stores, operating in the
metropolitan New York area, northern New Jersey, and Connecticut, to the Company
store base. As of the date of conversion, total loan advances to BCNY were $80.0
million. As part of this transaction, the Company assumed $5.8 million in
liabilities owed to third parties. The transaction has been accounted for as a
purchase, and, accordingly, the purchase price was allocated to identified
assets and liabilities based upon their fair values at the date of the
transaction, resulting in goodwill of $72.6 million (based upon a preliminary
allocation), which is being amortized over a 35-year life. The operating results
of BCNY are included in consolidated net income from the date of acquisition.

     The following represents the unaudited pro forma results of operations as
if the purchase transaction described above had occurred at the beginning of the
Company's fiscal year (in thousands of dollars, except per share data):
<TABLE>
<CAPTION>

<S>                                   <C>
          Revenue..................   $146,539
          Net income...............     18,294
          Net income per share.....   $   0.27
</TABLE>

     There can be no assurance that the Company or ENBC will exercise future
rights to convert their loans to any other area developers or acquire an equity
interest in any other area developers to which they provide financing, or that
such exercise or acquisition will result in a majority interest in such area
developer.

     (b)  COMMITMENTS TO EXTEND AREA DEVELOPER FINANCING

     The following tables summarize loan commitments, loan availability,
outstanding loan balances (included in Notes Receivable on the Company's balance
sheets) and contributed capital for Boston Market and ENBC area developers (in
thousands of dollars, except number of area developers):
<TABLE>
<CAPTION>

                                                              December 29,     April 20,
                                                                  1996           1997
                                                              ------------     ---------
<S>                                                           <C>              <C>
Boston Market:
-------------
Number of area developers receiving financing............               15            15
Loan commitments.........................................        $ 838,043     $ 755,620
Loan availability........................................         (190,778)     (132,946)
                                                                 ---------     ---------
Loans outstanding (included in Notes Receivable).........        $ 647,265     $ 622,674
                                                                 =========     =========
Contributed capital......................................        $ 286,413     $ 290,694
                                                                 =========     =========
</TABLE>

                                       6
<PAGE>
 
<TABLE>
<CAPTION>

                                                                  December 29,   April 20,
                                                                     1996          1997
                                                                  ------------   ---------
<S>                                                               <C>            <C>
ENBC:
----
Number of area developers receiving financing................              11           12
Loan commitments.............................................       $ 283,200    $ 359,900
Loan availability............................................        (142,446)    (148,158)
                                                                    ---------    ---------
Loans outstanding (included in Notes Receivable).............       $ 140,754    $ 211,742
                                                                    =========    =========
Contributed capital..........................................       $  75,765    $  95,227
                                                                    =========    =========
</TABLE>

     The following tables summarize area developer financing activity of Boston
Market and ENBC area developers (in thousands of dollars):
<TABLE>
<CAPTION>

                                                                        Quarter Ended
                                                                   -----------------------
                                                                    April 21,    April 20,
                                                                      1996         1997
                                                                   ----------    ---------
<S>                                                               <C>            <C>
Boston Market:
-------------
Area developer loan balances, beginning of quarter...........      $ 411,418     $ 647,265
Additional loan advances.....................................        299,402       292,451
Loan repayments..............................................       (160,656)     (237,042)
Loans converted into equity or eliminated
 in consolidation............................................              -       (80,000)
                                                                   ---------     ---------
Area developer loan balances, end of quarter.................      $ 550,164     $ 622,674
                                                                   =========     =========
</TABLE>
<TABLE>
<CAPTION>

                                                                                  Quarter
                                                                                   Ended
                                                                                 April 20,
                                                                                   1997
                                                                                 ---------
<S>                                                                              <C>
ENBC:
----
Area developer loan balances, beginning of quarter...........                    $ 140,754
Loan advances................................................                      124,298
Loan repayments..............................................                      (53,310)
                                                                                 ---------
Area developer loan balances, end of quarter.................                    $ 211,742
                                                                                 =========
</TABLE>


     The majority of the loan advance and repayment activity reflects the
revolving nature of the loans, that is, amounts are drawn and repaid on a
regular basis to optimize cash management.

     (c)  CREDIT RISK AND ALLOWANCE FOR LOAN LOSSES

     Two Boston Market area developers accounted for approximately 15% and 13%
of the Boston Market area developers' notes receivable balance at April 20, 1997
and no other Boston Market area developer individually accounted for 10% or more
of such notes receivable balance as of such date. Three ENBC area developers
accounted for approximately 16%, 15%, and 12% of the ENBC area developers' notes
receivable balance at April 20, 1997 and no other ENBC area developer
individually accounted for 10% or more of such notes receivable balance as of
such date.

     The allowance for Boston Market and ENBC financed area developers' loan
losses is maintained at a level that in management's judgment is adequate to
provide for estimated possible loan losses. The amount of the allowance is based
on management's review of use of loan proceeds, adherence to store development
schedules, store performance trends, type and amount of collateral securing the
loan, prevailing economic conditions, and other factors that management deems
relevant at the time. Based upon this review and analysis, no allowance for loan
losses was required as of December 29, 1996 and April 20, 1997.

                                       7
<PAGE>
 
     The following tables set forth certain combined audited financial
information as of the dates indicated provided annually to the Company by Boston
Market financed area developers. During 1995, six financed area developers were
formed, and their data have been included in the table for 1995 from the dates
of their respective formation. During 1996, two financed area developers were
formed, and their data have been included in the table for 1996 from the dates
of their respective formation and two financed area developers combined with two
other financed area developers with geographically contiguous territories. The
table excludes Mid-Atlantic and New Jersey Rose for both years and BCNY for
1996, the loans to which have been converted into equity or eliminated in
consolidation (in thousands, except number of financed area developers and store
data):

<TABLE>
<CAPTION>
 
                                                                    December 31,     December 29,
                                                                        1995             1996
                                                                    ------------     ------------
<S>                                                                 <C>              <C>
Boston Market Financed Area Developers:
--------------------------------------

Total number of financed area developers......................           15               14
Total number of financed area developer stores open...........          627              841

Balance sheet data:
  Total gross assets..........................................       $ 513,926        $ 640,534
  Total debt:
    To the Company............................................        372,071          555,105
    To third parties (including capital lease obligations)....         14,456           23,797
  Total other liabilities (including trade payables)..........        105,129          105,635
  Total stockholder/partner/member deficit....................        (9,891)         (102,754)


                                                                          Fiscal Year Ended
                                                                    -----------------------------
                                                                    December 31,     December 29,
                                                                        1995             1996
                                                                    ------------     ------------
Statement of operations data:
  Gross revenue...............................................       $ 491,341        $ 865,082
  Income (loss) from continuing operations....................        (148,338)        (156,505)

Statement of cash flows data:
  Cash flows from (used in) operating activities..............       $ (76,926)       $(128,819)
  Cash flows from (used in) investing activities..............        (193,100)         (82,307)
  Cash flows from (used in) financing activities..............         269,746          212,366
                                                                     ---------        ---------
    Net change in cash........................................       $    (280)       $   1,240
                                                                     =========        =========
</TABLE>

     The following tables set forth certain combined audited financial
information as of the dates indicated provided annually to ENBC by its financed
area developers. During 1995, two financed area developers were formed, and
their data have been included in the table for 1995 from the dates of their
respective formation. During 1996, ten financed area developers were formed, and
their data have been included in the table for 1996 from the dates of their
respective formation and one financed area developer combined with one other
financed area developer with geographically contiguous territory.

                                       8
<PAGE>
 
<TABLE>
<CAPTION>
 
                                                               December 31,   December 29,
                                                                   1995          1996
                                                               ------------   ------------
<S>                                                            <C>            <C>
ENBC Financed Area Developers:
-----------------------------

Total number of financed area developers...................         2              11
Total number of financed area developer stores open........         13            301

Balance sheet data:
  Total gross assets.......................................       $9,262        $221,156
  Total debt:
    To ENBC................................................       3,538         140,754
    To third parties.......................................         -              -
  Total other liabilities (including trade payables).......       3,011          37,033
  Total partner/member equity..............................       2,676          33,847

                                                                        Fiscal Year Ended
                                                               ----------------------------------
                                                                 December 31,    December 29,
                                                                    1995            1996
                                                               ----------------------------------
Statement of operations data:
  Gross revenue............................................       $   768        $ 109,940
  Income (loss) from continuing operations.................        (1,324)         (40,592)

Statement of cash flows data:
  Cash flows from (used in) operating activities...........       $ 1,616        $ (16,382)
  Cash flows from (used in) investing activities...........        (8,064)        (187,955)
  Cash flows from (used in) financing activities...........         7,038          205,756
                                                                  -------        ---------
    Net change in cash.....................................       $   590        $   1,419
                                                                  =======        =========
</TABLE>

3.  PROGRESSIVE FOOD CONCEPTS, INC.

     The Company has provided a $17.0 million convertible loan to Progressive
Food Concepts, Inc. ("PFCI") on terms substantially similar to those provided
to Boston Market area developers (see note 2). As of April 20, 1997, $6.9
million was outstanding under the loan agreement. PFCI has entered into a series
of agreements with Harry's Farmers Market, Inc. ("Harry's"), an operator of
retail food stores in the Atlanta area. Scott Beck, the Company's Chairman of
the Board, President and Chief Executive Officer, and Saad J. Nadhir, the
former Co-Chairman of the Board and President of the Company, each own a 46.2%
equity interest in PFCI, and Harry's owns a 7.6% interest in PFCI. Messrs. Beck
and Nadhir have expressed their intention to transfer a significant portion of
their shares of PFCI common stock to other persons, who may include area
developers of the Company, as PFCI's business plan becomes more defined and is
implemented.

4.  ROYALTIES AND FRANCHISE RELATED FEES

     Royalties and franchise related fees are comprised of the following (in
thousands of dollars):

<TABLE>
<CAPTION>
                                                                     Quarter Ended
                                                                  --------------------
                                                                  April 21,  April 20,
                                                                    1996       1997
                                                                  ---------  ---------
<S>                                                               <C>        <C>
Royalties..................................................        $14,776    $20,856
Lease and real estate services income......................          7,968      9,244
Initial franchise and area developer fees..................          2,692      6,865
Software license and maintenance fees......................          2,610      4,467
                                                                   -------    -------
                                                                   $28,046    $41,432
                                                                   =======    =======
</TABLE>

                                       9
<PAGE>
 
5.  COMMITMENTS

     Through April 20, 1997, BC Equity Funding, L.L.C. ("BCEF") had invested an
aggregate of $58.3 million in certain Boston Market area developers in the form
of 10% cumulative preferred equity, redeemable by the area developers at a
premium initially equal to 10% of the initial issue price, to be increased by 2%
each year up to a maximum of 20% of the initial issue price plus accrued
dividends (the "Redemption Price").  In the event the Company's conversion and
option rights under its secured loan agreement with any of these area developers
expire unexercised and the Company does not consent to an area developer's
request to undertake a firm commitment underwritten public offering of the stock
of such area developer, the Company has agreed to purchase the preferred equity
of such area developer from BCEF at the Redemption Price.

     Through April 20, 1997, Bagel Store Development Funding, L.L.C. ("Bagel
Funding") had invested an aggregate of $89.5 million in ENBC's area developers
in the form of common equity.  ENBC is obligated to purchase Bagel Funding's
equity interest in an area developer at a formula price in the event that the
area developer fails to fulfill its obligation to redeem such interests at such
price in any one of the following circumstances:  (i) ENBC converts its loan
into or otherwise acquires a majority equity interest in the area developer;
(ii) ENBC does not consent to the area developer's request to undertake a firm
commitment underwritten public offering of stock of the area developer after
ENBC's conversion and option rights under its loan agreement with the area
developer have expired unexercised; or (iii) ENBC does not consent to the area
developer's request to terminate the area developer's area development and
franchise agreements with ENBC after ENBC's conversion and option rights under
its loan agreement with the area developer have expired unexercised.

6.  SUBSEQUENT EVENTS

     In April 1997, the Company issued in a public offering $287.5 million of 7
3/4% convertible subordinated debentures due May 1, 2004.  Interest is payable
semi-annually on May 1 and November 1 of each year beginning November 1, 1997.
The debentures are convertible at any time prior to maturity into shares of the
Company's common stock at a conversion rate of $26.70 per share, subject to
adjustments under certain conditions.  The debentures may be redeemed at the
option of the Company beginning May 1, 2000 initially at 104.43% of their
principal amount and at declining prices thereafter, plus accrued interest.

     In May 1997, ENBC issued in a private offering $125.0 million of 7 1/4%
convertible subordinated debentures due June 1, 2004. Interest is payable semi-
annually on June 1 and December 1 of each year beginning December 1, 1997.  The
debentures are convertible at any time prior to maturity into shares of ENBC's
common stock at a conversion rate of $21.25 per share, subject to adjustments
under certain conditions.  The debentures may be redeemed at the option of ENBC
beginning June 1, 2000 initially at 104.14% of their principal amount and at
declining prices thereafter, plus accrued interest.

7.  CONTINGENCIES

     The Company is subject to various lawsuits, claims, and other legal matters
in the course of conducting its business, including its business as a
franchisor.  The Company believes that the outcome of such lawsuits, claims, and
other legal matters will not have a material impact on the Company's
consolidated financial position or results of operations.

                                       10
<PAGE>
 
8.  EARNINGS PER SHARE

     In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share".  SFAS No. 128 requires disclosure of basic and
diluted earnings per share.  Basic earnings per share excludes dilution and is
computed by dividing income available to common shareholders by the weighted-
average number of common shares outstanding for the reporting period.  Diluted
earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock.  SFAS No. 128 is effective for financial statements issued
for periods ending after December 15, 1997.  The pro forma earnings per share
for the quarters ended April 21, 1996 and April 20, 1997, utilizing the
requirements of SFAS No. 128 are as follows:

<TABLE>
<CAPTION>
 
                                                Quarter Ended
                                       -------------------------------
                                       April 21, 1996   April 20, 1997
                                       --------------   --------------
<S>                                    <C>              <C>
    Basic earnings per share.......        $0.26             $0.33
    Diluted earnings per share.....        $0.24             $0.31
</TABLE>


                                       11
<PAGE>
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     CERTAIN STATEMENTS IN THIS FORM 10-Q CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995 (THE "REFORM ACT"). SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL
RESULTS, PERFORMANCE, OR ACHIEVEMENTS OF BOSTON CHICKEN, INC. (THE "COMPANY"),
EINSTEIN/NOAH BAGEL CORP. ("ENBC"), BOSTON MARKET INTERNATIONAL, INC. ("BMI"),
THEIR AREA DEVELOPERS, FRANCHISEES, AND LICENSEES, BOSTON MARKET(R) STORES,
EINSTEIN BROS.(TM) BAGEL AND NOAH'S NEW YORK BAGEL(R) STORES, AND PROGRESSIVE
FOOD CONCEPTS, INC. ("PFCI") TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,
PERFORMANCE, OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: COMPETITION;
SUCCESS OF OPERATING INITIATIVES, INCLUDING ROLL-OUT OF THE F.A.S.T. TRACK(TM)
SYSTEM AT BOSTON MARKET STORES; DEVELOPMENT AND OPERATING COSTS; AREA
DEVELOPERS' ADHERENCE TO DEVELOPMENT SCHEDULES; ADVERTISING AND PROMOTIONAL
EFFORTS; BRAND AWARENESS; ADVERSE PUBLICITY; ACCEPTANCE OF NEW PRODUCT
OFFERINGS; EXPANSION OF THE HOLIDAY HOME MEAL REPLACEMENT BUSINESS;
AVAILABILITY, LOCATIONS, AND TERMS OF SITES FOR STORE DEVELOPMENT; CHANGES IN
BUSINESS STRATEGY, INCLUDING THE POSSIBLE INTEGRATION OF FRESH, READY-TO-HEAT
PREPARED FOODS IN THE BOSTON MARKET CONCEPT; CHANGES IN DEVELOPMENT PLANS;
AVAILABILITY AND TERMS OF CAPITAL; FOOD, LABOR, AND EMPLOYEE BENEFIT COSTS;
CHANGES IN GOVERNMENT REGULATIONS; REGIONAL WEATHER CONDITIONS; AND OTHER
FACTORS REFERENCED IN THIS FORM 10-Q. THE SUCCESS OF THE COMPANY, ENBC, AND BMI
IS DEPENDENT ON THEIR RESPECTIVE AREA DEVELOPERS, FRANCHISEES, AND LICENSEES AND
THE MANNER IN WHICH THEY OPERATE AND DEVELOP BOSTON MARKET STORES, EINSTEIN
BROS. BAGELS STORES, AND NOAH'S NEW YORK BAGELS STORES.


GENERAL

     During fiscal year 1996, the Company converted its loan into a majority
equity interest in ENBC and acquired a 93% interest in Mid-Atlantic Restaurant
Systems L.P. ("Mid-Atlantic"), its Boston Market area developer for the
Philadelphia area.  Subsequent to the Company's acquisition of its interest in
Mid-Atlantic, Mid-Atlantic acquired 100% of the equity interest in New Jersey
Rose, L.L.C. ("New Jersey Rose"), the Boston Market area developer for the
southern New Jersey area. In March 1997, the Company converted its loan to BC
New York, L.L.C. ("BCNY") into a majority equity interest in BCNY, its Boston
Market area developer for the metropolitan New York, northern New Jersey, and
Connecticut areas. Additionally, the Company has agreed to acquire a portion of
the current equity holders' interest in BCNY, which, if acquired, will result in
the Company having an equity interest in BCNY of approximately 84%.

     As a result of these transactions, the revenue previously generated by the
Company as a lender and service provider to ENBC and as a lender, franchisor,
and service provider to such area developers prior to the date of the respective
transactions has been eliminated in consolidation and replaced with revenue and
operating expenses from ENBC franchise operations as well as from ENBC company-
owned stores and from Company-owned stores from and after the dates of the
respective transactions.  The foregoing results are adjusted in the "minority
interest" line item to reflect the minority interests not owned by the Company.
As a result of these transactions, the operating results for the first quarter
of fiscal 1997 will not be readily comparable to those for the first quarter of
fiscal 1996.

                                       12
<PAGE>
 
COMPANY-OWNED STORES

     As part of its rapid store development strategy, the Company had a practice
of "seeding" a start-up market with Company stores, which the Company would
subsequently sell to a newly-formed area developer for that market.  As a result
of the completion of the area developer network in 1995, the Company no longer
has the need to "seed" start-up markets with Boston Market stores.  ENBC
completed its seeding program in March 1997.  As a result of the sale of Company
stores to newly-formed area developers, revenue and operating expenses from such
stores (while owned by the Company and ENBC) was replaced with revenue generated
as a franchisor and service provider. There have been no material gains or
losses recognized as a result of the sales.

     Beginning with the acquisition of the Mid-Atlantic stores, the Company has
established a base of Company-owned stores that it believes are more reflective
of mature store performance in an established market.  The following table sets
forth store performance data for Company stores for the quarter ended April 20,
1997 (in thousands of dollars).  Such amounts exclude unallocated capital
charges, income taxes and non-store overhead costs, including accounting,
administration and discretionary advertising:

<TABLE>
<CAPTION>
 
<S>                                              <C>      <C>
    Net sales..............................      $47,511  100.0%
    Food and paper costs...................       17,826   37.5%
    Salaries and benefits..................       11,396   24.0%
    Operating expenses.....................        4,049    8.5%
    Occupancy and advertising costs........        5,569   11.7%
                                                 -------  -----
    Store cash flow........................      $ 8,671   18.3%
                                                 =======  =====
</TABLE>

RESULTS OF OPERATIONS

     Revenue.  Total revenue increased 147% for the quarter ended April 20, 1997
over the quarter ended April 21, 1996.  Royalties and franchise related fees
increased 48%, primarily attributable to the inclusion of ENBC royalties and
franchise related fees and higher royalties resulting from an increase in
revenue from Boston Market franchised stores.  ENBC's royalties and franchise
related fees accounted for 70% of the increase in royalty and franchise related
fees for the first quarter of 1997.  Interest income increased 40% over the
first quarter of 1996 due to the inclusion of ENBC interest income and higher
outstanding loan balances associated with the increase in stores opened by
Boston Market area developers.  ENBC's interest income from area developer
financing accounted for 73% of the increase in interest income.

     Revenue from Company stores is significantly affected by the average number
of such stores operating in the periods being compared. The average number of
Company stores for the first quarter of 1997 was 134 compared to 3 for the first
quarter of 1996.  This change in average number of stores is attributable to the
acquisition or conversion of Mid-Atlantic, New Jersey Rose, and BCNY.  Revenue
from Company stores increased from $1.3 million for the first quarter of 1996 to
$50.1 million for the first quarter of 1997.  The increase for the first quarter
of 1997 was due primarily to a higher average number of Company stores operating
during the first quarter of 1997.

     Total systemwide Boston Market gross revenue was $415.2 million for the
first quarter of 1997 compared to $311.8 million for the first quarter of 1996.
The increase in systemwide store revenue was due primarily to an increase in the
number of Boston Market stores.  Gross weekly per store average ("WPSA") revenue
per Boston Market store increased 3.4% from $22,762 for the first quarter of
1996 to $23,528 for the first quarter of 1997.  WPSA represents the weekly per
store average gross revenue for all stores in the Boston Market system based
upon the actual number of days the stores are open in the reporting period. The
cost of customer discounts and promotions to the stores in the Boston Market
system, net of vendor allowances, expressed as a percentage of systemwide gross
revenue, increased from approximately 3% for the first quarter of 1996 to
approximately 7% for the first quarter of 1997.  In general, over the past year 
the Company believes the increase in customer discounts and promotions was
primarily attributable to an increase in promotions associated with the
introduction of the Boston Carver and Extreme Carver line of

                                      13
<PAGE>
 
sandwiches.  The Company believes that its entry into the highly competitive
sandwich business required a higher level of promotions than its core dinner
business. The Company now believes, however, that because a significant portion
of sandwich sales are occurring at dinner, the promotions undertaken to drive
its sandwich business during the lunch daypart have negatively affected sales of
individual meals at dinner and led to an increase in promotions of its core 
dinner products.  Accordingly, the Company believes that reducing the
level of customer discounts and promotions is an important element in achieving
the overall brand positioning it desires. As a result, management currently
intends to modify its marketing strategy during the third and fourth quarters of
fiscal 1997 to emphasize its dinner business. The Company believes that such
strategy will involve a reduced rate of customer discounts and promotions. Any
change in the overall level of discounts and promotions may effect WPSAs, which
in turn, may effect store-level profitability. SEE "SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS" ON PAGE 12.

     Cost of Products Sold.  As a result of a higher average number of Company
stores operating during the quarter, cost of products sold increased from $.5
million for the first quarter of 1996 to $18.7 million for the first quarter of
1997.  Cost of products sold, as a percentage of Company store net revenue,
increased from 36.5% for the first quarter of 1996 to 37.4% for the first
quarter of 1997.  The increase in the percentage was primarily attributable to
lower net revenue resulting from the increased level of customer discounts and
promotions in the first quarter of 1997 compared to the first quarter of 1996.

     Salaries and Benefits.  Salaries and benefits increased 192% for the first
quarter of 1997 compared to the first quarter of 1996, primarily as a result of
the higher average number of Company stores operating in the first quarter of
1997.  The increase was also due to the inclusion of ENBC employees at both ENBC
company stores and its support center.  ENBC accounted for 21% of the increase
in salaries and benefits for the 1997 quarter.  In June 1997, the Company
reduced its support center workforce by approximately 115 people.  The workforce
reduction is presently estimated by the Company to result in a one-time charge
of up to $4.0 million in the second quarter of 1997. The reduction in workforce
is expected to result in lower salary and benefit expense for the remainder of
1997. Such workforce reductions are primarily the result of the elimination of
duplicative positions and the consolidation of various administrative functions.
SEE "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" ON PAGE 12.

     General and Administrative.  General and administrative expenses increased
178% for the first quarter of 1997 compared to the first quarter for 1996.  The
increase for the quarter was attributable to the increased number of Company
stores, greater depreciation and amortization expense, and inclusion of ENBC's
general and administrative expenses.  ENBC accounted for 27% of the increase in
general and administrative expenses for the quarter.  Included in general and
administrative expenses were depreciation and amortization charges of $10.9
million for the first quarter of 1997 compared with $4.2 million for the first
quarter of 1996.  The increase in depreciation and amortization expense was
attributable to the assets acquired from Mid-Atlantic, ENBC, BCNY, and New
Jersey Rose as well as a higher corporate fixed asset base reflecting the
Company's investment in support center infrastructure.  The reduction in 
workforce is expected to result in lower general and administrative expenses for
the remainder of 1997.  SEE "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" 
ON PAGE 12.

     Other Expense.  The Company incurred a net expense of $6.6 million for the
first quarter of 1997 compared to a net expense of $2.8 million for the first
quarter of 1996.  This increase was due to lower interest income earned in 1997
as a result of a lower cash balance during the quarter compared to the first
quarter of 1996 and the incurrence of interest expense in the first quarter of
1997 resulting from borrowings on the Company's and ENBC's senior secured
revolving credit facilities.  Included in other expense for the first quarter of
1997 was a $.7 million gain recognized as a result of ENBC issuing shares of its
common stock to third parties at prices per share greater than the Company's
carrying value.

     Income Taxes.  The provision for income taxes for the first quarter of 1997
is based upon the Company's anticipated tax rate.

     Minority Interest.  The minority interest in the earnings of subsidiaries
of $2.6 million for the first quarter of 1997 represents the minority ownership
interest in the earnings of ENBC and BCNY.

                                       14
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES

     Cash used in operations was $15.9 million for the first quarter of 1997
compared to cash provided from operations of $27.9 million for the first quarter
of 1996.  Income before non-cash charges and credits increased to $40.2 million
for the first quarter of 1997 compared to $25.4 million for the first quarter of
1996 due primarily to increased net income and depreciation and amortization.
Cash provided from working capital was $2.5 million for the first quarter of
1996 compared with cash used for working capital of $56.1 million for the first
quarter of 1997.  The change in working capital in the first quarter of 1997
compared to the first quarter of 1996 was primarily attributable to payments of
accounts payable and accrued expenses in the first quarter of 1997.

     During the first quarter of 1997, the Company and ENBC borrowed an
aggregate of $65.3 million under their senior secured revolving credit
facilities. Subsequent to the end of the first quarter of 1997, the Company
completed the issuance of $287.5 million in aggregate principal amount of its
7 3/4% convertible subordinated debentures due 2004 and ENBC completed the
issuance of $125.0 million in aggregate principal amount of its 7 1/4%
convertible subordinated debentures due 2004. The Company and ENBC utilized a
portion of such proceeds to retire the outstanding balances under their senior
secured revolving credit facilities. During the first quarter of 1996, the
Company received net proceeds of $87.4 million from issuance of shares of common
stock.

     The Company's primary use of capital reflects its goal of establishing
brand awareness and market leadership by providing partial financing to its area
developers for their use in store development and to finance their working
capital needs.  As of April 20, 1997, the Company had secured loan commitments
to its Boston Market financed area developers aggregating $755.6 million of
which $622.7 million had been advanced.  As of April 20, 1997, ENBC had secured
loan commitments to its area developers aggregating $359.9 million, of which
$211.7 million had been advanced.  Net loan advances to area developers declined
to $126.3 million for the first quarter of 1997 (consisting of $416.7 million of
loan advances, net of $290.4 million of loan repayments) from $138.7 million for
the first quarter of 1996 (consisting of $299.4 million of loan advances, net of
$160.7 million of loan repayments).  The majority of the loan advance and
repayment activity reflects the revolving nature of the loans, that is, amounts
are drawn and repaid on a regular basis to optimize cash management.  Other loan
advances and repayments in the first quarter of 1996 consisted primarily of
activity under the Company's convertible loan to ENBC prior to the date of
conversion of the loan.

     As a result of executing the rapid expansion strategy required by the
Company, Boston Market financed area developers have incurred net losses in each
of the last three years.  The net losses incurred over this three-year period,
which aggregated $156.5 million in 1996, $148.3 million in 1995, and $51.3
million in 1994, include (a) depreciation and amortization charges of
approximately $93.0 million, (b) approximately $148.0 million attributable to
investment overhead, scale inefficiencies in operating overhead, and other 
start-up costs which the Company believes are necessary to establish the Boston
Market brand in new territories and open stores at a rate sufficient to gain a
competitive advantage, and (c) royalties, interest, and other franchise related
fees that would no longer be incurred in the event the Company were to acquire,
or convert its convertible secured loans to, such financed area developers. The
net loss amounts for each of the fiscal years represent the aggregate net loss
amounts for all financed area developers, the operations of which were not
consolidated into the Company's financial statements as of the date the Company
first reported such losses for such fiscal year.  As a result of the foregoing
factors, as well as ongoing improvements to store operating performance and
increases in scale efficiencies, the Company does not consider these start-up
losses to be a meaningful financial measure during this rapid expansion phase
(i.e., that period during which new stores constitute a significant percentage
of the store base).  The Company believes the rapid expansion phase for most of
its developers should last approximately four to five years from the time
significant development commences in such area developer's ADI, although the 
rate of store development may vary within the rapid expansion phase. As the
rapid expansion phase ends, the size of the area developer's store base should
enable the developer to gradually reduce and eventually recover such start-up
losses. The reduction in and recovery of losses is expected to be driven
primarily by lower investment overhead, increased operational and advertising
efficiencies, greater economies of scale, and further increases in store revenue
through continued product and service enhancements. The point at which losses
may be recovered will vary by area developer depending primarily upon the size
and timing of the area developer's store development schedule, the achievement
of advertising efficiency, the level of debt and interest charges, the intensity
of competition, and the quality of management; however, there can

                                      15
<PAGE>
 
be no assurance that such losses will be recovered.  Because the financed area
developers are generally two to three years into significant store development
in their respective ADIs, the Company believes substantially all of its financed
area developers will remain in the rapid expansion phase during 1997 in most of
their ADIs; however, the Company expects that area developer aggregate net
losses will be lower in fiscal 1997 than in fiscal 1996.  Subsequent to the
completion of the rapid expansion phase, the Company expects area developer
profitability to be a more meaningful factor in assessing loan recoverability
and any future loan commitments.  Although the Company believes its current
financed area developers will achieve profitability, in the event the foregoing
strategy does not come to fruition or an area developer otherwise fails to
achieve a sufficient level of profitability subsequent to the completion of its
rapid expansion phase, such event could have a material adverse impact on the
Company's financial position and results of operations.  SEE "SPECIAL NOTE
REGARDING FORWARD-LOOKING STATEMENTS" ON PAGE 12.

     The allowance for financed area developers' loan losses is maintained at a
level that in management's judgment is adequate to provide for estimated
possible loan losses. The amount of the allowance is based on management's
review of use of loan proceeds, adherence to store development schedules, store
performance trends, type and amount of collateral securing the loan, prevailing
economic conditions, and other factors that management deems relevant at the
time.  Based upon this review and analysis, no allowance for loan losses was
required as of December 29, 1996 and April 20, 1997.

     Area developer loans are typically convertible into a majority equity
interest in the area developer at a conversion price set forth in the loan
agreement, which is at a premium over the per unit price paid by investors in
the area developer for their equity, after the expiration of a moratorium
period, provided generally that the area developer has completed not less than
80% of its area development commitment, or in the event of certain defaults. 
Any determination to convert any area developer loan or otherwise acquire an
equity interest in any area developer would involve a variety of economic and
operational considerations, including the projected financial impact of
converting the loan, the status of the area developer's market penetration, the
performance of the area developer's stores, the Company's desire to own such
stores and the willingness of the Company to incur the risk of owning such
stores versus receiving income as a franchisor, lender, and service provider,
the Company's ability to manage stores if necessary, the future capital
requirements of the area developer and its ability to raise a portion of such
capital, and the demand on Company resources.  However, factors and
circumstances unique to a specific transaction may also impact the Company's
decision.  In addition, any loan conversion or other acquisition of an equity
interest in an area developer by the Company would not be indicative of whether
the Company intended to, or would, convert or otherwise acquire an equity
interest in any other area developer.  There can be no assurance that the
Company will exercise its future rights to acquire an equity interest in any
area developer to which it provides financing or that such exercise will result
in control of the area developer.  The Company has no present intention to
convert any of its area developers' loans or otherwise acquire an equity
interest in any area developer.

  In addition to providing financing to its area developers, the Company's
capital requirements relate to continued development of its corporate
infrastructure, which supports systemwide expansion, acquisition and development
of Company stores, and funding commitments to PFCI and any future commitments to
BMI.  The Company has committed to provide PFCI a $17.0 million convertible
secured loan. As of April 20, 1997, the Company had funded $6.9 million of its
loan commitment to PFCI.  In the first quarter of 1997, the Company expended
$7.4 million on its corporate infrastructure and $18.4 million for Boston Market
and ENBC store acquisition and development, including acquisition of real
estate.  In the first quarter of 1996, the Company expended $20.9 million on its
corporate infrastructure and $6.2 million for Boston Market store development,
including acquisition of real estate.  These capital expenditures have been
partially offset with cash proceeds from selling ENBC company stores as a result
of its store seeding practice. During the first quarter of 1997, ENBC generated
$3.6 million from the sale of ENBC company stores to a newly-formed area
developer. As of the end of the first quarter of 1997, both the Company and
ENBC have completed their store seeding programs; accordingly, neither the
Company nor ENBC anticipates receiving cash proceeds in the future from the sale
of stores to newly-formed area developers. In addition to this seeding program,
the Company generated cash from financing land, building and equipment and from
the sale of assets of $16.7 million and $1.1 million in the first quarters of
1996 and 1997, respectively.

                                       16
<PAGE>
 
     The Company anticipates that it and its area developers will have a need
for additional financing dependent primarily upon the number of stores opened,
the cost of such stores and store operating results. As of April 20, 1997, the
Company and its area developers had entered into area development agreements
that provide for the opening of 2,425 additional stores over the next five to
seven years. As a result of a number of factors, including the availability and 
cost of capital to the restaurant industry in general and to the Company in 
particular and recent store performance, as well as the possible opportunity to
integrate offerings of fresh, ready-to-heat prepared foods in existing or future
Boston Market stores, the Company intends to review with its area developers the
rate of store development. As a result of such review, the rate of store
development could be reduced; however, the magnitude of such reduction, if any,
cannot be quantified until completion of the review process. Any reduction in
the rate of store development is likely to a have a negative impact on the
Company's earnings. SEE "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" ON
PAGE 12.

     The Company also expects that BMI, its area developers, franchisees,
licenses, and/or joint venture partners, ENBC and its area developers, and PFCI
will have need for additional financing. However, on May 31, 1997, the Company, 
BMI and John Sun, a restaurant developer in Southeast Asia, agreed to extend,
until June 1, 1998, the period during which such parties may negotiate and 
execute definitive agreements providing for BMI's development of Boston Market 
stores and Mr. Sun's sublicense from BMI of certain of such development rights.
The extension resulted from Mr. Sun's desire to explore the possible opportunity
to integrate the offerings of fresh, ready-to-heat prepared foods in Boston
Market international stores and the Company's desire to focus, in the short-run,
on its domestic business. The delay in international development will effect the
amount of fees to be received by the Company from BMI and the cost and expenses
incurred by the Company in connection with such development, which, in turn, 
will negatively impact the Company's earnings. SEE "SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS" ON PAGE 12.

     The Company believes that none of the factors being considered by it and
its area developers and BMI in reviewing the rate of Boston Market store
development will effect the rate of ENBC's area developers' store development.
SEE "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" ON PAGE 12.

     The Company's capital requirements depend primarily upon the amount and
timing of borrowings under the loan agreements between the Company and its area
developers,ENBC, BMI and PFCI. The Company, ENBC and the other aforementioned
entities may seek additional funds from offerings of debt or equity securities.
There can be no assurance that the Company, ENBC or such entities will be able
to raise such funds on satisfactory terms when needed. SEE "SPECIAL NOTE
REGARDING FORWARD-LOOKING STATEMENTS" ON PAGE 12.

                                       17
<PAGE>
 
PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

     A.  Exhibits: See Exhibit Index appearing elsewhere herein, which is
         incorporated herein by reference.

     B.  Reports on Form 8-K: The Company filed one report on Form 8-K during
         the quarter ended April 20, 1997. Such Form 8-K reported item 5, and
         was dated January 31, 1997 and filed on February 5, 1997.

                                       18
<PAGE>

                                  SIGNATURES

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.


                                            BOSTON CHICKEN, INC.


Date:  June 2, 1997                        /s/ Scott A. Beck
                              ----------------------------------------------
                                               Scott A. Beck
                              Chairman of the Board, Chief Executive Officer
                                               and President


Date:  June 2, 1997                      /s/ Mark W. Stephens
                              ----------------------------------------------
                                             Mark W. Stephens
                                     Vice Chairman and Chief Financial
                                   Officer (Principal Financial Officer)

                                       19

<PAGE>

                                       EXHIBIT INDEX
<TABLE>
<CAPTION>


                                                                                                             Sequential
Exhibit                                                                                                      ----------
-------                                                                                                         Page
Number                                    Exhibits                                                              ----
------                                    --------                                                             Number*
                                                                                                               -------
<S>      <C>                                                                                                 <C>  
  4.1    Indenture dated as of April 28, 1997 by and between the Company and Bankers Trust
         Company, as Trustee, which includes as an Exhibit the form of Debenture for the
         Company's 7 3/4% Convertible Subordinated Debentures due 2004 (the "7 3/4% Debenture
         Indenture").

 10.1    Amendment to 1995 Employee Stock Option Plan.

 10.2    Second Amendment dated April 29, 1997 to Secured Credit Agreement dated
         as of May 17, 1996 among ENBC, the Lenders named therein, and Bank of
         America Illinois, as Agent (incorporated by reference to Exhibit
         10.5(c) to ENBC's 1997 annual report on Form 10-K/A (Exchange Act File 
         No. 0-21097)).

 10.3    Third Amendment dated May 20, 1997 to Secured Credit Agreement dated as
         of May 17, 1996 among ENBC, the Lenders named therein, and Bank of
         America Illinois, as Agent (incorporated by reference to Exhibit 10.2
         to ENBC's Quarterly Report on Form 10-Q for the quarter ended April 20,
         1997 (Exchange Act File No. 0-21097)).

 10.4    Indenture dated as of May 29, 1997 by and between ENBC and Bankers Trust
         Company, as Trustee, which includes as Exhibits the forms of Debenture
         for ENBC's 7 1/4% convertible subordinated debentures due 2004 
         (incorporated by reference to Exhibit 4.1 to ENBC's Current Report
         on Form 8-K dated as of May 22, 1997 (Exchange Act File No. 0-21097)).

 10.5    7 3/4% Debenture Indenture (included in Exhibit 4.1).

   11    Statement re Computation of Earnings Per Share.

   27    Financial Data Schedule.

 99.1    Uniform Franchise Offering Circular dated March 25, 1997.
</TABLE>

* This information appears only in the manually signed original of this
Form 10-Q.


                                  Exhibit - 1