<PAGE>
 
                      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 June 29, 1997

                                      OR

[_]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934


                       Commission File Number:  0-21587


                               PJ AMERICA, INC.
            (Exact name of registrant as specified in its charter)


                    Delaware                                    61-1308435
          (State or other jurisdiction of                    (I.R.S. Employer
          incorporation or organization)                  Identification Number)


                               9109 Parkway East
                          Birmingham, Alabama  35206
                   (Address of principal executive offices)


                                (205) 836-1212
             (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 
                      ---                              ---

     At August 14, 1997, there were outstanding 5,781,610 shares of the
registrant's common stock, par value $.01 per share.




<PAGE>
 
                       PJ AMERICA, INC. AND SUBSIDIARIES

                                     INDEX

<TABLE>
<CAPTION>
 
 
PART I.   FINANCIAL INFORMATION                                         Page No.
                                                                        --------
<S>       <C>                                                           <C>
Item 1.   Financial Statements
 
 
          Condensed Consolidated Balance Sheets (Unaudited) --                 
          June 29, 1997 and December 29, 1996                              2
 
          
          Condensed Consolidated Statements of Income (Unaudited) --
          Three Months and Six Months Ended June 29, 1997
          and June 30, 1996                                                3
 
 
          Condensed Consolidated Statements of Cash Flows (Unaudited) --
          Six Months Ended June 29, 1997 and June 30, 1996                 4
 
 
          Notes to Condensed Consolidated Financial Statements 
          (Unaudited)                                                      5 


Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                        9
 
 
PART II.  OTHER INFORMATION
 
 
Item 4.   Submission of Matters to a Vote of Security Holders              12
 
 
Item 6.   Exhibits and Reports on 8-K                                      14
 
</TABLE>
<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE> 
<CAPTION> 

                       PJ AMERICA, INC. AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets

                                                  June 29,          December 29,
                                                    1997                1996
                                                (Unaudited)            (Note)
                                                -----------         ------------
(In thousands)
<S>                                             <C>                 <C> 
Assets
Current assets:
  Cash and cash equivalents                        $ 3,426              $ 4,076
  Accounts receivable, net                              65                   27
  Inventories                                          238                  229
  Advances to related parties                           79                  120
  Deferred income taxes                                -                    104
  Investments                                       12,436               12,058
  Prepaid expenses and other                            89                  221
                                                   -------              -------
Total current assets                                16,333               16,835
                                                                     
Net property and equipment                           7,101                5,936
Deferred franchise and development costs, net        1,038                  758
Other assets                                            88                   84
                                                   -------              -------

Total assets                                       $24,560              $23,613
                                                   =======              =======

Liabilities and stockholders' equity
Current liabilities:
  Accounts payable                                 $   291              $   189
  Accrued expenses                                   1,582                1,765
  Current maturities of bank debt                        -                   70
                                                   -------              -------
Total current liabilities                            1,873                2,024

Deferred income taxes                                  167                   71

Stockholders' equity:
  Common stock                                          50                   50
  Additional paid-in capital                        20,029               20,029
  Retained earnings                                  2,441                1,439
                                                   -------              -------
Total stockholders' equity                          22,520               21,518
                                                   -------              -------

Total liabilities and stockholders' equity         $24,560              $23,613
                                                   =======              =======

</TABLE> 

Note:  The condensed consolidated balance sheet at December 29, 1996 has been
derived from the audited financial statements at that date but does not include
all information and footnotes required by generally accepted accounting
principles for complete financial statements.

See accompanying notes.


                                       2
<PAGE>
                       PJ AMERICA, INC. AND SUBSIDIARIES
                  Condensed Consolidated Statements of Income
                                  (Unaudited)

<TABLE>
<CAPTION>
                                             Three Months Ended    Six Months Ended
                                             June 29,  June 30,   June 29,   June 30,
                                               1997      1996       1997       1996
                                             --------  --------   --------   --------
<S>                                          <C>       <C>        <C>        <C>
(In thousands, except per share amounts)
Restaurant sales                             $11,985    $5,105     $22,591   $10,020

Restaurant operating expenses:
     Cost of sales                             3,825     1,697       7,198     3,344
     Salaries and benefits                     3,077     1,258       5,792     2,484
     Other operating expenses                  2,899     1,188       5,380     2,306
     Depreciation and amortization               307       129         600       251
                                             -------    ------     -------   -------
                                              10,108     4,272      19,970     8,385
                                             -------    ------     -------   -------

Restaurant operating income                    1,877       833       3,362     1,635
General and administrative expenses              715       406       1,280       685
                                             -------    ------     -------   -------
Operating income                               1,162       427       2,341       950

Other income (expense)                           168       (25)        324       (46)
                                             -------    ------     -------   -------

Income before income taxes                     1,330       402       2,665       904
Income tax expense                               468         3         882         9
                                             -------    ------     -------   -------
Net income                                   $   862    $  399     $ 1,783   $   895
                                             =======    ======     =======   =======

Pro forma information:
Income before income taxes                   $ 1,330    $  402     $ 2,665   $   904
Pro forma income tax expense                     489       157         979       350
                                             -------    ------     -------   -------

Pro forma net income                         $   841    $  245     $ 1,686   $   554
                                             =======    ======     =======   =======

Pro forma net income per share               $  0.16    $ 0.12     $  0.33   $  0.27
                                             =======    ======     =======   =======
Weighted average shares outstanding            5,169     2,087       5,180     2,087
                                             =======    ======     =======   =======

</TABLE> 
See accompanying notes.

                                       3


<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
                  Condensed Consolidated Statements of Income
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                 Six Months Ended
                                                              June 29,        June 30,
                                                                1997            1996
                                                              --------        --------
<S>                                                           <C>             <C>
(In thousands)
Cash Flows from Operating Activities                          $ 2,321         $ 1,368
  Net cash provided by operating activities

Cash Flows from Investing Activities
  Purchases of property and equipment                          (1,742)           (377)
  Purchases of investments                                       (378)              -
                                                              -------         -------
    Net cash used in investing activities                      (2,120)           (377)

Cash Flows from Financing Activities
  (Payments on) proceeds from bank borrowings                     (70)            777
  Payments on stockholder notes                                     -             (31)
  Distributions paid                                             (781)         (1,557)
                                                              -------         -------
    Net cash used in financing activities                        (851)           (811)

Net (decrease) increase in cash                                  (650)            180
Cash and cash equivalents at beginning of period                4,076             507
                                                              -------         -------

Cash and cash equivalents at end of period                    $ 3,426         $   687
                                                              =======         =======
</TABLE> 
See accompanying notes.

                                       4

<PAGE>
 
                       PJ AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

June 29, 1997

Note 1 - Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance 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 three and six months ended June 29,
1997 are not necessarily indicative of the results that may be expected for the
year ending December 28, 1997.  A description of the Company's accounting
policies and other financial information is included in its audited supplemental
consolidated financial statements included in the prospectus that forms part of
the Company's Registration Statement on Form S-1 (Reg. No. 333-30109).

     The accompanying unaudited consolidated financial statements include the
accounts of PJ America, Inc. And its wholly-owned subsidiaries, PJ Cheese, Inc.
and Ohio Pizza Delivery Co. (the "Company").  All significant inter-company
transactions between the consolidated companies have been eliminated.  Prior to
the Company's initial public offering (the "Offering") and reorganization, the
Company's financial statements represented the combined financial position,
results of operations and cash flows of Extra Cheese, Inc. (Extra Cheese),
Textra Cheese Corp. (Textra) and Twice the Cheese, Inc. (Twice), collectively
referred to herein as the "Alabama Group."  Those financial statements excluded
the combined financial position of PJVA, Inc. and PJV, Inc., collectively
referred to as the "Virginia Group", prior to their acquisition on October 30,
1996 (See Note 6).  These unaudited condensed consolidated financial statements
have been restated to give retroactive effect to the merger with Ohio Pizza
Delivery Co. (OPD), on June 5, 1997, in a transaction accounted for as a pooling
of interests, as if the merger had occurred at the beginning of fiscal 1995.
(See Note 4).

     Extra Cheese, Textra, and Twice operated as S corporations through October
30, 1996, when their S corporation elections were terminated.  As a result, they
were not subject to federal or state income tax before October 30, 1996.

     OPD operated as an S corporation from January 1, 1995 through June 5, 1997,
when its S corporation election was terminated.  As a result, OPD was not
subject to federal or state income taxes before June 5, 1997.  However, OPD was
subject to local income taxes.

     In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings per Share, which is required to be adopted on December 31,
1997.  At that time, the Company will be required to change the method currently
used to compute earnings per share and to restate all prior periods.  Under the
new requirements for calculating primary earnings per share, the dilutive effect

                                       5
<PAGE>
 
of stock options and warrants will be excluded.  The impact is not expected to
result in an increase in primary earnings per share for the three and six months
ended June 29, 1997 and June 30, 1996.  The impact of Statement 128 on the
calculation of fully diluted earnings per share for these periods is not
expected to be material.

Note 2 - Reorganization

     The Company was formed in August, 1996 to succeed to the businesses of five
Papa John's International, Inc. (PJI) franchisees. Extra Cheese entered into an
Agreement dated June 10, 1996, as amended on July 10, 1996, and a Plan of Merger
with Twice, Textra, PJVA, Inc. and PJV, Inc., pursuant to which all such
corporations agreed to be merged into PJ Cheese, Inc. (PJ Cheese), a wholly-
owned subsidiary of Extra Cheese, in exchange for shares of common stock of
Extra Cheese. On October 30, 1996, concurrent with the completion of the
Offering (i) all such corporations merged into PJ Cheese; (ii) Extra Cheese
contributed to PJ Cheese all of the assets of Extra Cheese relating to its
restaurants, with PJ Cheese assuming all of Extra Cheese's liabilities relating
thereto; and (iii) Extra Cheese merged into the Company with the stockholders of
Extra Cheese receiving an aggregate of 3,000,000 shares of common stock of the
Company (the "Reorganization"). Accordingly, the Company is the parent of PJ
Cheese, and PJ Cheese owns all of the Papa John's restaurants which were owned
by Extra Cheese, Textra, Twice, PJVA, Inc. and PJV, Inc. (collectively, the
"Predecessor Companies").

     The Reorganization was an exchange of non-monetary assets by stockholders
and has been accounted for at historical cost.

Note 3 - Initial Public Offering

     The Company completed the offering of its common stock on October 30, 1996,
pursuant to which the Company sold 1,755,000 shares of its common stock,
including 135,000 shares exercised to cover underwriter over-allotments, at an
initial public offering price of $12.50 per share. Net proceeds from the
Offering (after deducting the underwriting discount of $1.5 million and expenses
of $1.2 million) were $19.2 million. Such proceeds were partially used to fully
retire the outstanding balance owed to banks and shareholders, pay S corporation
distributions, and for general corporate purposes.

Note 4 - Business Combinations

     On June 5, 1997, PJAM Acquisition Subsidiary, a subsidiary of PJ America,
Inc. merged with OPD, based in Akron, Ohio, in a transaction accounted for as a
pooling of interests. Pursuant to the Agreement and Plan of Merger, dated as of
May 30, 1997, PJAM Acquisition Subsidiary was merged into OPD, with OPD
surviving the merger as a wholly-owned subsidiary of PJ America, Inc.

     Pursuant to a fixed formula price, the OPD shareholders received 276,610
shares of the Company's common stock in exchange for 100% of the common stock of
OPD. The total value of the transaction was approximately $4.6 million, based
upon the conversion value of $16.50 per common share agreed upon on May 20,
1997.

                                       6
<PAGE>
 
Note 5 - Pro Forma Information Excluding the Virginia Group Acquisition

     The Company terminated is status as an S corporation on October 29, 1996
(June 5, 1997 for OPD).  Pro forma income taxes have been presented to reflect a
provision for federal, state, and local income taxes at an assumed effective
rate of 36.5% (41.0% for OPD).

     Pro forma net income per share is based on the weighted averaged number of
shares of common stock and common stock equivalents outstanding during the
period.  The pro forma net income per share amounts were calculated assuming
issuance of the number of shares of common stock in the Offering necessary to
generate sufficient proceeds to fund the payment of the Company's undistributed
S corporation earnings.  A summary of the components of the weighted average
shares of common stock and equivalents outstanding during the periods indicated
is as follows:
<TABLE>
<CAPTION>

                                                   Three Months Ended           Six Months Ended
                                                 June 29,      June 30,       June 29,     June 30,
                                                   1997           1996           1997         1996
                                                 ---------     --------       --------      --------
<S>                                             <C>            <C>            <C>            <C>
Total number of common shares
 outstanding throughout the period                   5,033        2,048          5,033         2,048
Shares issuable upon net exercise of
 outstanding stock options and warrant                 114            -            120             -
Adjustment to reflect shares issued to
 pay S corporation distributions                        22           39             27            39
                                                 ---------     --------       --------      --------
Total weighted average shares and
 equivalents outstanding                             5,169        2,087          5,180         2,087
                                                 =========     ========       ========      ========

</TABLE>

Note 6 - Acquisition of Virginia Group - Pro Forma Information

     Concurrent with the Offering, the Company acquired PJVA, Inc. and PJV, Inc.
(see Note 1). The acquisition was accounted for at historical cost, with the
shareholders of PJVA, Inc. and PJV, Inc. receiving an aggregate of 1,230,000
shares of common stock of the Company.

     The following represents the pro forma results of operations for the three
and six months ended June 29, 1996 as if the Reorganization and OPD merger had
occurred at the beginning of the Company's fiscal year. Pro forma net income
reflects an assumed corporate income tax rate of 36.5% for the Company, and
41.0% for OPD.

                                       7
<PAGE>
 
<TABLE>
<CAPTION>
                                             Three Months           Six Months
                                                 Ended                Ended
                                             June 30, 1996        June 30, 1996
                                            ---------------       --------------
<S>                                        <C>                   <C>
In thousands, except per share data:

Restaurant sales                                     $9,397              $17,920
                                            ===============       ==============
Pro forma net income                                 $  458              $   885
                                            ===============       ==============

Pro forma net income per share                       $ 0.13              $  0.26
                                            ===============       ==============
Weighted average shares outstanding                   3,444                3,444
                                            ===============       ==============

</TABLE>
     The pro forma information is not indicative of the results of operations
that actually would have been obtained if the transactions had occurred at the
beginning of the Company's fiscal year.  Additionally, the pro forma information
is not intended to be a projection of future results.

Note 7 - Subsequent Events

     On July 29, 1997, the Company sold in a public offering 750,000 shares of
its common stock at a price of $17.75 per share.  The net proceeds to the
Company from the offering were approximately $12.2 million.

     On June 26, 1997, the Company entered into an agreement to purchase the
assets of one Papa John's restaurant and development rights for three additional
Papa John's restaurants in northern Ohio from another Papa John's franchisee.
The purchase price consisted of a cash payment of $200,000, and has been
accounted for by the purchase method of accounting and closed on June 30, 1997.

                                       8
<PAGE>
 
               SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain statements in this Form 10-Q under "Management's Discussion and Analysis
of Financial Condition and Results of Operations" constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company 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; successful implementation of the Company's expansion strategy;
dependence on the success of the Papa John's system; success of operating
initiatives; advertising and promotional efforts; adverse publicity; acceptance
of new product offerings; availability, locations and terms of sites for store
development; changes in business strategy or 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.

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

Results of Operations

     Restaurant Sales. Restaurant sales increased 135% to $12.0 million for the
three months ended June 29, 1997, from $5.1 million for the comparable period in
1996, and 125% to $22.6 million for the six months ended June 29, 1997, from
$10.0 million for the comparable period in 1996. These increases were primarily
attributable to the 57 and 54 restaurants open throughout the three and six
months ended June 29, 1997, respectively (includes 25 Virginia restaurants
acquired on October 30, 1996), as compared to 24 and 22 restaurants for the same
periods in the prior year, and three restaurants opened in each of the first and
second quarters of 1997. Also, comparable restaurant sales increased 8.8% and
10.1% for the three and six months ended June 29, 1997, respectively.

     Costs and Expenses. Restaurant cost of sales, which consists of food,
beverage and paper costs, decreased as a percentage of restaurant sales to 31.9%
for the three and six months ended June 29, 1997, from 33.2% and 33.4%
respectively for the comparable periods in 1996. These decreases were primarily
attributable to lower cheese costs and a maturing restaurant base.

     Salaries and benefits increased as a percentage of restaurant sales to
25.7% and 25.6% for the three and six months ended June 29, 1997, respectively,
as compared to 24.6% and 24.8% for the same periods in 1996. These increases are
primarily due to the increase in minimum wage in October, 1996, and six
restaurant openings in the six months ended June 29, 1997, as compared to three
restaurant openings in the same period in 1996.

     Other operating expenses include other restaurant level operating costs,
the material components of which are automobile mileage reimbursement for
delivery drivers, rent, royalties, utility expenses, pre-opening expenses and
advertising expenses. Other operating expenses increased as a percentage of
restaurant sales to 24.2% and 23.8% for the three and six months ended June 29,
1997, respectively, as compared to 23.3% and 23.0% for the same periods in 1996.
These increases are primarily attributable to the acquisition of the Virginia
restaurants, which historically have had higher operating expenses as a

                                       9
<PAGE>

percentage of restaurant sales, partially offset by increased leverage of
expenses as a result of comparable store sales increases and increased
purchasing power for various expenses.

     Depreciation and amortization was relatively consistent as a percentage of
restaurant sales at 2.6% and 2.7% for the three and six months ended June 29,
1997, respectively, as compared to 2.5% for the same periods in 1996.

     General and administrative expenses (including merger expenses of $124,000
for the three and six months ended June 29, 1997), decreased as a percentage of
restaurant sales to 6.0% and 5.7% for the three and six months ended June 29,
1997, respectively, as compared to 7.9% and 6.8% for the same periods in 1996.
The decreases were primarily attributable due to leveraging of general and
administrative expenses as a result of increased sales, partially offset by
additional corporate infrastructure necessary to support planned growth.

     Other income (expense), consisting primarily of investment income was
approximately $168,000 and $324,000 for the three and six months ended June 29,
1997 respectively.  The increase in investment income is a result of earnings on
funds received from the Company's initial public offering.  Investment balances
are considered available to fund growth and acquisitions.

     Income Taxes.  The Company was subject to only local income taxes in 1996.
This increase was due to the conversion from an S corporation to a C corporation
on October 30, 1996 (June 5, 1997 for OPD), at which time the Company became
subject to corporate level income taxes.

Liquidity and Capital Resources

     Cash flow from operations increased to $2.3 million for the six months
ended June 29, 1997 from $1.4 million for the comparable period in 1996,
primarily due to the higher level of net income for the first six months of
1997.

     The Company requires capital primarily for the development and acquisition
of new restaurants.  Total capital expenditures, including those of OPD, for the
six months ended June 29, 1997, were approximately $1.7 million and funded by
available cash and cash flow from operations.

     The Company has financed its operations principally from cash provided by
operating activities and proceeds from bank borrowings and stockholder loans.
In October, 1996, the Company received $19.2 million in net cash proceeds from
its initial public offering.  These proceeds were used to fund final S
corporation distributions of $2.0 million to stockholders, $1.6 million to
retire stockholder indebtedness, and $2.0 million to retire bank indebtedness.
The remaining net proceeds were used to fund capital expenditures in 1996 or
were held in various investments.  Also, the Company received net proceeds of
approximately $12.2 million from a July, 1997, public offering of 750,000 shares
of its common stock.

     Capital expenditures are expected to be approximately $2.0 million for the
last six months of 1997, primarily for restaurant development and improvements
to existing restaurants.  The Company also may acquire the operations of other
Papa John's franchisees if such operations become available on
terms satisfactory to the Company.  Capital resources at June 29, 1997 include
$15.9 million of cash and investments.  The Company plans to fund its capital
expenditures through 1997 from available cash and cash generated from
operations.  The Company has not sought and does not have any commitments for
any credit facilities.

                                       10
<PAGE>
 
PART II.  OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

     The Company's annual meeting of stockholders was held on June 4, 1997, at
the Holiday Inn Express, 4627 Highway 280, Birmingham, Alabama at 10:30 am
(CDT).

     At the meeting, the Company's stockholders elected Stephen P. Langford and
Charles W. Schnatter to serve as directors until the 2000 Annual Meeting of
Stockholders.  Mr. Langford and Mr. Schnatter received affirmative votes
of 3,885,589 and 3,863,589, respectively, and abstained votes of 2,000 and
24,000, respectively.  The Company's other directors continue to serve in
accordance with their previous elections:  through 1998 - Martin T. Hart and
Michael M. Fleishman; and through 1999 - Richard F. Sherman, Frank O. Keener and
Douglas S. Stephens.

     The Company's stockholders' also ratified the selection of Ernst & Young
LLP as the Company's independent auditors for the year ending December 28, 1997,
by a vote of 3,887,589 affirmative to 175 negative and 284 abstention votes.

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits.

              Exhibit
              Number:      Description:
              ---------------------------------------------------------

              11           Statement regarding Computation of Earnings
                           per Common Share
 
              27           Financial Data Schedule which is submitted
                           electronically to the Securities and Exchange
                           Commission for information only and not deemed to be
                           filed with the Commission

          (b) Current Reports on Form 8-K

              A current report on Form 8-K dated June 19, 1997 was filed
              announcing the Company's merger with Ohio Pizza Delivery (OPD),
              effective June 5, 1997.

                                       11
<PAGE>
 
                                   SIGNATURES


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


                               PJ AMERICA, INC.



Date:  August 14, 1997                  /s/  D. Ross Davison
                              ----------------------------------------
                                           D. Ross Davison
                               Vice President, Chief Financial Officer
                            and Treasurer (Principal Financial Officer)