<PAGE>
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

|X|   Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
      of 1934

                  For the quarterly period ended June 30, 2002

| |   Transition report under Section 13 or 15 (d) of the Securities Exchange
      Act of 1934

    For the transition period from ____________________ to _________________

                         Commission file number 0-21625

                         FAMOUS DAVE'S OF AMERICA, INC.
             (Exact Name of Registrant as Specified in Its Charter)

            Minnesota                                  41-1782300
  (State or other Jurisdiction              (I.R.S. Employer Identification No.)
of Incorporation or Organization)

                    8091 Wallace Road, Eden Prairie, MN 55344
                    (Address of Principal Executive Offices)

                                 (952) 294-1300
              (Registrant's Telephone Number, Including Area Code)

                   7357 Anagram Drive, Eden Prairie, MN 55344
              (Former Name, Former Address and Former Fiscal Year,
                         If Changed Since Last Report)

      Indicate by check whether the registrant: (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
the past 90 days.

                                 Yes |X| No | |

      At August 13, 2002 there were 11,385,375 shares of common stock, $.01 par
value, outstanding.

      Transitional Small Business Disclosure Format (check one):

                                 Yes | | No |X|
<PAGE>
                         FAMOUS DAVE'S OF AMERICA, INC.
                                  June 30, 2002

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                   PAGE NO.

<S>                                                                                                <C>
PART I     FINANCIAL INFORMATION

Item 1     Condensed Consolidated Financial Statements

               Condensed Consolidated Balance Sheets -
               June 30, 2002 and December 30, 2001                                                     3

               Condensed Consolidated Statements of Operations -
               For the twenty-six weeks and thirteen weeks ended June 30,
               2002 and July 1, 2001                                                                   4

               Condensed Consolidated Statements of Cash Flows -
               For the twenty-six weeks ended June 30, 2002 and July 1, 2001                           5

               Notes to Condensed Consolidated Financial Statements                                    6

Item 2     Management's Discussion and Analysis of Financial
             Condition and Results of Operations                                                      10
Item 3     Quantitative and Qualitative Disclosures About Market Risk                                 19

PART II    OTHER INFORMATION

Item 1     Legal Proceedings                                                                          20
Item 4     Submission of Matters to a Vote of Security Holders                                        20
Item 6     Exhibits and Reports on Form 8-K                                                           20

           SIGNATURES AND CERTIFICATION                                                               21
</TABLE>


                                       2
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2002 AND DECEMBER 30, 2001
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                               (UNAUDITED)      (AUDITED)
                                                                 JUNE 30,      DECEMBER 30,
                                                                   2002            2001
                                                               -----------     -----------
<S>                                                            <C>             <C>
                                     ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                      $ 10,770        $  7,398
  Accounts receivable, net                                            969           1,903
  Inventories                                                       1,628           1,441
  Prepaids and other current assets                                 1,422           1,273
                                                                 --------        --------
     Total current assets                                          14,789          12,015

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET                49,487          46,940

OTHER ASSETS:
  Notes receivable, net of current portion                          1,098           1,146
  Deposits                                                            315             410
  Debt issuance costs, net                                            632             618
  Investment in and advances to unconsolidated affiliate            4,576           4,301
  Deferred tax asset                                                3,821           5,010
                                                                 --------        --------

TOTAL ASSETS                                                     $ 74,718        $ 70,440
                                                                 ========        ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Line of credit                                                 $      0        $    100
  Current portion of long-term debt                                   171             695
  Current portion of capital lease obligations                        837             865
  Accounts payable                                                  4,296           2,419
  Accrued payroll and related taxes                                 1,031           1,134
  Other current liabilities                                         1,762           2,096
                                                                 --------        --------
     Total current liabilities                                      8,097           7,309

LONG-TERM DEBT, NET OF CURRENT PORTION                              9,775           8,886
FINANCING LEASE OBLIGATION                                          4,500           4,500
CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION                     778           1,193
DEFERRED RENT                                                       1,914           1,553
DEFERRED GAIN, NET OF CURRENT PORTION                                 292             310
                                                                 --------        --------
     Total liabilities                                             25,356          23,751
                                                                 --------        --------

SHAREHOLDERS' EQUITY:
  Common stock, $.01 par value, 100,000 shares authorized,
   11,384 and 11,180 shares issued and outstanding                    114             112
  Additional paid-in capital                                       53,504          52,693
  Accumulated deficit                                              (4,256)         (6,116)
                                                                 --------        --------
     Total shareholders' equity                                    49,362          46,689
                                                                 --------        --------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                       $ 74,718        $ 70,440
                                                                 ========        ========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
          (IN THOUSANDS, EXCEPT PER SHARE DATA AND SHARES OUTSTANDING)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                THIRTEEN WEEKS ENDED                  TWENTY SIX WEEKS ENDED
                                                           --------------------------------        --------------------------------
                                                             JUNE 30,             JULY 1,             JUNE 30,            JULY 1,
                                                               2002                2001                2002                2001
                                                           ------------        ------------        ------------        ------------
<S>                                                        <C>                 <C>                 <C>                 <C>
REVENUES                                                   $     24,207        $     22,848        $     45,413        $     43,317
                                                           ------------        ------------        ------------        ------------
COSTS AND EXPENSES:
  Food and beverage costs                                         7,194               7,026              13,875              13,471
  Labor and benefits                                              6,361               6,061              12,158              11,797
  Operating expenses                                              5,148               5,061               9,738               9,873
  Depreciation and amortization                                   1,146               1,091               2,276               2,174
  Pre-opening expenses                                              318                  33                 330                 326
  General and administrative                                      2,020               1,623               3,790               3,075
                                                           ------------        ------------        ------------        ------------
     Total costs and expenses                                    22,187              20,895              42,167              40,716
                                                           ------------        ------------        ------------        ------------

INCOME FROM OPERATIONS                                            2,020               1,953               3,246               2,601
                                                           ------------        ------------        ------------        ------------

OTHER INCOME (EXPENSE):
  Interest income                                                   137                  29                 207                  54
  Interest expense                                                 (361)               (411)               (751)               (773)
  Gain on sale of property and equipment                              2                   9                 772                 104
  Other income                                                       84                  33                 123                  23
  Equity in loss of unconsolidated affiliate                       (120)               (193)               (548)               (193)
                                                           ------------        ------------        ------------        ------------
     Total other income (expense)                                  (258)               (533)               (197)               (785)
                                                           ------------        ------------        ------------        ------------

INCOME BEFORE INCOME TAXES                                        1,762               1,420               3,049               1,816

INCOME TAX EXPENSE                                                 (691)                  0              (1,189)                  0
                                                           ------------        ------------        ------------        ------------

NET INCOME                                                 $      1,071        $      1,420        $      1,860        $      1,816
                                                           ============        ============        ============        ============

BASIC NET INCOME PER COMMON SHARE                          $       0.09        $       0.15        $       0.16        $       0.19
                                                           ============        ============        ============        ============

DILUTED NET INCOME PER COMMON SHARE                        $       0.09        $       0.13        $       0.16        $       0.17
                                                           ============        ============        ============        ============

 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC          11,348,107           9,686,422          11,283,920           9,575,159
                                                           ============        ============        ============        ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED         11,998,155          10,937,755          11,964,679          10,602,118
                                                           ============        ============        ============        ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                     TWENTY SIX WEEKS ENDED
                                                                                 JUNE 30, 2002      JULY 1, 2001
                                                                                 -------------      ------------
<S>                                                                              <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                         $  1,860        $ 1,816
  Adjustments to reconcile net income to cash flows from operating activities
    Depreciation and amortization                                                       2,276          2,174
    Amortization of debt issuance costs                                                    27              0
    Loss (gain) on disposal of property                                                  (772)           104
    Deferred Tax Asset                                                                  1,189              0
    Deferred Rent                                                                         427            244
    Equity in loss of unconsolidated affiliate                                            548            193
    Changes in operating assets and liabilities:
     Accounts receivable, net                                                             405           (134)
     Inventories                                                                         (283)           (49)
     Prepaids and other current assets                                                   (122)          (139)
     Deposits                                                                              95            350
     Accounts payable                                                                   1,847           (110)
     Accrued payroll and related taxes                                                   (103)          (600)
     Other current liabilities                                                           (334)          (290)
                                                                                     --------        -------
      Cash flows from operating activities                                              7,060          3,559
                                                                                     --------        -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of property, equipment, and leasehold improvements                 2,983              0
  Purchases of property, equipment and leasehold improvements                          (5,318)        (2,971)
  Investment in unconsolidated affiliate                                                 (687)             0
  Repayments of advances from investment in unconsolidated affiliate                      392              0
  Payments received on notes receivable                                                   908             98
  Advances on notes receivable                                                           (887)             0
                                                                                     --------        -------
      Cash flows from investing activities                                             (2,609)        (2,873)
                                                                                     --------        -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments for debt issuance costs                                                          0            (15)
  Proceeds from capital lease obligations                                                   0            382
  Net advance (payments) on line of credit                                               (100)          (344)
  Payments on long-term debt                                                           (1,057)          (287)
  Payments on capital lease obligations                                                  (488)          (465)
  Proceeds from exercise of stock options and warrants                                    566            877
                                                                                     --------        -------
      Cash flows from financing activities                                             (1,079)           148
                                                                                     --------        -------

INCREASE IN CASH AND CASH EQUIVALENTS                                                   3,372            834

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                          7,398          1,895
                                                                                     --------        -------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                             $ 10,770        $ 2,729
                                                                                     ========        =======

NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Note receivable issued in connection with sale of assets                           $      0        $   145
                                                                                     ========        =======

   Stock options issued for debt issuance costs                                      $     41        $     0
                                                                                     ========        =======

   Equipment purchased under capital lease obligations                               $     45        $ 1,140
                                                                                     ========        =======

   Property and equipment exchanged for investment in unconsolidated affiliate       $      0        $ 2,665
                                                                                     ========        =======

   Common stock issued in connection with property acquired                          $    206        $     0
                                                                                     ========        =======

   Equipment purchased with notes payable                                            $  1,423        $     0
                                                                                     ========        =======
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2002
                                   (UNAUDITED)

(1) GENERAL

      Famous Dave's of America, Inc. ("Famous Dave's" or the "Company")
currently operates or franchises sixty-six restaurants under the name "Famous
Dave's" throughout various regions of the United States. Our restaurants, the
majority of which offer full table service, feature hickory smoked,
off-the-grill favorites served in one of our two casual formats: a "northwoods"
style lodge, or a nostalgic roadhouse "shack". We also operate one Blues Club
featuring nightly musical entertainment. We seek to differentiate ourselves by
providing high quality food in these distinctive and comfortable environments.
As of June 30, 2002 we operated or franchised sixty-four restaurants with three
additional company-owned and two franchised units in development. As of July 1,
2001 we operated or franchised forty-seven restaurants, with an additional two
company-owned and two franchised units in development.

(2) BASIS OF FINANCIAL STATEMENT PRESENTATION

      The accompanying unaudited condensed consolidated financial statements
have been prepared by us following the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations. Although we believe
that the disclosures are adequate to make the information presented not
misleading, it is suggested that these interim condensed consolidated financial
statements be read in conjunction with our most recent audited consolidated
financial statements and notes thereto included in our Annual Report on Form
10-K for the fiscal year ended December 30, 2001. In our opinion, all
adjustments (which include only normal recurring adjustments) necessary for a
fair presentation of the financial position, results of operations and cash
flows for the interim periods presented have been made.

(3) IMPAIRMENT OF LONG-LIVED ASSET

      Restaurant sites are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of restaurant sites to be held and used is measured
by a comparison of the carrying amount of the restaurant site to future net cash
flows expected to be generated on a restaurant-by-restaurant basis. If such
restaurant site is considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the restaurant site
exceeds the fair value. Restaurant sites to be disposed of are reported at the
lower of their carrying amount or fair value on a restaurant-by-restaurant
basis, less estimated costs to sell.

(4) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In April 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." The Company believes the adoption of SFAS No. 145 will not have a
material effect on the Company's consolidated financial position or results of
operations.

      In June 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 requires the recognition of a
liability for a cost associated with an exit or disposal activity when the
liability is incurred versus the date the Company commits to an exit plan. In
addition, SFAS No. 146 states the liability should be initially measured at fair
value. The requirements of SFAS No. 146 are effective for exit or disposal
activities that are initiated after December 31, 2002. The Company believes the
adoption of SFAS No. 146 will not have a material effect on the Company's
consolidated financial position or results of operations.


                                       6
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2002
                                   (UNAUDITED)

(5) NET INCOME PER COMMON SHARE

      Basic earnings per common share is computed by dividing the net income by
the weighted average number of common shares outstanding during the reporting
period. The Company's diluted net earnings per share is computed by dividing net
income by the weighted average number of common shares outstanding and common
share equivalents, when dilutive, for the reporting period. Following is a table
(in thousands, except per share data) of a reconciliation of basic and diluted
net income per common share:

<TABLE>
<CAPTION>
                                                Thirteen Weeks Ended        Twenty Six Weeks Ended
                                                June 30,      July 1,       June 30,       July 1,
                                                  2002         2001          2002          2001
<S>                                             <C>           <C>           <C>           <C>
NET INCOME PER SHARE - BASIC:
  Net income                                    $ 1,071       $ 1,420       $ 1,860       $ 1,816
  Weighted average shares - outstanding          11,348         9,686        11,284         9,575
  Net income per share - basic                  $   .09       $   .15       $   .16       $   .19

NET INCOME PER SHARE - DILUTED:
  Net income                                    $ 1,071       $ 1,420       $ 1,860       $ 1,816
  Weighted average shares outstanding            11,348         9,686        11,284         9,575
  Dilutive impact of common stock
    equivalents outstanding                         650         1,252           681         1,027
                                                -------       -------       -------       -------
  Weighted average shares and
    potential dilutive shares outstanding        11,998        10,938        11,965        10,602
  Net income per share - dilutive               $   .09       $   .13       $   .16       $   .17
</TABLE>

      The Company uses the treasury stock method for calculating the dilutive
effect of the stock options and warrants (using the average market price).

      Options to purchase 22,500 shares of common stock with a weighted average
exercise price of $8.08 were outstanding at June 30, 2002, but were excluded
from the computation of common share equivalents for the thirteen week diluted
share calculation because their exercise prices were greater than the average
market price of the common shares for that period. All options and warrants were
dilutive for the thirteen week period ended July 1, 2001.

      Options and warrants to purchase 58,000 and 66,667 shares of common stock
with a weighted average exercise price of $7.85 and $6.00 were outstanding at
June 30, 2002 and July 1, 2001, respectively, but were excluded from the
computation of common share equivalents for the twenty-six week diluted share
calculation because their exercise prices were greater than the average market
price of the common shares for that period.

(6) INCOME FROM FRANCHISEES

      As of June 30, 2002 we had twenty-seven franchise units in operation, six
in Minnesota, six in Wisconsin, four in Illinois, two in Nebraska, and one each
in Alabama, Indiana, South Dakota, Tennessee, Ohio, New Jersey, North Dakota,
Kentucky and Georgia. All of our franchise agreements require that each
restaurant operate in accordance with our operating procedures, adhere to the
menu established by us and meet all quality, service and cleanliness standards.


                                       7
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2002
                                   (UNAUDITED)

(7) RELATED PARTY TRANSACTIONS

      S&D LAND HOLDINGS, INC. - S&D Land Holdings, Inc. ("S&D"), is a company
wholly owned by the Company's founding shareholder and Chairman. We lease the
real estate for three of our units from S&D.

(8) INCOME TAXES

      At June 30, 2002, the Company had generated net operating losses of
approximately $6.5 million, which, if not used, will begin to expire in 2011,
and tax credit carryforwards of approximately $719,000, which, if not used, will
also begin to expire in 2011. Future changes in ownership of the Company may
place limitations on the use of these net operating loss carryforwards. The
Company utilizes the liability method of accounting for income taxes. Deferred
tax assets and liabilities are recognized for the expected future tax
consequences attributable to temporary differences between the financial
statement and income tax reporting bases of assets and liabilities. Deferred tax
assets are reduced by a valuation allowance to the extent that realization is
not assured.

(9) NOTES PAYABLE

      In May 2002, a note payable was signed with GE Capital Franchise Finance
Corporation for $1,485,321 to facilitate mortgage financing. The rate on the
note is 8.83%, with an expiration date of August 2022. This note provided
financing for our first Richmond, Virginia location, and is secured by the
building, land, and fixtures at this property. This note replaced a preliminary
note payable signed in October, 2001 for up to $1.6 million. This debt has been
shown on our balance sheet since December 2001.

      In March 2002, a preliminary note payable was entered into with GE Capital
Franchise Finance Corporation for $1.6 million to provide financing for our
second Richmond, Virginia location. As of June 30, 2002, approximately $1.4
million had been advanced on that note via a disbursement agreement. We
anticipate that note payable to be replaced by a final note payable for
approximately $1.5 million during the third quarter of 2002. This note is
secured by the building, land, and fixtures at this property.

(10) FINANCING LEASE OBLIGATIONS

      In March 1999, we completed a sale-leaseback transaction involving three
of our existing units that provided proceeds of approximately $4.5 million.
Under this financing we are obligated to make monthly payments of approximately
$42,917 (which increases 4.04% every two years) for a minimum of twenty years.

(11) DEFERRED GAIN AND NOTE RECEIVABLE

      During the second quarter ended July 2, 2000, the Company sold property
and equipment at two of its company-operated restaurants. These restaurants were
converted to franchises. The Company financed part of the sale price on each
transaction with notes that bear interest at 9.6% and 12% and require monthly
payments of principal and interest. The balance on these notes receivable was
approximately $801,000 as of June 30, 2002. They are secured by equipment and
mature through July 2010. The note receivable for the sale of one restaurant was
approximately 90% of the selling price. The Company recorded a deferred gain on
this sale and will recognize the gain over the term of the note receivable.

      Included in the notes receivable balance are several notes receivable with
franchisees relating to the sale of assets. This information is detailed in the
Company's Form 10-K for the fiscal year ended December 30, 2001. Total notes
receivable as of June 30, 2002 were $1,262,000.

      Advances on notes receivable during the twenty-six week period ended June
30, 2002 represent advances to franchisees. They are offset by payments on notes
receivable for a net effect of $21,000 of payments received during the
twenty-six week period ended June 30, 2002.


                                       8
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2002
                                   (UNAUDITED)

(12) COMMITMENTS AND CONTINGENCIES

      CONSTRUCTION AND DEVELOPMENT CONTRACTS

      In conjunction with our expansion activity, we enter into construction
contracts from time to time. At June 30, 2002, we had commitments outstanding
under two contracts for construction of restaurants in Lewisville, Texas and
Mesquite, Texas. As of June 30, 2002, the balance remaining to be paid under
these contracts was approximately $1,050,000.

      OTHER

      The LLC that owns the Chicago club (FUMUME, LLC) is responsible for the
payment of the rent for the Chicago club; however, the Company remains liable
under the lease with the landowner. The lease expires in 2008, and the future
minimum rental payments are approximately $2,479,000 over the balance of the
lease life.

(13) INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED AFFILIATE

      The Company owns approximately 40% of the membership interest of FUMUME,
LLC, a company that develops themed restaurants based on the entertainment
artist Isaac Hayes.

      For the quarter ended June 30, 2002, the Company recorded equity in loss
of unconsolidated affiliate based on the greater of 40% of the net loss (which
is accounted for on the equity method of accounting) or 100% of the cash loss
the Company is obligated to fund pursuant to the FUMUME operating agreement. For
the quarter ended June 30, 2002, the Company recorded 100% of the cash loss of
$120,000.

      The Company has agreed to reimburse FUMUME for operating losses incurred
at the Memphis and Chicago clubs. The Company can terminate the reimbursement
obligation with respect to the Chicago club if after any two-year period ending
May 31 there has been a cumulative operating loss. With respect to the Memphis
club, the Company may terminate the reimbursement obligation if the cumulative
deficit of the club (excluding management fees) exceeds $2 million or, if after
any five-year period ending May 31, there has been a cumulative operating loss.

      The membership interest in FUMUME, LLC is voting and is not publicly
traded.

      See the "Management's Discussion and Analysis of Financial Condition and
Operations" section for further discussion of this topic.

(14) SUBSEQUENT EVENT

      Two company-owned restaurants were sold to a new franchise group on July
1, 2002 for approximately $2.3 million. A deposit of $100,000 was received to
secure this sale during the quarter ended June 30, 2002. The franchise group
also signed an area development agreement to open an additional three
restaurants over the next 36 months. We provided short term financing to the
purchaser in the amount of $1.735 million, which we anticipate being paid off by
the end of the third quarter of 2002. As part of the transaction, Famous Dave's
provided approximately $452,000 in financing in the form of 60-month notes
bearing interest at 9.5%. These promissory notes are secured by the leaseholds,
furniture and equipment, and by the franchise agreement. In addition, the notes
are guaranteed by the corporation that owns the franchise group entity.


                                       9
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2.

OVERVIEW

      The business of Famous Dave's of America, Inc. ("Famous Dave's" or the
"Company") is to develop, own, operate and franchise casual dining restaurants
under the name "Famous Dave's." As of June 30, 2002 we owned & operated or
franchised 64 restaurants, with locations shown in the table below. We expect to
open five to seven additional company-owned restaurants before the end of the
fiscal year. In addition, we have signed development agreements representing
commitments to develop an additional 95 franchised restaurants. We expect five
to eight of these franchised restaurants to open before the end of the fiscal
year.

<TABLE>
<CAPTION>
                                 JUNE 30, 2002                                               JULY 1, 2001
                 ---------------------------------------------              -------------------------------------------------
                 COMPANY OWNED     FRANCHISED         TOTAL                 COMPANY OWNED        FRANCHISED          TOTAL
    STATE         RESTAURANTS     RESTAURANTS      RESTAURANTS               RESTAURANTS         RESTAURANTS      RESTAURANTS
    -----        -------------    -----------      -----------              ------------         -----------      -----------
<S>              <C>              <C>              <C>                      <C>                  <C>              <C>
Alabama                 0               1               1                          0                  0                0
Georgia                 0               1               1                          0                  0                0
Illinois                9               4               13                         6                  3                9
Indiana                 0               1               1                          0                  0                0
Iowa                    3               0               3                          3                  0                3
Kentucky                0               1               1                          0                  0                0
Maryland                5               0               5                          3                  0                3
Minnesota              12               6              18                         14                  4               18
Nebraska                1               2               3                          1                  1                2
New Jersey              0               1               1                          0                  0                0
North Dakota            0               1               1                          0                  0                0
Ohio                    0               1               1                          0                  0                0
South Dakota            0               1               1                          0                  1                1
Tennessee               0               1               1                          0                  0                0
Utah                    2               0               2                          2                  0                2
Virginia                5               0               5                          3                  0                3
Wisconsin               0               6               6                          3                  3                6
                  -----------     -----------      -----------               -----------         -----------      -----------
                       37              27              64                         35                 12               47
</TABLE>

      Famous Dave's is also a 40% participant in a joint venture (FUMUME, LLC)
to operate theme restaurant concepts based on the entertainment artist Isaac
Hayes. Pursuant to the agreement governing the joint venture, the participants
in the joint venture formed a Delaware limited liability company named FUMUME,
LLC. FUMUME opened its first location in Chicago in June 2001 and opened the
second location in Memphis, Tennessee in October 2001. Each location is
structured as a separate Delaware limited liability company, each of which is
wholly owned by FUMUME.

      Our future additional revenues and profits will depend upon various
factors, including additional market acceptance of the Famous Dave's concept,
the quality of our restaurant operations, the ability to successfully expand
into new markets, our ability to raise additional financing as required and
general economic conditions. There can be no assurance that we will successfully
implement our expansion plans, in which case we will continue to be dependent on
revenues from existing operations. We also face all of the risks, expenses and
difficulties frequently encountered in the development of an expanding business.
Furthermore, to the extent that our expansion strategy is successful, we must
manage the transition to multiple-site and higher-volume operations, the control
of overhead expenses and the addition and retention of necessary personnel.


                                       10
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      Components of operating expenses include operating payroll and employee
benefits, occupancy costs, repairs and maintenance, and advertising and
promotion. Certain of these costs are variable and will increase with sales
volume. The primary fixed costs are corporate and restaurant management and
occupancy costs. Our experience is that when a new restaurant opens, it incurs
higher than normal levels of labor and food costs until operations stabilize,
usually during the first three months of operation. As restaurant management and
staff gain experience after the opening of a new restaurant, improvements are
seen in expense controls such as labor scheduling, food cost management and
operating expenses, and expense levels are brought down to levels similar to
those at our more established restaurants.

      General and administrative expenses include all corporate and
administrative functions that serve to support existing operations and provide
an infrastructure to support future growth. Management, supervisory and staff
salaries, employee benefits, travel, rent, depreciation, general insurance and
marketing expenses are major items in this category.

      The following discussion and analysis of financial condition and results
of operations should be read in conjunction with the accompanying unaudited
condensed consolidated financial statements and notes and the audited
consolidated financial statements and notes included in the Company's Form 10-K
for the fiscal year ended December 30, 2001.


                                       11
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

      Our restaurant level operating profit expressed as a percentage of
restaurant revenues is as follows (this does not include any of our Franchise
Royalty Income, Licensing Royalty Income, or Franchise Fee Income):

<TABLE>
<CAPTION>
                                                    THIRTEEN WEEKS ENDED               TWENTY-SIX WEEKS ENDED
                                                 JUNE 30,            JULY 1,         JUNE 30,          JULY 1,
                                                    2002               2001             2002             2001
                                                (UNAUDITED)        (UNAUDITED)      (UNAUDITED)      (UNAUDITED)
<S>                                               <C>                <C>               <C>              <C>
RESTAURANT REVENUES                               100.0%             100.0%             100%             100%

UNIT-LEVEL COSTS AND EXPENSES
    Food and beverage costs                        31.5%              31.4%            32.0%            31.7%
    Labor and benefits                             27.8%              27.1%            28.0%            27.8%
    Operating expenses                             22.5%              22.7%            22.5%            23.2%
    Depreciation and amortization                   4.7%               4.6%             4.9%             4.8%
    Pre-opening expenses                            1.4%               0.1%             0.8%             0.8%
                                                  -----              -----             ----             ----
      Total costs and expenses                     87.9%              86.0%            88.2%            88.3%
                                                  -----              -----             ----             ----

RESTAURANT-LEVEL OPERATING PROFIT                  12.1%              14.0%            11.8%            11.7%
                                                  =====              =====             ====             ====
</TABLE>

REVENUES:

      RESTAURANT REVENUES

      Restaurant revenue for the thirteen weeks ended June 30, 2002 was
$22,870,000 compared to $22,344,000 for the same period in 2001, a 2.4%
increase. This increase is primarily due to an increase in comparable same store
sales. For the twenty-six weeks ended June 30, 2002, restaurant revenue was
$43,358,000 compared to $42,496,000 for the same period in 2001, a 2.0%
increase. This increase is due to an increase in comparable same store sales
(.8% year over year), as well as to an increase in the number of operating weeks
in 2002.

      During the year between July 1, 2001 and June 30, 2002, six new company
stores were opened, while four company-owned restaurants were sold to
franchisees. While the number of company stores increased by two, the number of
operating weeks in the second quarter of 2002 was the same as for the second
quarter of 2001. For the twenty-six week period ended June 30, 2002, the number
of operating weeks increased over the same period in 2001.

      As of June 30, 2002, the Company had twenty-six restaurants that had been
open for more than eighteen months and these restaurants reported increases in
same store sales of approximately 1.9% in the thirteen weeks ended June 30,
2002, and approximately 0.8% for the twenty six weeks ended June 30, 2002.


                                       12
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      OTHER REVENUE

      Other revenue for the Company consists of royalty revenues and franchise
fees. Franchise revenues for the thirteen weeks ended June 30, 2002 were
$1,253,000 compared to $421,000 for the thirteen weeks ended July 1, 2001, a
198% increase. For the twenty-six week period ended June 30, 2002, franchise
revenues totaled $1,926,000 compared to $691,000 for the same period in 2001, a
179% increase. Franchise revenue includes both franchise royalty income and
franchise fees. Royalties are based on a percent of sales, while fee amounts
reflect initial non-refundable fixed fees and are recorded as revenue when an
agreement is signed and no additional material services are required by the
Company. The increase in royalty revenues and franchise fees is primarily due to
an increase in the number of Company franchisees and the units they have opened.
The Company has twenty-seven franchises open at June 30, 2002, compared to
twelve for the same period in 2001.

      The Company also receives licensing revenue based on sales of branded
products including sauces, seasoning and prepared meats. For the thirteen weeks
ended June 30, 2002 the licensing royalty income was $84,000, compared to
$83,000 for the same period in 2001. For the twenty-six week period ended June
30, 2002 and July 1, 2001, the licensing royalty income was $129,000.

      The chart below shows a summary of revenues by type:

<TABLE>
<CAPTION>
                                               THIRTEEN WEEKS ENDED:                   TWENTY-SIX WEEKS ENDED:
                                           JUNE 30,              JULY 1,            JUNE 30,             JULY 1,
                                             2002                 2001                2002                 2001
                                          (UNAUDITED)          (UNAUDITED)        (UNAUDITED)          (UNAUDITED)
REVENUE:
<S>                                       <C>                  <C>                <C>                  <C>
    Restaurant Revenues                      $22,870              $22,344            $43,358              $42,496
    Franchise Royalty Income                     758                  316              1,326                  551
    Franchise Fees                               495                  105                600                  140
    Licensing Royalty Income                      84                   83                129                  129
                                             -------              -------            -------              -------
      TOTAL REVENUES                         $24,207              $22,848            $45,413              $43,317
                                             =======              =======            =======              =======
</TABLE>

FOOD AND BEVERAGE COSTS

      Food and beverage costs for the thirteen weeks ended June 30, 2002 were
$7,194,000 or 31.5% of restaurant revenue, compared to $7,026,000 or 31.4% of
restaurant revenue for the same period in 2001. For the twenty-six week period
ended June 30, 2002, food and beverage costs were $13,875,000, or 32.0% of
restaurant revenue, compared to $13,471,000 or 31.7% of restaurant revenue for
the same period in 2001. The increase in food and beverage costs as a percent of
restaurant revenue was due primarily to an increase in rib prices. The
improvement in the second quarter is due to higher margin promotional products
and favorable purchasing for other products. We expect to maintain this level of
costs for the third quarter of 2002.


                                       13
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LABOR AND BENEFITS

      Labor and benefits for the thirteen weeks ended June 30, 2002 were
$6,361,000 or 27.8% of restaurant revenue, compared to $6,061,000 or 27.1% of
restaurant revenue for the same period in 2001. For the twenty-six week period
ended June 30, 2002, labor and benefits were $12,158,000 or 28.0% of restaurant
revenue, compared to $11,797,000 or 27.8% of restaurant revenue for the same
period in 2001. This increase in labor and benefits as a percentage of
restaurant revenue is primarily due to increased staffing for new restaurant
openings. We expect to maintain this level of costs for the third quarter of
2002.

OPERATING EXPENSES

      For the thirteen weeks ended June 30, 2002, operating costs were
$5,148,000 or 22.5% of restaurant revenue, compared to $5,061,000 or 22.7% of
restaurant revenue for the same period in 2001. For the twenty-six week period
ended June 30, 2002, operating costs were $9,738,000 or 22.5% of restaurant
revenue, compared to $9,873,000 or 23.2% of restaurant revenue for the same
period in 2001. The decrease in operating expense as a percent of restaurant
revenue is due to the decrease in utility costs from a high in the first quarter
of 2001, as well as to continued emphasis placed on cost reduction efforts.

DEPRECIATION AND AMORTIZATION

      Unit-level depreciation and amortization for the thirteen weeks ended June
30, 2002 was $1,080,000 or 4.7% of restaurant revenue compared to $1,035,000 or
4.6% of restaurant revenue during the same period in 2001. For the twenty-six
week period ended June 30, 2002, unit-level depreciation and amortization was
$2,144,000 or 4.9% of restaurant revenue, compared with $2,060,000 or 4.8% of
restaurant revenue for the same period in 2001.

      Total company depreciation and amortization for the thirteen weeks ended
June 30, 2002 was $1,146,000 or 5.0% of revenue compared to $1,091,000 or 4.8%
of revenue during the same period in 2001. For the twenty-six week period ended
June 30, 2002, total company depreciation and amortization was $2,276,000 or
5.3% of restaurant revenue, compared with $2,174,000 or 5.0% of restaurant
revenue for the same period in 2001. The increased dollar amount of depreciation
expense is the result of new restaurants opened, offset by older restaurants
sold during the four quarters subsequent to July 1, 2001.

PRE-OPENING EXPENSES

      Pre-opening expenses were $318,000 or 1.4% of restaurant revenue for the
thirteen weeks ended June 30, 2002, compared to $33,000 or 0.1% of restaurant
revenue during the same period in 2001. For the twenty-six week period ended
June 30, 2002, pre-opening expenses were $330,000 or 0.8% of restaurant revenue,
compared to $326,000 or 0.8% of restaurant revenue for the same period in 2001.
Pre-opening expenses are charged to expense in the month that they are incurred.
There were three new restaurant openings during the second quarter of 2002, and
three opened year-to-date, compared to one new unit opened in the second quarter
of 2001, and two opened in the first two quarters of 2001. Pre-opening costs
will vary from location to location depending on a number of factors, including
(but not limited to) the size and physical layout of each location; the cost of
travel and lodging in different metropolitan areas; and the relative difficulty
of the restaurant staffing and training process. The increase in pre-opening
costs in 2002 over 2001, both in the quarter in year-to-date periods, is
primarily due to a greater number of restaurants opened, as well as to expenses
incurred for restaurant openings in progress at the end of the quarter.


                                       14
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESTAURANT-LEVEL OPERATING PROFIT

      Restaurant-level operating profit represents income from restaurant
operations before general and administrative expenses, and excludes licensing,
royalty and fee income. Restaurant-level operating profit totaled $2,769,000 or
12.1% of restaurant revenue for the thirteen weeks ended June 30, 2002, compared
to $3,131,000 or 14.0% of restaurant revenue in the corresponding period of
2001. For the twenty-six week period ended June 30, 2002, restaurant-level
operating profit totaled $5,113,000 or 11.8% of restaurant revenue, compared to
$4,972,000 or 11.7% of restaurant revenue. Although restaurant-level operating
profit should not be considered an alternative to income from operations as a
measure of our operating performance, such unit-level measurement is commonly
used as an additional measure of operating performance in the restaurant
industry and certain related industries. The increase in restaurant-level
operating profit for the year-to-date periods, both in amount and as a percent
of restaurant revenue from 2001 to 2002, is attributable to the increase in
revenue from new units. The decrease in restaurant level operating profit for
the quarter, both in amount and as a percent of restaurant revenue from 2001 to
2002, is primarily attributable to larger pre-opening expenses in 2002 than in
2001 ($318,000 versus $33,000). Other changes in costs and expenses as discussed
previously also contributed to the change in restaurant-level operating profit.

GENERAL AND ADMINISTRATIVE EXPENSES

      General and administrative ("G&A") expenses for the thirteen weeks ended
June 30, 2002 were $2,020,000 or 8.3% of operating revenue, compared to
$1,623,000 or 7.1% of operating revenue for the same period in 2001. For the
twenty-six week period ended June 30, 2002 G & A expenses were $3,790,000 or
8.3% of operating revenue, compared to $3,075,000 or 7.1% of operating revenue
for the same period in 2001. The increase in general and administrative expenses
reflects increased personnel at the corporate level and increased recruiting and
training costs to support restaurant and franchise growth.

INCOME FROM OPERATIONS

      Income from operations totaled $2,020,000 or 8.3% of operating revenue for
the thirteen weeks ended June 30, 2002, compared to $1,953,000 or 8.5% of
operating revenue in the corresponding period in 2001. For the twenty-six week
period ended June 30, 2002, income from operations totaled $3,246,000 or 7.1% of
operating revenue, compared to $2,601,000 or 6.0% of operating revenue in the
same period in 2001. The increase in income is primarily attributable to
increased flow through restaurant operations, control of operating expenses and
increased franchise royalty revenue and fees without a significant change to
costs and expenses.

INTEREST INCOME

      Interest income was $137,000 or 0.6% of operating revenue for the thirteen
weeks ended June 30, 2002. For the same period in 2001, interest income was
$29,000 or 0.1% of operating revenue. For the twenty-six week period ended June
30, 2002, interest income was $207,000 or 0.5% of operating revenue, compared to
$54,000 for the same period in 2001. The increase in interest income from 2001
to 2002 is primarily due to increased interest earned from cash on hand, as well
as interest earned on notes receivable to the Company.

INTEREST EXPENSE

      Interest expense was $361,000, or 1.5% of operating revenue for the
thirteen weeks ended June 30, 2002. For the same period in 2001, interest
expense was $411,000, or 1.8% of operating revenue. For the twenty-six week
period ended June 30, 2002, interest expense was $751,000, or 1.7% of operating
revenue, compared to $773,000, or 1.8% of operating revenue for the same period
in 2001. The decrease in dollars of expense is primarily due to reduction of
certain debt.



                                       15
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GAIN ON SALE OF PROPERTY AND EQUIPMENT, AND OTHER INCOME

      During the thirteen week period ended June 30, 2002, the Company recorded
a gain on sale of property and other income, net, of $86,000, or 0.4% of
operating revenue. This compares to $42,000, or 0.2% of operating revenue, for
the same period in 2001. For the twenty-six week period ended June 30, 2002, the
Company recorded a gain on sale of property and other income, net, of $895,000,
or 2.0% of operating revenue, compared to $127,000 or 0.3% of operating revenue
for the same period in 2001. Approximately $793,000 of the gain in 2002 is
attributable to the sale of three of our restaurants to a franchisee in
Wisconsin. Other income of $124,000 is made up of our management fees and
equipment rental fees to FUMUME, LLC. These income totals are offset by losses
on disposals of various property.

EQUITY IN LOSS FROM UNCONSOLIDATED AFFILIATE

      Effective June 1, 2001, Famous Dave's Ribs-U, Inc., our wholly-owned
subsidiary, entered into a joint venture with Memphis-based Lifestyle Ventures,
LLC, H&H Holding Company, LLC and another investor to develop a themed
restaurant concept based on the entertainment artist Isaac Hayes. Pursuant to
the agreement governing the joint venture, the participants in the joint venture
formed a Delaware limited liability company named FUMUME, LLC. FUMUME opened its
first location in Chicago in June 2001 and its second location in Memphis,
Tennessee in October 2001. Each location is structured as a separate Delaware
limited liability company, each of which is wholly owned by FUMUME.

      In exchange for a 40% interest in the LLC, the Company agreed to
contribute: (i) $825,507 in working capital, (ii) the assets comprising Famous
Dave's Ribs and Blues Club in Chicago and (iii) certain rights to use Famous
Dave's various licensed marks. Although the joint venture that owns the Chicago
club is now responsible for the payment of the rent for the Chicago club, the
Company remains liable under the lease with the landowner.

      The Company has agreed to reimburse the LLC for operating losses incurred
at the Memphis and Chicago clubs. The Company can terminate our reimbursement
obligation with respect to the Chicago club if after any two-year period ending
May 31 there has been a cumulative operating loss. With respect to the Memphis
club, the Company may terminate the reimbursement obligation if the cumulative
deficit of the club (excluding management fees) exceeds $2 million or, if after
any five-year period ending May 31, there has been a cumulative operating loss.

      The Company has agreed to provide various management services for the
clubs. In exchange for these services, the Company will receive a fee equal to
3% of gross sales per year. The management agreement with respect to a
particular club terminates upon, among other things, the termination of our
loss-reimbursement obligations as described above.

      In the quarter ended June 30, 2002, the Company recorded 100% of the cash
losses of ($120,000), or (0.5%) of operating revenue, compared to ($193,000) or
(0.8%) during the same period of 2001. This comparison period in 2001 only
included five weeks of operating activity from this affiliate, as it was
contributed to the affiliate effective June 1, 2001. This investment has not met
our expectations. Management has seen an improvement in cash flow trends,
however, and remains focused on additional training and cost controls to enhance
profitability at these sites. We do not plan on opening any additional Isaac
Hayes themed clubs or restaurants in the future, and continue to evaluate our
options relative to this investment.

INCOME TAX PROVISION

      For the quarter ended June 30, 2002, the Company recorded an income tax
provision of $691,000, or approximately 39% of income before taxes. For the
twenty-six week period ended June 30, 2002, the income tax provision totals
$1,189,000, or approximately 39% of income before taxes. The prior year periods
had been reported untaxed due to a valuation allowance of deferred income tax
assets.


                                       16
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

NET INCOME/DILUTED NET INCOME PER COMMON SHARE

      The net income for the thirteen weeks ended June 30, 2002 was $1,071,000
or $.09 per share on approximately 11,998,000 weighted average diluted shares
outstanding, compared to $1,420,000 or $.13 per share on approximately
10,938,000 weighted average shares outstanding during the comparable period in
2001. If net income had been reported fully taxed in both years, earnings per
share for the second quarter of 2002 and 2001 would have been $.09 and $.08,
respectively. The increase in net income and net income per share is
attributable to increased income from restaurant and franchise operations and an
emphasis on controlled expenses, but is offset by an increase in the number of
shares outstanding.

      The net income for the twenty-six weeks ended June 30, 2002 was $1,860,000
or $.16 per share on approximately 11,965,000 weighted average diluted shares
outstanding, compared to $1,816,000 or $.17 per share on approximately
10,602,000 weighted average shares outstanding during the comparable period in
2001. If net income had been reported fully taxed in both years, earnings per
share for the first two quarters of 2002 and 2001 would have been $.16 and $.10,
respectively. The increase in net income and net income per share is
attributable to increased income from restaurant and franchise operations and an
emphasis on controlled expenses, but is offset by an increase in the number of
shares outstanding

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

      During the twenty-six weeks ending June 30, 2002, our balance of cash and
cash equivalents increased by $3,372,000 to approximately $10,770,000 from the
December 30, 2001 balance. The primary sources of cash were cash from
operations, proceeds from the sale of three restaurants to a franchisee, while
the primary uses of cash were the purchases of property, equipment and leasehold
improvements (approximately $5.3 million), and payments on long-term debt and
capital leases (approximately $1.6 million).

      The Company finalized a note payable with GE Capital Franchise Finance
Corporation during the second quarter of 2002 for approximately $1.485 million.
This note replaced a preliminary note payable dated October 2001, and financed
the land and building for our first Richmond, Virginia location. The rate on
this note is 8.83%, and payments required are $13,326 per month for a period of
twenty years. In addition, the Company has entered into a preliminary note
payable with GE Capital Franchise Finance Corporation to finance the second
Richmond, Virginia location. The debt incurred as of June 30, 2002 is
approximately $1.4 million, and we expect to close on that note during the third
quarter of 2002.

      To continue our expansion, we anticipate that additional financing will
likely be required during the next twelve months. Any proceeds from financing
will be used to purchase real estate and develop company-owned restaurants. For
the next twelve months, we believe that future development and expansion will be
funded or financed primarily through cash and short-term investments currently
held, and proceeds from forms of financing such as mortgages or other credit
facilities. However, there can be no assurance that additional financing
required for expansion will be available on terms acceptable or favorable to us.


                                       17
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

      Our significant accounting policies are described in Note One and Note Six
to the consolidated financial statements included in our annual report for the
year ended December 30, 2001. The accounting policies used in preparing our
interim 2002 consolidated condensed financial statements are the same as those
described in our annual report.

      Our critical accounting policies are those both having the most impact to
the reporting of our financial condition and results, and requiring significant
judgments and estimates. Our critical accounting policies include those related
to (a) property, equipment and leasehold improvements impairments; (b) initial
franchise revenues; (c) investment in unconsolidated affiliate. The evaluation
of long-lived assets for impairment involves management judgment in estimating
future cash flows related to and fair values of such assets. Initial franchise
revenues are recognized when the Company has performed substantially all of its
obligations as franchisor. Management records the investment in unconsolidated
affiliate on the equity method based on the Company's net loss obligation (100%
of the cash loss).

SEASONALITY

      Our units typically generate higher revenues during the second and third
quarters (spring and summer months) than in the first and fourth quarters (fall
and winter months) as a result of seasonal traffic increases experienced during
the summer months, and possible adverse weather that can disrupt customer and
employee transportation to our restaurants during the winter months.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Form 10-Q and other materials filed or to be filed with the Securities and
Exchange Commission (as well as information included in oral statements or other
written statements made or to be made by us) contain statements that are
forward-looking. A number of important factors could, individually or in the
aggregate, cause actual results to differ materially from those expressed or
implied in any forward-looking statements. Such factors include, but are not
limited to, the following: our ability expand into new markets; our ability to
execute our expansion strategy; changes in business strategy or development
plans; availability and terms of capital; changes in costs of food, labor, and
employee benefits; changes in government regulations; competition; availability
of locations and terms of sites for restaurant development; development and
operating costs; advertising and promotional efforts; brand awareness. For
further information regarding these and other factors, see our Annual Report on
Form 10-K for the fiscal year ended December 30, 2001.


                                       18
<PAGE>
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3.

MARKET RISK SENSITIVITY

      The Company's financial instruments include cash and cash equivalents and
long-term debt. The Company includes as cash and cash equivalents certificates
of deposits and all other investments with original maturities of three months
or less when purchased and which are readily convertible into known amounts of
cash. The Company's cash and cash equivalents are not subject to significant
interest rate risk due to the short maturities of these instruments. The
Company's long-term debt is not subject to interest rate risk because all of the
Company's long-term debt has fixed rates of interest. The Company does not enter
into contracts for speculative purposes, nor is it a party to any leveraged
instruments.


                                       19
<PAGE>
PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      The Company is not a party to any material litigation and is not aware of
any threatened litigation that would have a material adverse effect on its
business.

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

(a)   On May 22, 2002, the Annual Meeting of Shareholders of the Company (the
      "Annual Meeting") was held.

(b)   At the Annual Meeting, all of management's nominees for directors as
      listed in the proxy statement were elected.

(c)   At the Annual Meeting:

      (1) The nominees for directors as listed in the proxy statement were
elected with the following vote:

<TABLE>
<CAPTION>
                                  SHARES VOTED "FOR"         SHARES VOTED "WITHHELD"
                                  ------------------         -----------------------
<S>                               <C>                        <C>
David W. Anderson                          8,858,760                          29,006
Thomas J. Brosig                           8,857,290                          30,476
James W. Cox                               8,854,461                          33,305
K. Jeffrey Dahlberg                        8,854,420                          33,346
Richard L. Monfort                         8,856,635                          31,131
Martin J. O'Dowd                           8,179,765                         708,001
</TABLE>

      (2) The Shareholders approved an amendment to the Company's 1995 Stock
Option and Compensation Plan to increase the number of shares of Common Stock
reserved for issuance thereunder from 1,950,000 shares to 2,350,000 shares.
6,957,140 votes were cast in favor of the amendment; 1,897,169 votes opposed and
33,457 votes abstained.

      (3) The Shareholders approved an amendment to the Company's 1998 Director
Stock Option Plan to increase the number of shares of Common Stock reserved for
issuance thereunder from 250,000 shares to 350,000 shares. 7,684,319 votes were
cast in favor of the amendment; 1,165,777 votes opposed and 37,670 votes
abstained.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      10.1  1995 Stock Option and Compensation Plan (as amended through May 22,
            2002).

      10.2  1997 Employee Stock Option Plan (as amended through May 22, 2002).

      10.3  1998 Director Stock Option Plan (as amended through May 22, 2002).

(b)   Reports on Form 8-K

      None.


                                       20
<PAGE>

SIGNATURES

In accordance with 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.

                                          FAMOUS DAVE'S OF AMERICA, INC.


                                          /s/ Martin J. O'Dowd
                                          ---------------------
                                          Martin J. O'Dowd
                                          President and Chief Executive Officer


                                          /s/ Kenneth J Stanecki
                                          ------------------------
                                          Kenneth J. Stanecki
                                          Chief Financial Officer

Pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, each of the undersigned hereby certifies in his
capacity as an officer of registrant that (a) the Quarterly Report of the
registrant on Form 10-Q for the period ended June 30, 2002 fully complies with
the requirements of Section 13(a) of the Securities Exchange Act of 1934 and
that (b) the information contained in such report fairly presents, in all
material respects, the financial condition of the registrant at the end of such
period and the results of operations of the registrant for such period.


                                          /s/ Martin J. O'Dowd
                                          ---------------------
                                          Martin J. O'Dowd
                                          President and Chief Executive Officer


                                          /s/ Kenneth J Stanecki
                                          ------------------------
                                          Kenneth J. Stanecki
                                          Chief Financial Officer

Date:  August 14, 2002


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