SECURITIES AND EXCHANGE COMMISSION
                                     Washington, D.C. 20549

                                           FORM 10-KSB

              X     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
          --------- SECURITIES EXCHANGE ACT OF 1934 {FEE REQUIRED}

                           For fiscal year ended   October 1, 1995
                                                   ---------------
          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934 {NO FEE REQUIRED}

          Commission File No: 0-14650
                              -------
                                 RUDY'S RESTAURANT GROUP, INC.
                                 -----------------------------
          (Exact name of registrant as specified in its charter)

                                Nevada                88-0210808
                                ------                ----------
                  (State or other jurisdiction        (I.R.S. Employer 
                         of incorporation)           Identification Number)

              11900 Biscayne Boulevard, Suite 806, Miami, Florida 33181
              ---------------------------------------------------------
                (Address of principal executive offices)    (Zip Code)

                  Registrant's telephone number, including area code: 
                                   (305) 895-7200
                                   --------------
          Registrant's fax number, including area code: (305) 895-2881
                                                        --------------
          Securities registered pursuant to Section 12 (b) of the Act: 
          None

          Securities registered pursuant to Section 12 (g) of the Act: 
          Common Stock, par value $ .01 per share

          Check 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 report(s)
          and (2) has been subject to such filing requirements for the past
          90 days.      X   Yes           No
                      -----         -----
          Check 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-KSB. [ X ]

          Issuer's revenues for its most recent fiscal year: $11,091,000
          <PAGE>                                             -----------<PAGE>





          The aggregate market value of the registrant's Common Stock, $.01
          par value, held by non-affiliates of the registrant as of
          December 15, 1995 was approximately $2,180,000 based on the
          average of the bid ($1.93) and ask ($2.19) prices on that date.
          As of December 15, 1995, 3,765,000 shares of the registrant's
          Common Stock, $.01 par value, were outstanding.

          Exhibit table is on page   39
          PAGE
<PAGE>





                                     TABLE OF CONTENTS

                  FORM 10-KSB ANNUAL REPORT YEAR ENDED OCTOBER 1, 1995

          RUDY'S RESTAURANT GROUP, INC. 

          PART I:                                                    Page
                                                                     ----
          Item 1.  Description of Business                             3 

          Item 2.  Description of Properties                           4 

          Item 3.  Legal Proceedings                                   5 

          Item 4.Submission of Matters to a Vote of Security Holders   5 

          ART II
          Item 5.  Market for Common Equity and Related Stockholder 
                   Matters                                             5 

          Item 6.  Management's Discussion and Analysis of Results 
                   Of Operations                                       6 

          Item 7.  Financial Statements                                9 

          Item 8.  Changes In and Disagreements With Accountants 
                   on Accounting and Financial Disclosure             20 

          PART III
          Item 9.  Directors and Executive Officers of the 
                   Registrant; Compliance with Section 16(a) 
                   of the Exchange Act                                20 

          Item 10.  Executive Compensation                            21 

          Item 11.  Security Ownership of Certain Beneficial 
                    Owners and Management                             23 

          Item 12.  Certain Relationships and Related 
                    Transactions                                      24 

          PART IV
          Item 13.  Exhibits and Reports on Form 8-K                  24 

          SIGNATURES                                                  27 

          PAGE
<PAGE>





                                   PART I

          Item 1.  DESCRIPTION OF BUSINESS
                   -----------------------
          GENERAL

          Rudy's Restaurant Group, Inc. (the "Company") is a Nevada
          corporation which, through its wholly-owned subsidiaries, owns
          and operates six "Samurai" Japanese steak and seafood
          restaurants. The Company owns 100% of the stock of The Samurai,
          Inc. ("The Samurai"), Maxwell's International, Inc. ("Maxwell's")
          and Rudy's Sirloin SteakBurgers, Inc. ("Rudy's").

          SUBSIDIARIES

          The Samurai. The Company acquired 100% of the outstanding common
          stock of The Samurai from Bright Star Holding, Inc. ("BSH") in
          1985. The Samurai currently owns and operates five Samurai
          restaurants.

          Maxwell's. The Company acquired its interest in Maxwell's from 
          BSH in 1985 at which time Maxwell's was operating under the
          protection of Chapter 11 of the United States Bankruptcy Code.
          Maxwell's assets, liabilities and results of operations were not
          included in the Company's consolidated financial statements until
          1989 when Maxwell's plan of reorganization was confirmed. Since
          the Company did not guarantee, assume or otherwise secure any
          obligations of Maxwell's prior to or at the time of Maxwell's
          reorganization, Maxwell's reorganization and related legal
          proceedings have not had a material effect on the financial
          position of the Company. 

          Maxwell's currently owns and operates one Samurai restaurant.

          Rudy's. The Company acquired its interest in Rudy's in 1985.
          Substantially all of the assets, liabilities and operations of
          this subsidiary were sold in 1991 and this subsidiary is
          currently inactive.

          RESTAURANT OPERATIONS 

          Samurai restaurants feature "teppanyaki" cooking, in which steak,
          chicken, shrimp and other seafood are prepared on a grill which
          forms the focal point at the center of a large table seating from
          eight to ten patrons. The decor of each restaurant features a
          traditional Japanese theme. The restaurants range in size from
          approximately 5,000 to 10,000 square feet and include a bar and
          lounge area designed to provide a casual and comfortable
          atmosphere. Seating capacity ranges from 128 to 192 and averages
          156 persons.

          In addition to entrees prepared at the table, a variety of
          Japanese appetizers are available, as are alcoholic and non-
          PAGE
<PAGE>





          alcoholic beverages. In addition, one restaurant has a "sushi"
          bar offering various types of raw fish served either in the
          traditional manner or as "sashimi".  

          The Samurai restaurants are open for lunch and dinner. Dinner
          entrees range in price from $12.50 to $25.95; the average dinner
          check is $19.70. The average luncheon check is approximately
          $10.00. Sales of alcoholic beverages represent approximately
          14.5% of Samurai restaurant sales.

          The Samurai restaurant format includes several features which
          limit costs. The "teppanyaki" table arrangement improves
          efficiency of service since most seats at the table are occupied
          at the same time. Service is coordinated at the table by the
          presiding chef so that meals begin and end simultaneously.
          Limited menu choices, portion controlled servings and preparation
          of entrees at the table minimize waste, contributing to savings
          in food costs. In addition, labor costs are reduced by combining
          such functions as order taking, preparation and serving.

          Quality and uniformity at The Samurai restaurants are maintained
          through training and careful supervision of personnel. Restaurant
          operations are under the general supervision of the Company's
          President and Chief Operating and Financial Officer as well as
          the direct supervision of The Samurai's Manager of Restaurant
          Operations. Each restaurant has a head manager, assistant
          managers and head chefs. The restaurants are operated in
          accordance with uniform specifications, as set forth in operating
          manuals, relating to food and beverage preparation, maintenance
          of premises and conduct of employees. Operational reviews are
          conducted periodically to ensure adherence to standards of
          quality in food preparation and customer service.

          Each restaurant manager is responsible for the purchase and
          receipt of restaurant supplies. Food is purchased from a minimum
          of two suppliers to provide a reliable source of fresh food at
          competitive prices. The Company believes that many alternative
          food suppliers are available.

          Financial control is maintained through the use of automated data
          processing, including centralized accounting and management
          reports. Sales information, vendor invoices, payroll data and
          other operating information are forwarded periodically to the
          Company's headquarters for review and processing.

          EXPANSION

          Expansion, if any, is dependent upon the availability of and
          competition for appropriate locations and the Company's ability
          to obtain financing for the development, construction and opening
          of new restaurants. See Item  6. Management's Discussion and
          Analysis of Results of Operations for a discussion of a business
          acquisition contemplated to be completed in fiscal 1996.
          PAGE
<PAGE>





          COMPETITION

          The restaurant business is highly competitive and is affected by
          changes in the public's taste and eating habits, local and
          national economic conditions affecting spending habits and
          population and traffic patterns.  While the principal competitive
          factors in the industry are the quality and price of the food
          products offered, name recognition, restaurant location, service
          and attractiveness of facilities are also of importance.

          Since the success of the Samurai restaurants is primarily
          dependent upon the continued popularity of oriental food and the
          "teppanyaki" style of cooking in the communities within which the
          restaurants are located, the Samurai restaurants rely heavily on
          local newspaper and other forms of print media to promote its
          restaurants.

          GOVERNMENT REGULATION

          The Company is subject to Federal, state and local laws affecting
          the operation of the restaurants, including zoning, health,
          sanitation and safety regulations and alcoholic beverage
          licensing requirements. The suspension of a food service or
          liquor license could cause an interruption of operations at the
          affected restaurant.

          The Company is also subject to the Federal Fair Labor Standards
          Act and state and local labor regulations which govern minimum
          wage, overtime and other working conditions. Accordingly, any
          change in such regulations may affect the Company's results of
          operations.

          SERVICE MARKS

          The Company has registered the service mark and related logo
          designs of "Samurai" with the United States Patent and Trademark
          Office. The use of these service marks, logo designs and trade
          names is one factor supporting the Company's competitive position
          in the industry. However, there are no assurances that the
          Company will be able to exclusively utilize these trade names. 
          
          EMPLOYEES

          The Company has approximately 270 employees of which 265 are
          employed in restaurant operations and 5 are corporate management
          and office personnel. None of the Company's employees are covered
          by collective bargaining agreements.

          Item 2.  DESCRIPTION OF PROPERTIES
                   -------------------------
          The Company's restaurant facilities are leased pursuant to long-
          term lease agreements. The following table identifies certain
          information with respect to each of the Company's restaurants as
          of October 1, 1995.          PAGE
<PAGE>





                                      SIZE          LEASE
          LOCATION                  (sq ft)    Expiration Date
          --------                   ------    ----------------
          Pittsburgh, Pennsylvania    8,000          2001
          Cleveland, Ohio            10,392          2004
          Cincinnati, Ohio            5,000          1997
          Minneapolis, Minnesota     10,000          2000
          Miami, Florida              7,500          2006
          Washington, D.C.            7,761          2002

          The lease year shown is that of the current term, including
          exercised renewal options. All leases contain options to renew
          ranging between one to three 5-year terms. Aggregate minimum
          rentals payable by the Company under operating leases in fiscal
          1996 will approximate $675,000. Certain leases also require
          additional rental payments based on restaurant sales as well as
          real estate taxes, insurance, common area charges and other
          costs.

          Item 3.  LEGAL PROCEEDINGS
                   -----------------
          Garry A. Tyson, Plaintiff vs. The Samurai, Inc., Ysmael (Mike)
          --------------------------------------------------------------
          Vinas, and Alcide LIpar, Defendants, United States District Court
          -----------------------------------------------------------------
          for the Northern District of Ohio, Eastern Division, Civil Action
          -----------------------------------------------------------------
          Number 1:95CV1060.
          ------------------

          In May 1995 the Company's Samurai subsidiary and certain
          employees of The Samurai were named defendants in a lawsuit
          alleging discrimination under the Civil Rights Act of 1870, 42
          U.S.C. 1981, as amended (1992 Supp).

          Although the Company believes that the claims as set forth in the
          complaint are without merit, due to the prohibitive costs of
          defending such allegations, in September 1995 the Company and
          Plaintiff entered into a Settlement Agreement wherein, in return
          for certain monetary consideration, the Plaintiff agreed to
          release all existing claims against the Company and its
          employees. Pursuant to the terms of the Agreement the complaint
          was dismissed in September 1995. The costs of settlement,
          including legal fees incurred, totalled approximately $50,000.
          Accordingly, the Company recorded a nonrecurring charge of
          $50,000, included in the accompanying statements of operations as
          non-operating expense.

          Although the Company is not currently a party to any significant
          ongoing legal proceedings, the Company is subject to such legal
          proceedings and claims as may arise in the ordinary course of its
          business that cover a wide range of matters, including but not
          limited to such matters as workers compensation, general
          PAGE
<PAGE>





          liability and products liability claims. Because the Company
          carries comprehensive insurance to assist in limiting the
          Company's exposure to financial loss as a result of substantially
          all claims as may arise in the normal course of business, such
          proceedings and/or claims will not, in the opinion of management
          based upon the information it presently possesses, have a
          material adverse effect on the financial position of the Company.

          Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                   ---------------------------------------------------
                   None.
                                        PART II

          Item 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
                   --------------------------------------------------------
          The common stock of Rudy's Restaurant Group, Inc. is quoted on
          the NASD electronic bulletin board system under the symbol:
          "RUDY". The following sets forth the high and low ask and bid
          quotations for the Common Stock of the Company. Quotations do not
          include retail markups or commissions and do not necessarily
          reflect actual transactions.

                                             Quarter
                                      Beginning   Ending     Ask     Bid 
                                      ---------  --------   -----   -----
          Fiscal 1994:  First Quarter   10/4/93  12/26/93   $ .38   $ .12
                        Second Quarter 12/27/93   3/20/94   $ .37   $ .18
                        Third Quarter   3/21/94   6/12/94   $ .62   $ .18
                        Fourth Quarter  6/13/94   10/2/94   $ .64   $ .44
          
          Fiscal 1995:  First Quarter   10/3/94  12/25/94   $ .63   $ .31
                        Second Quarter 12/26/94   3/19/95   $ .60   $ .38
                        Third Quarter   3/20/95   6/11/95   $ .62   $ .44
                        Fourth Quarter  6/12/95   10/1/95   $1.03   $ .56

          The Company estimates there were approximately 380 holders of
          record of the Common Stock of the Company and that the total
          number of beneficial holders is in excess of 500 at October 1,
          1995. The Company's policy is to retain all available earnings
          for the development and growth of its business. Accordingly, the
          Company does not contemplate payment of dividends within the
          foreseeable future.

          Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
                  OPERATIONS
                  ---------------------------------------------------
          The consolidated financial statements and related footnotes
          should be read in conjunction with the following discussion and
          analysis.

          Fiscal 1995 Business Overview.
          ------------------------------
          Restaurant revenues, expenses and earnings are dependent upon a
          PAGE
<PAGE>





          number of factors, including the number of operating restaurants
          and the level of restaurant patronage, both in number of guests
          served and average check. As more fully discussed below, the
          Company's 1995 revenues, net income and earnings per share
          increased as a result of both an increase in the number of
          restaurants operating during the year and increased restaurant
          patronage. 

          Subsequent Event.  In December 1995, through it's Maxwell's
          subsidiary, the Company signed an Asset Purchase and Sale
          Agreement (the "Agreement") to acquire substantially all of the
          assets and business operations of four Japanese steak and seafood
          restaurants owned by Asian Restaurants International, Inc. for a
          total of approximately $2,400,000 including the cost of a non-
          compete and consulting agreement.

          The acquisition of the assets and business operations is subject
          to various conditions, including, but not limited to, inspections
          of the properties and the books and records. The Company expects
          this acquisition, which will be treated as a purchase, will be
          completed in the second quarter of the Company's 1996 fiscal
          year. See Note 10 to the Company's financial statements for
          additional information on this proposed acquisition as well as an
          unaudited pro forma condensed balance sheet which gives effect to
          the acquisition as if it had occurred at October 1, 1995 and
          unaudited pro forma consolidated results of operations presented
          as though the acquisition had occurred on October 3, 1993.

          Inflation. The impact of inflation on the Company's operating
          results has not been significant due to lower inflation rates
          experienced in the years covered in this discussion. 

          Federal, State and Local Regulations. The Company presently pays
          a significant portion of its employees in excess of the Federal
          minimum wage. In addition, a large number of the Company's
          employees are tipped employees whose wages are subject to the
          Federal tip credit. Therefore, changes in the Federal minimum
          wage have not historically had as significant an impact on the
          Company's results of operations as might otherwise be expected. 

          The restaurant business is highly labor intensive. Although the
          Company currently provides health insurance to its employees,
          management believes the government's introduction of a national
          health care program which would require employers to pay a
          significant portion of employee health care costs would have a
          significant impact on the Company's results of operations.

          With the exception of the newly rebuilt Miami Samurai, the
          Company's restaurant facilities were built prior to the enactment
          of Federal regulations regarding equal opportunity for
          individuals with disabilities, the Americans with Disabilities
          Act, "ADA". The ADA includes certain requirements to alter public
          facilities, including restaurants, as necessary to make
          PAGE
<PAGE>





          facilities accessible to and useable by individuals with
          disabilities. Although Federal regulations consider the cost of
          alterations and the overall financial resources of the Company in
          determining the nature and timing of compliance, the cost of such
          alterations could have a significant impact on the Company's cash
          flow. The Company is proceeding with required alterations as soon
          as reasonably economically feasible.  

          Liquidity and Capital Resources
          -------------------------------
          Net cash provided by operating activities is $1,424,000 in 1995
          as compared to $696,000 in 1994. Cash and cash equivalents total
          $1,477,000 at the end of fiscal 1995 as compared to $341,000 at
          the end of 1994. At October 1, 1995 the Company had a working
          capital surplus of $808,000 as compared to a deficit of $186,000
          at October 2, 1994. The primary factors contributing to the
          improvement in working capital and increase in cash and cash flow
          in 1995 are payments made in 1994 to reduce the Company's
          indebtedness to related parties (total $512,100) and the Miami
          Samurai restaurant reconstruction costs paid in 1994 (see
          discussion below).

          Capital expenditures in 1995 total $283,000. The Company
          estimates that, including estimated costs of renovation to
          accommodate compliance with ADA regulations, capital expenditures
          to be funded out of cash flow from operating activities will
          approximate $400,000 in fiscal 1996. 

          The Company is seeking to expand through the acquisition of
          operating restaurants as such opportunities become available. As
          discussed above, in December 1995 the Company entered into an
          Agreement which, if completed pursuant to the terms of the
          Agreement, will require cash outlays of approximately $600,000,
          excluding expenses associated with the acquisition. This
          acquisition, if completed is expected to have a significant
          effect on the Company's cash flow and results of operations. See
          Note 10 to the Company's financial statements for additional
          information on this proposed acquisition as well as an unaudited
          pro forma condensed balance sheet which gives effect to the
          acquisition as if it had occurred at October 1, 1995 and
          unaudited pro forma consolidated results of operations presented
          as though the acquisition had occurred on October 3, 1993.

          The Company adopted SFAS No. 109 "Accounting for Income Taxes" in
          the 1994 fiscal year. The adoption of this statement did not have
          a material impact on financial position and results of operations
          of the Company in fiscal 1995 or 1994.

          Year to Year Comparison of Results of  Operations for the Years
          Ended October 1, 1995 and October 2, 1994
          ---------------------------------------------------------------
          Revenues.  The Company suffered the loss of its most profitable
          restaurant when Hurricane Andrew struck South Florida in August
          PAGE
<PAGE>





          1992. When the restaurant reopened in March 1994, long pent-up
          demand resulted in unusually high sales which did not level off
          to more normal levels until the beginning of fiscal 1995. Thus,
          while fiscal 1995 operations include the operations of six
          restaurants for a full year, fiscal 1995 operations include the
          operations of five restaurants for the first six months of the
          fiscal year and six restaurants for the balance of the year. The
          effect of the Miami restaurant's reopening in the following
          discussion has been excluded where appropriate for a clear
          presentation of current year operations.

          While the Company's fiscal 1995 total revenues increased over 14%
          when compared to 1994, same-restaurant revenues increased 4.9%,
          including a 2.9% increase in average check and a 2% increase in
          customer covers as compared to 1994. The increase in average
          check is the result of a combination of price increases which
          went into effect in 1995 and changes in customer eating habits to
          more expensive items. 

          The restaurant business is highly competitive, affected by
          changes in the public's eating habits and customer perception of
          current economic circumstances. Further, because of the limited
          number and diverse geographic location of its restaurants, it is
          not economically beneficial for the Company to use extensive
          mass-media advertising available to larger restaurant companies.
          Therefore, management does not consider the increase in customer
          covers indicative of a trend but rather the result of the mild
          improvement in the national economy in fiscal 1995.

          Costs and expenses variable with revenues. Costs and expenses
          variable with revenues increased 1% as a percent of revenues in
          fiscal 1995 compared to fiscal 1994. The 1% increase in these
          costs and expenses is the result of a .6% increase in food,
          beverage and supplies costs and a .4% increase in labor and
          related benefit costs.

          The cost of seafood, meat and chicken, the major components of
          the Company's food, beverage and supplies costs, varies with
          supply and demand and other market conditions. The increase in
          food, beverage and supplies costs is due primarily to seafood
          costs which increased approximately 10% in 1995 and meat and
          chicken costs which increased approximately 7.5% in 1995. 

          Labor and related benefit costs increased primarily due to base
          wage rates which were adjusted throughout the year to give effect
          to current costs of living and prevailing local wage scales.

          Expenses of restaurant operations: General operations. General
          operations expense includes restaurant management and
          supervision, occupancy costs, repairs and maintenance, utilities,
          advertising, and insurance. A substantial portion of these
          expenses vary with revenues. These expenses increased $253,000 in
          1995 due primarily to expenses for the full year at the Miami
          PAGE
<PAGE>





          restaurant. General operations expense as a percent of revenues
          declined 1.5% to 29.3% of revenues in 1995 compared to 30.8% of
          revenues in 1994. 

          Significant general operations cost savings were achieved in 1995
          through 1) modifications in the Company's advertising program
          which resulted in a $21,000 decrease in advertising expense and
          2) a restructuring of the Company's insurance program,
          specifically with regards to general liability insurance which
          declined over $42,000 in 1995 compared to 1994.

          General supplies costs increased $56,000, due to higher sales
          volume and costs associated with restocking china and glassware
          with new designs; occupancy costs increased approximately $28,000
          due to higher rents incurred as certain rent abatements
          negotiated in 1992 expired as well as increases in contingent
          rentals due to increased revenues.

          Corporate overhead: General and administrative expenses. General
          and administrative expenses did not change significantly in 1995
          compared to 1994.

          Interest Expense. Interest expense decreased $38,700 in 1995
          compared to 1994 as a result of the reduction in the Company's
          indebtedness discussed below. 

          Non-operating (expense) income. Settlement costs and expenses
          (fiscal 1995). In May 1995 the Company's Samurai subsidiary and
          certain employees of The Samurai were named defendants in a
          lawsuit alleging discrimination under the Civil Rights Act of
          1870, 42 U.S.C. 1981, as amended (1992 Supp).

          Although the Company believes that the claims as set forth in the
          complaint are without merit, due to the prohibitive costs of
          defending such allegations, in September 1995 the Company and
          Plaintiff entered into a Settlement Agreement wherein, in return
          for certain monetary consideration, the Plaintiff agreed to
          release all existing claims against the Company and its
          employees. Pursuant to the terms of the Agreement the complaint
          was dismissed in September 1995. The costs of settlement,
          including legal fees incurred, totalled approximately $50,000.
          Accordingly, the Company recorded a nonrecurring charge of
          $50,000, included in the accompanying statements of operations as
          non-operating expense.

          Although the Company is not currently a party to any significant
          ongoing legal proceedings, the Company is subject to such legal
          proceedings and claims as may arise in the ordinary course of its
          business that cover a wide range of matters, including but not
          limited to such matters as workers compensation, general
          liability and products liability claims. Because the Company
          carries comprehensive insurance to assist in limiting the
          Company's exposure to financial loss as a result of substantially
          PAGE
<PAGE>





          all claims as may arise in the normal course of business, such
          proceedings and/or claims will not, in the opinion of management
          based upon the information it presently possesses, have a
          material adverse effect on the financial position of the Company.

          Loss on guaranty to related parties (fiscal 1994).  As previously
          disclosed, in connection with the acquisition of the Company's
          Rudy's subsidiary in 1985 the Company guaranteed payment of
          certain obligations of BSH to the former owners of Rudy's,
          including Douglas M. Rudolph (the "Rudolph Obligations"). 

          BSH had been in default under certain of the Rudolph Obligations
          since 1989. However, until and through December 1993, BSH owned
          certain assets which, upon disposition, were expected to provide
          BSH with resources to pay the Rudolph Obligations in full or in
          part. In April 1994 BSH advised the Company that it had completed
          the sale of one of its most significant assets at far below
          expectations and distributed $15,000 from that sale to Mr.
          Rudolph in payment of the Rudolph Obligations. Since the asset
          sold by BSH was one of BSH's most significant sources of funds
          from which payments to creditors could be expected, the Company
          determined that future funds available to BSH to reduce the
          Rudolph Obligations guaranteed by the Company, if any, will be
          limited. As a result of this determination, in May 1994 the
          Company and Mr. Rudolph entered into an agreement wherein the
          Company's obligation under its guaranty was fixed at $584,800, of
          which the Company had previously recorded $150,500. Accordingly,
          fiscal 1994 operations include a loss on guaranty to related
          parties of $434,300.

          The terms of the agreement between the Company and Mr. Rudolph
          required the Company to pay Mr. Rudolph a minimum of $230,000 in
          1994. However, in order to minimize potential corporate tax
          liability, the Company paid Mr. Rudolph a total of $512,100 in
          fiscal 1994, including $334,300 principal and $177,800 accrued
          interest. 

          Pursuant to the terms of the agreement between the Company and
          Mr. Rudolph, interest is accrued at 7% on the remaining balance.
          Interest expense on amounts due Mr. Rudolph totalled $5,000 in
          1995 and $37,900 in 1994. 

          Subject to certain conditions, including a change in control of
          the Company, Mr. Rudolph has agreed to waive his rights to demand
          additional payment under the Company's guaranty until July 1996.
          In addition the Company has agreed to waive its rights to make
          future claims against the common stock of the Company presently
          or previously held by BSH. The Company's guaranty of payment of
          the balance due under the Rudolph Obligations,  $106,000 at
          December 15, 1995, is secured by substantially all of the assets
          of the Company, including but not limited to the stock of the
          Company's Samurai subsidiary. The Company intends to reduce the
          balance due Mr. Rudolph as cash flow permits. Accordingly, the
          PAGE
<PAGE>





          remaining outstanding balance, $105,000 at October 1, 1995, has
          been classified as a current liability in the financial
          statements.

          Insurance recovery from business interruption (fiscal 1994). Non-
          operating (expense) income in 1994 includes insurance proceeds
          from business interruption insurance equal to estimated profits
          lost as a result of Hurricane Andrew, net of continuing expenses.
          Insurance proceeds received attributable to business
          interruption, reduced by continuing expenses, were recognized as
          income over the time period the restaurant was closed for
          renovation. Insurance proceeds recognized as revenue attributable
          to business interruption, net of continuing expenses totalled
          $122,500 in fiscal 1994.

          Item 7.  FINANCIAL STATEMENTS
                   --------------------
               The following documents are filed on the pages listed below,
          as part of Part II, Item 7 of this report:

                                                                      Page
          Independent Auditors' Report                                 15
          Consolidated Financial Statements:
            Balance Sheets - October 1, 1995 and October 2, 1994       16
            Statements of Operations - Years ended October 1, 1995 
            and October 2, 1994                                        17
            Statements of Stockholders' Equity - Years ended 
               October 1, 1995 and October 2, 1994                     18
            Statements of Cash Flows - Years ended October 1, 1995
               and October 2, 1994                                     19
            Notes to Consolidated Financial Statements                 20

          PAGE
<PAGE>





          INDEPENDENT AUDITORS' REPORT

          To the Board of Directors and Stockholders of
           Rudy's Restaurant Group, Inc.

          We have audited the accompanying consolidated balance sheets of
          Rudy's Restaurant Group, Inc. and Subsidiaries (the "Company") as
          of October 1, 1995 and October 2, 1994, and the related
          consolidated statements of operations, stockholders' equity, and
          cash flows for each of the two years in the period ended October
          1, 1995. These financial statements are the responsibility of the
          Company's management. Our responsibility is to express an opinion
          on the financial statements based on our audits.

          We conducted our audits in accordance with generally accepted
          auditing standards. Those standards require that we plan and
          perform the audit to obtain reasonable assurance about whether
          the financial statements are free of material misstatement. An
          audit includes examining, on a test basis, evidence supporting
          the amounts and disclosures in the financial statements. An audit
          also includes assessing the accounting principles used and
          significant estimates made by management, as well as evaluating
          the overall financial statement presentation. We believe that our
          audits provide a reasonable basis for our opinion.

          In our opinion, such consolidated financial statements present
          fairly, in all material respects, the financial position of the
          Company as of October 1, 1995 and October 2, 1994, and the
          results of their operations and their cash flows for each of the
          two years in the period ended October 1, 1995 in conformity with
          generally accepted accounting principles.

          DELOITTE & TOUCHE LLP
          Certified Public Accountants
          Miami, Florida
          December 15, 1995
          (December 26, 1995 as to Note 10)

          PAGE
<PAGE>





           RUDY'S RESTAURANT GROUP, INC.
                        AND SUBSIDIARIES

                  Consolidated Balance Sheets

                      October 1, 1995 and
                        October 2, 1994
   <TABLE>
   <S>                                          <C>             <C>
         Assets                                   1995           1994
         ------                              ------------   -------------
   Current Assets:
     Cash and cash equivalents               $ 1,476,652    $    341,477 
     Accounts receivable (Note 4)                  5,915           8,113 
   Inventories                                   162,685         153,222 
   Prepaid expenses                              107,924         103,779 
                                             ------------   -------------
       Total current assets                    1,753,176         606,591 
                                             ------------   -------------
   Property and Equipment, net 
     (Notes 2 and 3)                           2,094,841       2,076,434 

   Goodwill, net of accumulated 
     amortization of $309,441
     at October 1, 1995 and 
     $288,464 at October 2, 1994                 529,658         550,635 

   Other assets (Note 4)                         204,783         204,401 
                                             ------------    ------------
                                             $ 4,582,458     $ 3,438,061 
                                             ============    ============

       Liabilities and Stockholders' Equity

   Current Liabilities:                     
   Due to related parties (Note 8)           $   105,076    $    100,000 
   Accounts payable and accrued 
     expenses (Notes 5 and 7)                    840,364         692,774 
                                             ------------   -------------
        Total current liabilities                945,440         792,774 
                                             ------------   -------------
     Total liabilities                           945,440         792,774 
                                             ------------   -------------
   Legal proceedings, commitments, 
     contingencies and related party
     transactions (Notes 3, 8, 9 and 10)

   Stockholders' Equity:
   Preferred stock, $.01 par value.
     Authorized 10,000,000 shares, 
     none issued.


   PAGE
<PAGE>





   Common stock, $.01 par value. 
     Authorized 30,000,000 shares; 
     issued and outstanding 3,520,000 
     shares (Notes 6 and 8)                      35,200           35,200 
   Paid-in capital                           17,823,603       17,823,603 
   Accumulated (deficit)                    (14,221,785)     (15,213,516)
                                            ------------     ------------
     Net stockholders' equity                 3,637,018        2,645,287 
                                            ------------     ------------
                                            $ 4,582,458      $ 3,438,061 
                                            ============     ============

   <FN>        See accompanying notes to consolidated financial statements.
   </TABLE>
   PAGE
<PAGE>





           RUDY'S RESTAURANT GROUP, INC.
                       AND SUBSIDIARIES

             Consolidated Statements of Operations

         Years ended October 1, 1995 and October 2, 1994
   <TABLE>
   <S>                                           <C>                 <C>
                                                    1995             1994 
   Revenues:                                    -------------      ------------
    Net sales                                   $ 11,052,603       $ 9,664,379 
    Other income                                      38,273            56,796 
                                                -------------      ------------
    Total revenues                                11,090,876         9,721,175 
                                                -------------      ------------
   Costs and expenses variable with revenues:
    Food, beverage and supplies                    3,267,129         2,809,674 
    Labor and related costs                        2,684,946         2,316,097 
      Total costs and expenses variable with    -------------       -----------
         revenues                                  5,952,075         5,125,771 
                                                -------------      ------------
   Costs and expenses of restaurant operations:
    General operations                             3,251,503         2,998,114 
    Depreciation and amortization                    243,852           170,217 
                                                -------------      ------------
      Total costs and expenses of restaurant 
        operations                                 3,495,355         3,168,331 
                                                -------------      ------------
   Earnings from restaurant operations             1,643,446         1,427,073 
                                                -------------      ------------
   Corporate overhead:
    General and administrative expenses               516,354           517,489 
    Depreciation and amortization                      32,685            32,191 
   Interest expense                                     6,126            44,864 
                                                 -------------     -------------
       Total corporate overhead                       555,165           594,544 
                                                 -------------     -------------
   Non-Operating (expense) income:
    Settlement cost and expense (Note 9)              (50,000)              --- 
    (Loss) on guaranty (Note 8)                           ---          (434,312)
    (Loss) on retirement of assets                       (550)           (3,743)
    Insurance recovery from business 
      interruption (Note 2)                               ---           122,465
                                                  ------------     ------------- 
       Total non-operating (expense) income           (50,550)         (315,590)
                                                  ------------     -------------
   Income before income taxes                       1,037,731           516,939 

   Income tax expense (Note 7)                         46,000            65,000 
                                                --------------      ------------
   Net Income                                   $     991,731       $   451,939 
                                                ==============      ============

   PAGE
<PAGE>





   Primary earnings per share                   $         .27       $       .12 
                                                ==============      ============
   Fully diluted earnings per share             $         .26       $       .12 
                                                ==============      ============
   Weighted average number of common shares 
      and common equivalent shares outstanding      3,718,358         3,716,172 
                                                ==============      ============


   <FN>        See accompanying notes to consolidated financial statements.
   </TABLE>
   PAGE
<PAGE>





                    RUDY'S RESTAURANT GROUP, INC.
                              AND SUBSIDIARIES

                Consolidated Statements of Stockholders' Equity

                Years ended October 1, 1995 and October 2, 1994
   <TABLE>
   <S>                       <C>         <C>          <C>             <C>        
                                                                         Net  
                                                                        Stock-
                             Common      Paid-in     Accumulated      holders'
                              Stock      Capital      (Deficit)        Equity
                             --------  ------------  ------------- - ----------

   Balance October 3, 1993   $ 35,200  $ 17,823,603  $(15,665,455)  $ 2,193,348

   Net Income                     ---           ---       451,939       451,939
                             --------  ------------  -------------  -----------
   Balance October 2, 1994     35,200    17,823,603   (15,213,516)    2,645,287

   Net Income                     ---           ---       991,731       991,731
                             --------  ------------  -------------  -----------
   Balance October 1, 1995   $ 35,200  $ 17,823,603  $(14,221,785)  $ 3,637,018
                             ========  ============  =============  ===========





   <FN>      See accompanying notes to consolidated financial statements.
   </TABLE>
   PAGE
<PAGE>





                          RUDY'S RESTAURANT GROUP, INC.
                               AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                   Years ended October 1, 1995 and October 2, 1994
   <TABLE>
   <S>                                              <C>               <C>
                                                        1995              1994     
   CASH FLOWS FROM OPERATING ACTIVITIES:            ------------     -------------
    Net income                                      $   991,731      $    451,939 
    Non-cash items:
     Depreciation and amortization                      276,536           212,171 
     Loss on retirement of assets                           550             3,743 
     Loss on guaranty to related parties                    ---           434,312 
    Changes in assets and liabilities:
     Decrease in accounts receivable                      2,198            10,017 
     Decrease in due from affiliate                         ---            18,368 
     (Increase) in inventories                           (9,463)          (46,656)
     (Increase) in prepaid expenses and other assets     (4,144)          (11,223)
     Increase/(Decrease) in accounts payable and 
       accrued expenses                                 161,999           (59,132)
     (Decrease) in deferred income                          ---          (177,157)
     Increase/(Decrease) in indebtedness to related
       parties                                            5,076          (139,936)
                                                   -------------   ---------------
     Total adjustments                                  432,752           244,507 
                                                   -------------   ---------------
    Net cash provided by operating activities         1,424,483           696,446 
                                                   -------------   ---------------
   CASH FLOWS FROM INVESTING ACTIVITIES:
    Insurance recovery of property losses                  ---            409,157 
    Proceeds from disposal of assets                       ---                100 
    Capital expenditures                              (282,794)        (1,184,361)
    Principal received on purchase money note 
      receivable                                           ---            293,042 
    Increase in other assets                            (6,514)           (38,438)
                                                  -------------      -------------
   Net cash (used in) investing activities            (289,308)          (520,500)
                                                  -------------      -------------
   CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments of debt                             ---            (13,178)
    Payments on guaranty to related parties                ---           (334,312)
                                                  -------------      -------------
   Net cash (used in) financing activities                 ---           (347,490)
                                                  -------------      -------------
   Net Increase/(Decrease) in Cash and 
     Cash Equivalents                                1,135,175           (171,544)

   Cash and Cash Equivalents, Beginning of Year        341,477            513,021 
                                                  -------------     --------------
   Cash and Cash Equivalents, End of Year          $ 1,476,652            341,477 
                                                   ============     ==============
   PAGE
<PAGE>





   Supplemental disclosures of cash flow information
     Cash paid for: 
       Interest                                   $      6,000        $   185,000 
                                                  =============       ============
       Income taxes                               $     42,000        $    66,000 
                                                  =============       ============

   Accrued and unpaid asset additions at year end $     16,300        $    30,700 
                                                  =============       ============



   <FN>       See accompanying notes to consolidated financial statements.
   </TABLE>
   PAGE
<PAGE>





                       RUDY'S RESTAURANT GROUP, INC. AND SUBSIDIARIES

                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
                  POLICIES

          Nature of Business. Rudy's Restaurant Group, Inc. (the
          "Company"), is a Nevada corporation which, through its wholly-
          owned subsidiaries,  owns and operates six Samurai Japanese steak
          and seafood restaurants. The Company owns 100% of the stock of
          The Samurai, Inc. ("The Samurai"),  Maxwell's International Inc.
          ("Maxwell's") and Rudy's Sirloin SteakBurgers, Inc. ("Rudy's").

          The Company's fiscal year includes either 52 or 53 weeks
          consisting of 13 four-week accounting periods or 12 four-week
          accounting periods and 1 five-week accounting period, ending on
          the Sunday closest to September 30. Fiscal years 1995 and 1994
          include 52 weeks of operations.

          Principles of Consolidation.  The consolidated financial
          statements include the accounts of the Company and its wholly-
          owned subsidiaries. All material intercompany transactions are
          eliminated in consolidation.

          Cash Equivalents.  The Company considers all highly liquid debt
          instruments with an initial maturity of three months or less to
          be cash equivalents for purposes of the statements of cash flows. 
          Inventories.  Inventories, consisting primarily of food,
          beverages and restaurant supplies, are stated at the lower of
          cost (first-in, first-out method) or market.

          Property and Equipment.  Property and equipment are stated at
          cost. Depreciation and amortization are provided on a straight-
          line method over the lesser of the estimated useful life of the
          asset or the remaining term of the lease.

          Goodwill.  The Company evaluates the propriety of goodwill, the
          excess of the purchase value of net tangible assets of acquired
          businesses over recorded value, and the related amortization
          policy periodically by review of many factors including current
          operating trends, the value of intangibles held by the Company
          such as trademarks and leasehold interests, and the current
          national economy particularly as it relates to the Company's
          business plan and operations. The Company's policy is to amortize
          goodwill using the straight-line method over forty (40) years.
          Under the current policy goodwill will be fully amortized in the
          year 2021.

          Income Taxes.  The Company adopted SFAS No. 109 - "Accounting for
          Income Taxes", in fiscal year 1994. The adoption of this
          statement did not have a material effect on the financial
          position and results of operations of the Company.
          PAGE
<PAGE>





          Earnings Per Share.  Earnings per share is calculated using the
          weighted average number of shares of common stock outstanding and
          common stock equivalents if dilutive. 

          Reclassifications. Certain items have been reclassified in the
          1994 fiscal year statement of operations to conform with the
          fiscal 1995 presentation.

          NOTE 2: PROPERTY AND EQUIPMENT

          Property and equipment consist of the following:

                                       1995           1994     Useful lives
                                    -----------   -----------  ------------
          Leasehold improvements    $ 3,151,918   $ 3,133,941    3 - 25 yrs 
          Restaurant equipment        1,573,427     1,412,475     3 - 7 yrs 
          Office equipment              157,907       162,295     3 - 7 yrs 
          Other                         259,638       250,572     2 - 7 yrs 
                                    -----------   -----------  ------------
                                      5,142,890     4,959,283
          Accumulated depreciation 
            and amortization          3,048,049     2,882,849
                                    -----------   ----------- 
                                    $ 2,094,841   $ 2,076,434
                                    ===========   ===========

          The Company suffered the almost complete destruction of its Miami
          restaurant when Hurricane Andrew struck South Florida in August
          1992. As a result of this loss, the Company received insurance
          proceeds of approximately $692,500 attributable to business
          interruption. Insurance proceeds attributable to business
          interruption, net of continuing expenses, were recognized as
          income while the restaurant was closed for reconstruction. The
          restaurant reopened March 1994. Insurance proceeds attributable
          to business interruption, net of continuing expenses, totalled
          $122,500 in fiscal 1994. The total cost to reconstruct the
          restaurant was $1,430,000.

          NOTE 3: LEASES

          The Company leases land, restaurant buildings and other
          facilities under noncancellable operating leases expiring at
          varying times through 2011.  Lease agreements frequently include
          renewal options and require the Company to pay all expenses
          related to the property. Certain leases include provisions for
          contingent rentals based on a percent of sales. Future minimum
          lease payments under noncancellable leases as of October 1, 1995
          are as follows: 

                                           Fiscal Year      Operating 
                                              Ending         Leases   
                                           -----------    -----------
                                               1996       $   675,456
          PAGE
<PAGE>





                                               1997           700,457
                                               1998           662,889
                                               1999           647,551
                                               2000           657,551
                           Thereafter, through 2011         2,861,144
                                                          -----------
                                                          $ 6,205,048
                                                          ===========
          Rent expense is summarized as follows:
                                               1995           1994     
                                             ---------    -----------
                   Minimum rentals           $ 648,485    $   604,614
                   Contingent rentals           91,080         83,948
                                             ---------    -----------
                   Total rent expense        $ 739,565    $   688,562
                                             =========    ===========

          NOTE 4: ACCOUNTS RECEIVABLE AND OTHER ASSETS

          Accounts receivable consists of credit card and other
          receivables.

          Other assets consist of the following:
                                                    1995         1994
                                                  ---------   -----------
          Liquor licenses, net of accumulated 
          amortization of $31,225 and $28,656 
          at 10/1/95 and 10/2/94, respectively    $  71,534   $    74,103
          Restaurant supplies                        80,577        74,063
          Deposits and other                         52,672        56,235
                                                  ---------   -----------
                                                  $ 204,783   $   204,401
                                                  =========   ===========

          NOTE 5: ACCOUNTS PAYABLE AND ACCRUED EXPENSES

          Accounts payable and accrued expenses are summarized as follows:

                                                    1995         1994  
                                                  ---------   ---------
          Trade accounts payable                  $ 372,409   $ 279,824
          Sales and property taxes                    8,031       5,425
          Accrued payroll and related costs         226,064     223,006
          Rent                                       90,866      52,551
          State and local income taxes               39,367      35,170
          Gift certificates payable                  23,130      21,385
          Professional fees                          23,805      28,801
          Insurance                                  39,634      32,403
          Other                                      17,058      14,209
                                                  ---------   ---------
                                                  $ 840,364   $ 692,774
                                                  =========   =========
          NOTE 6: CAPITAL STOCK
          PAGE
<PAGE>





          The Company's 1985  Employee Stock Option  Plan, as amended  (the
          "Plan") terminated in May 1995. The Plan provided that options to
          purchase up to 600,000  shares of the Company's common  stock may
          be granted. The Plan was designed so that either options intended
          to satisfy  the requirements of  the Internal  Revenue Code  with
          respect to  "Incentive Stock  Options" ("ISO's") or  options that
          are  not intended to satisfy  such requirements ("Non ISO's") may
          be granted. Exercise prices  for the options ranged from  100% to
          110% of the fair market value of the Company's common stock, with
          the option price dependent upon whether the option was  qualified
          as  an ISO and whether the  optionee had prior holdings in excess
          of 10%  of the outstanding common stock at the time of the grant.
          The  following summarizes  stock option  transactions  for fiscal
          years ended 1995 and 1994:

          Options  outstanding October 3, 1993      266,656      $  .10 - $
          4.63
              Expired                                (8,531)              $
          2.76
          Options outstanding at  October 2, 1994  258,125      $   .10 - $
          4.63
              Expired                                (13,125)    $ 1.23 - $
          4.63
                                                 --------    
          Outstanding and exercisable options 
                at October 1, 1995                   245,000     $  .10 - $
          .15
                                                =========    

          No options had been exercised at October 1, 1995. All outstanding
          options were exercised in December 1995 (see Note 8).

          NOTE 7: INCOME TAXES

          The Company adopted SFAS No. 109 "Accounting for Income Taxes" in
          fiscal 1994.  Under SFAS No. 109,  the effect of a  change in tax
          rates  is  recognized  for  the  tax  consequences  of  temporary
          differences between  book and taxable  income in the  period that
          includes  the enactment date of the tax rate change. Deferred tax
          liabilities  are  recognized  for  future   taxable  amounts  and
          deferred  tax assets  are  recognized for  future deductions  and
          operating loss carryforwards. A valuation allowance is recognized
          to reduce net deferred tax assets to amounts that are more likely
          than not to be realized.

          The  Company and  its  subsidiaries file  a consolidated  Federal
          income  tax return.  The Company's  tax loss  carryforwards total
          approximately $8,200,000, expiring 2001 through 2007. The Company
          also  has   certain   unused  business   tax  credits   totalling
          approximately $170,000 which arose in fiscal 1995, 1994 and prior
          to 1989. The Company's unused business tax credits are limited by
          Federal regulation and expire in 1996 through 2010.

          The Company's Maxwell subsidiary has approximately $6,000,000 tax<PAGE>





          loss carryforwards in addition  to the Company's consolidated tax
          loss  carryovers. These  losses arose  in 1982 through  1986, are
          limited by  Federal regulation and  expire in 1997  through 2001.
          Maxwell's  deferred  tax assets  total  approximately $2,000,000;
          none
          <PAGE>
          of  which have been recorded  in the financial  statements of the
          Company due to the  uncertainties associated with the realization
          of  tax  benefits  from  the  utilization  of  limited  tax  loss
          carryforwards.

          The  Company's  deferred tax  assets (excluding  Maxwell's) total
          approximately $2,980,000  related to  tax loss carryforwards  and
          unused business tax credit carryforwards. The  Company's deferred
          tax  liabilities   total   approximately  $180,000   related   to
          accelerated depreciation for tax purposes. No deferred tax assets
          or deferred tax liabilities  have been recognized as a  result of
          the Company's valuation allowance (total  $2,800,000) established
          to  reflect  uncertainties  associated  with realization  of  tax
          benefits from the utilization  of existing tax loss carryforwards
          and unused business tax credits.

          Income tax expense (benefit) includes the following:

                                                      Fiscal Years Ended 
                                                    -----------------------
                                                        1995         1994
                                                    ---------    ---------
          Current State and local income taxes        $ 106,900   $  90,100
          Utilization of net operating loss 
              carryforward                              (74,400)    (30,100)
          Federal income tax expense                    337,100     157,300
          Utilization of net operating loss 
              carryforward                             (323,600)   (152,300)
                                                     ----------   ---------
          Income Tax Expense                          $  46,000   $  65,000
                                                      ==========  ==========

          The actual income tax  rate for income differs from  the expected
          statutory Federal income tax rate of 34% as follows:

                                                      Fiscal Years Ended  
                                                      ------------------
                                                      1995        1994   
                                                   ----------  ----------
          Expected Federal tax provision at 
            statutory rate                         $ 352,800  $ 175,800 
          Increase (decrease) in income 
            taxes resulting from:<PAGE>





          State and local income taxes, net 
            of Federal tax benefit                    70,600     59,500 
          Tax effect of non-deductible items           7,100      7,100 
          Alternative minimum tax                     13,500      5,000 
          Change in Valuation:
            Tax benefits of utilization of 
          net operating loss carryforwards          (398,000)  (182,400)
                                                    ---------  ---------
                                                    $ 46,000   $ 65,000 
                                                    =========  =========
          <PAGE>
          Income taxes  due currently and included  in current liabilities,
          net of estimated taxes paid, total $39,400. 

          NOTE 8:  RELATED PARTY TRANSACTIONS AND GUARANTEES

          Change in  Control. Through June  1993 Bright Star  Holding, Inc.
          ("BSH") owned  59.1%  of the  Company's common  stock, and  BSH's
          holdings  in the  common  stock  of  the  Company  were  held  as
          collateral to  secure certain of  BSH's obligations to  its major
          creditor,  Chemical Bank,  N.A. New  York ("Chemical").  In April
          1990  the  Company, BSH,  Chemical and  certain of  the Company's
          directors  entered  into an  agreement  whereby  the Company  was
          released from all guarantees to Chemical. 

          In  June 1993 Chemical agreed to release the Company's stock held
          as collateral  for  BSH's indebtedness  and  BSH agreed  to  sell
          1,467,000 of the 2,080,000 shares released by Chemical to Douglas
          M.  Rudolph,  a  director, Chairman  of  the  Company's  Board of
          Directors  and President  of the  Company ("Mr.  Rudolph"). As  a
          result of these transactions at October 2, 1994 Mr. Rudolph owned
          56.3%  of the  Company's  then outstanding  common stock.  During
          fiscal  1995  Mr. Rudolph  sold 100,000  shares  of stock  and in
          December 1995 Mr.  Rudolph exercised options  granted in 1992  to
          purchase 200,000 shares of common  stock under the employee stock
          option plan (see Note 6). Mr. Rudolph held 53.4% of the Company's
          outstanding  common stock  at October  1, 1995  and 55.3%  of the
          Company's  common stock at December 15, 1995. BSH holds 12.8% and
          11.9% of  the Company's  outstanding common  stock at  October 1,
          1995 and December 15, 1995, respectively.

          Transactions with  Majority  Shareholder, Officer  and  Director.
          Guarantees. In connection with the acquisition of Rudy's in 1985,
          the Company guaranteed  payment of certain obligations  of BSH to
          the former owners of Rudy's, including Mr.  Rudolph (the "Rudolph
          Obligations").  BSH  had been  in  default under  certain  of the
          Rudolph  Obligations  since  1989.  However,  until  and  through
          December 1993, BSH owned  certain assets which, upon disposition,
          were  expected to provide BSH  with resources to  pay the Rudolph
          Obligations in full  or in part.  In April 1994  BSH advised  the
          Company that  it  had  completed the  sale  of one  of  its  most
          significant  assets at  far  below  expectations and  distributed
          $15,000 from that  sale to Mr. Rudolph in payment  of the Rudolph
          Obligations. Since the  asset sold by BSH  was one of BSH's  most<PAGE>





          significant  sources of  funds from  which payments  to creditors
          could  be  expected, the  Company  determined  that future  funds
          available to BSH to reduce  the Rudolph Obligations guaranteed by
          the  Company, if  any,  will  be limited.  As  a  result of  this
          determination, in  May 1994 the  Company and Mr.  Rudolph entered
          into  an agreement  wherein  the Company's  obligation under  its
          guaranty  was  fixed  at  $584,813,  of  which  the  Company  had
          previously recorded $150,501. Accordingly, fiscal 1994 operations
          include  a loss  of $434,312  as a  loss on  guaranty to  related
          parties.

          <PAGE>
          The  terms of the agreement  between the Company  and Mr. Rudolph
          required the Company to  pay Mr. Rudolph a minimum of $230,000 in
          1994.  However,  in order  to  minimize  potential corporate  tax
          liability,  the Company paid Mr.  Rudolph a total  of $512,100 in
          fiscal 1994,  including $334,300  principal and  $177,800 accrued
          interest. Interest is accrued at 7% on  the outstanding principal
          balance due. Interest on amounts due Mr. Rudolph totalled  $5,000
          in 1995 and $37,900 in 1994. 

          Subject to certain conditions,  including a change in  control of
          the Company, Mr.  Rudolph agreed  to waive his  rights to  demand
          additional payment  under the Company's guaranty  until July 1996
          and the Company  has agreed  to waive its  rights to make  future
          claims  against the  common  stock of  the  Company presently  or
          previously held by BSH. The Company intends to reduce the balance
          due Mr. Rudolph as cash flow permits. Accordingly, the  remaining
          outstanding  balance,  $105,076  at  October 1,  1995,  has  been
          classified as a current liability in the financial statements.

          Employment Agreement.  The Company  has  an employment  agreement
          with Mr. Rudolph and a consulting agreement with a company wholly
          owned by  Mr. Rudolph.  These agreements  provide a total  annual
          compensation  of  $150,000,  a  possible incentive  bonus  up  to
          $100,000 annually to be determined by the board of directors, and
          reimbursements  for  certain  expenses  incurred.  No  bonus  was
          awarded in fiscal  1995 or  1994. Amounts paid  or accrued  under
          these   agreements  and  for  continuing  services  rendered  and
          expenses incurred totalled $160,800 in 1995 and 1994.

          Transactions  with BSH. Prior to 1990 the Company and BSH entered
          into numerous  intercompany transactions  resulting in  a balance
          due the  Company by BSH of  $18,400 at October 3,  1993, of which
          $2,800  was received in  fiscal 1994.  The balance,  $15,600, was
          included in general and administrative expense in fiscal 1994.

          Other.  Each director  receives  an annual  fee  of $12,000  plus
          $1,000  per meeting  attended. Director  fees and  costs totalled
          $36,000 in 1995 and 1994.
          
          NOTE 9: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES

          In  May  1995  the   Company's  Samurai  subsidiary  and  certain<PAGE>





          employees  of  The Samurai  were  named defendants  in  a lawsuit
          alleging discrimination  under the Civil  Rights Act of  1870, 42
          U.S.C. 1981, as amended (1992 Supp).

          Although the Company believes that the claims as set forth in the
          complaint  are without  merit, due  to  the prohibitive  costs of
          defending  such allegations,  in September  1995 the  Company and
          Plaintiff entered into a  Settlement Agreement wherein, in return
          for  certain  monetary  consideration,  the  Plaintiff  agreed to
          release  all   existing  claims  against  the   Company  and  its
          employees. Pursuant to the  terms of the Agreement the  complaint
          was dismissed in
          <PAGE>
          September  1995. The  costs of  settlement, including  legal fees
          incurred,  totalled  approximately   $50,000.  Accordingly,   the
          Company recorded  a nonrecurring  charge of $50,000,  included in
          the  accompanying  statements   of  operations  as  non-operating
          expense.

          Although  the Company is not currently a party to any significant
          ongoing legal proceedings,  the Company is subject  to such legal
          proceedings and claims as may arise in the ordinary course of its
          business  that cover a wide  range of matters,  including but not
          limited  to   such  matters  as  workers   compensation,  general
          liability  and  products   liability  claims.  While   there  are
          presently  no  ongoing proceedings,  because the  Company carries
          comprehensive  insurance to  assist  in  limiting  the  Company's
          exposure  to  financial loss  as  a result  of  substantially all
          claims  as may  arise  in the  normal  course of  business,  such
          proceedings and/or claims will not,  in the opinion of management
          based  upon  the  information  it  presently  possesses,  have  a
          material adverse effect on the financial position of the Company.

          NOTE 10: SUBSEQUENT EVENT (UNAUDITED)

          On  December   26,  1995  the  Company,   through  its  Maxwell's
          subsidiary,  signed an  Asset  Purchase and  Sale Agreement  (the
          "Agreement")  to  acquire substantially  all  of  the assets  and
          business  operations   of  four   Japanese   steak  and   seafood
          restaurants owned by Asian  Restaurants International, Inc. for a
          total  of $2,400,000. The Agreement calls  for an initial payment
          of approximately  $600,000 cash, the issuance  of notes totalling
          $1,400,000,  payable over four years,  and the signing  of a non-
          compete and  consulting agreement requiring  payment of  $400,000
          over five years.

          The acquisition  of the assets and business operations is subject
          to various conditions, including, but not limited to, inspections
          of  the properties and the books and records. The Company expects
          this  acquisition, which will be  treated as a  purchase, will be
          completed  in the  second quarter  of  the Company's  1996 fiscal
          year.

          The following unaudited  proforma condensed  balance sheet  gives<PAGE>





          effect to this acquisition  as if it  had occurred at October  1,
          1995.

                                               Proforma Condensed         
                               -------------------------------------------
                                                   Proforma  
          Assets                 As Reported      Adjustments    Proforma 
          ------                 -----------     ------------   -----------
           Cash                 $ 1,477,000     $  (600,000)   $   877,000
           Net property and 
             equipment            2,095,000       1,675,000      3,770,000
           All other assets       1,010,000         725,000      1,735,000
                                -----------     ------------   -----------
                                $ 4,582,000     $ 1,800,000    $ 6,382,000
                                ===========     ============   ===========
          <PAGE>
          Liabilities and 
          Stockholders Equity
          ------------------------
           Notes payable, current $      ---     $   314,000    $   314,000
           All other liabilities     945,000         400,000      1,345,000
           Notes payable, 
             long-term                   ---       1,086,000      1,086,000
           Stockholders equity     3,637,000             ---      3,637,000
                                 -----------     ------------   -----------
                                 $ 4,582,000     $ 1,800,000    $ 6,382,000
                                 ===========     ============   ===========

          The   following  unaudited   proforma  consolidated   results  of
          operations give effect  to the proposed acquisition  as though it
          had occurred October 3, 1993.
                                               October          October   
          Fiscal Years Ended                   1, 1995          2, 1994   
                                             ------------     ------------
            Revenues                         $ 17,319,000     $ 15,989,000
                                             ============     ============
            Net Income                       $  1,612,000     $  1,129,000
                                             ============     ============
            Net income per share:
               Primary                       $        .43     $        .30
                                             ============     ============
               Fully diluted                 $        .43     $        .30
                                             ============     ============

          Permitted proforma adjustments include only the effects of events
          directly   attributable  to  a  transaction  that  are  factually
          supportable and  expected to  have a continuing  impact. Proforma
          adjustments reflecting anticipated  "efficiencies" in  operations
          resulting from  a transaction are, under  most circumstances, not
          permitted.  For  purposes  of   presenting  the  above  unaudited
          consolidated  results of operations  certain proforma adjustments
          were made including adjustments to depreciation, interest expense
          and general and  administrative expense to reflect  the effect of
          the  acquisition  and the  Company's basis  in  the assets  to be<PAGE>





          acquired.

          The unaudited  proforma information  is presented to  provide the
          reader  with  information about  the  continuing  impact of  this
          proposed  acquisition  by  showing  how it  might  have  affected
          historical financial statements and is not necessarily indicative
          of  results  of operations  that  would  have  occurred  had  the
          acquisition been made  on October 3, 1993 or of future results of
          operations of the Company.

          <PAGE>





          Item  8.  CHANGES  IN   AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
          ACCOUNTING
                  AND FINANCIAL DISCLOSURE
    
                None.

                                        PART III

          Item 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT;
                  COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT; 
                  ---------------------------------------------------

            (a)   Identification of Directors.
                  ----------------------------
          The following sets forth certain  information with respect to all
          directors of the Company:

                Name           Age   Position and                  Term of
                                     Offices Held                  Office 
          ------------------   ---   -------------               ----------
          --
          Douglas M.  Rudolph    44     President,  Chairman of the   1985-
          Present
                                     Board, Chief Executive 
                                     Officer, Secretary and 
                                     Director

          Peter Graham          40     Director                       1986-
          Present

          Eli Boyer             76     Director                       1986-
          Present

          Pursuant to the Company's By-Laws, as amended in fiscal 1988, the
          Board  of Directors is divided into four classes defined with the
          purpose of  providing for continuity of  management by staggering
          the term  of office of each director. The term of office of Class
          A expires in  one year and  the term of  office of the  remaining
          three  classes expires in the  second (Class B),  third (Class C)
          and fourth (Class D) succeeding years. Subsequent terms of office
          for  each  class expire  the fourth  year  after election  to the
          initial term of office. 

          Mr. Boyer comprises the member of Class A, the term  of which was
          to have expired in 1991. Mr. Graham comprises the member of Class
          B which  was to have expired  in 1993. Mr. Rudolph  comprises the
          member of Class D, the term of  which was to expire in 1991.  The
          terms  of all  the directors  have been  extended until  the next
          Meeting of Shareholders. 

          Mr. Rudolph is a director, President and Chairman of the Board of
          Rudy's Restaurant Group, Inc. and  its subsidiaries and has  held<PAGE>





          these  positions since prior to 1990. He  is also a member of the
          Executive  Committee  and  the  Transactions  Committee  of   the
          Company's Board of Directors. Mr.  Rudolph has been the principal
          shareholder  and president of Rudolph Entertainment, Inc. ("REI",
          formerly Rudolph  Foods,  Inc.)  since  1983. Mr.  Rudolph  is  a
          registered
          <PAGE>
          Florida real estate salesman.

          Peter Graham was elected a director of  the Company in June 1986.
          In  addition,   he  is  a  member  of  the  Executive  Committee,
          Transactions  Committee, Stock Option  and Executive Compensation
          Committee  and   Audit  Committee  of  the   Company's  Board  of
          Directors. Mr.  Graham is a  principal and director  at Ladenburg
          Thalmann & Co.  Inc., an  investment banking firm,  and has  been
          associated with such firm  for over ten years. Mr.  Graham served
          as  a  director of  BSH  and  Safety Harbor  Corporation  through
          February  1990 at which time  he resigned from  these boards. Mr.
          Graham also  serves as  a  director of  SPI-Suspension and  Parts
          Industries  Ltd.,  Regency  Equities Corp.,  Prism  Entertainment
          Corp. and Seventh Generation. 

          Eli Boyer was elected a director of the Company in April 1986. In
          addition,  he is  a  member of  the  Stock Option  and  Executive
          Compensation Committee and Audit Committee of the Company's Board
          of  Directors. Previously Mr. Boyer  was a senior  partner in the
          accounting  firm of Laventhol  & Horwath. Mr.  Boyer now performs
          consulting  services. He  is a  director of  Fries Entertainment,
          Inc., a company engaged in the television entertainment business.
          Mr. Boyer was  formerly a director of  Safety Harbor Corporation,
          and The Horn and Hardart Company.

            (b) Identification of Executive Officers.
                -------------------------------------

          The following sets forth certain information with  respect to all
          executive officers of the Company:

                 Name          Age             Position(s) Held
          ------------------   ---    -------------------------------------
          --
          Douglas M. Rudolph    44    President, Chief Executive Officer,
                                      Secretary and Director

          Marie G. Peterson     48    Vice President, Treasurer, Chief
                                      Operating and Financial Officer


          See "Identification of Directors" for a biography of Mr. Rudolph.

          Ms.  Peterson is  the Vice  President  of Finance,  Treasurer and
          Chief Financial Officer of  Rudy's Restaurant Group, Inc. and its
          subsidiaries and  has held these  positions since prior  to 1990.
          She  was named  Chief Operating  Officer of  the Company  and its<PAGE>





          subsidiaries in 1995. 

              (c) Compliance with Section  16(a) of the Securities Exchange
          Act
          -----------------------------------------------------------

          Section  16(a)  of  the  Securities  Exchange  Act  requires  the
          Company's executive  officers and  directors and persons  who own
          more  than  ten percent  of the  Company's  common stock  to file
          reports of ownership
          <PAGE>
          and  changes in ownership of  the Company's Common  Stock and any
          other equity  securities of the  Company with the  Securities and
          Exchange  Commission (the  "SEC"). Executive  officers, directors
          and greater  than ten  percent shareholders  are required by  SEC
          regulation  to furnish  the Company  with copies  of all  Section
          16(a) forms filed.

          Based solely on  its review of the copies of  such forms received
          by the Company, or written representations from certain reporting
          persons that no  Form 5's  were required for  those persons,  the
          Company believes  that all its executive  officers, directors and
          greater   than  10%   shareholders  complied   with  all   filing
          requirements applicable to them during 1995.

          Item 10. EXECUTIVE COMPENSATION
                   ----------------------

                   Cash Compensation
                   -----------------

          The  following sets  forth  certain information  with respect  to
          annual compensation for all executive officers of the Company for
          fiscal years ended October  1, 1995, October 2, 1994  and October
          3, 1993:

  <TABLE> 
  <S>                     <C>      <C>        <C>        <C>         <C>
  Name and Principal     Year                                       Options
  Position(s) Held       Ended    Salary      Bonus      Other      Granted
  ------------------     -----   --------   --------    -------     -------
  Douglas M. Rudolph,
  President, CEO, 
  Secretary, Director    1995    $150,000     None      $22,800       None
                         1994    $150,000     None      $22,800       None
                         1993    $150,000   $100,000    $22,800       None

  Marie G. Peterson,
  VP, Treasurer, COO 
  and CFO                1995     $84,000     None        None        None
                         1994     $84,000     None        None        None
                         1993     $84,000    $36,000      None        None
  </TABLE>





          Mr.  Rudolph's  other  compensation includes  an  annual  expense
          allowance of $10,800 and annual Director's fees of $12,000.

          The executive officers of the Company are provided with insurance
          coverage under  the Company's group  medical plan under  the same
          terms  and   conditions  as  are  available   to  other  salaried
          employees.

          Mr. Rudolph renders services to the  Company on a full time basis
          pursuant to the terms of an employment agreement and a consulting
          agreement with  his wholly  owned company, REI.  These agreements
          provide Mr. Rudolph a total annual compensation of $150,000,
          <PAGE>
          reimbursement  for  certain  expenses  incurred  by  him,  and  a
          possible annual  incentive bonus  of up to  $100,000 annually  as
          determined by the Company's Board of Directors (the "Board"). The
          Company believes that the terms of its existing arrangements with
          Mr. Rudolph are  no less  favorable to the  Company than  similar
          arrangements which  might have  been entered into  with similarly
          qualified unrelated  parties. All  references to such  employment
          agreement and  consulting agreement are qualified  in entirety by
          reference   to  Exhibits   10.19  and   10.20  of   this  report,
          respectively.

          Ms. Peterson renders services to the Company on a full time basis
          pursuant  to the terms of an employment agreement entered into in
          February 1990. The initial term  of the employment agreement  was
          for
          a term of one year with certain renewal periods, as agreed by the
          parties. All references to such employment contract are qualified
          in its entirety by reference to Exhibit 10.11 of this report.
          
          Each director (including employee  directors) earns an annual fee
          of $12,000 for serving on the Board of Directors plus $1,000  per
          meeting  attended.  In  addition,  the  Company   reimburses  all
          directors  for travel  and other  reasonable and  normal expenses
          incurred  on  behalf  of  the Company.  Directors  fees  totalled
          $36,000  in 1995  and  1994. Payment  of  accrued directors  fees
          totalled $36,000 in 1995 and 1994.

          Employee Stock Option Plan
          --------------------------

          The Company's  1985 Employee Stock  Option Plan, as  amended (the
          "Plan") terminated in May 1995. The Plan provided that options to
          purchase up to 600,000  shares of the Company's Common  Stock may
          be granted. The Plan was designed so that either options that are
          intended to satisfy the requirements of the Internal Revenue Code
          with respect  to "Incentive  Stock Options" ("ISO's")  or options
          that are not intended to satisfy such requirements  ("Non ISO's")
          were authorized. 

          Pursuant  to  Plan provisions,  the  Board  designated the  Stock
          Option  and Executive  Compensation Committee  (the "Committee"),<PAGE>





          consisting of  Messrs. Graham and Boyer, to  administer the Plan.
          Within  the applicable limits of the Plan, the Committee had full
          authority to select from among eligible individuals those to whom
          options would  be granted under the  Plan,  the number  of shares
          subject to each option and the price, terms and conditions of any
          options to be granted thereunder. The Board of Directors had full
          authority  to  amend  the   Plan,  provided,  however,  that  any
          amendment which (i) increases  the number of shares which  may be
          the subject of stock options granted under the Plan, (ii) expands
          the class of  individuals eligible to  receive options under  the
          Plan, (iii)  increases the  period during  which  options may  be
          granted or the  permissible term  of options under  the Plan,  or
          (iv) decreases the minimum exercise price  of such options, could
          only  be   adopted  by  the   Board  of  Directors,   subject  to
          shareholders approval.
          <PAGE>
          Executive  officers and  key  employees of  the  Company and  its
          subsidiaries were eligible to receive options under the Plan. The
          exercise price of any option was to be not be less than 100% (or,
          in the case of an ISO granted to  a 10% shareholder, 110%) of the
          fair market  value of  the shares  purchasable thereunder  on the
          date of grant.

          Payment  for shares purchased  upon the exercise  of options were
          authorized to be made  in cash, certified check or by transfer to
          the Company of  a number of shares of the  Company's Common Stock
          whose  aggregate market value  is equal  to the  aggregate option
          price  (provided  that,  unless  waived by  the  Committee,  with
          respect to
          options issued after April 19, 1988 the shares of Common Stock
          shall have been owned at least six months). This latter provision
          would  include   the  "pyramiding"   of   shares  in   successive
          simultaneous exercise. Thus, an optionee could initially exercise
          an option in part,  acquiring a few  shares of Common Stock,  and
          thereafter  effect further  exercises  of the  option, using  the
          Common Stock acquired upon  the earlier exercises to pay  for the
          increasingly greater number of shares received on each successive
          exercise. This  procedure would  permit an  optionee  to pay  the
          option  price with  only a single  share of  Common Stock  and to
          acquire  a number of shares  of Common Stock  having an aggregate
          fair  market value  equal to  the excess  of (a) the  fair market
          value of  all shares  to which  the option  relates over  (b) the
          aggregate  exercise  price  under  the option.  The  Company  was
          authorized to make loans to an optionee for the  purpose of fully
          or partially exercising an option under the Plan.

          From  June 1, 1985 to May 1,  1995, employees received options to
          purchase 538,155  shares of  Common Stock  of which  245,000 were
          exercisable  and were  exercised in  December 1995.  The weighted
          average option price under such options is $.13 per share. 

          Inasmuch as  the purpose  of the Plan  was to attract  and retain
          qualified employees, the Company intends to establish an employee
          stock  option plan with terms similar to those outlined herein in<PAGE>





          1996.

          The above summary is  qualified in its entirety by reference to a
          full  description  of the  Plan, found  in  Exhibit 10.1  of this
          report.

          Stock Options of Executive Officers
          -----------------------------------

          The  following sets  forth  certain information  with respect  to
          stock options granted executive officers of the Company under the
          Company's 1985 Employee stock option plan.





          <PAGE>
  <TABLE>
  <S>                                  <C>        <C>              <C>
                                                           All Officers 
                                    Douglas M.   Marie G.  consisting of
  Stock Options                     Rudolph     Peterson  two individuals
  ----------------------------    ----------   ---------      ------------
  ----
  Options granted June 1985 through 
      October 1, 1995              248,750         53,125        301,875
  Average per share exercise price $   .12        $   .73       $    .25
  Options exercised June 1985 through 
      October 1, 1995                None          None          None
  Options expiring June 1985 through 
      October 1, 1995                48,750         13,125        61,875
  Unexercised Options at October 
      1, 1995                       200,000         40,000       240,000
  </TABLE>

          The exercise price of each option is at or  above the approximate
          fair market value of the Company's Common Stock on the date the
          option was  granted. Directors who are not  executive officers of
          the Company have not  received any options to purchase  shares of
          Common Stock.  All unexercised  options at  October 1,  1995 were
          exercised in December 1995.


          Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                   MANAGEMENT
 --------------------------------------------------------

            (a)    Security Ownership of Certain Beneficial Owners
                   -----------------------------------------------

          The following sets  forth certain information as of  December 15,
          1995 with respect to the Common Stock of the Company beneficially
          owned  by any  person  who is  known  to the  Company  to be  the
          beneficial  owner  of  more  than  5%  of  the  Company's  voting
          securities. The percent of  common stock shown is as  of December
          15,  1995 and  includes  the  effect  of  245,000  shares  issued
          pursuant to the terms of options exercised in December 1995:

          Name and Address of          Amount and Nature of         Percent
          of
          Beneficial Owner               Beneficial Ownership        Common
          Stock
          ---------------------       --------------------       ----------
          --
          Bright Star Holding, Inc.
          101 Convention Center Drive
          Las Vegas, NV 89109                450,000                 12.0%

          Douglas M. Rudolph
          4000 Towerside Terrace
          Miami, FL 33138                  2,081,100*                55.3%

          *Does  not include  (i)  7,500 shares  owned  by Judi  Male,  Mr.
          Rudolph's sister, (ii) 7,500 shares owned by Richard Rudolph, Mr.
          <PAGE>
          Rudolph's  brother,  or  (iii)  12,900  shares  owned  by  Muriel
          Rudolph, Mr. Rudolph's mother. Mr. Rudolph may be deemed a parent
          of  the Company as that term  is defined under the Securities Act
          of 1933.as amended.

            (b)   Security Ownership of Management
                  --------------------------------

          The following sets  forth certain information as  of December 15,
          1995 with respect to the Common Stock of the Company beneficially
          owned by all directors and nominees (other than  directors listed
          as  principal shareholders  in the  preceding  table) and  by all
          executive  officers  and  directors   as  a  group.  The  persons
          identified in  this table have  sole voting and  investment power
          with respect to the shares according to  information furnished to
          the Company by each of them.

          Name of Individual or         Amount of Beneficial     Percent of
          Identity  of Group                     Ownership           Common
          Stock*

          Eli Boyer                           1,000               Less than
          1%





          Peter Graham                        100,000                      
          2.7%

          Marie  G. Peterson                   40,000                      
          1.1%

          All executive officers and 
          directors as a group 
          (consisting of 4 individuals)
          including 1,982,100 shares 
          outstanding at October 1, 
          1995 and 240,000 shares issued
          December 1995 pursuant to 
          options exercisable October 
          1, 1995                           2,222,100                      
          59.0%

          *  Percent shown is  of 3,765,000 shares  outstanding at December
          15, 1995

            (c)  Change in Control
                 -----------------

          In June 1993 BSH sold 1,467,000 of the 2,080,000 shares then held
          by BSH to Douglas  M. Rudolph. As a  result of this  transaction,
          there was  a change in  control of  the Company. At  December 15,
          1995, Mr. Rudolph holds 55.3% of the Company's outstanding Common
          Stock  and  BSH holds  12%  of the  Company's  outstanding Common
          Stock.

          A  change  in  control  of  the   Company  constitutes  an  event
          triggering  certain severance  provisions  of certain  employment
          contracts  between  the  Company  and   its  executive  officers.
          However, as of December 15, 1995 the Company's executive officers
          have not  elected to exercise  their rights under  such severance
          provisions.
          <PAGE>
          Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
                    ----------------------------------------------

          See  Note  8  to  the Company's  financial  statements  regarding
          transactions with  BSH,  the Company's  majority shareholder  and
          related transactions.

                                   PART IV

          Item 13.  EXHIBITS  AND REPORTS ON FORM 8-K.
                    ----------------------------------
            (a) Exhibits
                --------
          3.1    Amended and  Restated  Articles  of  Incorporation of  the
          Company    dated April  24,  1986. Incorporated  by  reference to
          Exhibit 3.1 to The Company's  Registration Statement on Form S-18
          as filed with the Securities and Exchange Commission File No. 33-<PAGE>





          5362, effective June 18, 1986 (the "Registration Statement").

          3.2  By-Laws of the Company. Incorporated by reference to Exhibit
          3.1 of the Company's Quarterly Report on Form 10-Q for the fiscal
          quarter ended June 5, 1988.

          4.1    Specimen of  Common  Stock Certificate.    Incorporated by
          reference to Exhibit 4.1 of the Registration Statement.

          4.2  $750,000 10% Convertible Subordinated Secured Note of Rudy's
          Sirloin  SteakBurgers,  Inc.   issued  to  Douglas   M.  Rudolph.
          Incorporated by reference to Exhibit  4.2 of the Company's Annual
          Report on  Form 10-K for the fiscal year ended September 27, 1987
          (the "1987 Form 10-K").

          4.3  $750,000 10% Convertible Subordinated Secured Note of Rudy's
              Sirloin  SteakBurgers,  Inc.  issued to  Sidney  J.  Rudolph.
          Incorporated by reference to Exhibit 4.3 of the 1987 Form 10-K.

          4.4   $296,250  Promissory Note  of Rudy's  Sirloin SteakBurgers,
          Inc. issued to Douglas  M. Rudolph, as amended.   Incorporated by
          reference to Exhibit 4.4 of the 1987 Form 10-K.

          4.5   $296,250  Promissory Note  of Rudy's  Sirloin SteakBurgers,
          Inc.  issued to Sidney J.  Rudolph, as amended.   Incorporated by
          reference to Exhibit 4.5 of the 1987 Form 10-K.

          4.6   Rights Agreement dated as of  April 21, 1988 between Rudy's
          Restaurant  Group, Inc.  and Bank  of America National  Trust and
          Savings Association. Incorporated by  reference to Exhibit 2.1 of
          the Company's Form 8-A dated May 6, 1988.

          10.1  1985 Employee Stock Option Plan of the Company, as amended.
          Incorporated by reference to Exhibit 10.1 of the Company's Annual
          Report  on Form  10-K for the  fiscal year ended  October 2, 1988
          (the "1988 Form 10-K").
          <PAGE>
          10.2  Non-transferable Stock Purchase Warrant issued to Sidney J.
          Rudolph.  Incorporated  by  reference  to  Exhibit  10.3  of  the
          Registration Statement. 

          10.3   Non-transferable  Stock  Purchase Warrant  issued to  Judi
          Male.    Incorporated   by  reference  to  Exhibit  10.3  of  the
          Registration Statement.

          10.4  Amendment  to Employment  Agreement dated as  of April  30,
          1989        among Rudy's  Restaurant Group, Inc.,  Rudy's Sirloin
          SteakBurgers,  Inc., The  Samurai, Inc.  and Douglas  M. Rudolph.
          Incorporated by reference to Exhibit 10.4 of the Company's Annual
          Report on Form  10-K for the  fiscal year ended  October 1,  1989
          (the "1989 Form 10-K").

          10.5   Consulting Agreement dated  as of October  1, 1988 between
          Rudy's Restaurant Group, Inc. and Peter Graham.   Incorporated by<PAGE>





          reference to Exhibit 10.8 of the 1988 Form 10-K.

          10.6     Collateral  Agreement  between  BSH   and  the  Company.
          Incorporated by  reference to  Exhibit 10.13 of  the Registration
          Statement.

          10.7   Acquisition Agreement dated  as of October  21, 1985 among
          the  Company, BSH,  Sidney  J. Rudolph,  Douglas  M. Rudolph  and
          Rudy's Sirloin  SteakBurgers, Inc. Incorporated  by reference  to
          Exhibit 10.5 of the Registration Statement.

          10.8  Directors and Officers  Liability Indemnification Agreement
          dated  as  of  April  1, 1987  among  BSH  and  the officers  and
          directors  of  BSH, the  Company  and  all subsidiaries  thereof,
          Directors  and  Officers  Liability  Indemnification  Trust dated
          April 1, 1987 among  BSH, as Settlor, and Jeffrey  Mischel, Peter
          Graham, and  Eli Boyer,  as original Co-Trustees;  Mortgage dated
          April  3,  1987  from  BSH to  Directors  and  Officers Liability
          Indemnification  Trust.   Incorporated  by  reference  to Exhibit
          10.12 of the 1987 Form 10-K.

          10.9  Loan and Security Agreement dated as of December 8, 1988 by
          and  among   Rudy's  Restaurant  Group,   Inc.,  Rudy's   Sirloin
          SteakBurgers, Inc., The Samurai,  Inc. and Heller Financial, Inc.
          Incorporated by  reference to  the Company's  Report on Form  8-K
          dated December 19, 1988.

          10.10    Letter Agreement  dated  December 8,  1988  among Donald
          Schupak,   Rudy's   Restaurant   Group,  Inc.,   Rudy's   Sirloin
          SteakBurgers, Inc., The Samurai,  Inc. and Heller Financial, Inc.
          Incorporated by reference to Exhibit 10.13 to the 1988 Form 10-K.

          10.11   Form  of Employment  Agreement  between the  Company  and
          certain of its  executive officers.  Incorporated by reference to
          Exhibit 10.11 to the December 24, 1989 Form 10-Q.


          <PAGE>
          10.12  Stipulation of Settlement filed in that certain action
          ------------------------------------------------------
          styled Chemical Bank v. Bright Star Holding, Inc., Rudy's
          ---------------------------------------------------------
            Restaurant  Group, Inc., Sidney Rudolph and Douglas
            Rudolph,
 ----------------------------------------------------------
       (U.S.District Court,Southern Districtof NewYork) 89
          Civ. 0609 (WK) dated April 20, 1990. Incorporated by reference to
          the Company's Current Report on Form 8-K dated April 25, 1990.

          10.13   Agreement  for Acquisition  of  Assets and  Assumption of
          Certain Liabilities  of Rudy's Sirloin SteakBurgers,  Inc. by and
          between  Rudy's  Sirloin SteakBurgers,  Inc.  and Euro-  American
          Holding    Corporation,   Inc.,   dated    December   24,   1990;<PAGE>





          Indemnification and Security Agreement from RSSB, Inc., a Florida
          corporation  in  favor  of  Rudy's  Sirloin  SteakBurgers,  Inc.,
          executed  on January  25, 1991;  Guaranty of  payment from  Euro-
          American Holding  Corporation, Inc.,  a  Florida Corporation  and
          East-West Logistics,  Inc., a  Liberian corporation, in  favor of
          Rudy's  Sirloin   SteakBurgers,  Inc.,  dated  January 25,  1991;
          Agreement for Sale and  Purchase of Proprietary Information dated
          December  24, 1990.  Incorporated by  reference to  the Company's
          Report on Form 8-K dated January 25, 1991.

          10.14   Asset  Purchase Agreement  by and between  Rudy's Sirloin
          SteakBurgers,  Inc. and  Supreme Chicken  of Kendall,  Inc. dated
          10/30/90. Incorporated  by reference  to the Company's  Report on
          Form 8-K dated January 25, 1991.

          10.15   Settlement Stipulation and  Agreement dated April 9, 1991
          by and between  Chester Del  Bello, Trustee for  the Amended  and
          Restated Irrevocable Trusts for Dale  Del Bello Jr. and  Danielle
          Del Bello and The Samurai, Inc. and Rudy's Restaurant Group, Inc.
          Incorporated  by  reference to  Exhibit  10.15  of the  Company's
          Quarterly Report on  Form 10-Q  for the quarter  ended March  17,
          1991.

          10.16   Settlement Stipulation dated April 7, 1992 by and between
          12605 Biscayne, Rudy's Restaurant  Group, Inc. and Rudy's Sirloin
          SteakBurgers, Inc. Incorporated by  reference to Exhibit 10.16 of
          the Company's Quarterly Report on Form 10-Q for the quarter ended
          March 15, 1992.

          10.17   Joint Stipulation of the Parties to Settlement dated June
          24,  1992  by and  between  Metlife  Capital Corporation,  Rudy's
          Sirloin  SteakBurgers,  Inc. and  Rudy's  Restaurant Group,  Inc.
          Incorporated  by  reference to  Exhibit  10.17  of the  Company's
          Quarterly Report on Form 10-Q for the quarter ended June 7, 1992.

          10.18  Joint Motion for Approval of Stipulation and Compromise of
          Claim  dated December  17, 1992  by and  between RSSB,  Inc., and
          Rudy's Sirloin  SteakBurgers, Inc.  Incorporated by  reference to
          Exhibit 10.18 of the Company's Annual Report on Form 10-K for the
          fiscal year ended October 3, 1993 (the "1992 Form 10-K").
          <PAGE>
          10.19   Employment  Agreement  by and  between Rudy's  Restaurant
          Group,  Inc.  and  Douglas M.  Rudolph  dated  July  1, 1992  and
          Amendment   to  Employment   Agreement   dated  April   1,  1992.
          Incorporated by reference to Exhibit 10.19 of the 1992 Form 10-K.

          10.20   Consulting Agreement by and between The Samurai, Inc. and
          Rudolph  Entertainment,  Inc.  ("REI")   dated  April  1,   1992.
          Incorporated by reference to Exhibit 10.20 of the 1992 Form 10-K.

          10.21    Rudolph  Obligation  Agreement  by  and  between  Rudy's
          Restaurant Group, Inc. and Douglas M. Rudolph dated June 1, 1994.
          Incorporated by reference to Exhibit 10.21 of the 1994 Form 10-K.<PAGE>





          22   Subsidiaries of the  Company.  Incorporated  by reference to
          Exhibit 22 of the 1986 Form 10-K.

            (b )  Reports on Form 8-K:
                  --------------------

                  None.

          <PAGE>





                                      SIGNATURES

          Pursuant  to the  requirements  of Section  13  or 15(d)  of  the
          Securities  and  Exchange Act  of 1934,  the registrant  has duly
          caused this report to be signed on its behalf by the undersigned,
          thereunto duly authorized.

                                          RUDY'S RESTAURANT GROUP, INC.
                                                  (Registrant)

                                          By: /s/   Douglas M. Rudolph
                                              -------------------------
                                              Douglas M. Rudolph
                                              Chief Executive Officer
                                              Chairman of the Board

          Dated:   January 12, 1996 
                 --------------------

          Pursuant to  the requirements of  the Securities Exchange  Act of
          1934,  this report has been signed below by the following persons
          on behalf  of the registrant  and in  the capacities  and on  the
          dates indicated:

/s/ Douglas M. Rudolph     President, Chairman  January 12, 1996
-----------------------   ofthe Board, Chief 
Douglas M. Rudolph        Executive Officer, 
                          Secretary and Director

/s/ Marie G. Peterson      Vice President,        January  12, 1996
---------------------     Treasurer, Chief 
Marie G. Peterson         Financial and 
                          Operating Officer, 
                          and Principal 
                          Accounting Officer

/s/  Eli Boyer           Director                January 12, 1996
-----------------------
Eli Boyer

/s/  Peter Graham        Director               January 12, 1996
-----------------------
Peter Graham


          <PAGE>