UNITED STATES
                      SECURITIES & EXCHANGE COMMISSION
                           Washington, D.C.  20549
                                      
                                  FORM 10-K
                                      
(Mark One)
[  X  ]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                                EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 1996

                                     OR
                                      
[     ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934
                                      
For the transition period from

Commission file number 0-12343

                               VICORP Restaurants, Inc.
              (Exact name of registrant as specified in its charter)

        COLORADO                              84-0511072
(State or other jurisdiction of          (I.R.S. Employer
 incorporation or organization)           Identification No.)


        400 West 48th Avenue, Denver, Colorado      80216
       (Address of principal executive offices)   (Zip Code)
                                      
Registrant's telephone number, including area code: (303) 296-2121
 Securities registered pursuant to Section 12(b) of the Act: None
 Securities registered pursuant to Section 12(g) of the Act:
                                      
                         Title of each class
                                      
                             Common Stock
                      $.05 par value per share

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

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

The aggregate market value of 7,980,896 shares of the registrant's common stock
held by non-affiliates on January 14, 1997 was approximately $ 99,761,200.

At January 14, 1997, there were 9,069,926 shares of the Company's Common Stock 
$.05 par value outstanding.

              DOCUMENTS INCORPORATED BY REFERENCE

The Notice of Annual Meeting of Shareholders and Proxy Statement pertaining
to the 1997 Annual Meeting of Shareholders ("the Proxy  Statement") are
incorporated herein by reference into Parts I and III.

                             PART I

ITEM 1. BUSINESS.

VICORP Restaurants, Inc., the registrant, is referred to herein as "VICORP"
or the "Company". The Company was incorporated in 1959 and is headquartered
in Denver, Colorado.

VICORP operates family style restaurants primarily under the names "Bakers
Square" and "Village Inn" and franchises restaurants under the Village Inn
name.  At October 31, 1996, VICORP operated 253 restaurants in 13 states,
of which, 154 were Bakers Squares, 98 were Village Inns and one was a
different concept.  On that date, there were 108 franchised Village Inn
restaurants in 21  states.  The Company has a pie manufacturing  division
supporting its restaurants, which operates under the name VICOM.  VICOM has
three production facilities.

Company Operations

During fiscal 1996, the Company closed 11 restaurants.  The closures largely
resulted from a decision in 1996 to substantially discontinue the Angel's
concept and a 1994 plan to close and dispose of undesirable locations.  The
Company did not open any new restaurants in fiscal 1996.  While the Company
plans to resume growth of Company-operated restaurants, the Company's
principal focus in fiscal 1997 will be on improving existing operations.

Both of the Company's restaurant concepts serve breakfast, lunch and dinner
with a guest check average between $4 and $7.  Village Inn is primarily
known for its breakfast foods while Bakers Square emphasizes lunch and
dinner and features fresh baked pies as signature items, for internal
consumption or for carryout.  Each Company-operated restaurant offers a
relatively standard core menu.  The standard menus are supplemented with
daily and monthly specials.  Daily specials are chosen at the discretion of
the restaurant managers to provide specific locality appeal.

Store management typically consists of a general manager and two
associate/assistant managers.  This management team has primary
responsibility for the efficient and profitable operation of their
restaurant and are provided incentives to do so.  Additionally, the Company
employs area directors, who work closely with the restaurant general
managers in helping them meet the Company's objectives.  Each area director
reports to a Vice President of Operations.

The Company believes the principal measure of success for its restaurants is
the ability to provide each customer with a satisfying experience.  Hiring
and retaining the right people, making certain that employees are adequately
trained to do their jobs, clearly communicating the specific results
expected from each employee and providing relevant feedback of performance
are central factors in ensuring customer satisfaction.  Training programs
are designed to meet these objectives and focus on outcome-based training,
emphasizing the acquisition of basic skills and behavior that result in
desired performance for specific positions.

Cost effective procurement of quality products is also critical to providing
a satisfying customer experience.  The Company makes centralized purchasing
decisions for basic menu ingredients to gain favorable prices and ensure
uniform quality specifications.  Management does not anticipate any
difficulty in obtaining food products of adequate quantity or quality at
acceptable prices.

The Company utilizes advertising where market penetration allows.
Expenditures for advertising were 2.0% of Company-operated restaurant sales
in fiscal 1996.

All of the Company-operated restaurants utilize point-of-sale computer
systems.  These systems capture and record sales and payroll data which are
transmitted daily to the Company's corporate office.  These systems are
supplemented with personal computer back office systems that provide
analytical and reporting tools for restaurant managers.

Franchise Operations

The Village Inn restaurants franchised by the Company generally operate for an
initial term of 20 years and require payments to the Company of an initial 
franchise fee of $25,000 and a continuing royalty fee of three percent of the 
franchisee's revenues.  In support of its franchising activities, the Company 
employs field consultants who visit the franchise restaurants regularly to 
ensure that the franchisees maintain compliance with certain standards of 
operations and make recommendations for improvements.  A Franchise Advisory 
Board, consisting of seven franchisees who are elected by their peers every 
two years, meets regularly with Company personnel to discuss facets of 
operations that affect the Company's franchise community.

During fiscal 1996, six new franchise restaurants were opened and four
franchise restaurants were closed.  The net number of Village Inn franchise
restaurants in operation over the last five years has not changed
significantly.  However, as franchising provides a profitable revenue stream
and at the same time leverages the strength of the Village Inn brand into
new markets, the Company continues to pursue franchising opportunities with
qualified applicants.  Eight new franchise units are expected to open in
fiscal 1997.

Trademarks and Service Marks

The Company has acquired the right to use the marks which it considers
important to its business through various federal and state registrations.
VICORP has no reason to believe that there are any conflicting rights that
might materially impair the use of the Company's marks.

Working Capital Items

The Company is not required to maintain significant levels of working
capital because its revenues are primarily derived from cash sales while
restaurant inventories are purchased on credit and rapidly converted to cash.

Competition

The restaurant industry is highly competitive and is often affected by
changes in taste and eating habits of the public, by local and national
economic conditions affecting spending habits, and by population and traffic
patterns.  The Company competes directly or indirectly with all types of
restaurants, from national and regional chains to local establishments.
Some of its competitors are corporations much larger than the Company,
having at their disposal greater capital resources and greater ability to
withstand adverse business trends.

Research and Development

No material amount was spent on Company sponsored research and development
activities during the last fiscal year.  Additionally, no material amounts
were spent by the Company on customer sponsored research activities relating
to the development of new products, services or techniques or the
improvement of existing products, services or techniques.

Regulation

The Company is subject to various federal, state and local laws affecting
its business.  Restaurants generally are required to comply with a variety
of regulatory provisions relating to zoning of restaurant sites, sanitation,
health and safety.  With respect to the restaurants operated by the Company
which serve alcoholic beverages, VICORP is governed by the laws regulating
the sale of liquor, wine and beer.

The Company is subject to a substantial number of state laws regulating
franchise operations and sales.  Those laws impose registration and
disclosure requirements on franchisors in the offer and sale of franchises
and, in certain cases, also apply substantive standards to the relationship
between franchisor and franchisee.  The Company also must adhere to the
Federal Trade Commission regulations governing disclosure requirements in
the sale of franchises.

Various federal and state labor laws govern the Company's relationship with
its employees, including such matters as minimum wage requirements,
overtime, and other working conditions.  Environmental requirements have not
had a material effect on the operations of the Company or those of its
franchisees.

Employees

At October 31, 1996 the Company employed approximately 12,400 persons.

Executive Officers of the Company

The following sets forth certain data concerning the executive officers of
the Company, all of whom are appointed on an annual basis.  There is no
family relationship between any of the executive officers.

<TABLE>
<CAPTION>

       Name                    Age       Position
       ----                    ---       --------
<S>                             <C>      <C>
Charles R. Frederickson         58       Chairman of the Board
J. Michael Jenkins              50       Director, President and Chief Executive Officer
James R. Burke                  48       President/Bakers Square
Robert E. Kaltenbach            51       President/Village Inn
Nicholas S. Galanos             46       Executive Vice President/Development
Richard  E.  Sabourin           46       Executive Vice President/Chief Financial Officer

</TABLE>


Charles R. Frederickson has been a director of the Company since 1968, and
Chairman of the Board since November 1986.

J. Michael Jenkins was appointed President in August 1994.  From February
1992 until his appointment with the Company, he served as Chief Executive
Officer and Chairman of the Board for El Chico Restaurants, Inc.  Mr. 
Jenkins served as President and Chief Executive Officer of Metromedia
Steakhouses, Inc. from May 1989 to February 1992.

James R. Burke was appointed President/Bakers Square in March 1996 after
serving as Executive Vice President/Bakers Square since May 1995.  From
November 1992 to April 1995, he served as Vice President Operations/Village
Inn.  For approximately six years prior to that time, Mr. Burke served as
Vice President of Operations for Sea Galley Restaurants.

Robert E. Kaltenbach was appointed President/Village Inn in December 1994
after serving as Vice President/Franchise Operations since July 1988.

Nicholas S. Galanos joined the Company in February 1995 as President/Angel's.
In October 1995, he assumed the duties of Executive Vice President/Development.
From September 1993 until February 1995, he served as Chief Executive Officer/
Chief Operating Officer for Champps Entertainment, Inc.  Mr. Galanos served as 
Chief Operating Officer/Executive Vice President of T.G.I. Friday's Hospitality 
Worldwide, Inc. from October 1991 to September 1993.

Richard E. Sabourin was appointed Executive Vice President/Chief Financial
Officer in August 1996.  From 1989 to August 1996, Mr. Sabourin was employed by
Bestop, Inc in various positions including President, Chief Operating Officer 
and Chief Executive Officer.

ITEM 2. PROPERTIES.

The following table provides information as of October 31, 1996 concerning
the land and buildings at restaurant locations operated, leased to others
or held for disposal by the Company.

                                 Village     Bakers
                                   Inn       Square     Other     Total
                                 -------     ------     -----     -----
Company-operated restaurants:
 Properties owned in fee             7          53        --         60
 Buildings owned on leased land      5           9        --         14
 Leased locations                   86          92         1        179
                                 -------     ------     -----     -----
                                    98         154         1        253
                                 =======     ======     =====     =====

Properties leased to others:
 Properties owned in fee             1          --         4          5
 Buildings owned on leased land     --          --         1          1
 Leased locations                   23          --        23         46
                                 -------     ------     -----     -----
                                    24          --        28         52
                                 =======     ======     =====     =====

Properties held for disposal:
 Properties owned in fee            --          --         7          7
 Buildings owned on leased land     --          --        --         --
 Leased locations                   --          --        19         19
                                 -------     ------     -----     -----
                                    --          --        26         26
                                 =======     ======     =====     =====

The restaurants operated by the Company are located primarily in Arizona,
California, Florida, the Rocky Mountain region, and the upper Midwest.  The
Company considers its existing operating restaurant properties and equipment
to be in good condition.  For additional information concerning the
Company's leases  see Note 4 of Notes to Consolidated Financial Statements
which is included in Item 8 of Part II.

The Company intends to lease, sublease or sell the 26 properties which are
currently idle.

The Company owns its corporate office complex in Denver, Colorado.  It also
owns the land and buildings comprising its bakery facilities in Oak Forest,
Illinois.  It leases the land and buildings which comprise its bakery
facilities in Santa Fe Springs, California and Mounds View, Minnesota.

ITEM 3. LEGAL PROCEEDINGS.

VICORP is a party to various judicial and administrative proceedings, all of
which have risen in the ordinary course of business.  None of the
proceedings are deemed to be material in light of the amounts involved.

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

There were no matters submitted to the Company's security holders during the
three month period ended October 31, 1996.

                            PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.

The Company's common stock is traded in the over-the-counter market and is
quoted on the National Association of Securities Dealers (NASDAQ) National
Market System under the symbol "VRES".  As of January 14, 1997, the Company
had 517 shareholders of record.  The following table sets forth for the
periods indicated the high and low closing sales quotations per share of
common stock as reported by NASDAQ:

                                    Fiscal Quarter
                         ---------------------------------------
                           First     Second     Third     Fourth
                         ---------------------------------------
1996
High                     $ 11 3/4  $ 15 1/4  $ 14 1/4    $ 15
Low                         9 3/4    10 1/8    11 1/2      12 3/4


1995
High                     $ 18      $ 16 1/2  $ 15 3/4    $ 14 3/4
Low                        15 1/2    14        13 1/2      10 1/2

The range of high and low closing sales quotations contained in the
foregoing table reflects inter-dealer prices, without retail mark-up, mark-
down or commissions, and may not represent actual transactions.

The Company has not paid cash dividends on its common stock since 1986.
Future common stock dividend payments will be dependent upon operating
results, loan agreement restrictions and other financial and business
considerations.

ITEM 6. SELECTED FINANCIAL DATA.

<TABLE>
<CAPTION>

(dollars in thousands, except per share data)      1996       1995       1994       1993       1992
                                              -----------------------------------------------------
RESULTS OF OPERATIONS
<S>                                             <C>        <C>        <C>        <C>        <C>
System-wide sales including franchise sales     $ 456,352  $ 496,300  $ 529,982  $ 542,986  $ 527,817
Restaurant sales                                  339,937    370,116    409,297    425,139    414,324 
Total revenues                                    343,280    373,838    412,644    428,505    417,518
Income (loss) before extraordinary item              (929)    (4,532)    (6,638)    16,524     15,522
Net income (loss)                                    (929)    (4,532)    (6,638)    16,524     14,940
                                              -----------------------------------------------------
OPERATING ANALYSIS
Restaurant operating profit analysis as a
 percentage of restaurant sales
  Costs and expenses
   Food                                              32.9%      33.5%      30.1%      29.8%      30.9%
   Labor                                             32.0%      33.7%      30.2%      28.5%      27.8%
   Other operating                                   26.7%      28.3%      28.2%      27.5%      27.2%
  Restaurant operating profit                         8.4%       4.5%      11.4%      14.2%      14.1%
General and administrative expense
 as a percentage of revenues                          7.3%       7.0%       8.7%       7.8%       7.5%
Interest expense as a percentage of revenues          1.2%       1.0%        .9%        .9%       1.3%
Income before income taxes and extraordinary
 and unusual items as a percentage of revenues         .9%      (2.4%)      2.5%       6.3%       6.1%
Effective income tax rate                            64.0%      50.0%      37.5%      36.2%      39.5%
                                                -----------------------------------------------------
BALANCE SHEET DATA
Total assets                                    $ 203,946  $ 228,161  $ 249,023  $ 254,031  $ 241,958
Long-term debt and capitalized lease obligations   33,585     42,179     42,554     40,008     43,736
Common shareholders' equity                       122,269    123,098    134,866    148,318    135,445
Debt to total capitalization                         21.5%      25.5%      24.0%      21.2%      24.4%
                                                -----------------------------------------------------
CASH FLOW DATA
Net income (loss)                               $    (929)  $ (4,532)  $ (6,638) $  16,524  $  14,940
Depreciation and amortization                      21,088     22,565     26,133     23,381     20,242
Deferred income tax provision                      (1,950)    (4,825)    (5,414)     5,932      8,145
Write-offs, extraordinary item, and other           5,877        446     24,113      4,397      2,645
                                                -----------------------------------------------------
 Subtotal                                          24,086     13,654     38,194     50,234     45,972
Change in current assets and liabilities           (6,239)    (6,345)    (4,100)       636      8,196
                                                -----------------------------------------------------
Cash provided by operations                        17,847      7,309     34,094     50,870     54,168
 As a percentage of revenues                          5.2%       2.0%       8.3%      11.9%      13.0%
Investment in property and equipment                7,922     13,234     28,733     42,426     41,509
                                                -----------------------------------------------------
PER COMMON SHARE
Earnings (loss) before extraordinary item       $    (.10) $    (.49) $    (.69) $    1.60  $    1.48
Earnings (loss)                                      (.10)      (.49)      (.69)      1.60       1.42
Book value                                          13.50      13.61      14.18      14.96      13.58
Market price at year-end                           14 1/2         11     16 3/4     20 3/4     22 1/4
Weighted average common and dilutive
 common equivalent shares (000's omitted)           9,050      9,246      9,656     10,301     10,519
                                                -----------------------------------------------------
NUMBER OF RESTAURANTS AT YEAR-END
Bakers Square                                         154        160        189        187        181
Company-operated Village Inn                           98         99        112        126        122
Franchised Village Inn                                108        106        107        104        105
Other company-operated                                  1          5          6         --         --
                                                -----------------------------------------------------
Total                                                 361        370        414        417        408
                                                -----------------------------------------------------
</TABLE>

 .    An asset disposal charge of $5,800,000 was included in results of
     operations for 1996.
 .    An asset disposal, impairment and restructuring charge of $23,000,000
     and income of $1,918,000 from settlement of litigation were included in
     results of operations for 1994.
 .    Fiscal 1993 consisted of 53 weeks while the remainder of the fiscal
     years presented consisted of 52 weeks.  A restructuring charge of 
     $1,300,000 was included in results of operations for 1993.
 .    Pretax extraordinary debt extinguishment costs of $963,000 were
     included in results of operations for 1992.
 .    The Company has not paid dividends on its common stock during the last
     five years.

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

The following analysis should be read in conjunction with the Selected
Financial Data (Item 6 of Part II) and the Consolidated Financial Statements
(Item 8 of Part II).

RESULTS OF OPERATIONS

The following table sets forth selected operating statistics for the last
three fiscal years.
 
                                      1996           1995           1994
                                 -------------  -------------  -------------
Bakers Square
 Restaurant sales                $ 204,697,000  $ 226,996,000  $ 260,110,000
 Average sales per restaurant        1,309,000      1,282,000      1,364,000
 Restaurant operating profit (loss)  9,316,000         (9,000)    28,802,000
 Restaurant operating profit %             4.6%           0.0%          11.1%
 Divisional administrative costs     4,560,000      5,902,000      7,425,000
 Divisional operating profit (loss)  4,756,000     (5,911,000)    21,377,000
 Restaurants at year-end                   154            160            189

Village Inn
 Restaurant sales                $ 129,442,000  $ 132,349,000  $ 145,410,000
 Average sales per restaurant        1,317,000      1,251,000      1,192,000
 Restaurant operating profit        19,523,000     17,930,000     17,894,000
 Restaurant operating profit %            15.1%          13.5%          12.3%
 Franchise income                    3,343,000      3,722,000      3,347,000
 Divisional administrative costs     3,059,000      3,284,000      4,854,000
 Divisional operating profit        19,807,000     18,368,000     16,387,000
 Restaurants at year-end                    98             99            112

Angel's
 Restaurant sales                $   5,798,000  $  10,771,000  $   3,777,000
 Average sales per restaurant        1,352,000      1,539,000      2,122,000
 Restaurant operating profit (loss)   (626,000)    (1,488,000)        12,000
 Restaurant operating profit (loss) %    (10.8%)        (13.8%)           .3%
 Divisional administrative costs       278,000        956,000        796,000
 Divisional operating loss            (904,000)    (2,444,000)      (784,000)
 Restaurants at year-end                     1              5              6

Consolidated
 Restaurant sales                $ 339,937,000  $ 370,116,000  $ 409,297,000
 Food cost %                              32.9%          33.5%          30.1%
 Labor cost %                             32.0%          33.7%          30.2%
 Other operating cost %                   26.7%          28.3%          28.2%
 Restaurant operating profit %             8.3%           4.4%          11.4%

 Restaurant operating profit     $  28,213,000  $  16,433,000  $  46,708,000
 Franchise income                    3,343,000      3,722,000      3,347,000
 Divisional general and
  administrative costs               7,897,000     10,142,000     13,075,000
                                 ------------------------------------------- 
 Divisional operating profit        23,659,000     10,013,000     36,980,000
                                 -------------------------------------------
 Unallocated general and
  administrative costs              17,232,000     16,119,000     22,677,000
                                 -------------------------------------------
 Operating profit (loss)(1)      $   6,427,000  $  (6,106,000) $  14,303,000
                                 ===========================================

(1) Before asset disposal charge of $5.8 million in 1996 and asset
    disposal, impairment and restructuring charge of $23 million in 1994.

Consolidated restaurant sales decreased 8.2% in 1996 compared to 1995 due to
operating, on average, approximately 31 fewer locations in 1996 as a result
of restaurant closures.  Comparable consolidated same store sales decreased
1.2%, reflecting  a 1.5% increase for Village Inn and a 2.8%  decrease for
Bakers Square.  Village Inn's comparable sales increase was due primarily to
increased average customer expenditures from menu mix changes coupled with a
modest customer count increase.  Bakers Square's comparable sales decrease
was due primarily to lower customer counts.  A menu price decrease for
Bakers Square taken in the middle of 1995 was offset by the addition of
higher priced "Manager's Daily Specials" in September 1995 and other menu
changes in 1996.

Consolidated restaurant sales decreased 9.6% in 1995 versus 1994.  The
Company operated approximately 25 fewer restaurants in 1995 compared to 1994
due to restaurant closures.  A comparable same store sales decline of 5.9%
also contributed to the overall decrease in sales.  The Bakers Square
division registered the majority of the decrease which was affected by a
menu price reduction put into place in the middle of 1995, which decreased
average customer expenditures by approximately 10%.  This action of reducing
prices was taken to reverse a four-year decline in customer counts in that
division.  Compared to the prior year, same store customer counts for
Bakers Square decreased 8.7% in 1995 prior to the price reduction, but only
decreased 1.4% thereafter.

Consolidated restaurant operating profit increased 72% in 1996 versus 1995.
Bakers Square accounted for the majority of the improvement as a result of
programs to control waste and gain efficiencies.  Also, more pronounced
costs of programs to improve customer counts in 1995, reduced advertising
costs, and the closure of unprofitable locations contributed to the
improvement.  Village Inn's restaurant operating profit improved due largely
to reduced food and advertising costs.

Consolidated restaurant operating profit decreased 65% in 1995 versus 1994.
Bakers Square's restaurant operating profit decreased significantly due to
the menu price reductions, lower comparable sales in relationship to fixed
costs, and investments in food, labor and certain other restaurant related
items in order to improve customer counts.  Village Inn's restaurant
operating results were essentially unchanged from the prior year, but
improved as a percentage of sales.  The closure of unprofitable restaurants
and reduced advertising and insurance costs were largely offset by higher
labor costs from increased staffing.  Angel's, the Company's experimental
concept, recorded a restaurant operating loss in 1995 due to preopening
costs and a higher than expected cost structure.

Franchise income decreased 10% in 1996 versus 1995 due to higher costs to
resume growth in that group.  Franchise income increased 11% in 1995 versus
1994 due to lower administrative costs.

General and administrative expense decreased 4% in 1996 versus 1995 due to
cost control measures, but increased to 7.3% of revenues from 7.0% in 1995.
General and administrative expense decreased 27% in 1995 compared to 1994 as
the result of administrative office consolidations, staff reductions,
reduced incentive and legal expenses and a $1,000,000 sign-up bonus for the
Company's President paid in 1994.

Interest expense increased 4% in 1996 versus 1995 due to increased average
levels of borrowing partially offset by reduced capital lease interest.

Other income/expense in 1994 included $1,918,000 of income related to
settlement of litigation against certain of the Company's insurance carriers.

In 1996, the Company recorded a $5,800,000 asset disposal charge related to
its decision to close almost all of its Angel's Diner restaurants after
determining that its strategy of using that concept to invigorate
underperforming restaurants was not economically feasible.  The charge
reduced the carrying values of related assets to net realizable value and
provided for closure and carrying costs.

In 1994, the Company recorded a $23,000,000 charge related primarily to a
plan to close and dispose of underperforming restaurants and discontinue a
portion of the Company's manufacturing and distribution activities.  Also,
included were charges to impair the carrying values on four properties and
to accrue for administrative restructuring costs.  As of October 31, 1996,
all of the restaurants scheduled for disposition had been closed.

Operating results for the closed restaurants for the past three fiscal years
were as follows:

                                        1996          1995         1994
                                     ----------  ------------  ------------  
Bakers Square
  Sales                             $ 2,211,000  $ 18,190,000  $ 30,511,000
  Restaurant operating profit (loss)   (395,000)   (1,829,000)     (465,000)
Village Inn
  Sales                                 455,000     5,454,000    11,849,000
  Restaurant operating profit (loss)    (29,000)     (144,000)     (470,000)
Angel's
   Sales                              3,743,000     8,060,000       143,000
   Restaurant operating profit (loss)  (611,000)   (1,312,000)      (23,000)
Total
   Sales                              6,409,000    31,704,000    42,503,000
   Restaurant operating profit (loss)(1,035,000)   (3,285,000)     (958,000)


In 1995, the Company discontinued internal warehousing and distribution of
grocery products for its restaurants.  The Company does not anticipate
significant changes in delivered product costs as a result of the change.
Also, the Company closed its bakery facility in Phoenix, Arizona in 1995 and
its bakery facilities in Denver, Colorado and Orlando, Florida in 1996.

The effective income tax rates used for financial reporting were 64.0% in
1996, 50.0% in 1995 and 37.5% in 1994.  The higher rates in 1996 and 1995
were primarily due to the greater impact of tax credits.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal source of funds is cash provided by operations.
Cash flow from operations increased in 1996 due primarily to higher
operating income.

The Company's working capital is generally in a deficit position because,
like most restaurant businesses, substantially all sales are for cash, while
credit is received from trade suppliers.  Furthermore, the Company has not
maintained large excess cash balances, but rather has utilized available
cash for capital spending, repayment of borrowings or the repurchase of its
common stock.

The Company supplements cash provided by operations with bank borrowings and
occasional lease financing.  During fiscal 1996, the Company reduced its
outstanding debt borrowings by $10,854,000.  At October 31, 1996, the
Company had $24,500,000 of outstanding borrowings under its bank credit
facility, with approximately $10,600,000 available for additional direct
advances.

At October 31, 1996, the Company had 26 properties remaining which it was
trying to dispose of.  Seven of these properties were owned in fee and the
rest were leased.  The Company intends to sell the fee properties over the
next year and $5.3 million of proceeds are expected to be realized from
their sale.  The Company does not anticipate significant proceeds from the
disposition of the leased properties.  It is expected that the majority of
the leased properties will be disposed of through sublease over the next
twelve to sixteen months.  Cash carrying costs of approximately $2.0 million
are expected to be incurred over that period.  The Company expects to
sublease five of the properties at rentals lower than the Company's
obligations under the prime leases.  Those sublease losses will be incurred
over the remaining years of the leases and the Company does not anticipate
that the losses will materially affect the Company's liquidity.

In 1995 and 1994, 949,500 shares of the Company's common stock were
repurchased for $14,976,000, under authorizations approved by the Board of
Directors.  At October 31, 1996, authorization to repurchase an additional
300,500 common shares was available.  Future purchases with respect to this
authorization may be made from time to time in the open market or through
privately negotiated transactions and will be dependent upon various
business and financial considerations.

Capital expenditures in 1996 totaled $7,922,000 and consisted of $5,127,000
for improvements to existing restaurants, $1,179,000 for the purchase of
equipment previously leased, and $1,616,000 for other support related
projects.  Capital expenditures of $20,000,000 are expected for 1997.  No
new restaurants are planned during 1997.  Cash flow from operations, funds
available under a bank credit facility, or other financing sources are
expected to be adequate for planned capital projects and any repurchases of
common stock authorized by the Board.

At October 31, 1996, the Company had $46,324,000 of net deferred tax assets,
the majority of which relates to federal net operating loss carryforwards
totaling $211,833,000.  The Company has established a valuation allowance
due to the uncertainty that the full amount of the operating loss
carryforwards will be applied against future taxable income.  While a
continuation of the Company's 1996 taxable income level is not sufficient to
realize the portion of the net deferred tax asset related to the operating
loss carryforwards before the expiration periods, the Company feels that its
1996 operating results are not indicative of future performance. Historically,
the Company had taxable income in excess of the amount necessary for realization
and believes it will do so again in future years. The amount of the deferred tax
asset considered realizable, however, could be reduced in the near term if 
estimates of future taxable income during the carryforward period are reduced.
Cumulative taxable income of approximately $60,000,000 for fiscal years 1997
through 1999 will be necessary to realize net deferred tax assets of
approximately $20,000,000 before expiration for a majority of the net
operating loss carryforwards before they expire.

MANAGEMENT OUTLOOK

Federal law was recently enacted that raised the hourly minimum wage by 50-
cents to $4.75 on October 1, 1996, and will raise it again by another 40-
cents to $5.15 on September 1, 1997.  However, the legislation freezes the
wages of tipped employees to $2.13 an hour assuming the difference is earned
in tip income.  The tipped wage is higher in certain states in which the
Company operates that either do not allow tip credit or provide for a
smaller tip credit than allowed under federal law.  Also, the minimum wage
in California is scheduled to increase to $5.00 per hour in March 1997 and
to $5.75 per hour in March 1998, and a number of other states have indicated
that they are considering raising their minimum wage rate above the federal
level.  The Company expects an annual impact from the federal minimum wage
increase of approximately  $1.6 million, prior to the benefits of the
operational efficiencies that are being implemented to offset this increase.
Raising menu prices is not contemplated at this time.

The mid-scale segment of the restaurant industry remains extremely competitive.
The Company has discontinued opening new restaurants until existing operations
improve.  Improvements in future operating performance will be primarily 
dependent upon the Company's ability to increase comparable sales, especially
given the significant profit impact associated with incremental sales at 
existing restaurants.  Cost controls will also play a significant factor in 
future profit growth.  In addition, numerous external factors could have a 
significant impact on future performance, including but not limited to food 
commodity costs, labor availability, site availability, the economy, the weather
and government initiatives such as minimum wage rates, mandated benefits and 
taxes.

Historically, the Company has mitigated the effects of inflation through
cost controls and periodic price increases.  Management believes it will be
able to minimize the effects of future inflation through similar measures,
although such price increases will be subject to competitive constraints and
other business considerations.

Certain matters discussed in this report are "forward-looking  statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995.  These forward-looking
statements can generally be identified as such because the context of the
statement will include words such as the Company "believes," "anticipates,"
"expects" or words of similar import.  Similarly, statements that describe
the Company's future plans, objectives or goals are also forward-looking
statements.  Such forward-looking statements are subject to certain risks
and uncertainties which are described in close proximity to such statements
and which could cause actual results to differ materially from those
currently anticipated.  Shareholders, potential investors and other readers
are urged to consider these factors carefully in evaluating the forward-
looking statements and are cautioned not to place undue reliance on such
forward-looking statements.  The forward-looking statements made herein are
only made as of the date of this report and the Company undertakes no
obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.

NEW ACCOUNTING PRONOUNCEMENTS

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-
Based Compensation".  The SFAS, which will be effective for the Company's
fiscal 1997, recommends a fair value based method of accounting for an
employee stock option.  However, companies may choose to continue to account
for stock options using the intrinsic value based method as prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" and provide proforma disclosures of net income and earnings per
share as if the fair value based method had been applied.  The Company
anticipates it will continue to account for stock options using the
intrinsic value based method, and thus SFAS No. 123 will not have any impact
on its reported results.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

MANAGEMENT'S REPORT ON FINANCIAL STATEMENTS

TO OUR SHAREHOLDERS:

The preparation and integrity of the financial statements of VICORP 
Restaurants, Inc. are the responsibility of its management.  This
responsibility includes the selection of accounting procedures and practices
which conform with generally accepted accounting principles considered
appropriate in the circumstances.  Informed judgments and estimates which
the Company believes to be reasonable are required in the determination of
certain data used in the accounting and reporting process.

The Company maintains a system of internal accounting controls designed to
provide reasonable assurance that transactions are executed in accordance
with management's authorization and properly recorded in all material
respects.  Adequate communication of Company policies to its employees,
segregation of responsibilities for the  authorization and execution of
transactions, and proper accountability for the Company's assets are
essential elements of the system.

Each year the Board of Directors appoints an Audit Committee comprised of
directors who are not employees of the Company.  The principal responsibilities
of this Committee are to recommend an independent auditor for the Company and
to periodically meet with representatives of the independent auditors and with
management to obtain reasonable assurances that the auditors are properly 
discharging their responsibilities and that the Company's financial reporting
to stockholders and others is adequate and appropriate.

Arthur Andersen LLP has conducted an independent examination in order to
render their opinion on the Company's financial statements.

Charles R. Frederickson     J. Michael Jenkins        Richard E. Sabourin
Chairman of the Board       President and             Executive Vice President/
                            Chief Executive Officer   Chief Financial Officer

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF VICORP RESTAURANTS, INC.:

We have audited the accompanying consolidated balance sheets of VICORP
Restaurants, Inc. (a Colorado corporation) and subsidiary as of October 31, 1996
and October 31, 1995, and the related consolidated statements of operations, 
shareholders' equity and cash flows for each of the three years in the period
ended October 31, 1996. These financial statements are the responsibility of 
the Company's management.  Our responsibility is to express an opinion on these 
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of VICORP Restaurants, Inc.
and subsidiary as of October 31, 1996 and October 31, 1995, and the results
of their operations and their cash flows for each of the three years in the
period ended October 31, 1996, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP
Denver, Colorado,
December 6, 1996.


VICORP Restaurants, Inc.
CONSOLIDATED BALANCE SHEETS
                                                 October 31,  October 31,
(in thousands)                                         1996         1995
                                                 -----------  -----------
ASSETS

Cash (Note 1)                                    $     1,406  $     3,988
Receivables (Notes 1 and 2)                            3,221        3,149
Inventories (Note 1)                                   6,517        8,597
Deferred income taxes (Notes 1 and 9)                  5,000        5,000
Prepaid expenses and other (Note 1)                    1,202        2,003
                                                 -----------  -----------
 Total current assets                                 17,346       22,737
                                                 -----------  -----------

Property and equipment, net (Notes 1 and 3)          134,653      152,592
Deferred income taxes (Notes 1 and 9)                 41,324       39,375
Long-term receivables (Notes 1 and 2)                  2,541        3,032
Other assets (Note 1)                                  8,082       10,425
                                                 -----------  -----------
Total assets                                     $   203,946  $   228,161
                                                 ===========  ===========


LIABILITIES AND SHAREHOLDERS' EQUITY

Current maturities of long-term debt and 
 capitalized lease 
  obligations (Notes 1, 4 and 5)                 $     1,592  $     6,116
Accounts payable, trade                               11,131       16,526
Accrued compensation                                   5,686        5,542
Accrued taxes                                          6,941        7,998
Accrued insurance (Note 10)                            4,524        5,656
Other accrued expenses                                 4,776        4,984
                                                 -----------  -----------
 Total current liabilities                            34,650       46,822

Long-term debt (Notes 1 and 5)                        24,642       31,094
Capitalized lease obligations (Note 4)                 8,943       11,085
Non-current accrued insurance (Note 10)                5,349        6,092
Other non-current liabilities and credits              8,093        9,970

Commitments and contingencies (Notes 4, 5 and 10)

Shareholders' equity (Note 6)
Series A Junior Participating Preferred Stock,
 $.10 par value, 200,000 shares authorized,
 no shares issued                                         --           --
Common stock, $.05 par value, 20,000,000
 shares authorized, 9,055,026 and 9,044,026
 shares issued                                           453          452
Paid-in capital                                       84,431       84,332
Retained earnings                                     37,385       38,314
                                                 -----------  -----------
 Total shareholders' equity                          122,269      123,098
                                                 -----------  -----------
Total liabilities and shareholders' equity       $   203,946  $   228,161
                                                 ===========  ===========

The accompanying notes are an integral part of the financial statements.


VICORP Restaurants, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                         Year ended
                                            -------------------------------------
                                            October 31,  October 31,  October 30,
(in thousands, except per share data)             1996         1995         1994
                                            -------------------------------------
<S>                                        <C>           <C>          <C> 
Revenues
 Restaurant operations                      $   339,937  $   370,116  $   409,297
 Franchise operations (Note 1)                    3,343        3,722        3,347
                                            -------------------------------------
                                                343,280      373,838      412,644
                                            -------------------------------------
Costs and expenses
 Restaurant operations
  Food                                          111,954      124,028      123,280
  Labor                                         108,929      124,792      123,718
  Other operating                                90,841      104,863      115,591
 General and administrative                      25,129       26,261       35,752
 Asset disposal, impairment, restructuring
  and related costs (Note 8)                      5,800           --       23,000
                                            -------------------------------------
Operating profit (loss)                             627       (6,106)      (8,697)

 Interest expense                                 4,014        3,855        3,867
 Other (income) expense, net (Note 2)              (804)        (897)      (1,944)
                                            -------------------------------------
Loss before income taxes                         (2,583)      (9,064)     (10,620)
Provision for income taxes (Note 9)              (1,654)      (4,532)      (3,982)
                                            -------------------------------------
Net loss                                    $      (929)  $   (4,532)  $   (6,638)
                                            =====================================
Loss per common and dilutive
 common equivalent share (Note 1)           $      (.10)  $     (.49)  $     (.69)

</TABLE>

The accompanying notes are an integral part of the financial statements.


VICORP Restaurants, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                          Year ended
                                            ---------------------------------------
                                            October 31,   October 31,   October 30,
(in thousands)                                    1996          1995          1994
                                            ---------------------------------------
<S>                                         <C>           <C>           <C>  
OPERATIONS
Net loss                                    $      (929)  $    (4,532)  $    (6,638)
Reconciliation to cash provided by operations
 Depreciation and amortization                   21,088        22,565        26,133
 Deferred income tax provision                   (1,950)       (4,825)       (5,414)
 Asset disposal, restructuring and 
  related costs                                   6,173           436        24,788
 Other, net                                        (296)           10          (675)
                                            ---------------------------------------
                                                 24,086        13,654        38,194

 Change in assets and liabilities
  Trade receivables                                (289)          250        (1,855)
  Inventories                                     2,080         1,962         1,240
  Accounts payable, trade                        (5,395)       (2,720)       (1,423)
  Other current assets and liabilities           (1,891)       (4,180)       (1,379)
  Non-current accrued insurance                    (744)       (1,657)         (683)
                                            ---------------------------------------
Cash provided by operations                      17,847         7,309        34,094
                                            ---------------------------------------

INVESTING ACTIVITIES
Purchase of property and equipment               (7,922)      (13,234)      (28,733)
Purchase of other assets                           (425)          (14)       (1,568)
Disposition of property                            (651)         (768)          (16)
Additions to non-trade receivables                   --            --        (1,088)
Collection of non-trade receivables                 804         6,582         1,617
                                            ---------------------------------------
Cash used for investing activities               (8,194)       (7,434)      (29,788)
                                            ---------------------------------------

FINANCING ACTIVITIES
Proceeds from issuance of debt                   45,500        41,250        17,750
Payments of debt and capital lease 
 obligations                                    (57,889)      (35,984)      (14,471)
Purchase of common stock                             --        (7,694)       (7,282)
Other, net                                          154           418           532
                                            ---------------------------------------
Cash used for financing activities              (12,235)       (2,010)       (3,471)
                                            ---------------------------------------
Increase (decrease) in cash                      (2,582)       (2,135)          835
Cash at beginning of year                         3,988         6,123         5,288
                                            ---------------------------------------
Cash at end of year (Note 1)                $     1,406   $     3,988   $     6,123
                                            =======================================
Supplemental information
Cash paid during the year for
 Interest (net of amount capitalized)       $     4,102   $     3,933   $     3,792
 Income taxes                                       313           968         1,217

</TABLE>

The accompanying notes are an integral part of the financial statements.


VICORP Restaurants, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of operations

VICORP operates family style restaurants primarily under the names "Bakers
Square" and "Village Inn" and franchises restaurants under the Village Inn
name.  At October 31, 1996, VICORP operated 253 restaurants in 13 states, of
which, 154 were Bakers Squares, 98 were Village Inns and one was a different
concept.  On that date, there were 108 franchised Village Inn restaurants in
21 states.  The restaurants operated by the Company are located primarily in
Arizona, California, Florida, the Rocky Mountain region, and the upper
Midwest.  The Company has a pie manufacturing division supporting its
restaurants, which operates under the name VICOM.  VICOM has three
production facilities.

Basis of presentation

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions.  These estimates and assumptions affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported amounts of revenues and expenses.  Actual
results could differ from these estimates.

Principles of consolidation

The consolidated financial statements include the accounts of VICORP
Restaurants, Inc. and the accounts of its wholly-owned subsidiary through
March 1996, the date of its dissolution.  Prior to its dissolution, VICORP's
subsidiary transfered all of its assets and liabilities to the Company.
All significant intercompany transactions and accounts have been eliminated.

Fiscal year

In fiscal 1995, the Company switched its fiscal year end to the last day in
October.  Prior to that, the Company utilized a 52/53 week fiscal year which
ended on the last Sunday in October.

Inventories

Inventories are valued at the lower of first-in, first-out cost or market
value.  Inventories consisted of the following (in thousands):

                              October 31,         October 31,
                                    1996                1995
                              -----------         -----------
Food at production facilities
  Raw materials               $     2,171         $     2,828
  Finished goods                    2,067               3,252
                              -----------         -----------
                                    4,238               6,080

Food at restaurants                 2,279               2,517
                              -----------         -----------
                              $     6,517         $     8,597
                              ===========         ===========

Prepaid expenses

Prepaid expenses consist primarily of supplies, prepaid contract costs and
restaurant preopening costs.  Preopening costs are amortized over a one-year
period following restaurant opening.  At October 31, 1996 and 1995, no
material amounts of preopening costs were reported as assets.

Depreciation and amortization

Depreciation and amortization of property and equipment are provided using
principally the straight-line method at rates based upon estimated useful
lives of the assets, ranging from 20 to 40 years for buildings and 3 to 15
years for equipment and improvements. Amortization of leasehold rights and
excess of cost over net assets acquired in purchase transactions is provided
using the straight-line method, primarily over the remaining lives of
location leases or assets acquired, generally 5 to 25 years.  Deferred loan
fees ($300,000 and $0, net of amortization at October 31, 1996, and 1995,
respectively) are included in other assets and are amortized over the 3 year
loan commitment period using the straight-line method (Note 5).

Franchise revenues

Initial franchise fees are deferred when received and recognized as income
when the franchisee has commenced operations and the Company has performed
all material services and conditions related to the sale of the franchise.
Continuing service fees, which are a percentage of the gross sales of
franchised operations, are accrued as income when earned except for situations 
in which collectibility is in doubt.  In those situations, continuing service
fees and rental income are recognized when received, and gains on property sales
are recorded using the cost recovery method.

Net franchise revenues consisted of the following (in thousands):

                                       1996     1995     1994
                                    -------------------------
Continuing service fees             $ 4,216  $ 4,192  $ 3,968
Initial and renewal fees                169      167      166
Property rental income                  206      269      319
Interest income on franchisee notes     247      293      263
Equipment sales income                   42       50       64
Administrative expense               (1,537)  (1,249)  (1,433)
                                    -------------------------
Franchise revenues                  $ 3,343  $ 3,722  $ 3,347
                                    =========================

Advertising costs

The Company expenses the production costs of advertising the first time the
advertising takes place.  Costs of communicating advertising are expensed
when incurred, generally when airtime or print media is used.  Direct response
advertising is seldom used by the Company and is expensed when incurred.

Advertising expense for 1996, 1995 and 1994 was $6,653,000, $11,106,000 and
$14,043,000, respectively.  At October 31, 1996 and 1995, no material
amounts of advertising were reported as assets.

Fair value of financial instruments

The Company has notes receivable carried on its balance sheets at values
approximating estimated fair market value. Because these instruments are not
publicly traded, the Company estimates the value based on the respective
facts and circumstances of each instrument.  The fair value of the Company's
long-term debt approximates carrying value because of its variable, market-
based interest rate feature.

Income taxes

Based on enacted tax laws, deferred income tax assets and liabilities are
recognized for the expected future income tax consequences of carryforwards
and temporary differences between the financial reporting and tax bases of
assets and liabilities.  Deferred tax assets are reduced, if deemed
necessary, by a valuation allowance for the amount of any tax benefits
which, more likely than not based on current circumstances, are not expected
to be realized.

Earnings per common and common equivalent share

Earnings per common and common equivalent share is  based upon earnings
attributable to common shareholders and the weighted average number of
common and dilutive common equivalent shares for stock options outstanding
during the year.  Common equivalent shares for fiscal years 1996, 1995 and
1994 were anti-dilutive due to the net losses recorded in those years.  The
weighted average number of common and common equivalent shares used for the
1996, 1995 and 1994 calculations were as follows:

                                               1996        1995        1994
                                            ---------   ---------   ---------
Weighted average common shares outstanding  9,049,501   9,246,439   9,656,094
Common equivalent shares outstanding               --          --          --
                                            ---------   ---------   ---------
                                            9,049,501   9,246,439   9,656,094
                                            =========   =========   =========

Statements of cash flows

The Company considers all highly liquid investments and debt instruments
with original maturities of three months or less to be cash equivalents.

NOTE 2. RECEIVABLES

Receivables consisted of the following:

                                  October 31,    October 31,
(in thousands)                          1996           1995
                                  -----------    -----------
Trade receivables                 $     2,826    $     3,391
Notes receivable                        4,327          5,808
Discounts                                (687)          (750)
Allowance for doubtful accounts          (704)        (2,268)
                                  -----------    -----------
Receivables, net                        5,762          6,181
Current portion                         3,221          3,149
                                  -----------    -----------
Long-term portion                 $     2,541    $     3,032
                                  ===========    ===========

The Company's receivables arose primarily from contracts and property
transactions with its franchisees and other sublessees.  The ability of
these parties to honor their obligations is largely dependent on cash flows
generated from their restaurant operations.  The trade receivables are
generally unsecured but the related contracts are cancelable if the debtor
fails to perform.  Under Company policy, the notes receivable are generally
secured with security agreements on the property that gave rise to the 
transaction.

In November 1994, the Company settled a lawsuit against certain of its
insurance carriers.  The litigation arose in April 1992 when the Company
claimed the defendants breached their contract of insurance by withholding
payments to fund a $6,500,000 court approved settlement arising from prior
litigation against the Company.  The Company recorded income of $1,918,000
in the fourth quarter of 1994, representing the excess recovery over the net
carrying value of the receivable.  This receivable was collected in the
first quarter of 1995.

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

                                          October 31,    October 31,
(in thousands)                                  1996           1995
                                          -----------    -----------
Property and equipment used in operations
 Land                                     $    20,801    $    21,982
 Buildings and improvements                   120,464        122,533
 Equipment                                    107,477        104,856
 Construction in progress                         740          1,829
Restaurant property leased to others            4,505          4,339
Accumulated depreciation                     (128,608)      (111,339)
                                          -----------    -----------
                                              125,379        144,200
                                          -----------    -----------
Capitalized lease buildings                     8,575         10,091
Accumulated amortization                       (4,017)        (5,091)
                                          -----------    -----------
                                                4,558          5,000
                                          -----------    -----------
Properties held for disposal, net              10,271         10,011
Allowance for loss on disposal                 (5,555)        (6,619)
                                          -----------    -----------
Property and equipment, net               $   134,653    $   152,592
                                          ===========    ===========

Depreciation and amortization expense charged to operations for property and
equipment was $20,555,000 in 1996, $22,018,000 in 1995 and $25,509,000 in 1994.

At October 31, 1996, all of the Company's fee owned properties were free of
mortgages, pledges or other liens.

NOTE 4. LEASES

The Company is the prime lessee under various land and building leases for
restaurants operated by it and certain of its franchisees.  Additionally,
the Company leases certain bakery production facilities.  The leases have
initial terms generally ranging from 15 to 35 years and in certain
instances, provide for renewal options ranging from 5 to 20 years.  Some of
the leases contain purchase options at the end of the lease terms.  Many of
the leases contain escalation clauses, either predetermined or based upon
inflation.  Most of the leases require additional (contingent) rental
payments by the Company if sales volumes at the related restaurants exceed
specified levels.  Most of the agreements require payment of taxes,
insurance and maintenance costs.  The implicit interest rates range from
7.2% to 14.0% for capital leases.

The Company as prime lessee has entered into sublease agreements with
franchisees and others on certain locations that are not operated by the
Company.  These leases generally have terms similar to the prime lease with
the sublessee assuming the Company's obligations to pay taxes, insurance and
maintenance costs.

Following is a summary as of October 31, 1996, of future minimum lease
payments under capital and operating leases having an initial or remaining
non-cancelable term of one year or more:

                                                         Lease and
                                  Capital   Operating    sublease
(in thousands)                    leases     leases      rentals
                                  ---------------------------------
1997                              $ 2,709   $  14,546    $  (2,467)
1998                                2,524      14,079       (2,324)
1999                                2,371      13,478       (2,086)
2000                                2,144      12,359       (1,913)
2001                                1,953      11,584       (1,652)
Later years                         3,448      40,941       (4,889)
                                  --------------------------------
Total minimum lease payments       15,149   $ 106,987    $ (15,331)
                                            ======================
Less amount representing interest   4,692
                                  -------   
Present value of mininum lease 
 payments                          10,457
Current maturities of capitalized
 lease obligations                  1,514
                                  -------
Capitalized lease obligations     $ 8,943
                                  =======

Net rental expense consisted of the following:

(in thousands)                          1996       1995       1994
                                     ------------------------------- 
Restaurant land and buildings
 Minimum rentals                     $ 14,239   $ 14,714   $ 15,243
 Contingent rentals                     2,441      2,685      2,922
Equipment                                 742      1,346      3,293
                                     -------------------------------
Rental expense                         17,422     18,745     21,458
Less lease and sublease rental income   3,198      3,368      3,152
                                     ------------------------------- 
Net rental expense                   $ 14,224   $ 15,377   $ 18,306 
                                     ===============================

NOTE 5. DEBT

Long-term debt consisted of the following:

                                          October 31,   October 31,
(in thousands)                               1996          1995
                                          -------------------------
Advances under bank credit agreement      $   24,500    $   35,250
Other long-term debt                             220           324
                                          -------------------------
                                              24,720        35,574
Current maturities                                78         4,480
                                          -------------------------
Long-term debt                            $   24,642    $   31,094
                                          =========================

On October 31, 1996, the Company canceled its existing credit facility and
entered into two new unsecured revolving credit agreements which together
provide up to $40,000,000 for direct advances and letters of credit with a
sublimit of $10,000,000 on letters of credit.  The available commitments
will be reduced by $10,000,000 on October 31, 1997 and $5,000,000 on October
31, 1998 and expire entirely on October 31, 1999 unless otherwise extended.
Initial fees on the agreements totaled approximately $300,000.  The Company
is required to pay a quarterly agent's fee of $7,500, 3/8% per annum on
unused commitments and 1 1/8% on issued letters of credit.  Advances bear
interest at the higher of the Federal Funds rate plus 1/2% or the lender's
prime rate; or, the Company may elect to borrow at the lender's Eurodollar
rate plus 1 1/2%.  The Eurodollar and unused commitment rates are adjustable
based on the Company's debt to capitalization ratio.  During 1996, the
largest aggregate outstanding balance under the Company's bank facilities
was $40,000,000.  The average balance outstanding was $32,995,000 and the
average interest rate was 6.9%.  At October 31, 1996, the Company had placed
letters of credit totaling $4,916,000 in connection with its insurance
programs and the interest rate charged on its outstanding advances was 8 1/4%.

The agreements contain various restrictive covenants which include, among
others, maintenance of certain financial ratios, maintenance of a minimum
balance of tangible net worth and limitations on annual capital expenditures,
indebtedness, dividends, dispositions and acquisitions.

At October 31, 1996, principal amounts of long-term debt due during each of
the five succeeding fiscal years were $78,000 in 1997, $4,570,000 in 1998,
$20,072,000 in 1999, and none in both 2000 and 2001.

The Company incurred $4,014,000, $3,864,000 and $3,956,000 of interest
charges in 1996, 1995 and 1994, respectively.  Of these amounts, none,
$9,000 and $89,000 were capitalized in each respective year.

NOTE 6. SHAREHOLDERS' EQUITY

The Company's authorized preferred stock consists of 5,000,000 $.10 par
value shares to be issued in series.  The rights of each series are to be
determined by the Company's Board of Directors.

The Company has outstanding one right for each outstanding common share of
the Company.  When exercisable, each right will entitle its holder to buy
1/100th of a share of the Company's Series A Junior Participating Preferred
Stock at an exercise price of $40.  If, among other things, the Company is
acquired in a merger or other business combination transaction, including
one in which the Company is the surviving corporation, each right will
entitle its holder to purchase, at the then current exercise price of the
right, that number of shares of common stock of the surviving company which
at the time of such transaction would have a market value of twice the
exercise price of the right.  The rights are exercisable only if, without
the Company's prior consent, a party acquires, or obtains the right to
acquire, 25% or more of the Company's outstanding voting securities or
announces a tender offer which would result in such ownership.  At the
Company's option, the rights are redeemable at two cents per right at any
time before a 25% position has been acquired and under limited circumstances
thereafter.  The rights expire May 26, 1997.

At various times since August 1992, the Company's Board of Directors has
authorized the purchase of shares of the Company's common stock.  At October
31, 1996, authorization to purchase an additional 300,500 common shares was
available.

Under Colorado law, repurchased shares of capital stock are considered
authorized and unissued shares and have the same status as shares which have
never been issued.

Under the most restrictive covenants of the Company's bank credit agreement,
approximately $2,100,000 of consolidated retained earnings were unrestricted
at October 31, 1996, as to the declaration of cash dividends and the
acquisition of the Company's common stock.

The following table summarizes shareholders' equity activity:
<TABLE>
<CAPTION>

                                         Common stock                               Total
                                        ---------------    Paid-in    Retained   shareholders'
(in thousands, except share data)       Shares   Amount    capital    earnings      equity
                                     ---------------------------------------------------------
<S>                                  <C>         <C>       <C>        <C>        <C>
Balances at October 31, 1993         9,911,563   $ 496     $ 98,338   $ 49,484   $ 148,318
Net loss                                    --      --           --     (6,638)     (6,638)
Common stock options exercised
 including income tax benefit           39,513       2          466         --         468
Purchase of common shares             (441,650)    (22)      (7,260)        --      (7,282)
                                     ---------------------------------------------------------
Balances at October 30, 1994         9,509,426     476       91,544     42,846     134,866
Net loss                                    --      --           --     (4,532)     (4,532)
Common stock options exercised
 including income tax benefit           42,600       1          457         --         458
Purchase of common shares             (508,000)    (25)      (7,669)        --      (7,694)
                                     ---------------------------------------------------------
Balances at October 31, 1995         9,044,026     452       84,332     38,314     123,098
Net loss                                    --      --           --       (929)       (929)
Common stock options exercised
   including income tax benefit         11,000       1           99         --         100
                                     ---------------------------------------------------------
Balances at October 31, 1996         9,055,026   $ 453     $ 84,431   $ 37,385   $ 122,269
                                     =========================================================
</TABLE>

NOTE 7. STOCK OPTION, STOCK PURCHASE AND PROFIT-SHARING PLANS

The Company has stock option plans which generally provide for the granting
of options to all employees and non-employee directors of the Company at
exercise prices not less than the market value of the common stock on the
date of the grant.  The options generally vest over three years and expire
ten years after the date of grant or three months after employment termination,
whichever occurs first.

In 1994, the Company entered into a stock option agreement with J. Michael
Jenkins, a Director, Chief Executive Officer and President of the Company.
Under the agreement, Mr. Jenkins was granted an option to purchase 300,000
shares of the Company's stock.  These options were canceled in 1996, and the
Company entered into a new stock option agreement with Mr. Jenkins.  Under
the new agreement, Mr. Jenkins was granted an option to purchase 300,000
shares of the Company's stock at a price of $13.00.  The options vest
100,000 in August 1996, 100,000 in October 1999 and 100,000 in October 2002
and are exercisable until August 2006, unless accelerated under certain 
conditions.

In August 1996, the Company entered into stock option agreements with Craig
Held and Rick Sabourin, Executive Vice President/Chief Marketing Officer and
Executive Vice President/Chief Financial Officer, respectively.  Each
individual was granted options to purchase 100,000 common shares. Mr. Held's
employment with the Company was terminated in November 1996 and his options
were canceled at that time.  Mr. Sabourin's options have a grant price of
$11.50 per share, vest evenly over a four year period and expire in August
2006, unless earlier canceled.

The following table summarizes stock option activity:

                                           Shares        Option price
----------------------------------------------------------------------
Outstanding at October 31, 1993 
(554,516 shares exercisable)              635,514       $ 5.63 - 26.00
Granted                                   338,809        14.25 - 30.17
Exercised                                 (39,513)        5.63 - 14.75
Canceled                                  (87,500)        5.63 - 23.50
----------------------------------------------------------------------
Outstanding at October 30, 1994 
(508,336 shares exercisable)              847,310         5.63 - 30.17
Granted                                    19,882        15.25 - 17.00
Exercised                                 (42,600)        5.63 - 15.00
Canceled                                 (146,694)        9.88 - 25.50
----------------------------------------------------------------------
Outstanding at October 31, 1995 
(356,607 shares exercisable)              677,898         5.63 - 30.17
Granted                                   534,000        11.50 - 14.88
Exercised                                 (11,000)        5.63 -  9.88
Canceled                                 (332,598)        5.63 - 30.17
----------------------------------------------------------------------
Outstanding at October 31, 1996 
(459,140 shares exercisable)              868,300       $ 5.63 - 26.00
======================================================================

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-
Based Compensation".  The SFAS, which would be effective for the Company's
fiscal 1997, recommends a fair value based method of accounting for an
employee stock option.  However, companies may choose to continue to account
for stock options using the intrinsic value based method as prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" and provide proforma disclosures of net income and earnings per
share as if the fair value based method had been applied.  The Company
anticipates it will continue to account for stock options using the
intrinsic value based method, and thus SFAS No. 123 will not have any impact
on its reported results.

In October 1996, the Company adopted an Employee Stock Purchase Plan under
which any eligible employee who has completed 12 months of employment may
contribute up to $25,000 of their annual earnings toward the quarterly
purchase of the Company's common stock.  The common stock will be purchased from
the Company at 85% of the quarter-end market value.  There are no charges or 
credits to income in connection with the plan.  The Company has reserved 500,000
common shares for issuance under the plan which terminates on September 30, 
2001. No common shares were issued in fiscal 1996 under this plan.

The Company also has an Outstanding Common Stock Purchase Plan under which
eligible participants may elect to utilize incentive compensation that
otherwise would be paid in cash to purchase the Company's common stock in
the open market at prevailing prices.  If the participant still owns these
shares and is still employed by the Company after two years from the
purchase of the common shares, then a cash bonus equal to 25% of the
incentive compensation used to purchase the shares will be paid to the
participant.  The plan expires the earlier of October 31, 1999 or when
100,000 common shares have been purchased by plan participants.  No material
expense under this plan was incurred during the last three fiscal years.

The Company has an employees' profit-sharing plan, established under Section
401(k) of the Internal Revenue Code of 1986, which provides for annual
contributions by the Company to be determined by the Board of Directors.
The Company's annual contribution, if the Company is profitable (as defined
in the plan), must be equal to at least 2% and may not exceed 15% of the
aggregate compensation of the participants while participating.  Any full-
time employee 21 years of age or older who has completed one year of service
with the Company is eligible to participate.  Assets of the profit-sharing
plan can be invested in the Company's common stock, or among several other
alternatives.  The Company's expenses related to contributions to the plan
in 1996, 1995 and 1994 were $473,000, $455,000 and $829,000, respectively.

NOTE 8. ASSET DISPOSAL, IMPAIRMENT, RESTRUCTURING AND RELATED COSTS

In 1996, the Company recorded a $5,800,000 asset disposal charge related to
a decision to close and dispose of most of its Angel's Diner  restaurants.
The Company had previously converted seven of its existing restaurants to
the Angel's Diner format with the intent of utilizing that concept to
invigorate underperforming locations.  Based on the results of the test
restaurants, the Company determined that this strategy did not have merit.
One Angel's restaurant will continue to be operated and the remainder closed
in the fourth quarter of fiscal 1996 with the intent to dispose of the 
properties through sale or sublease over the next fiscal year.

The asset disposal charge consisted of the following (in 000's):

Total net assets                                      $ 6,628
Estimated net realizable value                          1,957
                                                      -------
Reduction of disposal assets to net realizable value    4,671
Closure and carrying costs                              1,129
                                                      -------
Total charge                                          $ 5,800
                                                      =======

In 1994, a $23,000,000 charge was recorded principally related to a plan to
close and dispose of 50 restaurants that had declining sales and profits and
that were in trade areas no longer considered appropriate for the Company's
operating concepts.  The disposition plan also included a portion of the
Company's manufacturing and distribution operations which were no longer
economical to operate.  The disposal charge consisted of estimates to reduce
the carrying amounts of assets to net realizable value, accruals for closure
and carrying costs, and losses on sublease dispositions where it was
expected that sublease rentals would be lower than the Company's obligations
under the prime lease.

Included in the 1994 charge was an impairment of assets of $2,287,000 for
four restaurant properties with projected cash flows insufficient to recover
remaining investments and a $1,291,000 restructuring charge related to the
elimination of 27 administrative positions that were redundant or non-
essential to ongoing operations.

As of the end of fiscal 1996, the Company had closed all the restaurants
related to the above mentioned disposal plans. Additionally, in 1996 the
Company closed two restaurants which were not included in the disposal
plans.  Both properties are owned in fee and neither property is expected to
incur material disposition costs or losses.  In 1995 the Company
discontinued the internal distribution and warehousing of grocery products
for its restaurants and closed its bakery facility in Phoenix, Arizona.  In
1996, the Company closed its bakery facilities in Denver, Colorado and
Orlando, Florida.

Operating results for the closed restaurants for the past three fiscal years
were as follows (in thousands):

                                       1996      1995      1994
                                     ---------------------------
Sales                                $ 6,409   $31,704   $42,503
Restaurant operating profit (loss)    (1,035)   (3,285)     (958)

As of October 31, 1996, the Company had $9,031,000 of reserves remaining to
provide for the disposal of 26 properties, including six closed prior to
1994.  The reserves consisted of $5,806,000 to reduce the disposal property
to net realizable value and $3,225,000 to provide for carrying costs and
sublease losses.  The Company believes that these reserves are adequate to
cover the remaining costs and losses associated with the remaining disposal
properties.  During 1996, $2,500,000 of closure and carrying costs were
charged against the established liability.

NOTE 9. INCOME TAXES

The total provisions for income taxes consisted of the following:

(in thousands)                          1996      1995       1994
                                   ------------------------------
Current
 Federal                           $     75   $     --   $    414
 States                                 205        200        929
                                   ------------------------------
                                        280        200      1,343
                                   -----------------------------
Deferred
 Federal                             (2,063)    (4,316)    (3,613)
 States                                 113       (509)    (1,801)
                                   ------------------------------
                                     (1,950)    (4,825)    (5,414)
                                   ------------------------------
                                   $ (1,670)  $ (4,625)  $ (4,071)

The components of the income tax provision were as follows:

(in thousands)                                         1996      1995     1994
                                                   ---------------------------
Current
 Taxes on income before carryforwards              $   280   $   200   $ 6,177
 Less benefit of loss carryforwards utilized            --        --    (4,834)
                                                   ---------------------------
                                                   $   280       200     1,343
                                                   ---------------------------
Deferred
 Tax effect of net change in temporary differences     858     3,866    (9,659)
 Utilization of (addition to) tax net operating loss
   carryforward                                     (1,734)   (7,609)    4,834
 FICA tax credit                                      (999)     (780)     (749)
 Targeted jobs tax credit and AMT credit               (75)     (302)       --
 Expiration of tax credit carryforwards                 --        --     2,160
 Change in valuation allowance                          --        --    (2,000)
                                                   ---------------------------
                                                    (1,950)   (4,825)   (5,414)
                                                   ---------------------------
Tax effect of deduction for exercised stock
 options credited to paid-in capital                    16        93        89
                                                   ---------------------------
Income tax benefit                                 $(1,654)  $(4,532)  $(3,982)
                                                   ===========================

The provisions for income taxes differ from the amounts computed by applying
the federal income tax rate to income before income taxes as follows:

<TABLE>
<CAPTION>

(in thousands)                           1996      %     1995      %      1994      %
                                      ------------------------------------------------
<S>                                   <C>      <C>     <C>      <C>     <C>      <C>
Computed federal income taxes using
 statutory rate                       $  (904) (35.0%) $(3,172) (35.0%) $(3,717) (35.0%)
FICA tax credit                          (999) (38.7)     (780)  (8.6)     (749)  (7.0)
Targeted jobs tax credit and AMT credit   (75)  (2.9)     (302)  (3.3)       --     --
State income taxes net of federal
 income tax effect                        207    8.0      (201)  (2.2)     (567)  (5.3)
Expiration of tax credit carryforwards     --     --        --     --     2,160   20.3
Change in valuation allowance              --     --        --     --    (2,000) (18.8)
Effect of change in federal tax rate       --     --        --     --        --     --
Other                                     117    4.6       (77)   (.9)      891    8.4
                                      ------------------------------------------------
                                      $(1,654) (64.0%) $(4,532) (50.0%) $(3,982) (37.5%)
                                      ================================================
</TABLE>

The Company had taxable loss for federal income tax purposes and book income
(loss) before income taxes as follows:
 
(in thousands)                      1996        1995       1994
                                 -------------------------------
Federal taxable income (loss)    $  (4,033)  $ (17,588)  $  14,589
Book loss before income taxes       (2,583)     (9,064)    (10,620)

Federal taxable income is generally less than book income before income
taxes due to state income taxes, differences in depreciation rates, and
employee stock option exercises.  In 1994, such differences were more than
offset by the asset disposal charge of $23,000,000 a majority of which was
not deductible for tax purposes in that year.

The components of the net deferred tax assets were as follows:

(in thousands)                                       1996       1995
                                                   ------------------
Deferred tax assets
 Tax effect of net operating loss carryforwards    $ 81,002  $ 79,268
 Tax credit carryforwards                             4,206     4,206
 FICA tax credit                                      2,528     1,529
 Alternative minimum tax credits                      2,240     2,165
 Accrued insurance claims not yet deductible          3,789     4,512
 Leasing transactions                                 3,614     3,598
 Property and equipment                                 356       543
 Other                                                4,289     4,782
                                                   ------------------
                                                    102,024   100,603
 Valuation allowance                                (53,000)  (53,000)
                                                   ------------------
Deferred tax asset, net                              49,024    47,603
                                                   ------------------
Deferred tax liability                               (2,700)   (3,228)
                                                   ------------------
Net deferred tax asset                               46,324    44,375
Current portion                                       5,000     5,000
                                                   ------------------
Long-term portion                                  $ 41,324  $ 39,375
                                                   ==================

As of October 31, 1996, the Company had federal net operating loss
carryforwards totaling $211,833,000 which expire $71,186,000 in 1998,
$112,880,000 in 1999, $6,146,000 in 2001, $17,588,000 in 2010 and
$4,033,000 in 2011.  The Company also has investment tax credit
carryforwards of $3,506,000 expiring from 1997 through 2000.  The Company
has established a valuation allowance due to the uncertainty that the full
amount of those credits and operating loss carryforwards will be applied
against future taxable income.  This allowance was reduced by $2,000,000 in
1994 due to the expiration of investment tax credits to which a portion of
the allowance applied. While a continuation of the Company's 1996 taxable
income level is not sufficient to realize the portion of the net deferred
tax assets related to the operating loss carryforwards before the expiration
periods, the Company feels that its 1996 operating results are not
indicative of future performance.  Historically, the Company had taxable
income in excess of the amount necessary for realization and believes it
will do so again in future years.  The amount of the deferred tax asset
considered realizable,  however, could be reduced in the near term if
estimates of future taxable income during the carryforward period are
reduced.  Cumulative taxable income of approximately $60,000,000 for fiscal
years 1997 through 1999 will be necessary to realize net deferred tax assets
of approximately $20,000,000 for a majority of the net operating loss
carryforwards before they expire.  Future adjustments to the valuation
allowance deemed appropriate due to changed circumstances will be recognized
as a separate component of the provision for income taxes.

NOTE 10. COMMITMENTS AND CONTINGENCIES

The Company retains a significant portion of certain insurable risks
primarily in the medical, dental, workers' compensation, general liability
and property areas.  Traditional insurance coverage is obtained for
catastrophic losses.  Provisions for losses expected under these programs
are recorded based upon the Company's estimates of liabilities for claims
incurred, including those not yet reported.  Such estimates utilize prior
Company history and actuarial assumptions followed in the insurance
industry.  The Company has provided letters of credit totaling $4,916,000 in
connection with certain of these insurance programs.

The Company is involved in various lawsuits and claims arising from the
conduct of its business and has guaranteed certain indebtedness and leases
of its franchisees and others.  Management believes the ultimate disposition
of these matters will not have a material adverse effect on the Company's 
consolidated financial position or results of operations.

At October 31, 1996, the Company had contractual commitments for restaurant
construction of approximately $1,340,000.

NOTE 11. QUARTERLY FINANCIAL DATA (UNAUDITED)

The Company's quarterly results of operations are summarized as follows (in
thousands, except per share data):

                                               Quarter ended (a)
                                ------------------------------------------------
                                January 31,  April 30,  July 31,     October 31,
                                   1996       1996       1996           1996
                                 (92 days)   (90 days)  (92 days)     (92 days)
                                ------------------------------------------------
Revenue                         $ 89,281     $ 86,153   $ 86,445     $ 81,401
Restaurant operating income        4,156        6,440      8,400        9,217
Net income (loss)                   (916)          45     (1,532) (b)   1,474
Net income (loss) per common and
 dilutive common equivalent share   (.10)         .00       (.17)         .16
                                ================================================

                                                Quarter ended (a)
                                ------------------------------------------------
                                February 19,  May 14,   August 6,    October 31,
                                   1995        1995      1995           1995
                                (112 days)   (84 days)  (84 days)     (86 days)
                                ------------------------------------------------
Revenues                        $124,033     $ 85,324   $ 83,216     $ 81,265
Restaurant operating income (loss)11,706        5,810     (1,063)         (20)
Net income (loss)                  2,499          158     (3,978)      (3,211)
Net income (loss) per common and
 dilutive common equivalent share    .26          .02       (.44)        (.36)
                                ================================================

(a) In fiscal 1995, the Company switched its year-end to the last day in
    October.  In conjunction with that change, each fiscal quarter in 1996
    consisted of three months.  Previously, the Company's first fiscal quarter
    consisted of sixteen weeks and all other quarters consisted of twelve
    weeks.  The Company determined that a significant amount of estimation
    would be required to restate quarterly 1995 operating results to
    correspond with the three month quarterly reporting.  Therefore,
    restatements of results were not made and the interim results for fiscal
    years 1996 and 1995 are not comparable.

    Restaurant sales in 1995 restated to a comparable time frame basis as 1996
    were as follows:

                         Restated         Reported
                        Fiscal 1995      Fiscal 1995
                       -----------------------------
   1st Quarter         $103,133,000     $123,041,000
   2nd Quarter           89,893,000       84,433,000
   3rd Quarter           90,492,000       82,275,000
   4th Quarter           86,598,000       80,367,000
                       -----------------------------
                       $370,116,000     $370,116,000
                       =============================

(b) Includes pre-tax asset disposal charge of $5,800,000.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

                            PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

ITEM 11. EXECUTIVE COMPENSATION.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company will file a definitive proxy statement pursuant to Regulation
14A for its 1997 Annual Meeting of Shareholders.  Such statement will be
filed no later than 120 days after the close of the fiscal year covered by
this Form 10-K.  Except for certain information concerning executive
officers of the Company which is included in Part I of this Form 10-K, the
information called for by the above items will be included in such
definitive proxy statement under "Election of Directors", "Certain
Transactions", "Compensation of Directors and Executive Officers" and
"Voting Securities and Principal Holders Thereof", which is incorporated
herein by reference.

                            PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) (1)  The following Consolidated Financial Statements of VICORP
         Restaurants, Inc. are filed as part of this report:

         Management's Report on Financial Statements.

         Report of Independent Public Accountants.

         Consolidated Balance Sheets - October 31, 1996 and October 31, 1995.

         Consolidated Statements of Operations - Years ended October 31, 1996,
         October 31, 1995 and October 30, 1994.

         Consolidated Statements of Cash Flows - Years ended October 31, 1996,
         October 31, 1995 and October 30, 1994.

         Consolidated Statements of Shareholders' Equity - Years ended October
         31, 1996, October 31, 1995 and October 30, 1994 as presented in Note 6
         of Notes to Consolidated Financial Statements.

(a) (2)  The following financial statement schedule for VICORP Restaurants, 
         Inc., as listed in the Index below, is included herein beginning on  
         page 28.

         Report of Independent Public Accountants on Financial Statement 
         Schedule.

         Schedule II - Valuation and Qualifying Accounts for the years ended
         October 31, 1996, October 31, 1995 and October 30, 1994.

         All other schedules for which provision is made in the applicable
         accounting regulations of the Securities and Exchange Commission are
         not required under the related instructions or are inapplicable, and
         therefore have been omitted.

(a) (3)  The exhibits filed in response to Item 601 of Regulation S-K are
         listed in the Exhibit Index on Page 30.

         For the purpose of complying with the amendments to the rules
         governing Form S-8 (effective July 13, 1990) under the Securities Act
         of 1933, the undersigned registrant hereby undertakes as follows, which
         undertaking shall be incorporated by reference into registrant's
         currently effective Registration Statements on Form S-8:

         Insofar as indemnification for liabilities arising under the
         Securities Act of 1933 may be permitted to directors, officers, and
         controlling persons of the registrant pursuant to any statute, charter
         provisions, bylaws, contract, or other arrangements, the registrant has
         been advised that in the opinion of the Securities and Exchange
         Commission such indemnification is against public policy as expressed
         in the Securities Act of 1933 and is, therefore, unenforceable.  In the
         event that a claim for indemnification against such liabilities (other
         than the payment by the registrant of expenses incurred or paid by a
         director, officer, or controlling person of the registrant in the
         successful defense of any action, suit or proceedings) is asserted by
         such director, officer, or controlling person in connection with the
         securities being registered, the registrant will, unless in the opinion
         of its counsel the matter has been settled by controlling precedent,
         submit to a court of appropriate jurisdiction the question whether such
         indemnification by it is against public policy as expressed in the Act
         and will be governed by the final adjudication of such issue.

(b) Reports on Form 8-K filed in fourth quarter of 1996:

    None.

(c) Exhibits filed with this report are attached hereto.

(d) Financial statement schedules filed with this report follow:
                                      
                  REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of VICORP Restaurants, Inc. and
subsidiary included in this form 10-K and have issued our report thereon
dated December 6, 1996.  Our audit was made for the purpose of forming an
opinion on the basic financial statements taken as a whole.  The schedule
listed in the attached index is the responsibility of the Company's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements.  The
schedule has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Denver, Colorado,
  December 6, 1996.

                                      
                          VICORP Restaurants, Inc.
               Schedule II - VALUATION AND QUALIFYING ACCOUNTS
                 For the Three Years Ended October 31, 1996
                               (in thousands)

<TABLE>
<CAPTION>

Column A                             Column B           Column C          Column D      Column E
--------                            ----------         ----------        ------------  ----------- 
                                                       Additions
                                                -----------------------
                                    Balance at   Charged      Charged                   Balance
                                    beginning    to costs     to other                  at end
Description                         of period   and expenses  accounts    Deductions    of period
-----------                         ----------  ------------  ---------   -----------  -----------
<S>                                 <C>          <C>          <C>         <C>           <C>
Year ended October 31, 1996:
  Allowance for doubtful accounts   $    2,268   $     32     $ 189 (4)   $ 1,785 (1)   $     704
  Discounts                                750        (63)       --            --             687
  Allowance for loss on disposal         6,852      2,915        --         3,961 (1)       5,806
  Accumulated amortization               5,674        642        --           278 (3)       6,038
                                    ----------   -----------  ---------   -----------  ----------- 
                                    $   15,544   $  3,526     $ 189       $ 6,024       $  13,235
                                    ==========   ===========  =========   ===========  ===========
Year ended October 31, 1995:
  Allowance for doubtful accounts   $    3,037   $     25     $ 234 (4)   $ 1,028 (1)   $   2,268
  Discounts                              1,170        (63)       --           357 (5)         750
  Allowance for loss on disposal        12,427         --        --         5,575 (1)       6,852
  Accumulated amortization               6,215        689        --         1,230 (3)       5,674
                                    ----------   -----------  ---------   -----------  -----------
                                    $   22,849   $    651     $ 234       $ 8,190       $  15,544
                                    ==========   ===========  =========   ===========  ===========
Year ended October 30, 1994:
  Allowance for doubtful accounts   $    4,657   $    185     $ 295 (4)   $ 2,100 (1)   $   3,037
  Discounts                              1,019       (115)      266 (2)        --           1,170
  Allowance for loss on disposal         2,615     10,675        --           863 (1)      12,427
  Accumulated amortization               5,549        813        --           147 (3)       6,215
                                    ----------   -----------  ---------   -----------  ----------- 
                                    $   13,840   $ 11,558     $ 561       $ 3,110       $  22,849
                                    ==========   ===========  =========   ===========  ===========

</TABLE>
(1)  Charges to the accounts for purposes for which the reserves were created.
     Deductions to the allowance for doubtful accounts in 1994 includes
     $1,918,000 reversal of previously established allowance due to settlement
     of litigation in excess of the net receivable previously recognized for
     the claim.
(2)  Establishment of discounts on receivables.
(3)  Asset dispositions and write-offs of fully amortized assets.
(4)  Establishment of reserves by charges directly to income.
(5)  Recognition of deferred gains.

Year-end balances are reflected in the Consolidated Balance Sheets as follows:

                                        October 31,    October 31,
                                           1996           1995
                                        -----------    -----------
Deducted from current receivables       $       330    $     1,067
Deducted from property and equipment          5,555          6,619
Deducted from long-term receivables           1,061          1,951
Deducted from other assets                    6,289          5,907
                                        -----------    -----------
                                        $    13,235    $    15,544
                                        ===========    ===========
                                      

                                EXHIBIT INDEX
                                      
The following documents are filed as a part of this report.  Those exhibits
previously filed and incorporated herein by reference are identified below
by an asterisk (*).  For each such exhibit there is shown below the filing
and exhibit number of the document in the previous filing.  The registration
statements were filed by the Company unless otherwise indicated.  Exhibits
which are not required for this report are omitted.

Exhibit             Description of Document
-------             -----------------------
3       - * (i)  Articles of Incorporation, as Amended - Form 10-K for the year 
                 ended October 29, 1989.
        - *(ii)  Bylaws - Form 10-K for the year ended October 29, 1989.
4       - * (i)  Specimen Stock Certificate - Form 10-K for the year ended 
                 October 30, 1988.
        - *(ii)  Certificate of Designation, Preferences and Rights of
                 Series A Junior Participating Preferred Stock of VICORP
                 Restaurants, Inc. - Current Report of VICORP Restaurants, Inc. 
                 on Form 8-K dated May 26, 1987.
        - *(iii) Rights Agreement dated as of May 12, 1987 between VICORP 
                 Restaurants, Inc. and Bank of America National Trust &
                 Savings Association as Rights Agent - Current Report of VICORP
                 Restaurants, Inc. on Form 8-K dated May 26, 1987.
10      -  Material Contracts
          *(i)   Franchise Operating Agreement - Registration Statement 2-83326,
                 Exhibit 10(b).
           (ii)  U.S. $35,000,000 Credit Agreement dated October 31, 1996, 
                 between VICORP Restaurants, Inc. and NationsBank of Texas, N.A.
                 and Colorado National Bank.
           (iii) U.S. $5,000,000 Credit Agreement dated October 31, 1996, 
                 between VICORP Restaurants,Inc. and NationsBank of Texas, N.A.
           (iv)  Executive Compensation Plans and Arrangements
          *(a)   1982 Incentive Stock Option Plan - Registration Statement 
                 2-78250, Exhibit 10(c).
          *(b)   Amendment to 1982 Incentive Stock Option Plan - Form 10-Q for 
                 the quarter ended May 10, 1987, Exhibit 10(i).
          *(c)   Amendment to 1982 Incentive Stock Option Plan - Form 10-Q for 
                 the quarter ended August 2, 1987, Exhibit 10.
          *(d)   Amendment to 1982 Incentive Stock Option Plan - Form 10-Q for 
                 the quarter ended May 8, 1988, Exhibit 10.
          *(e)   Amendment to 1982 Incentive Stock Option Plan - Form 10-K for 
                 the year ended October  25, 1992, Exhibit 10(ix).
          *(f)   Amendment to 1982 Incentive Stock Option Plan dated April 11, 
                 1995 - Form 10-K for the year ended October 31, 1995, Exhibit
                 10(x)(f).
          *(g)   1983 Non-Qualified Stock Option Plan - Registration Statement 
                 2-83326, Exhibit 10(c).
          *(h)   Amendment to 1983 Non-Qualified Stock Option Plan - Form 10-Q 
                 for the quarter ended May 10, 1987, Exhibit 10(ii).
          *(i)   Amendment to 1983 Non-Qualified Stock Option Plan - Form 10-K 
                 for the year ended October 25, 1992, Exhibit 10(x).
          *(j)   Amendment to 1983 Non-Qualified Stock Option Plan dated April 
                 11, 1995 - Form 10-K for the year ended October 31, 1995, 
                 Exhibit 10(x)(j).
          *(k)   VICORP Restaurants, Inc. Outstanding Stock Purchase Plan (1989)
                 - Registration Statement 33-32608, Exhibit 4(h).
          *(l)   VICORP Restaurants, Inc. Stock Purchase Plan - Registration 
                 Statement 333-11003 , Form S-8 dated August 28, 1996.
          *(m)   Deferred Compensation Plan of VICORP Restaurants, Inc. dated 
                 May 1, 1996 - Form 10-Q/A for the quarter ended July 31, 1996, 
                 Exhibit 10(iii).
          *(n)   Form Severance Agreement (Executive Officers excluding 
                 Frederickson and Jenkins) - Form 10-K for the year ended 
                 October 31, 1993, Exhibit 10(vi).
          *(o)   Severance Agreement Charles R. Frederickson - Form 10-K for the
                 year ended October  31, 1993, Exhibit 10(vi).
          *(p)   Employment Agreement of J. Michael Jenkins dated August 26, 
                 1994 - Form 10-K for year ended October 30, 1994, 
                 Exhibit 10 (vi)(n).
          *(q)   Employment Agreement of Nicholas Galanos dated February 3, 1995
                 - Form 10-K for the year ended October 31, 1995, 
                 Exhibit 10(x) (s).
          *(r)   Employment Agreement for Richard E. Sabourin dated July 25, 
                 1996 - form 10-Q for the quarter ended July 31, 1996, 
                 Exhibit 10(ii)(b).
          *(s)   Stock Option Agreement of Richard E. Sabourin dated August 19,
                 1996 - Form 10-Q for the quarter ended July 31, 1996, 
                 Exhibit 10(ii)(d).
           (t)   Stock Option Agreement of J. Michael Jenkins dated August 19, 
                 1996.
23      -        Consents of Accountants
24      -        Power of Attorney
27      -        Financial Data Schedule


                           SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized, on the
14th day of January, 1997.

                             VICORP Restaurants, Inc. (Registrant)


                      By /s/ Charles R. Frederickson
                             -----------------------
                             Charles R. Frederickson, Chairman of the Board


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on January 14, 1997 on
behalf of the registrant and in the capacities indicated.

       Signature                        Title
       ---------                        -----
/s/ Charles R. Frederickson         Chairman of the Board
    -----------------------
   (Charles R. Frederickson)

/s/ J. Michael Jenkins              Director, President and Chief Executive 
    ------------------               Officer
   (J. Michael Jenkins)                

/s/ Richard E. Sabourin             Executive Vice President/Chief Financial
    -------------------              Officer
   (Richard E. Sabourin)            (Principal Financial and Accounting Officer)


/s/ Charles R. Frederickson
    -----------------------
   (Charles R. Frederickson)*


*  Charles R. Frederickson, as attorney-in-fact for Carole Lewis Anderson,
Bruce B. Brundage, John C. Hoyt, Robert T. Marto, Dudley C. Mecum, Dennis B.
Robertson, Hunter Yager, and Arthur Zankel, constituting a majority of the Board
of Directors of the registrant.