U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)


   |X| Quarterly report under Section 13 or 15(d) of the Securities and Exchange
       Act of 1934 for the quarterly period ended July 15, 1997.

   |_| Transition  report  under  Section  13 or  15(d) of the  Securities  and
       Exchange Act of 1934 for the transition period from _____ to_______.

                        COMMISSION FILE NUMBER 333-5488-D

                          STOICO RESTAURANT GROUP, INC.
       (Exact name of small business issuer as specified in its charter)

                        Delaware                   48-1177558
               (State or other jurisdiction        (I.R.S. Employer
              of incorporation or organization)    Identification No.)


                 Brittany Two Place, 1938 N. Woodlawn, Suite 301
                              Wichita, Kansas           67208
              (Address of principal executive office) (Zip code)

                                 (316) 691-8880

                (Issuer's telephone number, including area code)

     Check  whether  the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 past 90 days. Yes |X| No |_|.

     At July 15, 1997,  5,708,966  shares of common  stock,  $0.01 per share par
value were outstanding.

     Transitional Small Business Disclosure Format (check one): Yes |_|  No |X|





<PAGE>


                          STOICO RESTAURANT GROUP, INC.
                        INDEX TO 10-QSB FOR THE QUARTERLY
                           PERIOD ENDED JULY 15, 1997

                                                                         PAGE
                                                                         ----

PART I:  FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS

         Stoico Restaurant Group, Inc. and Subsidiaries Consolidated
         Balance Sheets - July 15, 1997 and December 31, 1996              3

         Stoico Restaurant Group, Inc. and Subsidiaries Consolidated
         Statements of Operations -  Twelve Week Period and Twenty-
         Eight Week Period ended July 15, 1997 and July 9, 1996,
         respectively.                                                     4

         Stoico Restaurant Group, Inc. and Subsidiaries Consolidated
         Statements of Cash Flows - Twenty-Eight Week Period ended
         July 15, 1997 and July 9, 1996, respectively.                     5

         Notes to Consolidated Financial Statements - July 15, 1997        6

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATION8

PART II: OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS                                                 16

ITEM 2:  CHANGES IN SECURITIES                                             16

ITEM 3:  DEFAULTS UPON SENIOR SECURITIES                                   16

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF
         SECURITY HOLDERS                                                  16

ITEM 5:  OTHER INFORMATION                                                 16

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K                                  17

         SIGNATURES                                                        18


                                        2

<PAGE>

<TABLE>
<CAPTION>

                 Stoico Restaurant Group, Inc. and Subsidiaries
                           Consolidated Balance Sheets
                       July 15, 1997 and December 31, 1996

<S>                                                   <C>            <C>
                                                       July 15,      December 31,
           Assets                                        1997           1996
           ------                                     ---------      -----------
                                                      (Unaudited)
Current assets:

     Cash and cash equivalent                         $   136,743    $ 2,271,550
     Receivables                                          125,290         59,351
     Inventories                                          189,270        177,909
     Prepaid expenses and other current assets            181,667        253,216
                                                      -----------    -----------
         Total current assets                             632,970      2,762,026

Property and equipment                                  5,301,905      4,521,779

Goodwill, net of amortization of $118,855 and $76,655,
    respectively                                          947,214        989,413

Notes receivable:

     Former Officer                                        66,873        225,000
     Other, net of related deferred income of
        $201,560                                           33,024         22,077

Other assets                                               13,046         51,225
                                                      -----------    -----------
         Total assets                                $  6,995,032    $ 8,571,520
                                                      ===========    ===========

     Liabilities and Stockholders' Equity 
     ------------------------------------

Current liabilities:

     Accounts payable                                $  1,384,726    $ 1,963,764
     Accrued expenses                                     336,112        300,282
     Current portion of long-term debt                    653,002        190,191
     Note Payable - officer                                68,000           -
     Deferred revenue                                      75,000        195,000
                                                      -----------    -----------
         Total current liabilities                      2,516,840      2,649,237
Long-term debt, less current portion                       22,343         43,580
Long-term lease obligation on closed store                 80,965        116,951
Deferred revenue                                           35,000         95,000
                                                      -----------    -----------
         Total liabilities                              2,655,148      2,904,768

Stockholder's equity:

   Preferred stock, $.01 par value, 5,000,000 shares
        authorized, -0- shares issued-and outstanding        -             -
   Common stock, $.01 par value, 20,000,000 shares
        authorized, 5,708,966 issued and outstanding       57,090         57,090
   Additional paid-in capita1                           4,285,754     14,285,754
   Accumulated deficit                               (10,002,960)    (8,676,092)
                                                      -----------    -----------
         Total stockholders' equity                     4,339,884      5,666,752
                                                      -----------    -----------
Commitments                                                  -             -
                                                      -----------    -----------
         Total liabilities and stockholders' equity    $6,995,032    $ 8,571,520
                                                      ===========    ===========
</TABLE>



                                        3

<PAGE>
<TABLE>
<CAPTION>

                 Stoico Restaurant Group, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                                   (Unaudited)
     
                                                  Twelve Week Period               Twenty-Eight Week
                                                         Ended                       Period Ended
                                                  _______________________________________________________
<S>                                                <C>           <C>            <C>            <C>
                                                   July 15,      July 9,        July 15,       July 9,
                                                     1997         1996           1997            1996
                                                  _______________________________________________________
Revenues:

     Sales                                       $2,140,227    $1,656,574      $5,137,715    $3,649,014
     Royalty income                                  20,345        28,707          50,313        73,575
     Franchise Fees                                  15,000        34,000          60,000        34,000
                                                  _______________________________________________________

         Total revenue                            2,175,572     1,719,281       5,248,028     3,756,589
                                                  _______________________________________________________

Cost of sales:

     Food and paper                                 656,606       549,583       1,533,139     1,151,558
     Wages and benefits                             844,137       527,715       1,963,539     1,153,731
                                                  _______________________________________________________

         Total cost of sales                      1,500,743     1,077,298       3,496,678     2,305,289
                                                  _______________________________________________________

         Gross profit                               674,829       641,983       1,751,350     1,451,300

Restaurant operating expenses                       854,287       509,839       1,886,781     1,094,571

Pre-opening expenses                                  7,217        36,584         123,036        36,584

Administrative expenses                             455,376       340,091       1,105,006       854,626

Noncash compensation expense                           -           13,749          -             13,749
                                                  _______________________________________________________

         Operating loss                           (642,051)     (258,280)     (1,363,491)      548,230)

Other income (expense):

     Miscellaneous other income                      28,351       (6,930)         31,303        26,074

     Provision for lease obligation on 
     closed store                                       -       (175,855)           -        (175,855)

     Interest income                                  7,841        11,871         28,999        25,768

     Interest expense                              (14,157)     (139,953)       (23,679)     (309,605)
                                                  _______________________________________________________


         Loss before income                       (620,016)     (569,147)    (1,326,868)     (981,848)

Income taxes                                           -            -             -               -
                                                  _______________________________________________________

Net loss                                         $(620,$16)   $ (569,147)  $ (1,326,868)   $(981,848)
                                                 ========================================================
Total weighted average of common and common
      equivalent shares                           5,730,700     4,328,756     5,730,700    4,307,251  
                                                 ========================================================
Loss per common share                           $     (.11)    $    (.13)    $    (.23)    $   (.23)    
                                                 ========================================================
</TABLE>

                                        4

<PAGE>

<TABLE>
<CAPTION>


                 Stoico Restaurant Group, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<S>                                                                                          <C>            <C>
                                                                                             Twenty-Eight Week
                                                                                                Period Ended
                                                                                              -----------------
                                                                                              July 15,      July 9,
                                                                                               1997          1996
                                                                                              -------       -------
Cash from operating activities:

     Net loss                                                                              $(1,326,86$)  $ (981,848)

     Adjustments to reconcile net loss to net cash used in operating activities

         Depreciation and amortization                                                         508,291       251,216

         Gain on disposal of equipment                                                         (24,786)         (23)

         Noncash compensation expense                                                              -          13,749

         Income attributable to Area Development fee forfeiture                                (45,000)          -

         (Increase) decrease in receivables                                                    (65,939)        5,716

         Increase in inventories                                                               (11,361)      (1,553)

         Decrease (increase) in notes receivable                                                147,180    (158,127)

         Decrease  (increase)  in  prepaid expenses and other current assets                     71,549     (10,911)

         Decrease in other assets                                                                38,179       16,325  

         Decrease in accounts  payable                                                        (579,038)    (357,245)

         Increase  (decrease) in accrued expenses                                                35,830     (33,752)

         (Decrease) increase in long term lease obligation on closed store                     (35,986)      123,333

         (Decrease) increase in deferred revenue                                               (15,000)      203,083
                                                                                                -------      -------    
              Net cash used in operating activities                                         (1,302,949)    (930,037)
                                                                                                -------      -------
Cash flows from investing activities:

     Purchase of property, plant and equipment                                              (1,309,338)    (256,586)

     Proceeds from sale of restaurant                                                           87,906       251,300
                                                                                            -----------     --------
              Net cash (used in) provided by investing activities                           (1,221,432)      (5,286)
                                                                                            -----------     -------- 
Cash flows from financing activities:

     Proceeds from issuance of long term debt                                                   500,000    1,000,000

     Principal payments on long-term debt                                                      (58,426)    (183,224)

     Principal payments on officer note payable                                                (52,000)        -

     Proceeds from issuance of common stock                                                        -         315,095

     Deferred offering costs                                                                       -       (124,722)
                                                                                            -----------     -------- 
              Net cash provided by financing activities                                         389,574    1,007,149
                                                                                            -----------     -------- 
              Net (increase) decrease in cash and cash equivalents                          (2,134,807)       71,826

Cash and cash equivalents at beginning of period                                              2,271,550      784,171
                                                                                            -----------     -------- 
Cash and cash equivalents at end of period                                                   $  136,743     $855,997

                                                                                             ==========     ========
</TABLE>



                          STOICO RESTAURANT GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

(1)  Basis of Presentation

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance with the instructions to Form 10-QSB and,  therefore,  do not include
all  information  and footnotes  necessary for a fair  presentation of financial
position,  results of  operations  and cash flows in conformity  with  generally
accepted accounting  principles.  The information  furnished,  in the opinion of
management,   reflects  all  adjustments,  which  consist  of  normal  recurring
adjustments,  necessary to present  fairly the results of  operations  of Stoico
Restaurant  Group,  Inc. and  subsidiaries  (the "Company") for the twenty-eight
week period ended July 15, 1997,  and July 9, 1996. The  consolidated  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements and notes thereto, together with management's discussion and analysis
of financial  condition  and results of  operations,  contained in the Company's
Annual Report dated March 27, 1997.

     In February 1997,  FASB issued  Statement No. 128,  Earnings Per Share (FAS
128),  effective  for the Company for the interim  periods and years ended after
December 15, 1997.  FAS 128 replaces the  presentation  of primary  earnings per
share (EPS) with a presentation  of "basic" EPS. Basic EPS excludes the dilutive
effects of common stock equivalent shares in its calculation. A diluted EPS will
still be required,  and will be computed  similarly to the current fully diluted
EPS . Under FAS 128, both the basic and diluted EPS amounts will be presented in
the financial  statements.  Also, the statement will require  restatement of all
prior period EPS data presented in the financial  statements.  EPS as calculated
at June 30, 1997 would not be  materially  different if  calculated  using basic
EPS.

(2)  Income (Loss) Per Share

     Loss per share is determined based on the weighted average number of common
and common  equivalent  shares  outstanding  during each  period.  The  weighted
average  number of common  and  common  equivalent  shares  outstanding  for the
twenty-eight  weeks  ended  July 15,  1997 and July 9, 1996 were  5,730,700  and
4,307,251, respectively.

(3)  Statements of Cash Flow

     Noncash financing and investing activities consist of the following for the
period ended July 15, 1997 and July 9, 1996 respectively:

     July 15, 1997
o    Deferred revenue reclassified to note payable to an officer of $120,000.
     July 9, 1996
o    Property and equipment sold in exchange for note receivable, net of related
     deferred income of $201,560

                                        5

<PAGE>



(4)  Related Party Transactions

     On July 17 1996, the Company made a loan to Timothy J. Jeffrey,  the former
President,  Chief Executive  Officer and a director of the Company in the amount
of  $66,873.31  due July 31, 1997. As of the filing of this report that loan has
not been paid.

     In February 1997 the Company's board of directors  determined that $120,000
advanced to the Company by one of its officers should be refunded.  Accordingly,
this amount was reclassified from deferred revenue to note payable - officer, of
which $68,000 is still payable as of July 15, 1997.

(5)  Subsequent Events

The following events occurred subsequent to July 15, 1997:

o    Corporate office was moved on August 29, 1997.

o    Six under  performing  restaurants  have been closed  that were  previously
     opened earlier in 1997 or late 1996.

o    The Company borrowed $500,000 on a short term basis from WFB, Inc., a major
     stockholder  of the Company,  to fund a portion of the Company's  cash flow
     deficit.


                                        6

<PAGE>



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


Company-Owned Restaurants Opened at End of Period

                                            Twenty-Eight Weeks Ended
                                            ------------------------
                                              July 15    July 9,
                                                1997       1996
                                             ----------  ---------

         Spaghetti Jack's                        11          4
         Sub & Stuff                             22         16

Results of Operations

     The  following  table sets forth  information  derived  from the  Company's
statement of operations expressed as a percentage of revenues:


                                            Twenty-Eight Weeks Ended
                                         ------------------------------
                                             July 15,        July 9,
                                               1997            1996
                                         --------------- --------------
Revenues................................     100.00%         100.00%

Cost of sales...........................       66.6            61.3

Restaurant operating expenses...........       36.0            29.1

Pre-opening expenses....................        2.3             1.0

Administrative expenses.................       21.1            22.7

Other income (expense)..................         .7           (11.6)

Income taxes............................        0.0             0.0

Noncash compensation expense............        0.0              .4

Net loss................................      (25.3)          (26.1)




                                        7

<PAGE>



Twelve Week Period Ended July 15, 1997 and July 9, 1996

Revenues

     Revenues  for the twelve  week  period  ended July 15,  1997  increased  by
$456,291  or 26.5%  compared  to the  twelve  week  period  ended  July 9,  1996
primarily for the reasons  discussed below.  Spaghetti  Jack's  restaurant sales
increased  by $377,436 or 88.0% in 1997.  The increase in sales is the result of
the opening of three  Company-owned  restaurants during 1997, and the opening of
four  Company-owned  restaurants  late  in  1996.  Comparable  restaurant  sales
(defined as sales from  restaurants  open  during  both  fiscal  periods for the
entire  period)  for  Spaghetti  Jack's  decreased  by  $127,033 or 30.1% in the
aggregate.  Sub & Stuff  restaurant sales increased by $106,216 or 8.7% in 1997.
The increase in sales is the result of opening four Company-owned restaurants in
the first  quarter  1997,  the opening of three  restaurants  late in 1996,  the
opening of two restaurants in the second quarter of 1996,  relocating one store,
relocating  and dual  branding the second Sub & Stuff  restaurant  by adding the
Spaghetti  Jack's menu, and dual branding the third Sub & Stuff restaurant in an
existing  location by adding the Spaghetti  Jack's menu.  Comparable  restaurant
sales for Sub & Stuff  decreased  by  $53,752  or 5.1% in the  aggregate.  These
decreases in comparable  restaurant  sales for Spaghetti  Jack's and Sub & Stuff
are due to  discontinuing  couponing  as a  marketing  tool in early  1997,  and
increased  competition  in their core market.  Spaghetti  Jack's  royalty income
decreased by $7,959 or 32.2% in 1997,  compared to the same period in 1996,  due
to the closing of three franchise  stores.  Sub & Stuff royalty income decreased
$403 or 10.0% in  1997,  compared  to the same  period  in 1996.  Sub &  Stuff's
franchise fees for the twelve week period ended July 15, 1997 were $15,000 which
is the result of the  addition of one  franchisee.  For the period ended July 9,
1996,  Sub & Stuff's  franchise  fees  were  $9,000  which is the  result of the
addition of one franchisee.  Spaghetti Jack's franchise fees for the same period
ended  July 9, 1996 were  $25,000  which is the  result of the  addition  of one
franchisee.

Cost of Sales

     Cost of sales for the twelve week period ended July 15,  1997,  compared to
the twelve week period ended July 9, 1996, increased $423,445 or 39.3% primarily
as a  result  of  opening  seven  Company-owned  restaurants  in  1997,  and six
Company-owned  restaurants  in the last quarter of 1996,  and two  Company-owned
restaurants in the second quarter of 1996. Spaghetti Jack's food and paper costs
increased  by $128,863  or 102.6% in 1997,  compared to the same period in 1996.
This increase is attributed to the opening of three Company-owned restaurants in
1997 and four  Company-owned  restaurants in the comparable period in 1996. As a
percentage of Spaghetti  Jack's sales,  the cost of food and paper  increased to
31.5% in 1997 from 29.3%  compared to the same period in 1996.  This increase is
due to a decrease  in sales and an  increase  in product  specifications.  Sub &
Stuff food and paper cost decreased by $21,839 or 5.2% in 1997,  compared to the
same

                                        8

<PAGE>



period  in 1996.  This  decrease  is  attributed  to  operational  efficiencies,
reductions in product  specifications  and a price increase.  As a percentage of
Sub & Stuff  sales,  the cost of food and paper  decreased to 30.2% in 1997 from
34.5% in the  comparable  period  in 1996.  Spaghetti  Jack's  cost of wages and
benefits  increased  by $217,590 or 170.2% in 1997,  compared to the twelve week
period ended July 9, 1996. As a percentage of Spaghetti Jack's restaurant sales,
the cost of wages and  benefits  increased  to 42.8% in 1997 from 29.8% in 1996.
This increase in wages and benefits,  as a percentage of restaurant  sales, is a
result of the fixed component of management salaries and crew wages, compared to
the low sales  volume of the new  restaurants,  sales  decreases  in same  store
sales, labor  efficiencies and productivity of the new restaurants,  Sub & Stuff
wages and benefits  increased by $98,836 or 24.7% in 1997,  compared to the same
period in 1996. As a percentage  of Sub & Stuff  restaurant  sales,  the cost of
wages  and  benefits  increased  to 37.4% in 1997 from  32.6% in the  comparable
period in 1996.  This  increase is  attributed  to the opening of  Company-owned
restaurants as stated above.

Restaurant Operating Expense

     Overall restaurant operating expenses for the twelve week period ended July
15, 1997,  compared to the twelve week period  ended July 9, 1996,  increased by
$344,448  or  67.6%  primarily  as  a  result  of  opening  seven  Company-owned
restaurants in 1997, six  Company-owned  restaurants in the last quarter of 1996
two  Company-owned  restaurants  in the second  quarter of 1996,  as well as, an
increase  in  depreciation  and  amortization  associated  with  new  restaurant
development.   Spaghetti  Jack's  restaurant  operating  expenses  increased  by
$232,718 or 138.8% primarily a result of opening three Company-owned restaurants
in 1997,  four  Company-owned  restaurants  in the last  quarter  of 1996.  As a
percentage of Spaghetti Jack's restaurant sales, operating expenses increased to
49.6% in 1997, compared to 39.1% in the comparable twelve week period ended July
9, 1996. Spaghetti Jack's fixed costs totaled $78,846 for the twelve week period
ended July 9, 1996,  as compared to $266,138 for the  comparable  period in 1997
due to the new store additions.  Sub & Stuff's operating  expenses  increased by
$112,008 or 32.8% in 1997,  primarily the result of new store openings,  as well
as an increase in depreciation and  amortization  associated with new restaurant
development. As a percentage of Sub & Stuff restaurant sales, operating expenses
increased to 34.% compared to 27.9% in the  comparable  twelve week period ended
July 9, 1996.  Spaghetti  Jack's  depreciation  and  amortization  costs totaled
$74,517 for the twelve week period ended July 15,  1997,  as compared to $31,498
for the comparable twelve week period ended July 9, 1996.

Pre-opening Expenses

     Pre-opening  expenses  are those  costs  associated  with the  opening of a
Company-owned  restaurant.  The expenses  consist  principally of  non-recurring
costs such as employee  recruiting  and training and supplies and  miscellaneous
expenditures.  During the twelve  week  period  ended  July 15,  1997,  expenses
totaled $7,217 related to the conversion

                                        9

<PAGE>



of the third dual branded Sub & Stuff  restaurant by adding the Spaghetti Jack's
menu to an existing  location.  For the twelve  week period  ended July 9, 1997,
expenses  totaled  $36,584 of which  $20,195  was  related to the opening of two
Company-owned restaurants and $16,389 was related to stores that were not opened
as of the end of second quarter.
Costs are expensed as incurred.

Administrative Expenses

     Administrative  expenses increased by 33.9% or $115,285 for the twelve week
period  ended July 15,  1997,  compared to the twelve week period  ended July 9,
1996. This increase is attributed to the following:  1)increased insurance costs
to include a directors  and  officers  policy that was issued in late 1996,  the
expense  impact on second  quarter  1997,  over second  quarter 1996 was $16,955
2)increased   depreciation  and  amortization  expense  of  $11,974  3)increased
professional  fee  expense of  $60,017  4)expenses  related  to three  locations
leased, build outs not done due to the lack of funding of $31,532 5)reduction in
the amount of $60,253 due to the  elimination  of nine staff  positions  and all
associated expenses.

Other Income and Expense

     Interest  income  decreased  by $4,030 to $7,841 for the twelve week period
ended July 15,  1997,  compared to the twelve  week  period  ended July 9, 1996.
Interest  expense  decreased  by  $125,796 to $14,157 for the twelve week period
ended July 15, 1997,  compared to $139,953 for the comparable  period ended July
9, 1996.  This  decrease in interest  expense is the result of the  repayment of
debt with proceeds of the Company's initial public offering  completed  December
18,  1996.  During  second  quarter  1996,  the Company  recorded a provision of
$175,855 for a lease  obligation on a closed Company owned  restaurant  based on
management's assessment of the loss exposure to this lease.

Income Taxes

     The  Company  continues  to  operate  unprofitably  and to  accumulate  net
operating loss carryforwards, and as a result, does not have taxable income.


Twenty-Eight Week Period Ended July 15, 1997 and July 9, 1996

Revenues

     Revenues for the twenty-eight  week period ended July 15, 1997 increased by
$1,491,438 or 39.7% compared to the twenty-eight  week period ended July 9, 1997
primarily for the reasons  discussed below.  Spaghetti  Jack's  restaurant sales
increased by $959,755 or 93.4% in 1997, compared to the same period in 1996. The
increase in sales

                                       10

<PAGE>



is the result of opening three Company-owned restaurants during 1997 and opening
four  Company-owned  restaurants  late  in  1996.  Comparable  restaurant  sales
(defined as sales from  restaurants  open  during  both  fiscal  periods for the
entire  period)  for  Spaghetti  Jack's  decreased  by  $324,574 or 46.7% in the
aggregate. This decrease in comparable restaurant sales for Spaghetti Jack's due
to  the   performance  of  the  new  stores  not  meeting  up  to   management's
expectations,  and  increased  competition  in  the  core  market.  Sub &  Stuff
restaurant sales increased  $536,457 or 20.4% for the  twenty-eight  week period
ended July 15,  1997,  as compared to the same period in 1996.  The  increase in
sales is the  result of  opening  four  Company-owned  restaurants  in the first
quarter 1997, the opening of three  Company-owned  restaurants late in 1996, the
opening of two Company-owned  restaurants in the second quarter 1997, relocating
one store,  relocating  and dual  branding the second Sub & Stuff  restaurant by
adding  the  Spaghetti  Jack's  menu,  and dual  branding  the third Sub & Stuff
restaurant  in an  existing  location  by  adding  the  Spaghetti  Jack's  menu.
Comparable  restaurant  sales  for Sub & Stuff  decreased  $8,461  or .4% in the
aggregate.  Spaghetti Jack's royalty income decreased  $24,774 or 36.5% in 1997,
compared  to the same  period  in 1996  due to the  closing  of three  franchise
stores.  Sub & Stuff  royalty  income  increased  $1,512  or 26.3%  in 1997,  as
compared  to the  same  period  in  1996.  Sub & Stuff  franchise  fees  for the
twenty-eight week period ended July 15, 1997 totaled $15,000 which is the result
of  the  addition  of  one  franchisee.  Sub &  Stuff  franchise  fees  for  the
twenty-eight  week period ended July 9, 1996 totaled  $9,000 which is the result
of the  addition of one  franchisee.  Spaghetti  Jack's  franchise  fees for the
twenty-eight  week period  ended July 15, 1997  totaled  $45,000  which is a fee
fortfeiture on an Area Development Agreement.

Cost of Sales

     Cost of sales  for the  twenty-eight  week  period  ended  July  15,  1997,
compared  to  the  twenty-eight  week  period  ended  July  9,  1996,  increased
$1,191,389  or  51.7%  primarily  as a result  of  opening  seven  Company-owned
restaurants  in 1997, and six  Company-owned  restaurants in the last quarter of
1996, and two Company-owned restaurants in the second quarter of 1996. Spaghetti
Jack's food and paper costs  increased by $286,176 or 95.1%in 1997,  compared to
the same  period  in  1996.  This  increase  is  attributed  to the  opening  of
Company-owned  restaurants as stated above. As a percentage of Spaghetti  Jack's
sales,  the cost of food and paper  increased to 29.5% in 1997 from 29.3% in the
comparable  period in 1996.  Sub & Stuff food and paper  increased by $95,405 or
11.2% in 1997,  compared to the same period in 1996.  As a  percentage  of Sub &
Stuff restaurant sales, the cost of food and paper decreased from 30.0% to 32.5%
in 1997,  compared to the same period in 1996.  This  decrease is  attributed to
operational  efficiencies,  reductions  in  product  specifications  and a price
increase.  Spaghetti Jack's cost of wages and benefits  increased by $810,688 or
179.8% in 1997 compared to the same period in 1996. As a percentage of Spaghetti
Jack's  restaurant  sales, the cost of wages and benefits  increased to 40.8% in
1997 from 28.2% in the  comparable  period in 1996.  This  increase in wages and
benefits, as a percentage of restaurant sales, is a result of the fixed

                                       11

<PAGE>



component  of  management  salaries  and crew  wages,  compared to the low sales
volume of the new  restaurants,  sales  decreases in same store  sales,  lack of
efficiencies and labor  productivity in the new  restaurants.  Sub & Stuff wages
and benefits  increased by $288,836 or 33.4% in 1997 compared to the same period
in 1996. As a percentage of Sub & Stuff restaurant  sales, the cost of wages and
benefits  increased to 36.6% from 33.0% in 1997,  compared to the same period in
1996.  Sub & Stuff  wages and  benefits  increased  by $94,405 or 11.1% in 1997,
compared to the same period in 1996.  This increase is attributed to the opening
of Company-owned restaurants as stated above.

Restaurant Operating Expenses

     Overall  restaurant  operating  expenses for the  twenty-eight  week period
ended July 15, 1997 compared to the twenty-eight week period ended July 9, 1996,
increased  by  $792,489  or  72.4%  primarily  as  a  result  of  opening  seven
Company-owned  restaurants  in 1997, six  Company-owned  restaurants in the last
quarter of 1996, two Company-owned restaurants in the second quarter of 1996, as
well as, an  increase  in  depreciation  and  amortization  associated  with new
restaurant development. Spaghetti Jack's restaurant operating expenses increased
by  $523,072  or  144.8%  primarily  a result  of  opening  three  Company-owned
restaurants in 1997, four Company-owned restaurants in the last quarter of 1996.
As a  percentage  of  Spaghetti  Jack's  restaurant  sales,  operating  expenses
increased  to 44.5% in 1997,  compared to 35.2% in the  comparable  twenty-eight
week period  ended July 9, 1996.  Sub & Stuff  operating  expenses  increased by
$269,417 or 36.8% in 1997 primarily as the result of new store openings, as well
as an increase in depreciation and  amortization  associated with new restaurant
development. As a percentage of Sub & Stuff restaurant sales, operating expenses
increased to 31.8%, compared to 28.0% in the comparable twenty-eight week period
ended July 9, 1996.

Pre-Opening Expenses

     Pre-opening  expenses  are those  costs  associated  with the  opening of a
Company-owned  restaurant.  The expenses  consist  principally of  non-recurring
costs such as employee  recruiting  and training and supplies and  miscellaneous
expenditures.  During the twenty-eight week period ended July 15, 1997, expenses
totaled  $123,054 related to the opening of seven company  restaurants.  For the
twenty-six  week period ended July 9, 1996,  expenses  totaled  $36,584 of which
$20,195 was related to the opening of two Company-owned  restaurants and $16,389
related to stores that were not opened as of the end of second quarter.







                                       12

<PAGE>



Administrative Expenses

     Administrative expenses increased by 29.3% or $250,380 for the twenty eight
week period ended July 15, 1997,  compared to the twenty eight week period ended
July 9, 1996.  This  increase  is  attributed  to the  following:  1)  increased
insurance  costs of $38,994,  2)  increased  depreciation  and  amortization  of
$27,638  3)professional fee expense of $143,968 4)relocation expenses of $16,373
incurred due to restaurant openings.

Other Income and Expense

     Interest  income  increased  by $3,231 to $28,999 for the twenty eight week
period ended July 15, 1997, over the comparable period in 1996. Interest expense
decreased by $285,926 to $23,679 for the period ended July 15, 1997, compared to
$309,605 for the comparable  twenty-eight  week period ended July 9, 1996.  This
decrease  in  interest  expense  is the  result  of the  repayment  of debt with
proceeds of the Company's initial public offering completed December 18, 1996.

Income Taxes

     The  Company  continues  to  operate  unprofitably  and to  accumulate  net
operating loss carryforwards, and as a result, does not have taxable income.

Liquidity and Capital Resources

     The Company's restaurant operations do not have significant  receivables or
inventory  and receive  trade credit based upon  negotiated  terms in purchasing
food and  supplies.  As of July 15,  1997,  the  Company  had a working  capital
deficit of $1,883,870,  as compared to a deficit of $1,527,122, at July 9, 1996.
The increase in working  capital deficit of $356,748 is due primarily to the use
of cash  and  cash  equivalents  in  opening  new  restaurants  and  accumulated
operating losses.

     The Company incurred losses for the twenty-eight week period ended July 15,
1997 and July 9,  1996 of  $1,326,868  and  $981,848  resulting  in cash used by
operating activities of $1,302,949 and $930,037 in 1997 and 1996,  respectively.
The  Company  will not be able to  sustain  losses  or use of cash by  operating
activities  similar to the levels incurred  through second quarter 1997 and 1996
without obtaining additional financing.  The Company does not presently have any
commitments to obtain additional  financing.  Management's plans to address this
has included the elimination of ten corporate  staff  positions  compared to the
positions,  at year end 1996.  Subsequent to July 15, 1997 the Company relocated
its  corporate  offices and closed six under  performing  restaurants  that were
opened  earlier  in 1997 or late in  1996,  in an  effort  to  reduce  operating
expenses and cash flow needs.


                                       13

<PAGE>




Continued Negative Cash Flow

     Since April 22, 1997, the Company has continued to experience negative cash
flow as sales  revenues  have not been  sufficient  to meet the  Company's  cash
needs.  Subsequent to July 15, 1997,  the Company  borrowed  $500,000 on a short
term basis from WFB, Inc., a major stockholder of the Company, to fund a portion
of the Company's cash flow deficit

     The  Company  is  continuing  to  monitor  sales  levels of  certain  other
restaurant locations and is considering  additional closings of under-performing
units.  In addition,  the Company  will attempt to liquidate  assets from closed
units  to  raise  cash to  repay  indebtedness,  and if  possible,  to fund  its
operations  on a  positive  cash flow  basis.  In the event  that  sales  levels
continue to decline or are not sufficient to meet the Company's cash needs,  the
Company will be required to borrow additional funds, sell additional  assets, or
otherwise raise liquid  capital.  There is no assurance that any such sources of
cash will be available or that the Company will be able to meet its cash needs.

     During the twenty-eight  week period ended July 15, 1997, the Company had a
cash deficit from investing  activities of $1,221,432,  as compared to a deficit
of $5,286  for 1996.  The  increase  in the  deficit  was due  primarily  to the
purchases of property,  plant and equipment  related to the increased  number of
restaurant  openings in 1997. This increase was partially offset by the proceeds
from the sale of one Company-owned Sub & Stuff in 1997.

     Capital  expenditures  during the  twenty-eight  week period ended July 15,
1997  totaled  $1,309,338,  as compared  to  expenditures  of  $256,586  for the
comparable period in 1996. These expenditures are primarily  associated with the
opening of seven  Company  owned  restaurants  of which four were Sub & Stuff's,
three were  Spaghetti  Jack's,  and the addition of the third dual branded Sub &
Stuff  adding  the  Spaghetti  Jack's  menu  to  an  existing  location  in  the
twenty-eight week period ended July 15, 1997. The Company opened two Sub & Stuff
restaurants  during the  comparable  period in 1996. The amount of the Company's
cash requirements for capital  expenditures depends in part on the number of new
restaurants opened and the development costs associated with such restaurants.

     During the  twenty-eight  week period ended July 15, 1997,  the Company had
cash flows from financing  activities of $389,574,  as compared to cash flows of
$1,007,149 for the comparable  period in 1996. This decrease in cash flow is due
primarily to the level of financing  activity,  proceeds from the sale of common
stock,  and  principal  payments on long-term  debt during 1996,  as compared to
1997.



                                       14

<PAGE>





                                     PART II
                                OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS


              A lawsuit has been filed in Sedgwick  County,  Kansas  against the
         Company and others by a group of shareholders  seeking to represent the
         class of shareholders  that purchased  shares of the Company's stock in
         the registered  stock  offering  concluded late last year. The petition
         alleges that certain statements made by the Company,  certain officers,
         and the underwriter  were untrue or misleading.  The Company intends to
         defend this lawsuit vigorously.


ITEM 2:  CHANGES IN SECURITIES


         None


ITEM 3:  DEFAULTS UPON SENIOR SECURITIES


         Not applicable


ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


         Matters  submitted  during  the second  quarter  to a vote of  security
         holders,  was submitted at the Annual  Meeting held on May 5, 1997, and
         was reported on in the First Quarter ended April 22, 1997, 10QSB.


ITEM 5:  OTHER INFORMATION

         None





                                       15

<PAGE>





ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

     (a) EXHIBITS REQUIRED TO BE FILED BY ITEM 601 OF REGULATION
         S-B

         3(a)*    Articles of Incorporation
         3(b)*    Bylaws
         27       Financial Data Schedule
______________________

*  Incorporated  by  reference  to  such  numbered  exhibits  filed  as  part of
Registration  Statement No. 333- 5488-D filed with the  Commission on August 29,
1996.

     (b) REPORTS ON FORM 8-K

         None



                                       16

<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 thereto duly authorized.

Dated: September 12, 19    STOICO RESTAURANT GROUP, INC.
                           (Registrant)


                           /s/ Louis Stoico, Jr.
                           ------------------------------------
                           Louis Stoico, Jr.
                           Chairman of the Board and President


                           /s/ Cathy K. Martsolf
                           -----------------------------------
                           Cathy K. Martsolf
                           Senior Vice President of Administration
                           and principal accounting officer


                                       17

<PAGE>



                                  EXHIBIT INDEX

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

         3(a)*                     Articles of Incorporation
         3(b)*                     Bylaws
         27                        Financial Data Schedule

*  Incorporated  by  reference  to  such  numbered  exhibits  filed  as  part of
Registration  Statement No.  333-5488-D  filed with the Commission on August 29,
1996.



                                       18
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