<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

 X   Quarterly report pursuant to section 13 or 15(d) of the Securities
---
Exchange Act of 1934

For the quarterly period ended March 31, 2002 or

___  Transition report pursuant to section 13 or 15(d) of the Securities

Exchange Act of 1934

For the transition period from _________to_________

                         Commission file number 33-14051
                                                --------

                                 Prandium, Inc.
                                 --------------
             (Exact name of registrant as specified in its charter)

   Delaware                                 33-0197361
   -------------------------------          -----------------------------------
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
    incorporation or organization)

                  2701 Alton Parkway, Irvine, California 92606
                  --------------------------------------------
                  (Address of principal executive offices)   (Zip Code)

       Registrant's telephone number, including area code:  (949) 863-8500
                                                            --------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.

                           Yes    X        No ______
                               -------

As of May 10, 2002 the registrant had issued and outstanding 180,380,513 shares
of common stock, $.01 par value per share.

                                      - 1 -

<PAGE>

                         PART I.   FINANCIAL INFORMATION
                         -------------------------------

ITEM 1.   FINANCIAL STATEMENTS

                                 PRANDIUM, INC.
                                 --------------

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------
                                ($ in thousands)
                                 --------------

<TABLE>
<CAPTION>
                                                                                              March 31,       December 30,
                                                                                                 2002             2001
                                                                                             ------------      ------------
                                                                                             (Unaudited)

<S>                                                                                        <C>               <C>
ASSETS
------

Current assets:
    Cash and cash equivalents                                                              $      28,466     $      27,982
    Restricted cash                                                                               10,504            12,992
    Receivables, net                                                                               1,684             1,894
    Inventories                                                                                    1,724             1,887
    Other current assets                                                                           4,309             5,139
    Property held for sale                                                                        14,786            15,844
                                                                                             ------------      ------------
       Total current assets                                                                       61,473            65,738

Property and equipment, net                                                                       94,260            96,926
Other assets, net                                                                                 10,361            11,218
                                                                                             ------------      ------------
                                                                                           $     166,094     $     173,882
                                                                                             ============      ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------

Current liabilities:
    Current portion of long-term debt, including capitalized lease obligations             $     234,018     $     234,271
    Accounts payable                                                                               5,982             6,178
    Current portion of self-insurance reserves                                                     2,506             2,012
    Other accrued liabilities                                                                     84,941            81,117
    Income taxes payable                                                                           3,418             3,379
                                                                                             ------------      ------------
       Total current liablities                                                                  330,865           326,957

Self-insurance reserves                                                                            5,257             5,964
Other long-term liabilities                                                                        2,539             2,648
Long-term debt, including capitalized lease obligations, less current portion                        859               967
                                                                                             ------------      ------------
       Total liabilities                                                                         339,520           336,536
                                                                                             ------------      ------------

Commitments and contingencies

Stockholders' deficit:
    Common stock - authorized 300,000,000 shares, par value $.01 per share,
     180,380,513 shares issued and outstanding on March 31, 2002 and on
     December 30, 2001                                                                             1,804             1,804
    Additional paid-in capital                                                                   222,353           222,353
    Accumulated deficit                                                                         (397,583)         (386,811)
                                                                                             ------------      ------------
       Total stockholders' deficit                                                              (173,426)         (162,654)
                                                                                             ------------      ------------
                                                                                           $     166,094     $     173,882
                                                                                             ============      ============
</TABLE>

      See accompanying notes to condensed consolidated financial statements

                                      - 2 -

<PAGE>

                                 PRANDIUM, INC.
                                 --------------

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 -----------------------------------------------
                   ($ in thousands, except per share amounts)
                    ----------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                               For the Quarters Ended
                                                                                           --------------------------------
                                                                                             March 31,            April 1,
                                                                                               2002                 2001
                                                                                           --------------    --------------

<S>                                                                                      <C>               <C>
Sales                                                                                    $        67,895   $        75,982
                                                                                           --------------    --------------
Product costs                                                                                     17,266            20,461
Payroll and related costs                                                                         24,488            27,607
Occupancy and other operating expenses                                                            18,922            22,388
Depreciation and amortization                                                                      3,023             4,177
General and administrative expenses                                                                4,671             5,873
Opening costs                                                                                          1               50
Loss on disposition of properties, net                                                               141               402
Provision for divestitures and write-down of long-lived assets                                     2,207               189
Restructuring costs                                                                                  381               496
                                                                                           --------------    --------------

       Total costs and expenses                                                                   71,100            81,643
                                                                                           --------------    --------------

Operating loss                                                                                    (3,205)           (5,661)

Interest expense, net                                                                              7,473             6,646
                                                                                           --------------    --------------

Loss before income tax provision                                                                 (10,678)          (12,307)

Income tax provision                                                                                  94               106
                                                                                           --------------    --------------

Net loss                                                                                 $       (10,772)  $       (12,413)
                                                                                           ==============    ==============

Net loss per share - basic and diluted                                                   $         (0.06)  $         (0.07)
                                                                                           ==============    ==============

Weighted average shares outstanding - basic and diluted                                      180,380,513       180,380,513
                                                                                           ==============    ==============
</TABLE>

      See accompanying notes to condensed consolidated financial statements

                                      - 3 -

<PAGE>

                                 PRANDIUM, INC.
                                 --------------

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                                ($ in thousands)
                                 --------------
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                      For the Quarters Ended
                                                                                                 --------------------------------
                                                                                                  March 31,            April 1,
                                                                                                    2002                 2001
                                                                                                 -----------          -----------
<S>                                                                                            <C>                  <C>
Cash flows from operating activities:
    Cash received from customers, franchisees and licensees                                    $     68,273         $     76,144
    Cash paid to suppliers and employees                                                            (66,562)             (77,212)
    Interest received (paid), net                                                                       (63)                 252
    Opening costs                                                                                        (1)                 (50)
    Restructuring costs                                                                                (671)                (496)
    Income taxes paid                                                                                   (55)                (268)
                                                                                                 -----------          -----------

       Net cash provided by (used in) operating activities                                              921               (1,630)
                                                                                                 -----------          -----------

Cash flows from investing activities:
    Proceeds from disposal of property and equipment                                                     70                   75
    Proceeds from payments on notes receivable                                                            -                  175
    Capital expenditures                                                                               (405)              (1,713)
    Lease termination payments                                                                       (1,203)                (268)
    Other divestment expenditures                                                                      (486)                (751)
    Cash required for the El Torito Sale                                                                (96)                (573)
    Decrease in restricted cash, net                                                                  2,423                    -
    Other                                                                                              (336)                (854)
                                                                                                 -----------          -----------

       Net cash used in investing activities                                                            (33)              (3,909)
                                                                                                 -----------          -----------

Cash flows from financing activities:
    Payment of debt issuance costs                                                                      (92)                   -
    Reductions of long-term debt, including capitalized lease obligations                              (312)                (338)
                                                                                                 -----------          -----------

       Net cash used in financing activities                                                           (404)                (338)
                                                                                                 -----------          -----------

Net increase (decrease) in cash and cash equivalents                                                    484               (5,877)
Cash and cash equivalents at beginning of period                                                     27,982               53,505
                                                                                                 -----------          -----------

Cash and cash equivalents at end of period                                                     $     28,466         $     47,628
                                                                                                 ===========          ===========

Reconciliation of net loss to net cash provided by (used in) operating activities:

Net loss                                                                                       $    (10,772)        $    (12,413)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
    Depreciation and amortization                                                                     3,023                4,177
    Amortization of debt issuance costs and deferred gain                                                 6                   93
    Loss on disposition of properties                                                                   141                  402
    Provision for divestitures and write-down of long-lived assets                                    2,207                  189
    (Increase) decrease in receivables, inventories and other current assets                          1,255                 (529)
    Increase in accounts payable, self-insurance reserves, other
       accrued liabilities and income taxes payable                                                   5,061                6,451
                                                                                                 -----------          -----------

       Net cash provided by (used in) operating activities                                     $        921         $     (1,630)
                                                                                                 ===========          ===========
</TABLE>

      See accompanying notes to condensed consolidated financial statements

                                      - 4 -

<PAGE>

                                 PRANDIUM, INC.
                                 --------------

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)

         1. Company.  Prandium, Inc.  (together with its subsidiaries, the
            -------
"Company"), was incorporated in Delaware in 1986. The Company, through its
subsidiaries, is primarily engaged in the operation of restaurants in the
full-service and fast-casual segments. At March 31, 2002, the Company operated
178 restaurants in 21 states, approximately 66% of which are located in
California, Ohio, Pennsylvania, Indiana and Michigan, and franchised and
licensed 7 restaurants outside the United States.

         2. Financial Statements. The Condensed Consolidated Financial
            --------------------
Statements in this Form 10-Q have been prepared in accordance with Securities
and Exchange Commission Regulation S-X. Reference is made to the Notes to the
Consolidated Financial Statements for the Fiscal Year Ended December 30, 2001
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 30, 2001 (the "Form 10-K") for information with respect to the
Company's significant accounting and financial reporting policies, as well as
other pertinent information. The Company believes that all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results of the interim periods presented have been made. The
results of operations for the quarter ended March 31, 2002 are not necessarily
indicative of those for the full year.

         3. Going Concern Matters and Recapitalization Plan. The Company's
            -----------------------------------------------
consolidated financial statements have been presented on a going concern basis,
which contemplates the realization of assets and satisfaction of liabilities in
the normal course of business. As shown in the 2001 consolidated financial
statements included in the Form 10-K, the Company incurred net losses of
$63,277,000, $41,772,000 and $36,491,000 for the fiscal years ended December 30,
2001, December 31, 2000 and December 26, 1999, respectively. As further shown in
the condensed consolidated financial statements included in this Form 10-Q, the
Company incurred an additional loss of $10,772,000 for the quarter ended March
31, 2002 and had a stockholders' deficit of $173,426,000 on March 31, 2002.

Financial Restructuring and Reorganization

         On May 6, 2002, following approval from sufficient debtholders, the
Company and the Company's subsidiary, FRI-MRD Corporation ("FRI-MRD"), each
filed cases (together, the "Reorganization Case") seeking confirmation of a
pre-packaged Chapter 11 plan of reorganization (the "Plan") in the United States
Bankruptcy Court for the Central District of California, Santa Ana division (the
"Bankruptcy Court"). The case is entitled In re Prandium, Inc. and FRI-MRD
Corporation, Case No. SA-02-13529 (RA) (Jointly Administered). The Bankruptcy
Court has set a hearing for the confirmation of the Plan for June 14, 2002.
Provided such confirmation is received, the Company expects to exit from
bankruptcy (the "Closing") by June 30, 2002 or as soon as practicable
thereafter. The Closing will be conditioned upon, among other things, the
Company's ability to enter into a new credit facility.

         The Company will remain in possession of its assets and properties
during the Reorganization Case, and the Company's existing directors and
officers will continue to oversee operation of the

                                      - 5 -

<PAGE>

Company's business as a debtor-in-possession, subject to supervision and orders
of the Bankruptcy Court. The Company will continue to operate its business in
Chapter 11 in the ordinary course and to the extent required, the Company has
obtained the necessary relief from the Bankruptcy Court to pay employees, trade
and certain other creditors in full and on time regardless of whether their
claims arose before or after the Chapter 11 filing. The claims of employees,
general unsecured creditors (other than noteholders) and secured creditors,
other than holders of the FRI-MRD 14% Senior Secured Discount Notes (the "14%
FRI-MRD Notes"), are not impaired under the Plan.

         Under the Plan, the 14% FRI-MRD Notes will be exchanged at a discount
for cash and the FRI-MRD 15% Senior Discount Notes (the "15% FRI-MRD Notes" and
together with the 14% FRI-MRD Notes, the "FRI-MRD Notes") will be exchanged at a
discount for a combination of cash and new notes (the "New Notes") having
substantially similar terms as the 15% FRI-MRD Notes except that the New Notes
(i) will mature on January 31, 2005, (ii) will have an interest rate of 12%,
(iii) will include capital expenditure restrictions on the 14 location Hamburger
Hamlet restaurant chain (the "Hamburger Hamlet Chain"), (iv) will require that
free cash flow generated by the Hamburger Hamlet Chain prior to a sale of the
restaurants, and the proceeds of any Hamburger Hamlet sale, be applied to prepay
the New Notes and (v) will contain additional limitations on indebtedness and
capital expenditures. In addition, while no cash interest payments will be
required on the New Notes, prepayments will be encouraged by an extra reduction
in principal of up to 33.33% of the prepaid amount, depending on how quickly the
prepayment is made.

         Also under the Plan, Prandium's 9 3/4% Senior Notes (the "9 3/4%
Prandium Notes") will be cancelled in exchange for new common stock of the
Company. Prandium's 10 7/8% Senior Subordinated Discount Notes (the "10 7/8%
Prandium Notes" and together with the 9 3/4% Prandium Notes, the "Prandium
Notes") will be cancelled without receiving any consideration. The current
common stock of the Company will also be cancelled without receiving any
consideration.

         Upon any Closing, the Company will, among other things, enter into a
note agreement (the "New Note Agreement") governing the New Notes, revise its
charter and bylaws and the charter of FRI-MRD, enter into a new secured
financing agreement, and designate a new five member board of directors. The
Plan also provides that after the Closing and until the New Notes are paid in
full, the holders of the New Notes will have the right to appoint one member to
the board of directors of the Company.

         The Plan does not involve any of the Company's or FRI-MRD's operating
subsidiaries. All other general unsecured claims of the Company and FRI-MRD will
remain unimpaired.

         The Company cannot provide any assurance that it will satisfy the
conditions to the Plan or that the Plan will be confirmed by the Bankruptcy
Court and consummated. In light of the amount owed to creditors and the size of
the Company's operations, under the Plan there will not be value available for
recovery by the current stockholders or the holders of the 10 7/8% Prandium
Notes. If the Plan cannot be completed as contemplated, the Company will need to
consider other alternatives, including but not limited to, a federal bankruptcy
filing without a prearranged or prepackaged reorganization plan. Under any
circumstances, the Company does not anticipate that there will be value
available for distribution to its current stockholders or the holders of the 10
7/8% Prandium Notes. Assuming the Company is able to work out an acceptable
capital structure, its continuing viability will be dependent upon its ability
to generate sufficient operating cash flow or cash flow

                                      - 6 -

<PAGE>

from other sources to meet its obligations on a timely basis and to comply with
the terms of any new financing agreements or to be able to renegotiate such
obligations and terms.

Historical Background to the Plan of Reorganization

         During 1999 and the first half of fiscal 2000, the Company explored
several financing transactions and other strategic alternatives in an effort to
meet its debt service requirements. This process culminated in the sale to
Acapulco Acquisition Corp. ("Acapulco") of the El Torito restaurant division on
June 28, 2000 (the "El Torito Sale"). A portion of the net cash proceeds from
that transaction was used to pay indebtedness of $25.9 million outstanding under
the Company's credit facility (the "Foothill Credit Facility") with Foothill
Capital Corporation ("Foothill"). In addition, Acapulco assumed $9.8 million of
long-term debt, consisting primarily of capitalized lease obligations, as part
of the El Torito Sale. However, even after completion of the El Torito Sale, the
Company continued to be highly leveraged and have significant annual debt
service requirements.

         During the second half of fiscal 2000, the Company began considering
other alternatives to address its debt service requirements. As a result of
discussions and deliberation among the Company and its legal and financial
advisors during January 2001, FRI-MRD elected not to pay the semi-annual
interest payments due January 31, 2001 and July 31, 2001 and the principal and
interest due January 24, 2002 on the FRI-MRD Notes. The Company also elected not
to pay the semi-annual interest payments due February 1, 2001 and August 1, 2001
and the principal and interest due February 1, 2002 on the Prandium Notes. Under
the terms of the note agreements governing the FRI-MRD Notes and the indentures
governing the Prandium Notes, these non-payments became "Events of Default" and
the holders of all such debt became entitled to certain rights, including the
right to accelerate the debt. In addition, the vesting of the right (whether or
not exercised) of the noteholders to accelerate the debt caused an "Event of
Default" to occur under the Foothill Credit Facility, and Foothill became
entitled to certain additional rights. As a result of these "Events of Default,"
the Company has classified all debt outstanding under the FRI-MRD Notes and the
Prandium Notes (approximately $233.4 million at March 31, 2002) as current in
the condensed consolidated balance sheet.

          The Company conducted negotiations with certain of its creditors,
including Foothill, the holders of the FRI-MRD Notes and some of the holders of
the Prandium Notes, to reach agreement on a capital restructuring of the Company
and its subsidiaries. In connection with these negotiations, the Company entered
into a term sheet dated November 7, 2001 (the "Note Term Sheet") and subsequent
letter agreement (the "Note Letter Agreement") dated March 26, 2002 with an
authorized representative of holders of a majority of the FRI-MRD Notes and an
agreement, dated as of April 1, 2002, with members of an informal group holding
in excess of 40% of the 9 3/4% Prandium Notes whereby such members agreed to
vote to accept the Plan. As a result of such negotiations, on April 8, 2002, the
Company and FRI-MRD commenced solicitation of acceptances of the Plan from the
holders of the 9 3/4% Prandium Notes and the holders of the FRI-MRD Notes. The
Company did not solicit votes from the holders of the 10 7/8% Prandium Notes or
its old common stock.

         The voting period for the solicitation ended on May 3, 2002. Holders of
the requisite amounts of the FRI-MRD Notes and the 9 3/4% Prandium Notes
accepted the Plan.

         The accompanying condensed consolidated financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts

                                      - 7 -

<PAGE>

and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern. The Company's continuation as a going
concern is dependent on a successful restructuring of its obligations and its
ability to generate sufficient cash flow to meet its obligations on a timely
basis, to obtain modifications in its financial and capital structure, to comply
with the terms of any new financing agreements and, ultimately, to attain
profitable operations.

         4. Sale of Hamburger Hamlet Restaurants. On May 10, 2002, the Company
            ------------------------------------
and FRI-MRD entered into a definitive agreement (the "Hamlet Agreement") to sell
the Hamburger Hamlet Chain to Latin Intellectual Properties, Inc. (the
"Purchaser"). Under the terms of the Hamlet Agreement, the Company will receive,
subject to certain post-closing adjustments based on closing financial
statements, $15 million in cash ($500,000 of which will be placed in escrow
following consummation of the sale). The sale of the Hamburger Hamlet Chain is
contemplated by the Company's Reorganization Case and is expected to close after
the Closing of the Reorganization Case but no earlier than July 24, 2002. If the
New Note Agreement is entered into in accordance with the Reorganization Case,
the proceeds of the sale will be used to prepay the New Notes in accordance with
the terms of the New Note Agreement. The Hamlet Agreement may be terminated by
Purchaser prior to June 9, 2002, subject to Purchaser's forfeiture of a $75,000
deposit. The sale is also subject to customary terms and conditions. There can
be no assurance that the sale will be successfully completed. A prior agreement
to sell the Hamburger Hamlet Chain to another party was entered into on October
23, 2001 and terminated on February 6, 2002 in accordance with its terms.

         The assets and liabilities of the Hamburger Hamlet Chain have been
written down to their estimated net realizable value of $14,786,000 and
classified as property held for sale in the accompanying condensed consolidated
balance sheet. This amount reflects an additional write-down of $1,058,000
recorded in the quarter ended March 31, 2002 to recognize the terms of the
Hamlet Agreement.

         The Hamburger Hamlet Chain generated sales of $7,902,000 and $8,366,000
for the quarters ended March 31, 2002 and April 1, 2001, respectively, and
related operating income of $813,000 and $971,000 for the same periods,
respectively. Such operating income includes charges for allocated general and
administrative expenses of $185,000 and $198,000 for the quarters ended March
31, 2002 and April 1, 2001, respectively.

         5. Strategic Divestment Programs. During the fiscal years 1999, 2000
            -----------------------------
and 2001, the Company designated three, ten and four non-strategic Koo Koo Roo
restaurants for divestment (the "KKR Strategic Divestment Program"),
respectively. In conjunction with the KKR Strategic Divestment Program, for such
periods, the Company recorded provisions for divestitures of $904,000,
$4,510,000 and $814,000, respectively. On a cumulative basis, these provisions
consisted of (i) $3,429,000 for the write-down to net realizable value of the
property and equipment associated with such restaurants and (ii) $2,799,000 for
costs associated with lease terminations, subsidized leases, brokerage fees and
other divestment costs. During 2001, the Company also recorded a provision for
severance costs of $189,000 associated with certain restaurant managers in
connection with the restaurants to be divested. During 2000, two of the
restaurants designated in 1999 were subleased and a third restaurant's lease was
terminated. Of the ten restaurants designated in 2000, nine were divested or
closed during 2001, and one was closed during the first quarter of 2002. Of the
four restaurants designated in 2001, one was divested in the fourth quarter of
2001, and three were divested or closed during the first quarter of 2002. For
the years ended December 30, 2001, December 31, 2000 and December 26, 1999, the
Company paid (i) $138,000, $0 and $0,

                                      - 8 -

<PAGE>

respectively, for severance costs associated with certain restaurant and
regional managers who were terminated in connection with the restaurants
divested and (ii) $947,000, $135,000 and $0, respectively, for net costs
associated with lease terminations, subsidized subleases, brokerage fees and
other divestment costs. During the first quarter of 2002, the Company paid
$18,000 for severance costs and $161,000 for lease terminations. During the
first quarter of 2002, restaurants still in operation under the KKR Strategic
Divestment Program had sales of $352,000 and restaurant- level operating losses
of $224,000.

         In the fourth quarter of 1998, 48 non-strategic Chi-Chi's restaurants
were designated for divestment (the "CC Strategic Divestment Program"). In
conjunction with the CC Strategic Divestment Program, the Company recorded a
provision for divestitures of $22,884,000, including divestment reserves of
$12,256,000. During the fourth quarter of 1999, the Company determined that it
would not be able to satisfactorily negotiate lease terminations or subleases
for 20 operating restaurants of the 48 Chi-Chi's restaurants designated for
divestment. As a result, these 20 restaurants were removed from the CC Strategic
Divestment Program, and $1,048,000 previously recorded in conjunction with the
provision for divestitures was reversed during the fourth quarter of 1999. After
this reversal, the eight restaurants remaining in the CC Strategic Divestment
Program were divested during 2000. In the fourth quarter of 2001, sixteen
additional Chi-Chi's restaurants were designated for divestment. The Company
recorded a provision for divestitures of $2,736,000. This provision consisted of
(i) $2,386,000 for the write-down to net realizable value of the property and
equipment associated with such restaurants and (ii) $350,000 for costs
associated with lease terminations, subsidized leases, brokerage fees and other
divestment costs. In December 2001, the Company recorded an additional provision
for divestitures of $2,029,000 for costs associated with lease terminations,
subsidized leases, brokerage fees and other divestment costs. For the years
ended December 30, 2001, December 31, 2000 and December 26, 1999, the Company
paid (i) $33,000, $225,000 and $287,000, respectively, for severance costs
associated with certain restaurant and regional managers who were terminated in
connection with the restaurants divested and (ii) $1,681,000, $2,124,000 and
$1,913,000, respectively, for net costs associated with lease terminations,
subsidized subleases, brokerage fees and other divestment costs. During the
first quarter of 2002, the Company recorded an additional provision of $695,000.
The provision consisted of (i) $250,000 for the write-off of a liquor license
and (ii) $445,000 for lease terminations and other divestment costs. During the
first quarter of 2002, the Company paid $38,000 for severance costs and $874,000
for lease terminations. During the first quarter of 2002, restaurants still in
operation under the CC Strategic Divestment Program had sales of $3,647,000 and
restaurant- level operating losses of $457,000.

         In the second quarter of 2001, the Company announced an organizational
restructuring that resulted in the elimination of approximately 40 positions in
the Company's support center. The Company recorded a provision of $1,607,000 for
severance and outplacement services and the amount was included in restructuring
costs on the 2001 consolidated statements of operations. For the year ended
December 30, 2001, a total of $1,521,000 was paid for severance and outplacement
services. During the first quarter of 2002, the Company paid $15,000 for
outplacement services.

         6. Segment Information. The Company operates exclusively in the
            -------------------
food-service industry. Substantially all revenues result from the sale of menu
products at restaurants operated by the Company. The Company's reportable
segments are based on restaurant operating divisions. The Koo Koo Roo Division
includes the operations of Koo Koo Roo and Hamburger Hamlet restaurants.
Operating income (loss) includes the operating results before interest. The
corporate component of sales, depreciation and amortization and operating income
(loss) represents operating results of certain other restaurants, as well as
corporate general and administrative expenses. Corporate assets include
corporate cash, restricted cash, investments, receivables, asset portions of
financing instruments and certain other restaurants.

                                      - 9 -

<PAGE>


<TABLE>
<CAPTION>
                                                                        For the Quarters Ended
                                                                  ----------------------------------
                                                                     March 31,            April 1,
                                                                       2002                 2001
                                                                  -------------         ------------
                                                                              (Unaudited)
                                                                            ($ in thousands)

<S>                                                             <C>                   <C>
Sales
    Chi-Chi's Division                                          $       49,215        $      53,457
    Koo Koo Roo Division                                                17,882               21,226
    Corporate                                                              798                1,299
                                                                  -------------         ------------
       Total Sales                                              $       67,895        $      75,982
                                                                  =============         ============

Depreciation and Amortization
    Chi-Chi's Division                                          $        2,174        $       2,774
    Koo Koo Roo Division                                                   604                1,054
    Corporate                                                              245                  349
                                                                  -------------         ------------
       Total Depreciation and Amortization                      $        3,023        $       4,177
                                                                  =============         ============

Operating Loss
    Chi-Chi's Division                                          $         (960)       $      (2,537)
    Koo Koo Roo Division                                                (1,337)              (1,033)
    Corporate                                                             (908)              (2,091)
                                                                  -------------         ------------
       Total Operating Loss                                     $       (3,205)       $      (5,661)
                                                                  =============         ============

Interest Expense, net
    Chi-Chi's Division                                          $          183        $         106
    Koo Koo Roo Division                                                    61                   42
    Corporate                                                            7,229                6,498
                                                                  -------------         ------------
       Total Interest Expense, net                              $        7,473        $       6,646
                                                                  =============         ============

Capital Expenditures
    Chi-Chi's Division                                          $          352        $         578
    Koo Koo Roo Division                                                    14                  967
    Corporate                                                               39                  168
                                                                  -------------         ------------
       Total Capital Expenditures                               $          405        $       1,713
                                                                  =============         ============

                                                                      March 31,         December 30,
                                                                       2002                 2001
                                                                  -------------         ------------
                                                                   (Unaudited)
                                                                            ($ in thousands)

Total Assets
    Chi-Chi's Division                                          $       88,339        $      90,784
    Koo Koo Roo Division                                                31,222               43,028
    Corporate                                                           46,533               40,070
                                                                  -------------         ------------
       Total Assets                                             $      166,094        $     173,882
                                                                  =============         ============
</TABLE>

                                      - 10 -

<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------    RESULTS OF OPERATIONS

         Certain information and statements included in this Management's
Discussion and Analysis of Financial Condition and Results of Operations,
including, without limitation, statements containing the words "believes,"
"anticipates," "expects," "intends," "plans," "estimates" and words of similar
import, constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and involve known and unknown
risks and uncertainties that could cause actual results of the Company or the
restaurant industry to differ materially from expected results expressed or
implied by such forward-looking statements. Although it is not possible to
itemize all of the factors and specific events that could affect the outlook of
a restaurant company operating in a competitive environment, factors that could
significantly impact expected results include:

         .   the ability of the Company to satisfy or restructure its debt
             obligations and/or capital structure;

         .   determination of any judicial court involved in the restructuring
             of the Company;

         .   the ability of the Company to sell the Hamburger Hamlet restaurant
             chain on acceptable terms;

         .   the continuing development of successful marketing strategies for
             each of the Company's concepts;

         .   the effect of national and regional economic conditions;

         .   the availability of adequate working capital;

         .   competitive products and pricing;

         .   changes in legislation;

         .   demographic changes;

         .   the ability to attract and retain qualified personnel;

         .   changes in business strategy or development or divestment plans;

         .   business disruptions;

         .   changes in consumer preferences, tastes and eating habits;

         .   increases in food and labor costs; and

         .   increases in utility costs and the impact of potential utility
             interruptions.

                                      - 11 -

<PAGE>

         The Company disclaims any obligation to update any such factors or to
publicly announce the result of any revisions to any of the forward-looking
statements contained herein to reflect future events or developments.

         The following should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
presented in the Form 10-K.

CRITICAL ACCOUNTING POLICIES

         The Company's financial condition and results of operations are
necessarily impacted by the methods, assumptions and estimates used in the
application of critical accounting policies. The following accounting policies
are particularly important to the financial condition or results of operations
of the Company, and require estimates or other judgments of matters inherently
uncertain. Changes in the estimates or other judgments included within these
accounting policies could result in a significant change to the information
presented in the condensed consolidated financial statements.

         1. Impairment of Long-Lived Assets. The Company reviews long-lived
            -------------------------------
assets for impairment when events or circumstances indicate that the carrying
amounts may not be recoverable. Assets subject to this review, and for which
impairments have been recorded in 2002 or prior years, include property, plant
and equipment and costs in excess of net assets of business acquired.

         In determining asset impairments, management must make significant
judgments and estimates to calculate the fair value of an asset. Fair value is
developed through consideration of several valuation methods including
comparison of similar recent sales transactions and discounted cash flow.
Discounted cash flow is calculated by estimating future cash flow streams,
applying appropriate discount rates to determine the present values of the cash
flow streams, and then assessing the probability of the various cash flow
scenarios. The impairment is then recorded based on the excess of the carrying
value of the asset over fair value.

         Changes in assumptions and estimates included within the impairment
reviews could result in significantly different results than those discussed
below in Results of Operations and recorded in the condensed consolidated
financial statements.

         2. Insurance Reserves. Insurance liabilities and reserves are accounted
            ------------------
for based on actuarial estimates of the amount of loss inherent in that period's
claims, including losses for which claims that have not yet been reported. These
estimates rely on actuarial calculations of ultimate loss experience for similar
historical events and an estimate of incurred but not reported claims. The
Company's insurance reserves totaled $7,763,000 at March 31, 2002. Management
continually evaluates the potential for changes in loss estimates, both positive
and negative, and uses the results of these evaluations to adjust recorded
provisions and reserves.

         3. Divestment Reserves. The Company makes decisions to close
            -------------------
restaurants based on their cash flows and anticipated future profitability.
Losses on disposition of properties are recognized when a commitment to divest a
restaurant property is made by the Company and include

                                      - 12 -

<PAGE>

estimated carrying costs through the expected disposal date. These divestment
charges represent a liability for the net present value of any remaining lease
obligations, including executory costs, after the expected closure dates, net of
estimated sublease income, if any. These estimates of future costs often
require significant judgments and estimates by management and could be
materially affected by factors such as the Company's ability to secure subleases
and the Company's success at negotiating early termination agreements with
lessors. While management believes the current estimates of future liabilities
are adequate, it is possible that future events could require the Company to
make significant adjustments for revisions to these estimates.

         As used herein, "comparable restaurants" means restaurants operated by
the Company for at least eighteen months and that continued in operation through
the end of the first quarter of 2002.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

         A.  Liquidity

         The Company reported net cash provided by operating activities of
$921,000 for the quarter ended March 31, 2002 and net cash used in operating
activities of $1.6 million for the quarter ended April 1, 2001. Cash needs are
being funded by available cash balances which resulted from the El Torito Sale
and cash provided by operating activities. The Company's viability is dependent
upon its ability to restructure its debt and/or capital structure. As described
below, the Company filed a Reorganization Case to confirm a pre-packaged Chapter
11 plan of reorganization (the "Plan") with the Bankruptcy Court. The Company
cannot provide any assurance that it will satisfy the conditions to the Plan or
that the Plan will be confirmed by the Bankruptcy Court and consummated. In
light of the amount owed to creditors and the size of the Company's operations,
under the Plan, there will not be value available for recovery by the current
stockholders or the holders of the 10 7/8% Prandium Notes. If the Plan cannot be
completed as contemplated, the Company will need to consider other alternatives,
including but not limited to, a federal bankruptcy filing without a prearranged
or prepackaged reorganization plan. Under any circumstances, the Company does
not anticipate that there will be value available for distribution to its
current stockholders or the 10 7/8% Prandium Notes. Assuming the Company is able
to work out an acceptable capital structure, its continuing viability will be
dependent upon its ability to generate sufficient operating cash flow or cash
flow from other sources to meet its obligations on a timely basis and to comply
with the terms of any new financing agreements or to be able to renegotiate such
obligations and terms.

         Statement of Cash Flows. For the quarter ended March 31, 2002, net cash
provided by operating activities was $921,000 compared to $1.6 million used in
operating activities for the same period in 2001. This change was primarily due
to the $2.8 million increase in cash received from customers, franchisees and
licensees net of cash paid to suppliers and employers. For the first quarter of
2002, net cash used in investing activities was $33,000 compared to $3.9 million
used in investing activities for the same period in 2001. This change was
primarily due to a $1.3 million decrease in capital expenditures and a $2.4
million net decrease in restricted cash. For the first quarter of 2002, net cash
used in financing activities was $404,000 compared to $338,000 used in financing
activities for the same period in 2001.

         EBITDA. For the first quarter of 2002, the Company reported EBITDA
(defined as earnings (loss) before opening costs, loss (gain) on disposition of
properties, provision for divestitures, restructuring costs, interest, taxes and
depreciation and amortization) of $2.5 million, compared to

                                      - 13 -

<PAGE>

$(347,000) in the same period of 2001. The $2.9 million increase was primarily
composed of (i) a $1.7 million increase in the EBITDA attributable to the
Chi-Chi's restaurants; (ii) a $399,000 increase in the EBITDA attributable to
the Koo Koo Roo restaurants; (iii) a $158,000 decrease in the EBITDA
attributable to the Hamburger Hamlet restaurant chain; and (iv) $1.1 million of
previously unallocated general and administrative expenses which have been
eliminated.

         The Company has included information concerning EBITDA herein because
it understands that such information is used by certain investors as one
measure of an issuer's historical ability to service debt. EBITDA should not be
considered as an alternative to, or more meaningful than, operating income
(loss) as an indicator of operating performance or cash flows from operating
activities as a measure of liquidity. Furthermore, other companies may compute
EBITDA differently, and therefore, EBITDA amounts among companies may not be
comparable.

         Working Capital Deficiency. The Company normally operates with a
working capital deficiency because:

         .   restaurant operations are conducted primarily on a cash (and cash
             equivalent) basis with a low level of accounts receivable;

         .   rapid turnover allows a limited investment in inventories; and

         .   cash from sales is applied to the payment of related accounts
             payable for food, beverages and supplies which are generally
             purchased on trade credit terms.

         The Company had a working capital deficiency of $269.4 million on
March 31, 2002. This amount includes property held for sale of approximately
$14.8 million and the classification of approximately $233.4 million in debt
outstanding under the FRI-MRD Notes and Prandium Notes as current.

         The following represents a comprehensive list of the Company's
contractual obligations and commitments, giving effect to the Events of Default
discussed below and excluding any new debt resulting from the reorganization ($
in thousands):

<TABLE>
<CAPTION>
                                                    Payments Due by Period
                            -----------------------------------------------------------------------------------
                                      Remaining
                                      Nine Months                 Years Ending December
                                                    -----------------------------------------------
                             Total       2002       2003       2004      2005      2006       2007  Thereafter
                             ------      ----       ----       ----      ----      ----       ----  ----------
<S>                        <C>        <C>          <C>       <C>        <C>       <C>        <C>      <C>
Long-term debt,
   including capitalized
   lease obligations       $  1,521   $   554      $   381   $   194    $   157   $   113    $   122   $     -
Operating leases            129,547    19,435       23,985    20,489     17,803    12,201     10,293    25,341
                           --------   -------      -------   -------    --------  --------   --------   -------
   Total contractual
   cash obligations        $131,068   $19,989      $24,366   $20,683    $17,960   $12,314    $10,415   $25,341
                           ========   =======      =======   =======    =======   =======    =======   =======
</TABLE>

Debt Restructuring and History of Negotiations with Creditors.

         1. Reorganization Plan. On May 6, 2002, following approval from
            -------------------
sufficient debtholders, the Company and FRI-MRD each filed a Reorganization Case
seeking confirmation of the Plan with the Bankruptcy Court. The case is entitled
In re Prandium, Inc. and FRI-MRD

                                      - 14 -

<PAGE>

Corporation, Case No. SA-02-13529 (RA) (Jointly Administered). The Bankruptcy
Court has set a hearing for the confirmation of the Plan for June 14, 2002.
Provided such confirmation is received, the Company expects the Closing to
occur by June 30, 2002 or as soon as practicable thereafter. The Closing will
be conditioned upon, among other things, the Company's ability to enter into a
new credit facility.

         The Company will remain in possession of its assets and properties
during the Reorganization Case, and the Company's existing directors and
officers will continue to oversee operation of the Company's business as a
debtor-in-possession, subject to supervision and orders of the Bankruptcy
Court. The Company will continue to operate its business in Chapter 11 in the
ordinary course and to the extent required, the Company has obtained the
necessary relief from the Bankruptcy Court to pay employees, trade and certain
other creditors in full and on time regardless of whether their claims arose
before or after the Chapter 11 filing. The claims of employees, general
unsecured creditors (other than noteholders) and secured creditors, other than
holders of the 14% FRI-MRD Notes, are not impaired under the Plan.

         Under the Plan, the 14% FRI-MRD Notes will be exchanged at a discount
for cash and the 15% FRI-MRD Notes will be exchanged at a discount for a
combination of cash and New Notes having substantially similar terms as the 15%
FRI-MRD Notes except that the replacement notes (i) will mature on January 31,
2005, (ii) will have an interest rate of 12%, (iii) will include capital
expenditure restrictions on the Hamburger Hamlet Chain, (iv) will require that
free cash flow generated by the Hamburger Hamlet Chain prior to a sale of the
restaurants, and the proceeds of any Hamburger Hamlet sale, be applied to
prepay the New Notes and (v) will contain additional limitations on
indebtedness and capital expenditures. In addition, while no cash interest
payments will be required on the New Notes, prepayments will be encouraged by
an extra reduction in principal of up to 33.33% of the prepaid amount,
depending on how quickly the prepayment is made.

         Also under the Plan, the 9 3/4% Prandium Notes will be cancelled in
exchange for new common stock of the Company. The 10 7/8% Prandium Notes will
be cancelled without receiving any consideration. The current common stock of
the Company will also be cancelled without receiving any consideration.

         Upon any Closing, the Company will, among other things, enter into the
New Note Agreement, revise its charter and bylaws and the charter of FRI-MRD,
enter into a new secured financing agreement, and designate a new five member
board of directors. The Plan also provides that after the Closing and until the
New Notes are paid in full, the holders of the New Notes will have the right to
appoint one member to the board of directors of the Company.

         The Plan does not involve any of the Company's or FRI-MRD's operating
subsidiaries. All other general unsecured claims of the Company and FRI-MRD will
remain unimpaired.

          The Plan is the product of negotiations with certain of the Company's
creditors, including Foothill, the holders of the FRI-MRD Notes and some of the
holders of the Prandium Notes. As a result of these negotiations, on April 8,
2002, the Company and FRI-MRD commenced solicitation of acceptances of the Plan
from the holders of the 9 3/4% Prandium Notes and the holders of the FRI-MRD
Notes. The Company did not solicit votes from the holders of the 10 7/8%
Prandium Notes or its old common stock.

                                      - 15 -

<PAGE>

         The voting period for the solicitation ended on May 3, 2002. Holders
of the requisite amounts of the FRI-MRD Notes and the 9 3/4% Prandium Notes
accepted the Plan.

         The Company cannot provide any assurance that it will satisfy the
conditions to the Plan or that the Plan will be confirmed by the Bankruptcy
Court and consummated. In light of the amount owed to creditors and the size of
the Company's operations, under the Plan there will not be value available for
recovery by the current stockholders or the holders of the 10 7/8% Prandium
Notes. If the Plan cannot be completed as contemplated, the Company will need
to consider other alternatives, including but not limited to, a federal
bankruptcy filing without a prearranged or prepackaged reorganization plan.
Under any circumstances, the Company does not anticipate that there will be
value available for distribution to its current stockholders or the holders of
the 10 7/8% Prandium Notes. Assuming the Company is able to work out an
acceptable capital structure, its continuing viability will be dependent upon
its ability to generate sufficient operating cash flow or cash flow from other
sources to meet its obligations on a timely basis and to comply with the terms
of any new financing agreements or to be able to renegotiate such obligations
and terms.

         2. Credit Facility. On January 10, 1997, the Company entered into the
            ---------------
Foothill Credit Facility which provided for a five-year, $35 million credit
facility for the ongoing working capital needs of the Company. As a result of
the 1998 merger with Koo Koo Roo, Inc., the Company increased the Foothill
Credit Facility to $55 million. In connection with the El Torito Sale, (i) the
Company used a portion of the cash proceeds from the sale to repay $25.9
million outstanding under the Foothill Credit Facility and (ii) the Foothill
Credit Facility was amended and restated to adjust all restrictive covenants to
reflect the El Torito Sale and reduce the credit facility to a maximum of $20
million (subject to certain limitations) of letters of credit and revolving
cash borrowings. The Foothill Credit Facility:

         .   is secured by substantially all of the personal property of the
             Company (other than the capital stock of Hamlet) along with the
             cash collateral discussed below; and

         .   contains covenants which restrict, among other things, the
             Company's ability to incur debt, pay dividends on or redeem
             capital stock, make certain types of investments, make dispositions
             of assets and engage in mergers and consolidations.

         The Company was not in compliance with certain financial ratios at
March 31, 2002, December 30, 2001, September 30, 2001, July l, 2001, April 1,
2001 and December 31, 2000. In addition, the vesting of the FRI-MRD
noteholders' right to accelerate the debt caused an Event of Default to occur
under the provisions of the Foothill Credit Facility. The Company has notified
Foothill of all such Events of Default. Letters of credit are issued under the
Foothill Credit Facility in large part to provide security for future amounts
payable under the Company's workers' compensation insurance program ($9.5
million of letters of credit were outstanding as of May 10, 2002, all of which
were cash collateralized as described below). No working capital borrowings
were outstanding as of March 31, 2002 or May 10, 2002.

         On March 29, 2001, May 15, 2001 and June 18, 2001, Foothill, FRI-MRD
and Chi-Chi's entered into a series of letter agreements whereby FRI-MRD and
Chi-Chi's acknowledged certain specified events of default and that as a result
of such events of default, Foothill has no further obligation to make advances
under the Foothill Credit Facility, and Foothill agreed that, subject to
certain conditions, it would forbear from exercising its remedies relative to
such events of default.

                                      - 16 -

<PAGE>

Pursuant to the May 15, 2001 letter agreement, FRI-MRD paid a forbearance fee
in the amount of $100,000 and transferred $4,000,000 in cash to Foothill to be
held as cash collateral and as additional security for the outstanding letters
of credit. Pursuant to the June 18, 2001 letter agreement, in which FRI-MRD and
Chi-Chi's agreed to cash collateralize all letters of credit outstanding under
the Foothill Credit Facility in an amount equal to 105% of face value, FRI-MRD
transferred approximately $8,068,000 to Foothill, bringing the total amount
held by Foothill for that purpose to approximately $12,068,000 at that time
(cash collateral held by Foothill is included as part of the restricted cash
balance on the Company's condensed consolidated balance sheet). After receiving
this amount, Foothill released its liens on the real property of the Company
and its subsidiaries.

         On October 18, 2001, January 10, 2002 and March 13, 2002, the Company,
FRI-MRD, Chi-Chi's and certain other subsidiaries of the Company entered into
subsequent letter agreements with Foothill whereby the Company acknowledged
that certain specified events of default had occurred and reacknowledged that
Foothill has no further obligation to make advances or otherwise extend credit
under the Foothill Credit Facility. Foothill agreed that, subject to certain
conditions including the reaffirmation and consent by the Company, FRI-MRD and
certain other subsidiaries of the Company of their obligations under the
Foothill Credit Facility and the payment of forbearance fees in the amount of
$50,000 on October 18, 2001 and $60,000 on March 13, 2002, it would forbear
from exercising its remedies relative to the events of default specified in the
letter agreement until the earliest to occur of: (i) June 30, 2002 (or such
later date as Foothill may designate in writing in its sole discretion); (ii)
the occurrence of any Event of Default under the Foothill Credit Facility
(other than those defaults set forth in, and certain future defaults
contemplated by, the letter agreement); and (iii) the failure of the Company to
comply with certain covenants set forth in the letter agreements. The Company
also (A) released Foothill from any claims they may have arising under the
Foothill Credit Facility, (B) agreed not to seek authority from any bankruptcy
court to obtain the use of any cash Foothill holds as cash collateral and
additional security for letters of credit outstanding under the Foothill Credit
Facility and (C) agreed that the Company and FRI-MRD would each commence a
pre-negotiated or prepackaged proceeding under chapter 11 of the United States
Bankruptcy Code on or before May 15, 2002. The Foothill Credit Facility was
amended to extend its maturity date to June 30, 2002, and to increase the
amount of a substitute letter of credit, which the Company must deliver to
Foothill upon the Foothill Credit Facility's termination, from 105% to 107% of
the outstanding letters of credit if Foothill is not released from all such
letters of credit. The fee on undrawn letters of credit was also increased from
3% to 5% per annum. As of May 10, 2002, Foothill currently continues to hold
approximately $10.2 million as cash collateral for the outstanding letters of
credit.

         The Company is currently negotiating with Foothill to replace the
existing Foothill Credit Facility with a new $15 million credit facility. The
existence of a new credit facility is a condition to the Closing of the
Reorganization Case. The new credit facility would provide for letters of
credit, a line of credit for the ongoing working capital needs of the Company
and the release of the cash collateral held by Foothill. While a term sheet
between the parties expired on March 31, 2002, negotiations are continuing.
There can be no assurance that an agreement can be reached with Foothill or on
the terms of such an agreement.

         3. FRI-MRD and Prandium Notes. After completion of the El Torito Sale,
            --------------------------
the Company continued to be highly leveraged and have significant annual debt
service requirements. During the second half of fiscal 2000, the Company began
considering various alternatives to address its debt service requirements. As a
result of discussions and deliberations among the Company and its legal

                                      - 17 -

<PAGE>

and financial advisors during January 2001, the Company's subsidiary FRI-MRD
elected not to pay the semi-annual interest payments due January 31, 2001 and
July 31, 2001 and the principal and interest due January 24, 2002 on the
FRI-MRD Notes. The Company also elected not to pay the semi-annual interest
payments due February 1, 2001 and August 1, 2001 and the principal and interest
due February 1, 2002 on the Prandium Notes. Under the terms of the note
agreements governing the FRI-MRD Notes and the indentures governing the
Prandium Notes, these non-payments became Events of Default and the holders of
all such debt have become entitled to certain rights, including the right to
accelerate the debt. In addition, the vesting of the right (whether or not
exercised) of the noteholders to accelerate the debt caused an Event of Default
to occur under the Foothill Credit Facility and Foothill became entitled to
certain additional rights.

         The Company has executed each of the Note Term Sheet and the Note
Letter Agreement with an authorized representative of the holders of the
FRI-MRD Notes. The Note Term Sheet and the Note Letter Agreement contemplate
restructuring the terms of the FRI-MRD Notes as provided for in the Plan.

         4. Other. On May 10, 2002, the Company and FRI-MRD entered into the
            -----
Hamlet Agreement to sell the Hamburger Hamlet Chain to Latin Intellectual
Properties, Inc. Under the terms of the Hamlet Agreement, the Company will
receive, subject to certain post-closing adjustments based on closing financial
statements, $15 million in cash ($500,000 of which will be placed in escrow
following consummation of the sale). The sale of the Hamburger Hamlet Chain is
contemplated by the Company's Reorganization Case and is expected to close
after the Closing of the Reorganization Case but no earlier than July 24, 2002.
If the New Note Agreement is entered into in accordance with the Reorganization
Case, the proceeds of the sale will be used to prepay the New Notes in
accordance with the terms of the New Note Agreement. The Hamlet Agreement may
be terminated by Purchaser prior to June 9, 2002, subject to Purchaser's
forfeiture of a $75,000 deposit. The sale is also subject to customary terms
and conditions. There can be no assurance that the sale will be successfully
completed. A prior agreement to sell the Hamburger Hamlet Chain to another
party was entered into on October 23, 2001 and terminated on February 6, 2002
in accordance with its terms.

         B. CAPITAL EXPENDITURES

         Net cash used in investing activities was $33,000 for the first
quarter of 2002, including $405,000 used for capital expenditures, as compared
to net cash used in investing activities of $3.9 million for the same period in
2001. The change in net cash used in investing activities for the first
quarter of 2002 was primarily due to a $1.3 million decrease in capital
expenditures and a $2.4 million net decrease in restricted cash.

         Capital expenditures of up to approximately $7.8 million have been
identified for fiscal 2002. The Company is evaluating the roll-out of new decor
and kitchen equipment packages to additional Koo Koo Roo restaurants in support
of its new menu items and to revitalize guests' perceptions of the quality and
freshness of the food. Other capital plans are currently being formulated.
Actual capital expenditures for fiscal 2002 will be dependent on the successful
resolution of the Company's capital structure, restrictions under the Company's
debt instruments and the availability of the required funds.

                                      - 18 -

<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------

         In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement No. 141, "Business Combinations" ("SFAS 141"), and Statement No. 142,
"Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. SFAS 141 also specifies criteria for intangible assets
acquired in a purchase method business combination to meet in order to be
recognized and reported apart from goodwill. SFAS 142 requires that goodwill
and intangible assets with indefinite useful lives no longer be amortized, but
instead be tested for impairment at least annually in accordance with the
provisions of SFAS 142. SFAS 142 also requires that intangible assets with
definite useful lives be amortized over their respective estimated useful lives
to their estimated residual values and reviewed for impairment in accordance
with Statement No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144").

         The Company was required to adopt the provisions of SFAS 141 effective
July 1, 2001 and the provisions of SFAS 142 effective January 1, 2002. As a
result of the anticipated sale of the Company's Hamburger Hamlet restaurant
chain and the classification of the net realizable value of Hamburger Hamlet's
assets and liabilities as property held for sale, the Company no longer has
goodwill or intangible assets to analyze in connection with the adoption of
SFAS 142, accordingly, the adoption of this statement did not have a material
impact on the Company's condensed consolidated financial statements. Excess
reorganization value, if any, resulting from the Company's proposed
reorganization would fall under the scope of SFAS 142. The Company is unable to
determine the impact on the consolidated financial statements of any such
excess reorganization value.

         The FASB issued Statement No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS 143"), in September 2001. SFAS 143 is effective for fiscal
years beginning after June 15, 2002 and addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. Management does not believe
that the adoption of this standard will have any impact on the Company's
financial position, results of operations or liquidity.

         The FASB issued SFAS 144 in October 2001. SFAS 144 is effective for
fiscal years beginning after December 15, 2001, addresses financial accounting
and reporting for the impairment or disposal of long-lived assets and
effectively supersedes Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of." The Company was
required to adopt the provisions of SFAS 144 effective January 1, 2002. The
adoption of this standard did not have a material impact on the Company's
condensed consolidated financial statements.

RESULTS OF OPERATIONS
---------------------

         The Company's total sales of $67,895,000 for the first quarter of 2002
decreased by $8,087,000 or 10.6% as compared to the same period in 2001. The
decrease was the result of declines in comparable restaurant sales for
Chi-Chi's, Koo Koo Roo and Hamburger Hamlet and sales decreases for restaurants
sold or closed, partially offset by sales from a new Koo Koo Roo restaurant.
The breakdown of the sales decrease for the first quarter of 2002 is shown in
the

                                      - 19 -

<PAGE>

following table.

                                                              Change in
                                                             First Quarter
                                                                 Sales
                                                            ---------------
                                                            ($ in thousands)
Decrease in Sales of Comparable Restaurants                    $(4,669)
Decrease in Sales from Restaurants Sold or Closed               (3,671)
Sales from New Restaurant                                          253
                                                               -------
                                                               $(8,087)
                                                               =======
         Overall, sales for comparable restaurants were $65,960,000 for the
first quarter of 2002, a $4,669,000 or 6.6% decline from the same period in
2001. As is shown in the following table, this decline resulted from decreased
sales in all concepts. Some of the decline resulted from a mismatch for Easter
and Spring Break, which occurred in the second quarter of 2001 but in the first
quarter of 2002, and the televised coverage of the Winter Olympics in 2002.

                                              Change in
                                            First Quarter
                                                Sales
                                           --------------
                                           Amount   Percent
                                           ------   -------
                                           ($ in thousands)

Comparable Chi-Chi's                        $(3,144)    (6.1)%
Comparable Koo Koo Roo                       (1,061)   (10.2)
Comparable Hamburger Hamlet                    (464)    (5.5)
                                            --------
         Total                              $(4,669)    (6.6)%
                                            =======     ====

         Sales for comparable Chi-Chi's declined 6.1% in the first quarter of
2002 compared to the same period in 2001. Because approximately 20% of the
Chi-Chi's chain is closed for Easter and the remainder of the system
experiences much lower volumes on Easter, the Company estimates that the
mismatch of the holiday was responsible for approximately 1.2 percentage points
of the 6.1% decline versus prior year for the first quarter. The first
promotion for the year was a freestanding newspaper insert featuring Tacos,
Baja Style and including coupons valid during the quarter. The first broadcast
campaign began on March 11 with selected markets receiving television, radio or
cable media support and introducing "Flaming Fajitas" and Chi-Chi's "Total
Salsafication Guarantee" which promises guests that they will be totally
satisfied or their meal is free.

         In the first quarter of 2002, sales for comparable Koo Koo Roo
restaurants declined 10.2% compared to the same period in 2001. The Company
estimates that approximately 0.5 percentage point of the 10.2% variance was
related to the mismatch of Spring Break and the televised coverage of the
Winter Olympics which occurred during prime time in California where Koo Koo
Roo operates. Koo Koo Roo introduced the Greek Salad during a promotion of
salads that began January 28, 2002 and was supported by coupons distributed
through a shared mail program. The Greek Salad is the first new menu item to be
introduced system-wide as part of Koo Koo Roo's strategy to broaden its menu
appeal. Other items in various stages of development and test are scheduled to
be introduced to the system throughout the year.

                                      - 20 -

<PAGE>

         Sales for comparable Hamburger Hamlet restaurants decreased 5.5% in
the first quarter of 2002 as compared to the same period in 2001. The Company
estimates that the impact of the Winter Olympics was approximately 0.5
percentage point and the mismatch of Easter was an additional 0.1 percentage
point of the 5.5% decrease to prior year. From a marketing perspective, a new
"Hamlet at Night" menu was introduced at the beginning of March 2002. These
menus, of which there are approximately three introduced per year, are used to
add seasonal variety and excitement to the standard menu. The Spring 2002
"Hamlet at Night" menu features Curried Chicken and Apple Croquettes, Chicken
Parmesan Linguini, Chinese Sole, Blackened Mango Chicken and, for dessert,
Homemade Banana Cream Pie.

         Product costs of $17,266,000 for the first quarter of 2002 decreased
$3,195,000 or 15.6% as compared to the same period in 2001. Product costs as a
percentage of sales decreased 1.5 percentage points from 26.9% in 2001 to 25.4%
in 2002. The primary cause for the decrease in the percentage of sales was
favorable commodity costs versus 2001, particularly in chicken and produce.
Approximately 0.2 percentage point of the percentage of sales decrease was the
revision of the Week Day Fiesta cantina program for Chi-Chi's that provided
discounts in the first quarter of 2001 on margaritas and beer. Overall liquor
discounts in Chi-Chi's increased 260% during the first quarter of 2001 as the
result of this program. The program was modified at the beginning of the second
quarter of 2001. The remainder of the product costs decrease was related to the
sales declines from comparable and closed restaurants.

         Payroll and related costs of $24,488,000 decreased $3,119,000 or 11.3%
for the first quarter of 2002 as compared to the first quarter of 2001. As a
percentage of sales, payroll and related costs were 36.1% in the first quarter
of 2002, 0.2 percentage point lower than the same period in 2001. The primary
reasons for the percentage of sales decrease were improved labor efficiencies
offset by an increase in workers' compensation insurance expense. The remainder
of the payroll and related costs decrease was related to the sales declines
from comparable and closed restaurants.

         The Company is subject to Federal and state laws governing matters
such as minimum wages, overtime and other working conditions. Approximately
half of the Company's employees are paid at rates related to the minimum wage.
Therefore, increases in the minimum wage or decreases in the allowable tip
credit (tip credits reduce the minimum wage that must be paid to tipped
employees in certain states) increase the Company's labor costs. This is
especially true in California, where there is no tip credit. In October 2000,
the California Industrial Welfare Commission voted to increase the state's
minimum wage by 50[cent] to $6.25 on January 1, 2001 and by 50[cent] to $6.75
on January 1, 2002. No increases to the $5.15 Federal minimum wage are
currently scheduled for 2002. In response to previous minimum wage increases,
the Company has implemented various menu price increases. Each of the Company's
concepts raised prices in early 2001 and will raise prices in the second
quarter of 2002.

         Occupancy and other operating expenses were $18,922,000 for the first
quarter of 2002, $3,466,000 or 15.5% lower than the same period in 2001. As a
percentage of sales, occupancy and other operating expenses were 27.9% in 2002,
1.6 percentage points lower than 2001. The primary reasons for the decreased
percentage of sales were (i) reduced advertising expense in Chi-Chi's and Koo
Koo Roo, (ii) lower utilities expense, particularly natural gas for Chi-Chi's,
and (iii) 2001 expenses associated with two system-wide menu distributions and
added plates in Chi-Chi's which were not repeated in 2002. The remainder of the
occupancy and other operating expenses decrease

                                      - 21 -

<PAGE>

was related to restaurants open during the first quarter of 2001, but closed
during the same period of 2002.

         Depreciation and amortization of $3,023,000 for the first quarter of
2002 decreased by $1,154,000 or 27.6% as compared to the same period in 2001
due to the impact of restaurants sold or closed since the beginning of 2001 and
the reduced depreciable basis from the classification of assets held for sale
and the impairment write-down of certain long-lived assets.

         General and administrative expenses for the first quarter of 2002 were
$4,671,000, $1,202,000 or 20.5% lower than the same period in 2001. As a
percentage of sales, general and administrative expenses were 6.9% in 2002, 0.8
percentage point lower than 2001. Structural reductions in the Company's
support center implemented in 2001 generated approximately $1.3 million of
savings, 108.3% of the total variance, for the first quarter of 2002 when
compared to the same period of 2001.

         Opening costs are incurred in connection with the opening or
remodeling of a restaurant and are principally related to stocking the
restaurant and training its staff. Opening costs of $1,000 in 2002 decreased
$49,000 or 98.0% from 2001 as the Company did not open or remodel any
restaurants in the first quarter of 2002.

         The Company reported a loss on disposition of properties of $141,000
for the first quarter of 2002 compared to a loss of $402,000 for the same
period in 2001.

         In the first quarter of 2002, the Company recorded a provision for
divestitures of $2.2 million compared to $189,000 for the same period in 2001.
The provision for divestitures in 2002 was primarily composed of (i) $250,000
for the write-off of a liquor license; (ii) $445,000 for lease terminations and
other divestment costs and (iii) $1.5 million related to the sale of the
Hamburger Hamlet restaurant chain.

         The Company reported restructuring costs of $381,000 for the first
quarter of 2002 as compared to $496,000 in 2001. These costs are primarily
related to amounts paid to legal and financial advisors in connection with the
Company's debt and capital restructuring.

         Interest expense, net of $7,473,000 for the first quarter of 2002
increased by $827,000 or 12.4% as compared to 2001 primarily due to charges
related to defaults under the Foothill Credit Facility and reduced interest
income on excess cash balances.

SEASONALITY.
-----------

         The Company, as a whole, does not experience significant seasonal
fluctuations in sales. However, the Company's sales tend to be slightly greater
during the spring and summer months.

SELECTED DIVISION OPERATING DATA.
--------------------------------

         The following table sets forth certain information regarding (i) the
Company; (ii) its ongoing Chi-Chi's restaurants, Koo Koo Roo restaurants and
Hamburger Hamlet restaurants (both acquired on October 30, 1998) and other
operating restaurants; and (iii) the El Torito restaurant division divested on
June 28, 2000. At March 31, 2002, the Company operated 133 full-service
Chi-Chi's restaurants, 30 fast-casual Koo Koo Roo restaurants, 14 full-service
Hamburger Hamlet restaurants and one other restaurant.

                                      - 22 -

<PAGE>


<TABLE>
<CAPTION>
                                                                            For the Quarters Ended
                                                              ---------------------------------------------------
                                                                March 31,           April 1,           March 26,
                                                                  2002                2001               2000
                                                              ------------        ------------      -------------
                                                                  ($ in thousands, except average check amount)
<S>                                                             <C>               <C>                 <C>
Chi-Chi's Restaurants
---------------------
Restaurants Open at End of Period:
   Owned/operated                                                     133                140                  148
   Franchised and Licensed                                              7                 13                   13
Sales                                                           $  49,215           $ 53,457            $  55,939
Restaurant Level Cashflow(a)                                        5,344              3,481                5,689
Divisional EBITDA(b)                                                2,040                329                2,386
Percentage increase (decrease) in comparable restaurant sales        (6.1)%             (0.7)%                1.0%
Average check (excluding alcoholic beverage sales)              $   11.35           $  10.79            $    9.78

Koo Koo Roo Restaurants(c)
--------------------------
Restaurants Open at End of Period:
   Owned/operated                                                      30                  41                  44
   Franchised and Licensed                                              -                   -                   -
Sales                                                           $   9,980            $ 12,860           $  13,782
Restaurant Level Cashflow(a)                                          866                 781               1,304
Divisional EBITDA(b)                                                  (32)               (431)                 56
Percentage decrease in comparable restaurant sales                  (10.2)%              (6.2)%              (3.8)%
Average transaction                                             $    9.63            $   9.75           $    9.31

Hamburger Hamlet Restaurants(c)
-------------------------------
Restaurants Open at End of Period:
   Owned/operated                                                      14                  14                  14
   Franchised and Licensed                                              -                   -                   -
Sales                                                           $   7,902            $  8,366           $   8,218
Restaurant Level Cashflow(a)                                        1,090               1,293               1,339
Divisional EBITDA(b)                                                  813                 971               1,047
Percentage increase (decrease) in comparable restaurant sales        (5.5)%               1.8%                1.1%
Average check (excluding alcoholic beverage sales)              $   12.01            $  11.87           $   11.27

Other Operating Restaurants
---------------------------
Restaurants Open at End of Period:
   Owned/operated                                                       1                   3                   6
   Franchised and Licensed                                              -                   -                   -
Sales                                                           $     798            $  1,299           $   1,734
Restaurant Level Cashflow(a)                                          (81)                (29)                 54
Divisional EBITDA(b)                                                 (167)             (1,192)                (16)

Ongoing Operations
------------------
Restaurants Open at End of Period:
   Owned/operated                                                     178                 198                  212
   Franchised and Licensed                                              7                  13                   13
Sales                                                           $  67,895            $ 75,982           $   79,673
Restaurant Level Cashflow(a)                                        7,219               5,526                8,386
Divisional EBITDA(b)                                                2,654                (323)               3,473

Divested Operations(d)
----------------------
Restaurants Open at End of Period:
   Owned/operated                                                       -                   -                   95
   Franchised and Licensed                                              -                   -                    8
Sales                                                           $       -            $      -           $   53,441
Restaurant Level Cashflow(a)                                            -                   -                8,405
Divisional EBITDA(b)                                                    -                   -                5,590

Total Company
-------------
Restaurants Open at End of Period:
   Owned/operated                                                     178                 198                  307
   Franchised and Licensed                                              7                  13                   21
Sales                                                           $  67,895            $ 75,982           $  133,114
EBITDA(e)                                                           2,548                (347)               9,008
</TABLE>

(a)   Restaurant Level Cashflow with respect to any operating division
      represents Divisional EBITDA (as defined below) before general and
      administrative expenses and any net franchise profit or miscellaneous
      income (expense) reported by the respective division.

(b)   Divisional EBITDA with respect to any operating division is defined as
      earnings (loss) before opening costs, gain (loss) on disposition of
      properties, interest, taxes, depreciation and amortization. Corporate
      general and administrative expenses that would have been allocated to the
      El Torito Division prior to the sale of that division were charged to
      Other Operating Restaurants in 2001 so as not to distort the
      year-over-year comparisons of the Chi-Chi's, Koo Koo Roo and Hamburger
      Hamlet restaurants.

(c)   During fiscal 2001 and 2000, Koo Koo Roo and Hamburger Hamlet shared
      certain divisional support functions, the cost of which was absorbed by
      Koo Koo Roo.

(d)   Divested Operations represents the results of the El Torito Division until
      it was divested on June 28, 2000.

(e)   EBITDA is defined as earnings (loss) before opening costs, gain (loss) on
      disposition of properties, gain on sale of division, provision for
      divestitures and write-down of long-lived assets, restructuring costs,
      interest, taxes, depreciation and amortization and extraordinary items.
      The Company has included information concerning EBITDA herein because it
      understands that such information is used by certain investors as one
      measure of an issuer's historical ability to service debt.  EBITDA should
      not be considered as an alternative to, or more meaningful than,
      operating income (loss) as an indicator of operating performance or to
      cash flows from operating activities as a measure of liquidity.
      Furthermore, other companies may compute EBITDA

                                      - 23 -

<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
------

INTEREST RATE RISK
------------------

         The Company's primary exposure to financial market risks is the impact
that interest rate changes could have on the Foothill Credit Facility, under
which no working capital borrowings were outstanding as of March 31, 2002 and
May 10, 2002. Borrowings under the Foothill Credit Facility bear interest at
the prime rate as announced by Wells Fargo Bank plus 1.875% for borrowings less
than or equal to $10 million and at the prime rate plus 2.875% for borrowings
greater than $10 million.

                                      - 24 -

<PAGE>

                         PART II. OTHER INFORMATION
                         ---------------------------

ITEM 1.   LEGAL PROCEEDINGS
------

         On January 26, 2001, a purported stockholder of the Company initiated
a stockholder derivative suit against the Company and Kevin S. Relyea, in the
Superior Court of the State of California for the County of Orange, seeking,
among other things, compensatory damages, a constructive trust, punitive
damages and attorneys' fees. The suit arose out of the sale by AIF II, L.P. on
December 29, 2000, of 95,831,997 shares of the Company's common stock to Mr.
Relyea for a cash purchase price of $15,000. Mr. Relyea is the Company's Chief
Executive Officer, President and Chairman of the Board of Directors. The suit
alleged that Mr. Relyea improperly usurped the stock purchase opportunity from
the Company and also alleged constructive fraud.

         On February 13, 2001, a similar stockholder derivative suit was filed
in the Superior Court of the State of California for the County of Orange by
another purported stockholder against the Company and Mr. Relyea. This suit
arose out of the same set of facts as the suit filed on January 26, 2001 and
sought similar damages and fees. On April 25, 2001, the court ruled that the
two cases were related and would proceed before the same judge. However, on
June 28, 2001, the court in the case filed on February 13, 2001 granted the
plaintiff's request to dismiss his complaint without prejudice. While the
Company and Mr. Relyea believe that there exist valid defenses to each of the
claims asserted, it was determined that a potentially successful defense of the
suit would likely be more expensive than settlement.

         The Company, Mr. Relyea, and the plaintiff in the suit filed on
January 26, 2001 have executed a Stipulated Settlement of Derivative Claims,
under which Mr. Relyea agreed to certain restrictions on the sale of the block
of the Company's stock purchased on December 29, 2000. Without admitting
liability, the Company and Mr. Relyea agreed not to oppose an application for
attorney's fees by plaintiff's counsel of $99,000 as part of the settlement. On
March 14, 2002, the Board of Directors voted to approve the Stipulated
Settlement of Derivative Claims, with Mr. Relyea abstaining from voting. The
plaintiff recently filed a Motion to Approve Settlement of Action and for an
Award of Attorney's Fees. The Superior Court held a hearing on this motion on
April 9, 2002 and entered a Notice of Entry of Judgment and Final Judgment
approving the Stipulated Settlement of Derivative Claims and the award of
attorney's fees. It is expected that the cost of the settlement will be covered
by insurance.

         The Company is involved in various other litigation matters incidental
to its business. The Company does not believe that any of the existing claims
or actions will have a material adverse effect upon the consolidated financial
position or results of operations of the Company.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS
------

         None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES
------

         The Company has failed to pay the interest and principal that came due
February 1, 2001, August 1, 2001 and February 1, 2002 with respect to the
Prandium Notes. In addition, the Company's

                                      - 25 -

<PAGE>

subsidiary FRI-MRD Corporation has failed to pay the interest and principal due
January 31, 2001, July 31, 2001 and January 24, 2002 with respect to the
FRI-MRD Notes. Under the terms of the note agreements governing the FRI-MRD
Notes and the indentures governing the Prandium Notes, these non-payments
became "Events of Default" and the holders of all such debt have become
entitled to certain rights, including the right to accelerate the debt. The
unpaid principal amount on the FRI-MRD Notes as of May 5, 2002 amounted to
$99,000,000 and the amount of interest due and not paid on the FRI-MRD Notes as
of May 5, 2002 amounted to $25,848,000. The unpaid principal amount on the
Prandium Notes as of May 5, 2002 amounted to $134,356,000 and the amount of
interest due and not paid on the Prandium Notes as of May 5, 2002 amounted to
$23,791,000. The effect of these Events of Default on the Company will depend
on the success of the capital restructuring of the Company and its subsidiaries
as described in "Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations A. Liquidity."

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

         None.

ITEM 5.   OTHER INFORMATION
------

         None.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
------

         (a)      Exhibits

                  2    (a)      Agreement and Plan of Merger, dated as of June
                                9, 1998 by and among the Company, Fri-Sub, Inc.
                                and Koo Koo Roo, Inc. (Filed as Exhibit 2.1 to
                                the Company's Form S-4 filed with the SEC on
                                July 1, 1998.)

                  2    (b)      Stock Purchase Agreement dated as of March
                                27, 2000, by and among the Company, FRI-MRD
                                Corporation and Acapulco Acquisition Corp.
                                (Filed as Exhibit 2(b) to the Company's Form
                                10-K filed with the SEC on March 29, 2000.)

                  2    (c)      Amendment No. 1 to Stock Purchase Agreement
                                dated as of June 28, 2000, by and among the
                                Company, FRI-MRD Corporation and Acapulco
                                Acquisition Corp. (Filed as Exhibit 2.2 to the
                                Company's Form 8-K filed with the SEC on July 5,
                                2000.)

                 *2    (d)      Stock Purchase Agreement, dated as of May
                                10, 2002, by and among FRI-MRD Corporation, the
                                Company and Latin Intellectual Properties, Inc.

                  3    (a)      Sixth Restated Certificate of Incorporation of
                                the Company. (Filed as Exhibit 3(a) to the
                                Company's Form 10-Q filed with the SEC on May
                                12, 1999.)

                                      - 26 -

<PAGE>

                  3    (b)      Second Amended and Restated Bylaws of the
                                Company. (Filed as Exhibit 3(c) to the Company's
                                Form 10-K filed with the SEC on March 29, 1999.)

                  4    (a)      Indenture Dated as of January 27, 1994
                                Re: $300,000,000 9-3/4%  Senior Notes Due 2002.
                                (Filed as Exhibit 4(a) to the Company's Form
                                10-K filed with the SEC on March 28, 1994.)

                  4    (b)      Indenture Dated as of January 27, 1994
                                Re: $150,000,000  10-7/8% Senior Subordinated
                                Discount Notes Due 2004.(Filed as Exhibit 4(b)
                                to the Company's Form 10-K filed with the SEC
                                on March 28, 1994.)

                  4    (c)      First Supplemental Indenture, dated as of
                                July 3, 1996, between the Registrant and IBJ
                                Schroder Bank & Trust Company, a New York
                                Banking corporation, as Trustee. (Filed as
                                Exhibit 10.1 to the Company's Form 8-K filed
                                with the SEC on July 9, 1996.)

                  4    (d)      First Supplemental Indenture, dated as of
                                July 3, 1996, between the Registrant and Fleet
                                National Bank, as successor by merger to Fleet
                                National Bank of Massachusetts, formerly known
                                as Shawmut Bank, N.A., as Trustee. (Filed as
                                Exhibit 10.2 to the Company's Form 8-K filed
                                with the SEC on July 9, 1996.)

                  4    (e)      Note Agreement Dated as of August 12, 1997
                                Re: Up to $75,000,000 FRI-MRD Corporation Senior
                                Discount Notes Due January 24, 2002. (Filed as
                                Exhibit 4(e) to the Company's Form 10-Q filed
                                with the SEC on November 12, 1997.)

                  4    (f)      Joinder Agreement Dated as of January 14, 1998
                                Re: FRI-MRD Corporation Senior Discount Notes
                                due January 24, 2002. (Filed as Exhibit 4(f) to
                                the Company's Form 10-K filed with the SEC on
                                March 30, 1998.)

                  4    (g)      First Amendment dated as of June 9, 1998 to
                                the Note Agreement dated August 12, 1997. (Filed
                                as Exhibit 4.7 to the Company's Form S-4 filed
                                with the SEC on July 1, 1998.)

                  4    (h)      Note Agreement dated as of June 9, 1998 Re:
                                $24,000,000 FRI-MRD Corporation Senior Secured
                                Discount Notes due January 24, 2002. (Filed as
                                Exhibit 4.8 to the Company's Form S-4 filed with
                                the SEC on July 1, 1998.)

                  4    (i)      First Amendment dated as of October 30, 1998
                                to the Note Agreement dated as of June 9, 1998.
                                (Filed as Exhibit 4(i) to the Company's Form
                                10-Q filed with the SEC on November 12, 1998.)

                                      - 27 -

<PAGE>

                  4  (j)        Waiver dated as of January 29, 1999 to the
                                Note Agreements dated as of August 12, 1997 and
                                June 9, 1998. (Filed as Exhibit 4(j) to the
                                Company's Form 10-K filed with the SEC on March
                                29, 1999.)

                 10 (a)         Letter Agreement, effective as of January 10,
                                2002 by and among Foothill Capital Corporation,
                                the Company, FRI-MRD Corporation and certain of
                                its subsidiaries. (Filed as Exhibit 99.1 to the
                                Company's Form 8-K filed with the SEC on January
                                16, 2002.)

                 10 (b)         Letter Agreement, effective as of March 13,
                                2002 by and among Foothill Capital Corporation,
                                the Company, FRI-MRD Corporation and certain of
                                its subsidiaries. (Filed as Exhibit 10 (ee) to
                                the Company's Form 10-K filed with the SEC on
                                April 1, 2002.)

                 10 (c)         Letter Agreement, dated as of March 26, 2002
                                by and among the Company, FRI-MRD Corporation
                                and MacKay Shields Financial Corporation. (Filed
                                as Exhibit 10 (ff) to the Company's Form 10-K
                                filed with the SEC on April 1, 2002.)

                 10 (d)         Offering Memorandum and Disclosure Statement
                                describing the Company and FRI-MRD Corporation's
                                Chapter 11 Plan of Reorganization dated April 1,
                                2002 (including the Company and FRI-MRD
                                Corporation's Chapter 11 Plan of Reorganization
                                and all exhibits thereto, except for filings
                                under the Securities Act of 1934). (Filed as
                                Exhibit 99.2 to the Company's Form 8-K filed
                                with the SEC on April 9, 2002.)

                 10 (e)         First Supplement, dated April 5, 2002, to
                                Offering Memorandum and Disclosure Statement
                                describing the Company and FRI-MRD Corporation's
                                Chapter 11 Plan of Reorganization dated April 1,
                                2002. (Filed as Exhibit 99.3 to the Company's
                                Form 8-K filed with the SEC on April 9, 2002.)

                 10 (f)         Lock-up Agreement, dated as of April 1, 2002,
                                by and among the Company and certain members of
                                that certain informal group of holders of the
                                Company's 9 3/4% Senior Notes due 2002 listed
                                therein. (Filed as Exhibit 99.4 to the Company's
                                Form 8-K filed with the SEC on April 9, 2002.)

         (b)     Reports on Form 8-K.

                  On January 16, 2002, the Company filed a report on Form 8-K
                  announcing that it had entered into an extension of its
                  forbearance agreement with Foothill Capital Corporation.

                                      - 28 -

<PAGE>

                  On February 8, 2002, the Company filed a report on Form 8-K
                  announcing that FRI-MRD Corporation had terminated an
                  agreement regarding the sale of the Hamburger Hamlet
                  restaurant chain.

-----------------
* Filed herewith.

                                      - 29 -

<PAGE>

                                  SIGNATURE
                                  ---------

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

                                  Prandium, Inc.
                                  (Registrant)

                                  By: /S/ Robert T. Trebing, Jr.
                                      --------------------------
                                        Robert T. Trebing, Jr.
                                     Executive Vice President and
                                       Chief Financial Officer
                                     (Duly Authorized Officer and
                                      Principal Financial Officer)

Date:  May 15, 2002

                                      - 30 -