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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-K/A

|X| Annual Report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
Act of 1934 For the fiscal year ended DECEMBER 30, 2001

|_| Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from ________ to ________

Commission file number 333-90817

                                  SBARRO, INC.
             (Exact name of Registrant as specified in its charter)

         NEW YORK                                               11-2501939
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

 401 BROADHOLLOW ROAD, MELVILLE, NEW YORK                         11747
 (Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code:          (631) 715-4100

        Securities registered pursuant to Section 12(b) of the Act: None

        Securities registered pursuant to Section 12(g) of the Act: None

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirement for the past 90 days.  Yes X           No
                                             ---            ---

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ X ].

     The registrant's common stock is not publicly-held or publicly traded.

     The number of shares of Common Stock of the  registrant  outstanding  as of
March 15, 2002 was 7,064,328.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

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<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        ------------------------------------------------------------------------
        OF OPERATIONS
        -------------

     The  following  discussion  and  analysis of our  financial  condition  and
results  of  operations  should  be read in  conjunction  with the  consolidated
financial statements, the notes thereto and other data and information appearing
elsewhere in this report.

RESULTS OF OPERATIONS

     Our fiscal year ends on the Sunday  nearest to December  31. Each of fiscal
2001,  2000 and 1999  consisted  of 52  weeks.  The going  private  transaction,
including the purchase price  allocation and certain other related  transactions
described  in the notes to the  consolidated  financial  statements,  affect the
comparability of the interest income,  depreciation and  amortization,  interest
expense and income tax line items in our  consolidated  statements of operations
for fiscal 2000 as compared to fiscal 1999  discussed  below.  Our loss of $14.6
million in fiscal 2001  includes  charges of $18.2  million for a provision  for
asset impairment, restaurant closings and other charges discussed below.

     One high  volume  Sbarro-owned  quick  service  unit was  destroyed  in the
September  11,  2001  attack on the World  Trade  Center  in New York  City.  In
addition,  a number of airports  were closed due to the events of  September  11
causing  airport  Sbarro-owned  and  franchise  units to close  and a number  of
downtown  locations  experienced  reduced  sales.  We have made claims under our
business  interruption  insurance  policies with respect  thereto.  We are fully
insured  for the cost of the  assets  destroyed  at the  Company  location.  The
estimated amount of the expected recovery is included in accounts  receivable as
of December  30, 2001.  In  addition,  we expect to recover lost income from our
business  interruption  insurance  coverage  but,  under  applicable  accounting
principles,  have  not  reflected  any  estimated  recoveries  in our  financial
statements.

FISCAL 2001 COMPARED TO FISCAL 2000

     Our  consolidated  EBITDA  for the  fiscal  year ended  December  30,  2001
(including the charges  reflected above) was $46.3 million and our EBITDA margin
was 11.9%,  compared to $78.7  million and 19.7%,  respectively,  for the fiscal
year ended  December 31, 2000.  EBITDA  represents  earnings  before  cumulative
effect of change in accounting method, interest income, interest expense, taxes,
depreciation and amortization.  EBITDA margin represents EBITDA divided by total
revenues.  EBITDA should not be considered in isolation from, or as a substitute
for, net income,  cash flow from  operations or other cash flow  statement  data
prepared in accordance  with generally  accepted  accounting  principles or as a
measure of a company's  profitability or liquidity.  Rather, EBITDA is presented
because it is a widely accepted  supplemental  financial measure, and we believe
that it provides relevant and useful information.  Our calculation of EBITDA may
not be  comparable to a similarly  titled  measure  reported by other  companies
since all companies do not calculate  this non-GAAP  measure in the same manner.
Our EBITDA calculations are not intended to represent cash provided by (used in)
operating activities since they do not include interest and taxes and changes in
operating  assets and  liabilities,  nor are they  intended  to  represent a net
increase in cash since they do not include cash  provided by (used in) investing
and financing activities.

     Restaurant  sales from  Sbarro-owned  quick service units and  consolidated
other concept units  decreased by $9.7 million,  or 2.5%, to $372.7  million for
fiscal 2001 from $382.4 million in fiscal 2000.  Sales increases in consolidated
other concept  units of $4.0 million were offset by a $13.7  million  decline in
sales from quick service  units.  Sales at both Sbarro quick service and some of
our  consolidated  other concept  locations for fiscal 2001 have been  adversely
impacted by the  general


                                      -2-
<PAGE>

economic downturn and were further affected by the events of September 11, 2001.
During fiscal 2001,  we closed 34 more units than we opened which  resulted in a
net sales  reduction of  approximately  $1.2  million.  Revenues  from new quick
service  units did not offset the loss of  revenues  from  quick  service  units
closed since the beginning of fiscal 2000.  The units closed since the beginning
of fiscal 2000,  with the  exception of our high volume owned unit  destroyed in
the collapse of the World Trade  Center on  September  11, 2001 and the one high
volume unit closed in fiscal 2000 and  replaced in fiscal 2001,  were  generally
low  volume  units  that  did not  have a  material  impact  on our  results  of
operations. Following the events of September 11, a number of airport and other,
principally  downtown,  locations  were  closed for a period of time,  and those
locations,  as well as a  number  of other  downtown  locations,  experienced  a
prolonged period of reduced sales. These units had sales of $8.7 million for the
period from  September 11, 2001 through the end of fiscal 2001 compared to $11.2
million for the similar period in fiscal 2000.

     Comparable Sbarro quick service unit sales decreased 2.1% to $321.0 million
in fiscal 2001. Comparable Sbarro quick service unit sales levels that, as noted
above,  had already been affected by the decrease in mall traffic related to the
general economic downturn in the United States,  were negatively  affected after
the  tragedy  of  September  11.  In late  March  2001  and mid  June  2001,  we
implemented  price  increases  of  0.7%  and  3.3%,   respectively.   Comparable
restaurant  sales are made up of sales at  locations  that were open  during the
entire current and prior fiscal year.

     Excluding  approximately $0.3 million related to the termination of an area
development agreement in Egypt recognized during fiscal 2001 and $1.5 million of
termination  fees related to our  development  agreement  and the closing of all
Sbarro  locations in Japan recognized in fiscal 2000,  franchise  related income
increased 2.8% to $10.0 million for the fiscal year ended December 30, 2001 from
$9.7 million for the fiscal year ended December 31, 2000. The increase  resulted
from greater  continuing  royalties due to a higher number of franchise units in
operation  in the current  fiscal year  offset,  in large part,  by decreases in
royalties  from  locations  in  operation  during  all of fiscal  2001 and 2000.
Franchises,  both  domestically and  internationally,  were also affected by the
general economy and the events of September 11.

     Real estate and other revenues  decreased $56,000 for the fiscal year ended
December 30, 2001 from fiscal 2000  primarily due to decreases in certain vendor
rebates.

     Cost of food  and  paper  products  as a  percentage  of  restaurant  sales
increased  to 20.0% for fiscal  2001 from  19.5% in the 2000  fiscal  year.  The
increase in fiscal 2001 relates  primarily to higher average cheese prices ($2.7
million),  increased  distribution  fees ($0.5 million) and the reduced level of
sales.  Cheese prices to date in fiscal 2002 are lower than those experienced at
the  comparable  point in time in fiscal 2001 and  significantly  lower than the
average price for all of fiscal 2001.

     Payroll and other benefits  increased to 27.9% of restaurant  sales for the
year ended  December 30, 2001 from 26.6% of restaurant  sales for the year ended
December 31, 2000.  The increase was primarily due to the reduced level of sales
and tight labor  market that was  experienced  into the third  quarter of fiscal
2001 that had increased  wages and salaries and the associated  amounts paid for
payroll  taxes.  Since then,  we have seen an abatement of these  pressures as a
result of the continuing economic slowdown. In addition, we took steps to reduce
payroll  expenses  during late  fiscal  2001 and have seen a reduction  of those
costs in the early part of fiscal 2002.

     Other operating  expenses increased to 31.3% of restaurant sales for fiscal
2001 from 29.8% for fiscal 2000  primarily  due to increases in rent,  utilities
and other occupancy related expenses and the reduced level of sales.


                                      -3-
<PAGE>

     During  fiscal  2001,  we  recorded  a  provision  for  asset   impairment,
restaurant closings and other charges of $18.2 million.  Of that provision,  (a)
$5.5 million was for property and equipment  asset  impairment,  including  $3.6
million  related to our other  concepts,  (b) $11.7  million was for  restaurant
closings, including $6.7 million for our other concepts and $0.2 million for the
cost of the  conversion  of our Umberto and Tony & Bruno  locations  to our Mama
Sbarro  concept and (c) $1.0 million was for other  charges.  In early 2002,  we
closed two of other  concept  locations  for which  amounts were included in the
provision.

     Depreciation and amortization  expense increased by $1.3 million for fiscal
2001 from fiscal 2000.  Depreciation  and  amortization  expense  included  $5.4
million  and $5.0  million  in  fiscal  2001  and  2000,  respectively,  for the
amortization  of the  excess of the  purchase  price over the cost of net assets
acquired in connection  with the completion of the going private  transaction on
September 28, 1999. The  finalization of the purchase price allocation in fiscal
2000 resulted in a reduction of the originally  estimated amounts in fiscal 2000
while fiscal 2001  represents a full year of such  amortization.  Under SFAS No.
142, "Goodwill and Other Intangible  Assets,"  commencing in fiscal 2002 we will
no longer amortize  goodwill and intangible  assets with  indefinite  lives (for
which our earnings were charged $5.4 million and $5.0 million in fiscal 2001 and
fiscal 2000,  respectively) but instead we will review those assets annually for
impairment  (or more  frequently  if  impairment  indicators  arise).  Separable
intangible  assets that are not deemed to have indefinite lives will continue to
be amortized  over their useful lives.  With respect to goodwill and  intangible
assets  (trademarks  and  tradenames)  acquired  prior to July 1,  2001  ($205.2
million, net of accumulated  amortization,  at December 30, 2001), we will adopt
SFAS 142 effective with fiscal 2002.  Our initial  evaluations of impairment are
expected to be completed by the end of the first  quarter of fiscal 2002.  We do
not believe an impairment, if any, will be material.

     General and  administrative  expenses were $29.5 million,  or 7.6% of total
revenues,  for fiscal 2001 compared to $30.9 million, or 7.7% of total revenues,
for fiscal  2000.  General  and  administrative  costs for fiscal  2001  reflect
decreases in field management costs, a reduction in corporate staff costs due to
a cost containment program which we implemented  beginning in the fourth quarter
of fiscal 2001 and lower costs related to litigation  contingencies  offset,  in
part, by a decrease in the amount of overhead  capitalized  in  connection  with
capital projects due to the reduced number of new unit openings.

     Minority interest  represents the share of the minority holders'  interests
in the  combined  operations  or loss in each  period of the fiscal  years being
reported of the joint  ventures in which we have a majority  interest.  In early
fiscal  2002,  we closed  one of the two  locations  which are  included  in the
calculation of the minority  interest with a minimal charge to earnings that was
recorded in fiscal 2001.

     Interest  expense of $31.0  million  and $30.2  million for fiscal 2001 and
2000,  respectively,  relate to the 11%,  $255.0  million Senior Notes issued to
finance our going private transaction,  the 8.4%, $16.0 million mortgage loan on
our corporate  headquarters and fees for the unused borrowing capacity under our
Credit  Agreement.  Of  these  amounts,  $1.5  million  in each of 2001 and 2000
represented non-cash charges for the accretion of the original issue discount on
our Senior Notes and the amortization of deferred  financing costs on the Senior
Notes,  Credit Agreement and the mortgage loan. The increase in interest expense
was due to the full period impact in fiscal 2001 of the mortgage loan, which was
entered into in March 2000.


                                      -4-
<PAGE>

     Interest  income was  approximately  $0.8  million for fiscal 2001 and $0.9
million for fiscal 2000.  Interest income in fiscal 2001 was affected by reduced
availability of cash for investment and lower interest rates.

     Equity in the net income of unconsolidated  affiliates represents our share
of earnings  and losses in those new  concepts in which the company has a 50% or
less ownership interest. We have determined that we will continue to develop and
expand the steakhouse joint venture locations but are evaluating the disposition
of the other concepts in which we have a 50% or less ownership interest.

     We elected to be taxed under the provisions of Subchapter S of the Internal
Revenue Code and, where applicable and permitted,  under similar state and local
income  tax  provisions  beginning  January  3, 2000.  Under the  provisions  of
Subchapter S, substantially all taxes on our income are paid by our shareholders
rather than us. Our tax expense of $0.3 million and $0.5 million for fiscal 2001
and 2000,  respectively,  represents  taxes  owed to  jurisdictions  that do not
recognize S corporation  status or that tax entities based on factors other than
income. As required by Statement of Financial  Accounting Standards ("SFAS") No.
109,  "Accounting  for  Income  Taxes,"  we  recognized  a $5.6  million  credit
associated with the reversal of our deferred tax liabilities upon our conversion
to S corporation status in the first quarter of fiscal 2000.

FISCAL 2000 COMPARED TO FISCAL 1999

     Our  consolidated  EBITDA for the fiscal year ended  December  31, 2000 was
$78.7  million and our EBITDA  margin was 19.7%,  compared to $78.6  million and
20.2%, respectively, for the fiscal year ended January 2, 2000.

     Restaurant sales from Sbarro-owned quick service units and consolidated new
concept units  increased by $6.9 million,  or 1.8%, to $382.4 million for fiscal
2000  from  $375.5  million  in  fiscal  1999.  Sales  from  new  concept  units
contributed  $5.1  million of the increase in  restaurant  sales.  However,  the
revenues  from new quick  service units did not offset the loss of revenues from
closed quick  service  units as we closed two more units than we opened in 2000,
including two high volume units (one of which is being replaced in fiscal 2001).
No material price increases were implemented in fiscal 2000.  Comparable  Sbarro
quick  service  unit  sales  increased  0.2%  during  fiscal  2000.   Comparable
restaurant  sales are made up of sales at  locations  that were open  during the
entire current and prior fiscal year.

     Franchise  related income  increased  29.3% to $11.2 million for the fiscal
year ended December 31, 2000 from $8.7 million for the fiscal year ended January
2, 2000. The increase resulted from greater continuing royalties due to a higher
number of  franchise  units in  operation,  higher area  development  and higher
initial  franchise  fees in fiscal 2000 than in fiscal 1999,  particularly  from
international  markets, and approximately $1.5 million recognized in fiscal 2000
related to the termination of our  development  agreement and the closing of all
Sbarro  locations  in Japan.  In fiscal 2000,  we entered into area  development
agreements in specific  domestic and  international  venues and markets with two
major food service  operators.  To date,  these  arrangements  have not produced
expected revenues.

     Real estate and other  revenues  increased  by $0.3 million to $5.8 million
for the fiscal  year ended  December  31,  2000 from fiscal 1999 due to the full
year impact from leasing a majority of our corporate  headquarters  building not
occupied by Sbarro to third parties in 1999.


                                      -5-
<PAGE>

     Cost of food  and  paper  products  as a  percentage  of  restaurant  sales
improved  to 19.5% for fiscal  2000 from  20.2% in the 1999  fiscal  year.  This
improvement was primarily due to lower average cheese prices during fiscal 2000.

     Payroll and other employee benefits  increased to 26.6% of restaurant sales
for the year ended  December 31 2000 from 25.9% of restaurant  sales in the year
ended January 2, 2000.  This increase was primarily due to a tight labor market,
resulting in pressures on wages and salaries and associated increases in amounts
paid for payroll taxes.

     Other operating  expenses  increased to 29.8% for fiscal 2000 from 28.9% of
restaurant sales for fiscal 1999 primarily due to increases in rent, utility and
other occupancy related expenses.

     Depreciation and amortization  expense increased by $3.3 million for fiscal
2000 over fiscal 1999.  Depreciation and amortization  expense included $4.8 and
$2.0  million in fiscal 2000 and 1999,  respectively,  for  amortization  of the
excess of the purchase price over the cost of net assets  acquired in connection
with the  completion  of the going  private  transaction  on September  28, 1999
representing  a full year in 2000  compared to three  months in 1999.  In fiscal
2000, we finalized our  allocation of the purchase  price from the going private
transaction  based on an  evaluation  of our net assets at  September  29,  1999
resulting in lower annual amortization expense than originally estimated.

     General  and  administrative  costs  were $30.9  million,  or 7.7% of total
revenues, for fiscal 2000, compared to $28.9 million, or 7.4% of total revenues,
for fiscal 1999.  These  increases  were  primarily due to higher payroll costs,
costs incurred in expanding  franchise and new concept  operations and increases
in various  professional fees,  including  litigation  expenses.  These expenses
include the cost of operating our corporate headquarters building.

     The provision  for unit  closings is the result of a special  allocation of
losses in fiscal 1999 of $1.0 million in connection  with the final  disposition
of two joint venture unit closings recorded in 1997.

     Minority interest  represents the share of the minority holders'  interests
in the combined  income in fiscal 2000 and  combined  loss in fiscal 1999 of the
joint ventures in which we have a majority interest.

     Interest  expense  of $30.2  million  for fiscal  2000  relates to the 11%,
$255.0 million  Senior Notes issued to finance our going private  transaction on
September  28, 1999,  the 8.4%,  $16.0  million  mortgage  loan on our corporate
headquarters  in 2000 and line  fees for  unused  borrowing  capacity  under our
Credit  Agreement.  Results for fiscal 1999 included interest only from the date
of the going private transaction through the end of the 1999 fiscal year of $7.9
million for the Senior Notes and Credit  Agreement  line fees. Of these amounts,
$1.5 and $0.4  million  for  fiscal  2000 and  1999,  respectively,  represented
non-cash  charges for the accretion of the original issue discount on our Senior
Notes and the  amortization  of deferred  financing  costs on the Senior  Notes,
Credit Agreement and, in 2000, the mortgage loan.

     Interest  income was  approximately  $0.9  million and $3.8 million for the
fiscal  years  2000 and 1999,  respectively.  We used  substantially  all of our
available  cash on  September  28,  1999 in  order  to fund  the  going  private
transaction.  Therefore,  we had a substantial  reduction in our interest income
for fiscal 2000.


                                      -6-
<PAGE>

     Equity in the net income (loss) of unconsolidated affiliates represents our
share of  earnings  and losses in those new  concepts in which the Company has a
50% or less ownership interest.

     We have  elected to be taxed under the  provisions  of  Subchapter S of the
Internal Revenue Code and, where  applicable and permitted,  under similar state
and local  income tax  provisions  beginning  January 3, 2000.  As  required  by
Statement of Financial  Accounting  Standards  (SFAS) No. 109,  "Accounting  for
Income Taxes," we recognized a $5.6 million credit  associated with the reversal
of our deferred tax liabilities  upon conversion to S corporation  status in the
first   quarter  of  fiscal  2000.   Under  the   provisions  of  Subchapter  S,
substantially  all taxes on our  income is now paid by our  shareholders  rather
than us. Our tax  expense for the fiscal 2000  included  $0.5  million for taxes
owed to  jurisdictions  that do not recognize S  corporation  status or that tax
entities based on factors other than income.

IMPACT OF INFLATION AND OTHER FACTORS

     Food,  labor,  rent,  construction  and equipment  costs are the items most
affected by inflation in the restaurant business.  Although for the past several
years  inflation  has not been a significant  factor,  there can be no assurance
that this trend will continue. In addition,  food and paper product costs may be
temporarily  or  permanently  affected by weather,  economic  and other  factors
beyond our control  that may reduce the  availability  and  increase the cost of
these  items.  Historically,  the price of cheese has  fluctuated  more than our
other food ingredients and related restaurant supplies.

SEASONALITY

     Our  business  is  subject to  seasonal  fluctuations,  and the  effects of
weather and economic conditions. Earnings have been highest in our fourth fiscal
quarter due primarily to increased  volume in shopping  malls during the holiday
shopping  season.  Historically,  the fourth  fiscal  quarter had  accounted for
approximately 40% of annual operating net income before the effect of additional
amortization  associated with the going private transaction ("adjusted operating
income") and fluctuates due to the length of the holiday shopping period between
Thanksgiving  and New Year's Day and the number of weeks in our fourth  quarter.
Adjusted  operating  income  for the  fourth  quarter  of  2001  and  2000  were
approximately 24% and 40%,  respectively,  of adjusted  operating income for the
respective  fiscal year. The lower  percentage of adjusted  operating income for
the fourth  quarter of fiscal 2001  reflect  the  adverse  impact of the general
economic downturn and the effect of the events of September 11, 2001

ACCOUNTING PERIOD

     Our fiscal  year ends on the Sunday  nearest to December  31. All  reported
fiscal years contained 52 weeks. Fiscal 2002 will also contain 52 weeks.


                                      -7-
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     We have historically not required  significant  working capital to fund our
existing  operations and have financed our capital  expenditures and investments
in our joint ventures  through cash generated from  operations.  At December 30,
2001, we had unrestricted cash and cash equivalents of $37.0 million and working
capital of $4.6 million  compared to unrestricted  cash and cash  equivalents of
$42.3 million and working capital of $10.3 million as of December 31, 2000.

     As part of the going  private  transaction,  we sold $255.0  million of 11%
Senior Notes (at a price of 98.514% of par to yield  11.25% per annum),  the net
proceeds of which,  together with  substantially  all of our then existing cash,
was used to finance the  transaction,  and entered into a $30.0  million  Credit
Agreement.  At December  30, 2001 and March 15, 2002,  we had $27.0  million and
$27.3  million  of  undrawn  availability  under our  Credit  Agreement,  net of
outstanding  letters  of credit  and  guarantees  of  reimbursement  obligations
aggregating  approximately  $3.0  and  $2.7  million,  respectively.  We were in
compliance with the various  covenants in the Indenture for the Senior Notes and
the Mortgage as of December 30, 2001.  We have  received a waiver of  compliance
for fiscal 2001 from certain ratios  required to be maintained  under our credit
agreement  at year end and an amendment to certain  annual  ratios  required for
fiscal 2002 and fiscal 2003. As amended,  the Credit Agreement  requires that we
maintain a minimum ratio of consolidated EBITDA to consolidated interest expense
(in  each  case  with the  guaranteeing  subsidiaries)  of at least  1.25 to 1.0
through  December 28, 2002,  1.90 to 1.0 beginning  December 29, 2002 and 2.0 to
1.0  beginning  December 28, 2003.  We are also  required to maintain a ratio of
consolidated  senior  debt  to  consolidated  EBITDA  (in  each  case  with  the
guaranteeing  subsidiaries)  of 7.25 to 1 through  December 28, 2002, 4.7 to 1.0
beginning  December 29, 2002 and 4.5 to 1.0  beginning  December  28,  2003.  We
anticipate being in compliance with the revised ratios.

     Net cash  provided  by  operating  activities  was $34.8  million and $48.3
million for the fiscal  years ended  December  30, 2001 and  December  31, 2000,
respectively.  The $13.5  million  reduction was primarily due to a reduction in
operating income, before the provision for asset impairment, restaurant closings
and other charges, of $15.5 million.  Net cash provided by operating  activities
before the change in accrued  interest  payable and the reversal of deferred tax
liabilities in 2000 upon conversion to Subchapter S status was $53.5 million for
fiscal 2000.

     Net  cash  used  in  investing  activities  primarily  relates  to  capital
expenditures, including investments made by our consolidated other concepts. Net
cash used in investing  activities  was $22.5 million for 2001 compared to $31.2
million for 2000.

     Net cash used in financing activities was $17.7 million for the fiscal year
ended  December  30,  2001  compared  to $8.6  million for the fiscal year ended
December 31, 2000.  Cash used in financing  activities  for fiscal 2001 resulted
primarily from $12.6 million of  distributions  to  shareholders,  including tax
distributions  of $7.6  million  (see  below),  $4.0  million  of  loans  to our
shareholders,  net of $2.7 of repayments of certain  loans,  and the purchase of
the 20%  interest  in the  Umberto  of New Hyde Park  concept in  settlement  of
litigation for $1.0 million.  Cash used in financing  activities for fiscal 2000
resulted   primarily  from  $22.1  million  of  distributions  to  shareholders,
including tax distributions of $3.8 million (see below), and a $2.0 million loan
to our  Chairman,  President  and CEO offset,  in part,  by $15.6 million of net
proceeds  from a $16.0  million  8.4% ten year loan secured by a mortgage on our
corporate headquarters.


                                      -8-
<PAGE>

     In March 2000, we elected to be taxed under the  provisions of Subchapter S
of the Internal Revenue Code and, where applicable and permitted,  under similar
state and local  income tax  provisions  beginning  January  3, 2000.  Under the
provisions of Subchapter  S,  substantially  all taxes on our income are paid by
our  shareholders.  We and our shareholders had a tax liability of approximately
46% of our  taxable  income in both 2001 and 2000.  Despite  our book loss,  our
shareholders  are expected to have taxable  income in fiscal 2001 resulting from
differences  in  the  book  and  tax  treatments  of  the  provision  for  asset
impairment,  the  non-deductability of goodwill for tax purposes and significant
differences  in book and tax  depreciation.  The 46% tax rate is higher than our
historical  effective tax rate prior to 2000 due to (i) differences in tax rates
between  individual  and  corporate  taxpayers,   (ii)  the  timing  differences
previously  accounted for as deferred taxes in our financial  statements  (which
deferred taxes were eliminated upon our conversion to S corporation  status) and
(iii) the effect of double  taxation (once on us for our taxable income and once
on our  shareholders  for  dividends  received from us) in those state and local
jurisdictions that do not recognize S corporation  status. The Indenture for the
Senior  Notes  and the  Credit  Agreement  permit  us to make  distributions  to
shareholders  to  provide  funds  to them  for  their  payments  of taxes on our
earnings. We made tax distributions of $3.8 million in fiscal 2000, $7.6 million
in fiscal 2001 (all for fiscal 2000) and $3.1 million in January 2002 related to
2001 tax basis earnings.  We do not expect to make additional tax  distributions
in 2002 related to 2001 earnings.

     We incur annual cash interest expense of approximately  $29.7 million under
the Senior Notes and mortgage loan and may incur additional interest expense for
borrowings under our Credit  Agreement.  In addition to debt service,  we expect
that our other  liquidity  needs will  relate to capital  expenditures,  working
capital,  investments  in  other  ventures,  distributions  to  shareholders  as
permitted under the Indenture for the Senior Notes and the Credit  Agreement and
general  corporate  purposes.  We  believe  that  aggregate  restaurant  capital
expenditures and our investments in joint ventures during the next twelve months
will be  significantly  lower than levels in fiscal 2001 ($22.5  million) due to
reduced  levels of capital  expenditures  proposed  for our  consolidated  other
concepts.  Unpaid capital expenditure commitments aggregated  approximately $1.4
million at December 30, 2001.

     We expect our primary sources of liquidity to meet these needs will be cash
flow from operations and availability under our Credit Agreement.

     Under the  Indenture  under which our Senior  Notes are  issued,  there are
various  covenants that limit our ability to borrow funds in addition to lending
arrangements  that  existed at the date of the going  private  transactions  and
replacements of those  arrangements,  to make "restricted  payments"  including,
among other things,  dividend payments (other than as distributions  pursuant to
the Tax Payment  Agreement),  and to make  investments  in, among other  things,
unrestricted  subsidiaries.  Among other covenants, the Indenture requires that,
in order for us to borrow  (except under  specifically  permitted  arrangements,
such as up to  $75.0  million  of  revolving  credit  loans),  our  consolidated
interest  ratio coverage (as defined in the  Indenture),  after giving pro forma
effect to the interest on the new  borrowing,  for the four most recently  ended
fiscal quarters must be at least 2.5 to 1. In order to make restricted payments,
our  ratio  must be at least 2.0 to 1,  after  giving  pro  forma  effect to the
restricted  payment.  As of December  30,  2001,  that ratio was 2.03 to 1. As a
result,  we are not  presently  able to borrow  funds  other  than  specifically
permitted indebtedness, including up to $75.0 million of revolving credit loans.


                                      -9-
<PAGE>

     Our contractual obligations with respect to both our and the other concepts
(both those in which we have a majority or  minority  interest),  as of March 1,
2002, are as follows:

<TABLE>
<CAPTION>

                                                                           DUE BY PERIOD
                                                     ----------------------------------------------------------
                                                       LESS
                                                       THAN                                          AFTER
CONTRACTUAL OBLIGATIONS                  TOTAL         1 YEAR       1 - 3 YEARS     4 - 5 YEARS      5 YEARS
-----------------------                  -----         ------       -----------     -----------      -------
                                                                           (IN MILLIONS)
<S>                                    <C>           <C>           <C>              <C>             <C>
Senior Notes (1)                       $   255.0     $     -0-     $      -0-       $      -0-      $    255.0
Mortgage Loan (2)                      $    15.8     $     0.1     $      0.3       $      0.3      $     15.2
Credit Agreement (3)                   $     -0-     $     -0-     $      -0-       $      -0-      $      -0-
Standby Letters of Credit (4)          $     3.0     $     -0-     $      -0-       $      0.1      $      2.9
Guarantees (5)                         $     7.0     $     2.0     $      0.1       $      -0-      $      4.9
Operating Leases (6)                   $   590.9     $    77.8     $    147.4       $    134.1      $    231.6

</TABLE>

(1)  There are no principal  repayment  obligations  under the Senior Note until
     September 2009.
(2)  Payable in monthly  installments of principal and interest of $0.1 million.
     Table includes only principal portion of the installment payments.
(3)  The Credit Agreement  enables us to borrow,  from time to time, up to $30.0
     million,  net of outstanding  letters of credit issued  pursuant to a $10.0
     million subfacility therefor under the Credit Agreement.  No repayments are
     required  under  the  Credit  Agreement  until  September  2004.  There are
     currently no amounts  outstanding under the Credit Agreement.  However,  of
     the $3.0 million of letters of credit reflected below, $2.7 million reduces
     our availability under such Credit Agreement.
(4)  Represents  our  maximum  reimbursement  obligations  to the  issuer of the
     letter  of credit in the  event  the  letter of credit is drawn  upon.  The
     letters of credit  generally are issued  instead of cash security  deposits
     under leases or to guarantee construction costs for Sbarro or other concept
     locations.  With the  exception of one standby  letter of credit for one of
     our other concept  locations that  guarantees  the payment of  construction
     costs, all the standby letters of credit are annually renewable through the
     expiration of the related lease terms.
(5)  Represents our portion of the  borrowings of our steakhouse  joint venture,
     in which we have a minority interest.  Our obligation under the guaranty is
     several so that we are  potentially  responsible  only for our share of the
     debt. Our potential share is shown in the above table.
(6)  Includes  operating  leases  subleased by us to  franchisees  and operating
     leases for which we  guarantee  the  obligations  for  certain of our other
     concept locations.

     Except  for  the  foregoing,  we  have  no  off-balance  sheet  contractual
arrangements.  We have no  unconditional  purchase  obligations  except that, at
December 30, 2001,  we were a party to contracts  aggregating  $7.0 million with
respect to the construction of restaurants (of which  approximately $1.4 million
remained to be paid thereunder).  Historically, we have not purchased or entered
into  interest  rate  swaps or  future,  forward,  option  or other  instruments
designed to hedge against changes in interest rates, the price of commodities we
purchase or the value of foreign currencies.

RECENT ACCOUNTING PRONOUNCEMENTS

     In July 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting  Standards ("SFAS") No. 141, "Business  Combinations," and
No. 142,  "Goodwill  and Other  Intangible  Assets."  SFAS No. 141  requires all
business  combinations  initiated  after June 30, 2001 to be accounted for using
the purchase  method.  Under SFAS No. 142,  goodwill and intangible


                                      -10-
<PAGE>

assets with indefinite lives are no longer  amortized but are reviewed  annually
for impairment (or more frequently if impairment  indicators  arise).  Separable
intangible  assets that are not deemed to have indefinite lives will continue to
be amortized over their useful lives.  The  amortization  provisions of SFAS No.
142 have, since July 1, 2001, applied to goodwill and intangible assets acquired
after June 30, 2001.  With respect to goodwill and  intangible  assets  acquired
prior to July 1, 2001, we will adopt SFAS No. 142  effective  December 31, 2001.
The  provisions of SFAS No. 142 that we will adopt  effective  December 31, 2001
will result in a reduction of approximately $5.4 million in annual  amortization
of intangible assets.  Our initial  evaluations of impairment are expected to be
completed by the end of the first quarter of fiscal 2002.

     In August 2001, the Financial  Accounting  Standards  Board issued SFAS No.
143,  "Accounting for Asset Retirement  Obligations."  This statement  addresses
financial and reporting  obligations  associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. It applies to legal
obligations associated with the retirement of long-lived assets that result from
the  acquisition,  construction,  development  and/or  the normal  operation  of
long-lived assets,  except for certain  obligations of lessees.  We have adopted
SFAS No. 143 in fiscal  2002.  SFAS No. 143 is not  expected  to have a material
effect on our operations.

     In August 2001, the Financial  Accounting  Standards  Board issued SFAS No.
144,  "Accounting  for the  Impairment or Disposal of  Long-lived  Assets." This
statement  supersedes  SFAS 121,  "Accounting  for the  Impairment of Long-lived
Assets and for Long-lived  Assets to be Disposed Of" and  Accounting  Principles
Board Opinion No. 30, "Reporting  Results of  Operations-Infrequently  Occurring
Events and Transactions."  This Statement retains the fundamental  provisions of
SFAS  121  for  recognition  and  measurement  of  impairment,  but  amends  the
accounting and reporting standards for segments of a business to be disposed of.
The  adoption of SFAS 144 is not  expected to have a material  impact as we will
continue to assess impairment of the assets of our restaurants as we have in the
past.

CRITICAL ACCOUNTING POLICIES AND JUDGMENTS
------------------------------------------

     Accounting  policies whose application may have a significant effect on our
reported  results of  operations  and  financial  position  and that can require
judgments by management that can affect their  application,  include SFAS No. 5,
"Accounting for Contingencies," and SFAS No. 121, "Accounting for the Impairment
of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of." SFAS No. 5
requires management  judgments regarding the probability and estimated amount of
possible future contingent liabilities,  especially, in our case, legal matters.
SFAS No. 121 requires judgments  regarding future operating or disposition plans
for marginally  performing assets. The application of both of these policies has
affected  the amount and timing of charges to  operating  results that have been
significant  in recent  years.  In the past we have  made,  and we intend in the
future to make,  decisions  regarding  legal  matters based on the status of the
matter  and our best  estimate  of the  outcome  (we  expense  defense  costs as
incurred) and regarding our long-lived  assets based on our business judgment of
when to close underperforming units. We will be required to periodically assess,
under SFAS 142,  "Goodwill  and Other  Intangible  Assets,"  the  impairment  of
goodwill and intangible  asset  acquired prior to July 1, 2001 ($205.2  million,
net of accumulated amortization,  at December 30, 2001). Our initial evaluations
of  impairment  are expected to be completed by the end of the first  quarter of
fiscal 2002. Any such impairment would affect our earnings but, since any charge
to earnings  would be a non-cash  charge,  would not affect our cash flow. We do
not believe an impairment, if any, will be material.


                                      -11-
<PAGE>

                                   SIGNATURES

          Pursuant to the  requirements of Section 13 or 15(d) 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 on March 25, 2002.

                                   SBARRO, INC.


                                   By: /s/ STEVEN B. GRAHAM
                                       -----------------------------------------
                                       Steven B. Graham, Vice President and
                                       Controller (Principal Accounting Officer)