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 November 1, 1998

                                     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.  [ X ]

The aggregate market value of 8,722,603 shares of the registrant's
common stock held by non-affiliates on January 15, 1999 was approximately
$123,206,767.

At January 15, 1999 there were 9,064,706 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 1998 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 November 1, 1998, VICORP operated 249 restaurants in 13 states, of
which, 150 were Bakers Squares and 99 were Village Inns.  On that date, there
were also 110 franchised Village Inn restaurants in 20 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 1998, the Company closed one restaurant, resulting from a decision
not to renew the lease.  The Company opened three new restaurants in fiscal
1998.  The Company plans to resume growth of Company-operated restaurants, with
emphasis on the Village Inn concept.

Both of the Company's restaurant concepts serve breakfast, lunch and dinner with
a guest check average between $6 and $8.  Village Inn is primarily known for
its breakfast foods, while Bakers Square emphasizes lunch and dinner and
features fresh baked pies as signature items.  Each Company-operated restaurant
offers a relatively standard core menu.  The standard menus are supplemented
with daily and monthly specials.

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 regional managers, who
work closely with the restaurant general managers in helping them meet the
Company's objectives.  Regional managers report to Regional Vice Presidents.

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 marketing were 2.2% of Company-operated restaurant sales in fiscal 1998. 
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 25 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 1998, four new franchise restaurants were opened and two franchise
restaurants were closed.  The 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.  Six new franchise 
units are expected to open in fiscal 1999.

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 November 1, 1998 the Company employed approximately 11,800 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.

Name                                  Age     Position
----                                  ---     -------- 
Charles R. Frederickson               61      Chairman of the Board, President 
                                              and Chief Executive Officer
Robert E. Kaltenbach                  53      President/Village Inn
Richard E. Sabourin                   48      Executive Vice President/Chief
                                              Financial Officer
Joseph F. Trungale                    57      President/Bakers Square


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

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

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.

Joseph F. Trungale was appointed President/Bakers Square Division in August 
1998, after serving since July 1997 in various positions with operational 
responsibility over the Company's Bakers Square Restaurants in the Midwest.
Prior to joining the Company in 1997, Mr. Trungale operated a family-owned real
estate business (September 1995-July 1997).  For eight years preceding that, he 
was Vice President of Operations for Whataburger, Inc.

Item 2. Properties.

The following table provides information as of November 1, 1998 concerning the  
land and buildings at restaurant locations operated, leased to others or held 
for disposal by the Company.
<TABLE>
<CAPTION>
                                           Village   Bakers
                                             Inn     Square   Other   Total
                                           -------   ------   -----   ----- 
<S>                                           <C>     <C>      <C>   <C>    
Company-operated restaurants:
 Properties owned in fee                       10       51      --      61
 Buildings owned on leased land                 5       10      --      15
 Leased locations                              84       89      --     173
                                             ----     ----    ----    ----
                                               99      150      --     249
                                             ====     ====    ====    ==== 
Properties leased to others:
 Properties owned in fee                        2       --       3       5
 Buildings owned on leased land                --       --      --      --
 Leased locations                              21       --      20      41
                                             ----     ----    ----    ----
                                               23       --      23      46
                                             ====     ====    ====    ====
Properties held for disposal:
 Properties owned in fee                       --       --       2       2
 Buildings owned on leased land                --       --       1       1
 Leased locations                              --       --      11      11
                                             ----     ----    ----    ----  
                                               --       --      14      14
                                             ====     ====    ====    ==== 
</TABLE>
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 14 restaurant properties and 
its bakery facility in Denver, Colorado 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.

On September 28, 1998, two class actions were commenced in the Superior Court of
Los Angeles County, California.

The first, Kirk v. VICORP Restaurants, Inc., Case No. BC-198202, was brought by
a former manager of a California Bakers Square Restaurant.  Allegations in the
amended complaint assert violations by VICORP of California wage and hour laws 
and regulations concerning overtime wages.  The Plantiff is seeking class 
certification, injunctive relief, damages in an unspecified amount, statutory
penalties, interest, costs, and attorneys' fees.

The second, Schroeder v. VICORP Restaurants, Inc., Case No. BC-198203, was 
brought by a former server at a California Bakers Square Restaurant.  The 
Plaintiff alleges VICORP has violated California statutes or regulations 
concerning the payment of wages, tip pooling, reimbursement for uniform 
expenses, failure to remit tips, and the improper charging of walkouts to 
servers.  Class certification is requested, as well as injunctive relief, 
damages in an unspecified amount, statutory penalties, interest, costs, and 
attorneys' fees.

On December 28, 1998, a third action was commenced in the Superior Court of 
Los Angeles County, California, Ontiveros v. VICORP Restaurants, Inc., Case
No. BC-202962.  This action was brought by a former manager of a California 
Bakers Square Restaurant.  The Plantiff is seeking damages, statutory penalties,
injunctive and declaratory relief, the disgorgement of amounts by which VICORP
has been unjustly enriched, interest, attorneys' fees, and costs for alleged 
violations of California statutes and regulations concerning the payment of 
wages and of the California Business and Professional Code. 

The Company believes it has meritorious defenses to each of the claims in the 
actions and it intends to vigorously defend them.  Management believes that the 
Company will ultimately prevail and that the final resolution of the complaints 
will not have a material effect on its results of operations or financial 
position.  The cost of defense for these class actions will be recognized as 
incurred.

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 November 1, 1998.

                                 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 15, 1999, the Company
had 465 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:
<TABLE>
<CAPTION>
                                      Fiscal Quarter
                          First      Second       Third      Fourth
--------------------------------------------------------------------
<S>                      <C>         <C>         <C>         <C>
1998
High                     $17 1/2     $19 1/4     $16 3/4     $15 5/8
Low                       15 3/8      15 1/2      14 1/2      13

1997
High                     $14 3/4     $12 7/8     $14 1/4     $16 1/4
Low                       11 3/4      11 1/8      11          14
</TABLE>

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)            1998         1997         1996         1995          1994        1993        1992  
<S>                            <C>          <C>          <C>          <C>           <C>         <C>         <C>
---------------------------------------------------------------------------------------------------------------------
Results of operations
System-wide sales including
 franchise sales               $482,506     $450,534     $456,352     $496,300      $529,982    $542,986    $527,817 
Restaurant sales                342,654      322,188      339,937      370,116       409,297     425,139     414,324
Total revenues                  346,173      325,527      343,280      373,838       412,644     428,505     417,518
Income (loss) before
 extraordinary item               9,120        6,899         (929)      (4,532)       (6,638)     16,524      15,522
Net income (loss)                 9,120        6,899         (929)      (4,532)       (6,638)     16,524      15,522  
---------------------------------------------------------------------------------------------------------------------
Operating analysis
Restaurant operating profit
 analysis as a percentage of
 restaurant sales
  Costs and expenses
   Food                            30.8%        31.4%        32.9%        33.5%         30.1%       29.8%       30.9%  
   Labor                           32.7%        32.4%        32.0%        33.7%         30.2%       28.5%       27.8%
   Other operating                 25.4%        25.9%        26.7%        28.3%         28.2%       27.5%       27.2%
  Restaurant operating profit      11.1%        10.3%         8.3%         4.4%         11.4%       14.2%       14.1%
 General and administrative
  expense as a percentage
  of revenues                       7.5%         7.4%         7.3%         7.0%          8.7%        7.8%        7.5%
Interest expense as a percentage
 of revenues                         .5%          .8%         1.2%         1.0%           .9%         .9%        1.3%
Income before income taxes and
 extraordinary and unusual items
 as a percentage of revenues        4.2%         3.3%          .9%*       (2.4%)         2.5%*       6.3%*       6.1%* 
Effective income tax rate          36.5%        36.0%        64.0%        50.0%         37.5%       36.2%       39.5%
----------------------------------------------------------------------------------------------------------------------
Balance sheet data
Total assets                   $199,773     $194,990     $203,946     $228,161      $249,023    $254,031    $241,958
Long-term debt and capitalized
 lease obligation                 5,783       19,465       33,585       42,179        42,554      40,008      43,736  
Common Shareholders' equity     138,007      129,919      122,269      123,098       134,866     148,318     135,445 
Debt to total capitalization        4.0%        13.0%        21.5%        25.5%         24.0%       21.2%       24.4%
----------------------------------------------------------------------------------------------------------------------
Cash flow data
Cash provided by operations      42,248       28,568       17,847        7,309        34,094      50,870      54,168 
 As a percentage of revenues       12.2%         8.8%         5.2%         2.0%          8.3%       11.9%       13.0%
Investment in property and
 equipment                       21,054       16,410        7,922       13,234        28,773      42,426      41,509  
----------------------------------------------------------------------------------------------------------------------
Per common share
Earnings (loss) before
 extraordinary item            $    .98     $    .75     $   (.10)     $  (.49)     $   (.69)   $   1.62    $   1.50
Earnings (loss)                     .98          .75         (.10)        (.49)         (.69)       1.62        1.45
Book value                        15.18        14.18        13.50        13.61         14.18       14.96       13.58
Market price at year-end         14 1/8       15 1/2       14 1/2           11        16 3/4      20 3/4      22 1/4 
Weighted average common and
 dilutive common stock options
 (000's omitted)                  9,262        9,145        9,050        9,246         9,656      10,189      10,330
----------------------------------------------------------------------------------------------------------------------
Number of restaurants at year-end
Bakers Square                       150          150          154          160           189         187         181
Company-operated Village Inn         99           97           98           99           112         126         122 
Franchised Village Inn              110          108          108          106           107         104         105
Other company-operated               --           --            1            5             6          --          --
----------------------------------------------------------------------------------------------------------------------
Total                               359          355          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.
*   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.
-   Fiscal 1998 consisted of 366 days, while fiscal years 1997, 1996, 1995, 
    1994, 1993, 1992 consisted of 365 days, 366 days, 366 days, 364 days, 371 
    days and 364 days, respectively.
-   The Company has not paid dividends on its common stock during the last
    seven 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 Financial Statements
(Item 8 of Part II).

Results of Operations

The following table sets forth selected operating statistics for the last three 
fiscal years.
<TABLE>
<CAPTION>
                                         1998          1997            1996
                                         ----          ----            ----
<S>                                  <C>            <C>            <C>
Bakers Square
  Restaurant sales                   $207,251,000   $192,538,000   $204,697,000
  Average sales per restaurant          1,387,000      1,276,000      1,309,000
  Restaurant operating profit          14,712,000     11,740,000      9,316,000
  Restaurant operating profit %               7.1%           6.1%           4.6%
  Divisional administrative costs       5,320,000      4,987,000      4,560,000
  Divisional operating profit           9,392,000      6,753,000      4,756,000
  Restaurants at year-end                     150            150            154

Village Inn
  Restaurant sales                   $135,403,000   $128,586,000   $129,442,000
  Average sales per restaurant          1,394,000      1,326,000      1,317,000
  Restaurant operating profit          23,314,000     21,566,000     19,523,000
  Restaurant operating profit %              17.2%          16.8%          15.1%
  Franchise income                      3,519,000      3,339,000      3,343,000
  Divisional administrative costs       4,942,000      3,788,000      3,059,000
  Divisional operating profit          21,891,000     21,117,000     19,807,000
  Restaurants at year-end                      99             97             98

Angel's
  Restaurant sales                             --     $1,064,000     $5,798,000
  Average sales per restaurant                 --            N/A      1,352,000
  Restaurant operating profit (loss)           --        (19,000)      (626,000)
  Restaurant operating profit (loss) %         --           (1.8%)        (10.8%)
  Divisional administrative costs              --         12,000        278,000
  Divisional operating loss                    --        (31,000)      (904,000)
  Restaurants at year-end                      --             --              1

Consolidated
  Restaurant sales                   $342,654,000   $322,188,000   $339,937,000
  Food cost %                                30.8%          31.4%          32.9%
  Labor cost %                               32.7%          32.4%          32.0%
  Other operating cost %                     25.4%          25.9%          26.7%
  Restaurant operating profit %              11.1%          10.3%           8.3%
  Restaurant operating profit        $ 38,026,000   $ 33,287,000   $ 28,213,000
  Franchise income                      3,519,000      3,339,000      3,343,000
  Divisional general and
    administrative costs               10,262,000      8,787,000      7,897,000
                                      -----------------------------------------
   Divisional operating profit         31,283,000     27,839,000     23,659,000
                                      -----------------------------------------
 Unallocated general and
   administrative costs                15,756,000     15,110,000     17,232,000
                                      -----------------------------------------
 Operating profit <F1>               $ 15,527,000   $ 12,729,000   $  6,427,000
                                     ==========================================
</TABLE>
<F1> Before asset disposal charge of $5.8 million in 1996.


Consolidated restaurant sales increased 6.4% in 1998 compared to 1997.  
Comparable consolidated same store sales increased 6.7%, reflecting a 4.3% 
increase for Village Inn and an 8.3% increase for Bakers Square.  Village Inn  
and Bakers Square comparable sales increases were due to a combination of
higher customer counts and increased average customer expenditures.
Same store customer counts increased 2.6% at Village Inn and 4.5% at
Bakers Square.

Consolidated restaurant sales decreased 5% in 1997 versus 1996.  The Company
operated, on average, approximately eleven fewer restaurants in 1997 compared
to 1996 due to restaurant closures.  A comparable same store sales decline of
2% also contributed to the overall decrease in sales.  The Bakers Square
concept registered a 3% decrease in same store sales and a 1% decrease in
customer counts when compared to 1996.  Same store sales and customer counts
in the Village Inn concept were respectively up 0.3% and 0.8% over the prior
year.

Consolidated restaurant operating profit increased 14.2% in 1998 versus 1997.   
Bakers Square accounted for the majority of the improvement as a result of 
increased sales coupled with programs to control waste and gain efficiencies.
Village Inn's restaurant operating profit improved due largely to reduced food 
costs.

Consolidated restaurant operating profit increased 18% in 1997 versus 1996.
Bakers Square's restaurant operating profit increased 26% over the prior year, 
while profit as a percent of sales increased from 4.6% in 1996 to 6.1% in 1997.
Village Inn's profit improvement was 10% versus the prior year, with profit as
a percent of sales increasing from 15.1% to 16.8%.  Programs developed to 
improve efficiencies, control food costs and minimize controllable operating
costs added to the profit improvements realized by the closure of unprofitable
units.

Franchise income increased 5.4% in 1998 versus 1997 due to four new franchise 
units offset partially by the closing of two franchise units.  Net franchise  
income was basically unchanged from 1996 to 1997, as reduced franchise fees
were offset by lower administrative costs.

General and administrative expense was 7.5% of revenues in 1998 and 7.4% in 
1997.  The increase of $2.1 million, or 8.9%, was largely due to higher bonus
payouts to operating management as the result of improved operating results.
General and administrative expenses, as a percent of restaurant sales,
remained virtually unchanged in 1997 from 1996 at 7.4%.  However, actual
expenses decreased $1.2 million, or 4.9%, as a result of the continuing
programs of cost containment and improved efficiencies of support functions.

Interest expense decreased 39.8% for 1998 versus 1997 and 36.0% for 1997
versus 1996 due to significantly reduced levels of borrowing and reduced
capital lease interest.

Other income for 1998 decreased 38.3% from 1997 due to disposal of some 
subleased units and lower interest earned on notes receivable.  Other income 
for 1997 decreased 23% from 1996 due to lower interest earned on notes 
receivable and investments.

In 1996, the Company recorded a $5,800,000 asset disposal charge related to 
its decision to close its Angel's Diner restaurants after determining that 
its strategy of using that concept to invigorate underperforming restaurant 
properties was not economically viable.  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
was the recognition of the impairment of the carrying values on four
properties and an accrual for administrative restructuring costs.

As of October 31, 1996, all of the restaurants scheduled for disposition had 
been closed.  During fiscal 1998, 1997 and 1996, one, six and two additional 
units were closed, respectively.

Operating results for the closed restaurants for the past three fiscal years 
were as follows:
<TABLE>
<CAPTION>
                                            1998           1997           1996
                                            ----           ----           ----
<S>                                   <C>            <C>            <C>                   
Bakers Square
 Sales                                $       --     $1,276,000    $ 5,624,000
 Restaurant operating profit (loss)           --       (215,000)      (313,000)
Village Inn
 Sales                                $  146,000     $1,758,000    $ 3,112,000
 Restaurant operating profit (loss)      (26,000)       196,000            220
Angel's
 Sales                                $       --     $1,064,000    $ 5,798,000
 Restaurant operating profit (loss)           --        (18,000)      (626,000)
Total
 Sales                                $  146,000     $4,098,000    $14,534,000
 Restaurant operating profit (loss)      (26,000)       (37,000)      (719,000)
</TABLE>

The  Company closed its bakery facilities in Denver, Colorado, and Orlando,
Florida, in 1996.

The effective income tax rates used for financial reporting were 36.5% in
1998, 36.0% in 1997 and 64.0% in 1996.  The higher rate (benefit) in 1996
was largely due to the greater impact of tax credits, primarily the FICA tax 
credit relative to pre-tax income/loss.


Liquidity and Capital Resources

The Company's principal source of funds is cash provided by operations.  Cash  
flow from operations increased in 1998 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 1998, the Company reduced its
outstanding debt borrowings by $12.1 million.  At November 1, 1998 the Company  
had no outstanding borrowings under its bank credit facility, with $38.2
million available for additional direct advances.

At November 1, 1998, the Company had 15 properties which it was trying to 
dispose of.  Three 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  
approximately $1 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 six
to eighteen months.  Cash carrying costs of approximately $1,094,000 are
expected to be incurred over that period.  The Company expects to sublease 
six of the properties at rentals lower than the Company's obligations under
the prime leases.  Those sublease losses will be funded over the remaining
years of the leases and the Company does not anticipate any material affect
on the Company's liquidity.

In 1998, 213,700 shares of the Company's common stock were repurchased for
$2,912,000, under authorizations approved by the Board of Directors.  At
November 1, 1998, authorization to repurchase an additional 686,300, 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 1998 totaled $21.0 million and consisted of $4.6
million for construction of new restaurants, $7.7 million for improvements
to existing restaurants, and $8.7 million for other support related projects. 
Capital expenditures of $32.2 million are planned for 1999.  Ten to twelve new 
restaurant openings are planned during 1999.  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 November 1, 1998, the Company had $39,164,000 of net deferred tax assets,
the majority of which relates to federal net operating loss carryforwards
totaling  $140,371,000.  The Company also has investment tax credit ("ITC")
carryforwards totaling $2,289,000 which expire in 1999 and 2000.  The Company
has established a valuation allowance for the deferred tax assets related to
these carryforwards because the ITC carryforwards are not expected to be
realized and only a portion of the operating loss carryforwards are expected
to be applied against future taxable income before they expire.  The
remaining valuation allowance at November 1, 1998, is based on an
assumption that the Company will report taxable income in 1999 of
approximately $34 million.  To the extent actual taxable income for fiscal
1999 varies from the assumed amount, an adjustment to the valuation
allowance will be required.  Actual taxable income for fiscal 1998 was
approximately $14 million.  Management is currently pursuing certain tax 
planning strategies it believes can be implemented to increase taxable
income currently projected for fiscal 1999 to at least $34 million.
However, there can be no assurance these tax planning strategies will
be successfully implemented and the adequacy of the allowance is
principally dependent on the actual amount of taxable income ultimately
reported for fiscal 1999.

VICORP has guaranteed certain leases for 21 restaurant properties sold to
others in 1986 and 18 restaurant leases of certain franchisees.  Minimum
future rental payments remaining under these leases were approximately
$7.3 million and $9.5 million as of November 1, 1998 and October 31, 1997,
respectively.  These guarantees are included in the definition of
financial instruments with off-balance-sheet risk of accounting loss;
however, the Company has not been required to make payments with respect
to these guarantees and presently has no reason to believe any payments
will be required in the future.  The Company believes it is impracticable 
to estimate the fair value of these financial guarantees (e.g., amounts 
the Company could pay to remove the guarantees) because the Company has 
no present intention or need to attempt settlement of any of the guarantees.


Y2K

The Company completed a review of its computer systems during fiscal 1997,
resulting in a decision to replace a large portion of the existing systems at a
cost of approximately $12.5 million.  Approximately $7.5 million of this amount
was spent in fiscal 1998.  The new systems are Year 2000 compliant.

As of January 4, 1999, the Company implemented Year 2000 compliant systems at
its corporate headquarters.  These new ERP (Enterprise Resource Planning) 
systems have been designed to provide the infrastructure to support corporate 
and field-based systems.

A system-wide rollout to all restaurants of a new back-of-house point-of-sale 
(POS) system, as well as a modification of front-of-house systems to be Year 
2000 compliant, is planned to begin in March 1999 with a targeted completion 
date of September 1, 1999.  In-house testing of the new POS system is 85% 
complete and a pilot store test will begin February 1, 1999.  The Company is in
the process of developing a contingency plan for restaurant operations should 
the initial store testing and the rollout fall behind schedule.

The Company is currently conducting a review of its physical facilities in
order to identify potential areas of embedded technology (heating, lighting,
fixtures, and equipment, communications systems, waste treatment, emergency
backup systems, etc.) that may not be Year 2000 compliant.  The Company
believes its exposure is limited in this area and is formulating plans to
address any issues that may surface.

With respect to third parties, the Company has been in contact with and is
preparing written communications to send to all third parties considered 
critical to the Company's ongoing operations.  Written communication will 
request written confirmation from mission critical third parties of reasonable  
assurance that plans are being developed to ensure Year 2000 readiness.   
Reasonable assurance will include verification that critical third-party  
vendors have a plan in place for review of Year 2000 readiness for their 
supplier base.  To the extent that critical third-party vendors do not provide 
the Company with satisfactory evidence of readiness, contingency plans will be 
developed and implemented by the Company by December 31, 1999.

The Company has sent written notice to franchisees regarding the need for Year  
2000 readiness.  Approximately one-half of the Company's franchise restaurants  
have plans in place to replace non-compliant restaurant-based systems with the  
Company's new Year 2000 ready POS system.  All installations are targeted to be 
completed by October 1, 1999.

The Company does not believe the costs related to the Year 2000 readiness 
project will be material to its financial position or results of operations.
However, the cost of the project and the date on which the Company plans to
complete the Year 2000 modifications are based on management's best estimates,  
which were made utilizing numerous assumptions including the continued
availability of certain resources, third-party modification plans, and
other factors.  Unanticipated failures by vendors and franchisees, as well
as the failure by the Company to execute its own remediation efforts, could
have a material adverse effect on the cost of the project and its completion
date.  In addition, any such unforeseen occurrences, if combined with
failures of other third parties or public services beyond the Company's
control, could have a material adverse effect on the Company's financial
condition or results of operations.  Consequently, there can be no
assurance that the forward-looking estimates contained herein will be
achieved and the actual cost could differ materially from the projections 
contained herein. 

In the event they are needed, the Company's contingency plans, in management's
estimate, will be in place by December 31, 1999.

Management Outlook

The mid-scale segment of the restaurant industry remains extremely
competitive.  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 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 June 1997, the FASB issued Statement of Financial Accounting Standards 
No. 130, "Reporting Comprehensive Income" ("SFAS No. 130") which establishes
standards for reporting and display of comprehensive income and its components 
(revenues, expenses, gains, and losses) in a full set of general-purpose 
financial statements.  SFAS No. 130 requires that all items that are required  
to be recognized under accounting standards as components of comprehensive 
income be reported in a financial statement that is displayed with the same 
prominence as other financial statements.  Comprehensive income includes all 
changes in equity during a period except those resulting from investments by 
owners and distributions to owners.  SFAS No. 130 does not require a specific 
format for that financial statement but requires that an enterprise display an 
amount representing total comprehensive income for the period in that financial 
statement.  This Statement is effective for fiscal years beginning after 
December 15, 1997.  Through November 1, 1998, the Company had no current or 
cumulative items of other comprehensive income that had been excluded from net 
income.
                                      
In June 1997, the FASB issued Statement of Financial Accounting Standards 
No. 131, "Disclosures About Segments of an Enterprise and Related Information" 
("SFAS No. 131") which establishes standards for the way that public business 
enterprises report information about operating segments in annual financial 
statements and requires that those enterprises report selected information 
about operating segments in interim financial reports issued to shareholders.   
It also establishes standards for related disclosures about products and 
services, geographic areas, and major customers.  SFAS No. 131 supersedes SFAS 
No. 14, "Financial Reporting for Segments of a Business Enterprise," but retains
the requirement to report information about major customers.  SFAS No. 131 
requires that a public business enterprise report financial and descriptive 
information about its reportable operating segments.  Operating segments are  
components of an enterprise about which separate financial information is 
available that is evaluated regularly by the chief operating decision maker in 
deciding how to allocate resources and in assessing performance.  Generally,  
financial information is required to be reported on the basis that it is used
internally for evaluating segment performance and deciding how to allocate 
resources to segments.  SFAS No. 131 is effective for financial statements for
periods beginning after December 15, 1997.

In February 1998, the FASB issued statement of Financial Accounting Standards 
No. 132, "Employers' Disclosures about Pensions and Other Postretirement 
Benefits" ("SFAS No. 132") which revises employers' disclosures about pension 
and other postretirement benefit plans.  It does not change the measurement or 
recognition of those plans.  It standardizes the disclosure requirements for 
pensions and other postretirement benefits to the extent practicable, requires 
additional information on changes in the benefit obligations and fair values of 
plan assets that will facilitate financial analysis and eliminates certain 
disclosures that are no longer useful.  The Statement suggests combined formats 
for presentation of pension and other postretirement benefit disclosures.  This 
Statement is effective for fiscal years beginning after December 15, 1997.  
Restatement of disclosures for earlier periods provided for comparative purposes
is required unless the information is not readily available in which case the
notes to the financial statements should include all available information and a
description of the information not available.  The Company expects no impact on 
its financial statements. 

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                    Richard E. Sabourin
President, Chief Executive Officer,        Executive Vice President/
  and Chairman of the Board                  Chief Financial Officer


Report of Independent Public Accountants

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

We have audited the accompanying balance sheets of VICORP Restaurants, Inc.
(a Colorado corporation) as of November 1, 1998 and October 31, 
1997, and the related statements of operations, shareholders' equity and cash 
flows for each of the three years in the period ended November 1, 1998.  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.
as of November 1, 1998 and October 31, 1997, and the results of
its operations and its cash flows for each of the three years in the
period ended November 1, 1998, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP
Denver, Colorado,
December 11, 1998.

<TABLE>
<CAPTION>
VICORP Restaurants, Inc.
BALANCE SHEETS
                                                     November 1,     October 31,
(in thousands)                                              1998            1997
--------------------------------------------------------------------------------
ASSETS
<S>                                                     <C>             <C>
Cash (Note 1)                                           $ 10,262        $  1,464
Receivables (Notes 1 and 2)                                3,655           4,105
Inventories (Note 1)                                       7,501           6,751
Deferred income taxes (Notes 1 and 9)                      3,617           5,000
Prepaid expenses and other (Note 1)                        2,192           1,190
--------------------------------------------------------------------------------
  Total current assets                                    27,227          18,510
--------------------------------------------------------------------------------
Property and equipment, net (Notes 1 and 3)              128,648         128,915
Deferred income taxes (Notes 1 and 9)                     35,547          38,619
Long-term receivables (Notes 1 and 2)                        869           1,342
Other assets (Note 1)                                      7,379           7,604
--------------------------------------------------------------------------------
Total assets                                            $199,670        $194,990
================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current maturities of long-term debt and 
 capitalized lease obligations (Notes 1, 4 and 5)       $  1,711        $  1,585
Accounts payable, trade                                   21,847          14,083
Accrued compensation                                       6,013           4,119
Accrued taxes                                              8,629           8,276
Accrued insurance (Note 10)                                3,354           4,429
Other accrued expenses                                     5,208           4,580
--------------------------------------------------------------------------------
 Total current liabilities                                46,762          37,072
--------------------------------------------------------------------------------
Long-term debt (Notes 1 and 5)                                87          12,172
Capitalized lease obligations (Note 4)                     5,696           7,293
Non-current accrued insurance (Note 10)                    3,199           2,327
Other non-current liabilities and credits                  5,919           6,207

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, 9,067,699 and 9,132,786
 shares issued and outstanding                               455             458
Paid-in capital                                           84,148          85,177
Retained earnings                                         53,404          44,284
--------------------------------------------------------------------------------
 Total shareholders' equity                              138,007         129,919
--------------------------------------------------------------------------------
Total liabilities and shareholders' equity              $199,670        $194,990
================================================================================
</TABLE>

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

VICORP Restaurants, Inc.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                        Year ended
                                           -------------------------------------
                                           November 1,  October 31,  October 31,
(in thousands, except per share data)            1998         1997         1996
--------------------------------------------------------------------------------
<S>                                          <C>          <C>          <C> 
Revenues
 Restaurant operations                       $342,654     $322,188     $339,937
 Franchise operations (Note 1)                  3,519        3,339        3,343
--------------------------------------------------------------------------------
                                              346,173      325,527      343,280
--------------------------------------------------------------------------------
Costs and expenses
 Restaurant operations
  Food                                        105,416      101,152      111,954
  Labor                                       112,047      104,371      108,929
  Other operating                              87,165       83,378       90,841
 General and administrative                    26,018       23,897       25,129
 Asset disposal, impairment, restructuring
  and related costs (Note 8)                       --           --        5,800
--------------------------------------------------------------------------------
Operating profit                               15,527       12,729          627

 Interest expense                              (1,547)      (2,569)      (4,014)
 Other income, net (Note 2)                       382          619          804
--------------------------------------------------------------------------------
Income (loss) before income taxes              14,362       10,779       (2,583)
Provision (benefit) for income taxes (Note 9)   5,242        3,880       (1,654)
--------------------------------------------------------------------------------
Net income (loss)                            $  9,120     $  6,899     $   (929)
================================================================================

Earnings (loss) per share (Note 1)
 Basic                                       $    .99     $    .76      $  (.10)
 Diluted                                     $    .98     $    .75      $  (.10)
================================================================================
</TABLE>

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


VICORP Restaurants, Inc.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                    Year ended
                                                       -----------------------------------------
                                                       November 1,    October 31,    October 31,
(in thousands)                                               1998           1997           1996
------------------------------------------------------------------------------------------------
<S>                                                      <C>            <C>            <C> 
Operations
Net income (loss)                                        $  9,120       $  6,899       $   (929)
Reconciliation to cash provided by operations
 Depreciation and amortization                             19,486         19,746         21,088
 Deferred income tax provision(benefit)                     4,457          2,705         (1,950)
 Asset disposal, restructuring and related costs              269            490          6,173
 Other, net                                                  (491)          (286)          (296)
                                                       -----------------------------------------
                                                           32,841         29,554         24,086
Change in assets and liabilities
 Trade receivables                                            170           (171)          (289)
 Inventories                                                 (750)          (234)         2,080
 Accounts payable, trade                                    7,764          2,952         (5,395)
 Other current assets and liabilities                       1,325           (511)        (1,891)
 Non-current accrued insurance                                872         (3,022)          (744)
------------------------------------------------------------------------------------------------
Cash provided by operations                                42,222         28,568         17,847
------------------------------------------------------------------------------------------------
Investing activities
Purchase of property and equipment                        (21,054)       (16,410)        (7,922)
Sale (purchase) of other assets                               125           (329)          (425)
Disposition of property                                     1,005            881           (651)
Collection of non-trade receivables                         1,336            549            804
------------------------------------------------------------------------------------------------
Cash used for investing activities                        (18,588)       (15,309)        (8,194)
------------------------------------------------------------------------------------------------
Financing activities
Proceeds from issuance of debt                              1,300          2,100         45,500
Payments of debt and capital lease obligations            (15,186)       (16,240)       (57,889)
Purchase of common stock                                   (2,912)            --             --
Issuance of common stock                                    1,846            439             85
Other, net                                                    116            500             69
------------------------------------------------------------------------------------------------
Cash used for financing activities                        (14,836)       (13,201)       (12,235)
------------------------------------------------------------------------------------------------
Increase (decrease) in cash                                 8,798             58         (2,582)
Cash at beginning of year                                   1,464          1,406          3,988
------------------------------------------------------------------------------------------------
Cash at end of year (Note 1)                             $ 10,262       $  1,464       $  1,406
================================================================================================

Supplemental information
Cash paid during the year for
 Interest (net of amount capitalized)                    $  1,589       $  2,535       $  4,102
 Income taxes                                                 382            369            313
------------------------------------------------------------------------------------------------
</TABLE>

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


VICORP Restaurants, Inc.
NOTES TO 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 November 1, 1998, VICORP operated 249 restaurants in 13 states, of
which, 150 were Bakers Squares, and 99 were Village Inns.  On that date, there  
were also 110 franchised Village Inn restaurants in 20 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 the subsidiary's dissolution.  Prior to its dissolution, 
VICORP's subsidiary transferred all of its assets and liabilities to the 
Company.  All significant intercompany transactions and accounts have been 
eliminated.

Fiscal year
-----------
The  Company's current fiscal year ended on November 1.  Future fiscal years 
will end on the last Sunday in October.  The Company has determined to resume 
reporting on a 52/53 week fiscal year.  Its quarterly reports for fiscal 1999 
will consist of three quarters including 12 weeks and one quarter including 16 
weeks.

Inventories
-----------
Inventories are valued at the lower of first-in, first-out cost or market value.
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                            November 1,         October 31,
                                                  1998                1997
                                            -----------         -----------
<S>                                           <C>                <C>
Food at production facilities
  and third party storage facilities
   Raw materials                              $  2,476            $  1,976
   Finished goods                                2,837               2,511
                                            -----------         -----------
                                                 5,313               4,487
Food at restaurants                              2,188               2,264
                                            -----------         -----------
                                              $  7,501            $  6,751
                                            ===========         ===========
</TABLE>

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 November 1, 1998 and 1997, $67,000 and 
no amounts, respectively, of preopening costs were reported as assets.  The
American Institute of Certified Public Accountants has released a statement of  
position that will prospectively require the costs of preopening activities to 
be expensed as incurred, which is effective as of the beginning of the Company's
fiscal year 2000.

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 ($141,000 and 
$183,000 net of amortization at November 1, 1998, and October 31, 1997, 
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):
<TABLE>
<CAPTION>
                                              1998          1997          1996
                                          --------      --------      --------
<S>                                       <C>           <C>           <C> 
Continuing service fees                   $  3,979      $  3,828      $  4,216
Initial and renewal fees                        63           111           169
Property rental income                         184           316           206
Interest income on franchisee notes            167           202           247
Equipment sales income                          18            14            42
Administrative expense                        (892)       (1,132)       (1,537)
                                          --------      --------      --------
Franchise revenues                        $  3,519      $  3,339      $  3,343
                                          ========      ========      ========
</TABLE>

Advertising costs
-----------------
The Company expenses the production costs of advertising the first time the
advertising takes place.  Costs of media 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 1998, 1997 and 1996 was $7,982,000, $ 5,788,000, and
$6,653,000, respectively.  At November 1, 1998 and October 31, 1997, 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, based on the 
current circumstances, are not expected to be realized.

Earnings (loss) per share
-------------------------
Basic earnings (loss) per share is determined by dividing net income (loss) by 
the weighted average number of common shares outstanding during each period.  
Diluted earnings per share includes the effects of potentially issuable common  
stock, but only if dilutive.  The treasury stock method, using the average price
of the Company's stock for the period, is applied to determine dilution from 
stock options.  Stock options were excluded for fiscal 1996 as anti-dilutive 
because of the net loss reported for that year.

<TABLE>
<CAPTION>
Weighted average common shares outstanding             1998           1997           1996
                                                  ---------      ---------      --------- 
<S>                                               <C>            <C>            <C>       
  Basic                                           9,209,628      9,096,628      9,049,501
  Effect of dilutive common stock options            52,521         48,075         --  
                                                  ---------      ---------      ---------
  Diluted                                         9,262,149      9,144,703      9,049,501
                                                  =========      =========      =========
</TABLE>

*  The number of potentially issuable shares as of October 31, 1997 has been 
   restated to conform to the provisions of Statement of Financial Accounting
   Standards No. 128 "Earnings Per Share".

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. 

New Accounting Standards
------------------------
In June 1997, the FASB issued Statement of Financial Accounting Standards 
No. 130, "Reporting Comprehensive Income" ("SFAS No. 130") which establishes
standards for reporting and display of comprehensive income and its components 
(revenues, expenses, gains, and losses) in a full set of general-purpose 
financial statements.  SFAS No. 130 requires that all items that are required to
be recognized under accounting standards as components of comprehensive income 
be reported in a financial statement that is displayed with the same prominence 
as other financial statements.  Comprehensive income includes all changes in 
equity during a period except those resulting from investments by owners and 
distributions to owners.  SFAS No. 130 does not require a specific format for 
that financial statement but requires that an enterprise display an amount 
representing total comprehensive income for the period in that financial 
statement.  This Statement is effective for fiscal years beginning after 
December 15, 1997.  Through November 1, 1998, the Company had no current or 
cumulative items of other comprehensive income that had been excluded from net 
income.
                                      
In June 1997, the FASB issued Statement of Financial Accounting Standards 
No. 131, "Disclosures About Segments of an Enterprise and Related Information" 
("SFAS No. 131") which establishes standards for the way that public business 
enterprises report information about operating segments in annual financial  
statements and requires that those enterprises report selected information about
operating segments in interim financial reports issued to shareholders.  It also
establishes standards for related disclosures about products and services, 
geographic areas, and major customers.  SFAS No. 131 supersedes SFAS No. 14, 
"Financial Reporting for Segments of a Business Enterprise," but retains the 
requirement to report information about major customers.  SFAS No. 131 requires 
that a public business enterprise report financial and descriptive information 
about its reportable operating segments.  Operating segments are components of  
an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to 
allocate resources and in assessing performance.  Generally, financial 
information is required to be reported on the basis that it is used internally  
for evaluating segment performance and deciding how to allocate resources to 
segments.  SFAS No. 131 is effective for financial statements for periods 
beginning after December 15, 1997.

In February 1998, the FASB issued statement of Financial Accounting Standards 
No. 132, "Employers' Disclosures about Pensions and Other Postretirement 
Benefits" ("SFAS No. 132") which revises employers' disclosures about pension
and other postretirement benefit plans.  It does not change the measurement or 
recognition of those plans.  It standardizes the disclosure requirements for 
pensions and other postretirement benefits to the extent practicable, requires 
additional information on changes in the benefit obligations and fair values of 
plan assets that will facilitate financial analysis and eliminates certain 
disclosures that are no longer useful.  The Statement suggests combined formats 
for presentation of pension and other postretirement benefit disclosures.  This 
Statement is effective for fiscal years beginning after December 15, 1997.  
Restatement of disclosures for earlier periods provided for comparative purposes
is required unless the information is not readily available in which case the
notes to the financial statements should include all available information and a
description of the information not available.  The Company expects no impact on
its financial statements. 

Note 2.  Receivables

Receivables consisted of the following:
<TABLE>
<CAPTION>
                                                 November 1,        October 31,
(in thousands)                                         1998               1997
------------------------------------------------------------------------------
<S>                                                <C>                <C>    
Trade receivables                                  $  3,094           $  3,253
Notes receivable                                      2,141              3,530
Discounts                                               (68)              (660)
Allowance for doubtful accounts                        (643)              (676)
------------------------------------------------------------------------------
Receivables, net                                      4,524              5,447
Current portion                                       3,655              4,105
------------------------------------------------------------------------------
Long-term portion                                  $    869           $  1,342
------------------------------------------------------------------------------
</TABLE>

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 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 transactions.

Note 3.  Property and equipment

Property and equipment consisted of the following:
<TABLE>
<CAPTION>
                                                 November 1,        October 31,
(in thousands)                                         1998               1997
------------------------------------------------------------------------------
<S>                                                <C>                <C>
Property and equipment used in operations
 Land                                              $ 22,540           $ 20,121
 Buildings and improvements                         126,935            124,428
 Equipment                                          111,376            110,176
 Construction in progress                            10,051              1,455
Restaurant property leased to others                  7,947              7,169
Accumulated depreciation                           (154,629)          (141,576)
------------------------------------------------------------------------------
                                                    124,220            121,773
------------------------------------------------------------------------------
Capitalized lease buildings                           8,514              8,524
Accumulated amortization                             (4,849)            (4,507)
------------------------------------------------------------------------------
                                                      3,665              4,017
------------------------------------------------------------------------------
Properties held for disposal, net                     3,119              7,794
Allowance for loss on disposal                       (2,356)            (4,669)
------------------------------------------------------------------------------
Property and equipment, net                        $128,648           $128,915
==============================================================================
</TABLE>

Depreciation and amortization expense charged to operations for property and
equipment was $18,790,000 in 1998, $19,222,000 in 1997, and $20,555,000 in 1996.

At November 1, 1998, 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 as well as various 
equipment.  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 6.5% to 14.2% 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 November 1, 1998, of future minimum lease payments 
under capital and operating leases having an initial or remaining non-cancelable
term of one year or more:
<TABLE>
<CAPTION>
                                                                       Lease and
                                             Capital     Operating      sublease
(in thousands)                                leases        leases       rentals
--------------------------------------------------------------------------------
<S>                                         <C>           <C>           <C> 
1999                                        $  2,341      $ 14,394      $ (2,434)
2000                                           2,123        13,343        (2,205)
2001                                           1,911        12,503        (1,918)
2002                                           1,414         8,441        (1,492)
2003                                             740         6,668          (904)
Later years                                    1,109        28,075        (2,938)
--------------------------------------------------------------------------------
Total minimum lease payments                $  9,638      $ 83,424      $(11,891)
                                            ====================================
Less amount representing interest              2,378
----------------------------------------------------
Present value of minimum lease payments        7,260
Current maturities of capitalized
 lease obligations                             1,564
----------------------------------------------------
Capitalized lease obligations               $  5,696
====================================================
</TABLE>

Net rental expense consisted of the following:
<TABLE>
<CAPTION>
(in thousands)                                  1998          1997          1996
--------------------------------------------------------------------------------
<S>                                         <C>           <C>           <C> 
Restaurant land and buildings
 Minimum rentals                            $ 13,956      $ 13,892      $ 14,239
 Contingent rentals                            2,556         2,357         2,441
Equipment                                         85            66           742
--------------------------------------------------------------------------------
Rental expense                                16,597        16,315        17,422
Less lease and sublease rental income          3,368         3,271         3,198
--------------------------------------------------------------------------------
Net rental expense                          $ 13,229      $ 13,044      $ 14,224
================================================================================
</TABLE>

Note 5.  Debt

Long-term debt consisted of the following:
<TABLE>
<CAPTION>
                                           November 1,      October 31,
(in thousands)                                   1998             1997
----------------------------------------------------------------------
<S>                                          <C>              <C>  
Advances under bank credit agreement         $     --         $ 12,100
Other long-term debt                              234              155
----------------------------------------------------------------------
                                                  234           12,255
Current maturities                                147               83
----------------------------------------------------------------------
Long-term debt                               $     87         $ 12,172
======================================================================
</TABLE>

On December 19, 1997, the Company accepted an amended and restated credit
agreement which provides for an available credit limit of $40,000,000 in the
aggregate with a sublimit of $10,000,000 on letters of credit.  The maturity
date of the amended agreement is February 28, 2001.

Advances under the amended and restated agreement bear interest at the higher of
the Federal Funds rate plus 1/2 of 1% or the lender's Prime Rate, or the Company
may elect to borrow at the lender's Eurodollar rate plus 1% to 1 5/8%.  In 
addition, the Company is required to pay fees equal to 1/4 to 3/8 of 1% per 
annum on unused portions of the commitment, and 1% to 1 5/8% per annum on issued
letters of credit.

The unused commitment and letter of credit fees and the margin on Eurodollar
borrowings are adjusted based on the Company's debt-to-capitalization ratio and
fixed charge coverage ratio.  At the time of the closing of the amended and 
restated agreement, the Company qualified for minimum rates and fees provided in
the agreement.

During 1998, the largest aggregate outstanding balance under the Company's bank
facilities was $13,400,000.  The average balance outstanding was $4,086,000 and 
the average interest rate was 6.98%.  At November 1, 1998, the Company had 
placed letters of credit totaling $1,850,000 in connection with its insurance 
programs.  At November 1, 1998, the Company had no outstanding debt under its 
credit agreement.

The credit agreement contains 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 and franchise guarantees.

Principal amounts of other long-term debt outstanding as of November 1, 1998 due
during each of the five succeeding fiscal years were $147,000 in 1999, $46,000  
in the year 2000, $41,000 in 2001, and none in the years 2002 and 2003.

The Company incurred $1,553,000, $2,573,000, and $4,014,000 of interest charges 
in 1998, 1997, and 1996, respectively.  Of these amounts, $6,000 was capitalized
in 1998, $4,000 was capitalized in 1997, none was capitalized in 1996.

Note 6.  Shareholders' equity

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

At various times since August 1992, the Company's Board of Directors has 
authorized the purchase of shares of the Company's common stock.  On October 2, 
1998, the board authorized the repurchase of up to 900,000 shares.  Future
purchases with respect to the authorizations 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.  At November 1,  
1998, authorization to purchase an additional 686,300 common shares was 
available.  During 1998, 213,700 shares were purchased.

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 $28,878,000 of consolidated retained earnings were unrestricted at
November 1, 1998, 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, 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
Net income                                      --         --            --         6,899          6,899
Common stock options exercised
 including income tax benefit               82,900          5           797            --            802
Employee Stock Purchase Plan                14,860          1           168            --            169
Purchase of common shares                  (20,000)        (1)         (219)           --           (220)
---------------------------------------------------------------------------------------------------------
Balances at October 31, 1997             9,132,786        458        85,177        44,284        129,919
Net income                                      --         --            --         9,120          9,120
Common stock options exercised
 including income tax benefits             139,001          7         1,741            --          1,748
Employee Stock Purchase Plan                 9,612          1           131            --            132
Purchase of common shares                 (213,700)       (11)       (2,901)           --         (2,912)
---------------------------------------------------------------------------------------------------------
Balances at November 1, 1998             9,067,699        455        84,148        53,404        138,007
=========================================================================================================
</TABLE>

Note 7.  Stock option, stock purchase and profit-sharing plans

The Company has stock option plans which generally provide for granting
options to any 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 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. Under this plan, 9,612 shares were issued in fiscal
1998 and 14,860 shares were issued in fiscal 1997.

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 in the amount of 2% of the aggregate
compensation of the participants while participating. Any full-time
employee, or any part-time employee meeting a one-thousand (1,000) hour
service requirement 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 1998, 1997 and 1996 were $531,000, $515,000,
and $473,000, respectively.

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-
Based Compensation", which defines a fair value based method of accounting
for employee stock options and similar equity instruments. 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 pro
forma disclosures of net income and earnings per share as if the fair value
based method had been applied.

The Company has elected to account for its stock-based compensation plans
using the intrinsic value based method of APB No. 25. For pro forma
disclosure purposes, the Company has computed the value of all options
granted during 1998, 1997, and 1996 using the Black-Scholes option pricing
model and the following assumptions:

<TABLE>
<CAPTION>
                                                 1998          1997        1996
                                                 ----          ----        ---- 
<S>                                             <C>           <C>         <C>         
Risk-free weighted average interest rate.....     4.9%          6.7%        6.7%
Expected dividend yield......................       0%            0%          0%
Expected weighted average lives..............    6.28 yrs      6.25 yrs    6.25 yrs
Expected volatility..........................    44.3%         44.7%       44.7%
</TABLE>

The aggregate estimated fair value of stock options granted in 1998, 1997
and 1996 was $1,208,000 and $73,000, and $2,917,000 respectively.  For
purposes of pro forma disclosures, the estimated fair value of options is
amortized to expense over the options' vesting period.  All options are
initially assumed to vest.  Compensation previously recognized is reversed
to the extent applicable to forfeitures of unvested options.  If the Company
had accounted for its employee stock compensation plans in accordance with
SFAS No. 123, the Company's net income and pro forma net income per share
would have been reported as follows:

<TABLE>
<CAPTION>
                                                         Years Ended

                                      November 1,         October 31,           October 31,
                                        1998                 1997                  1996
                                        ----                 ----                  ---- 
<S>                                   <C>                 <C>                   <C>
Net Income (Loss)
As Reported                           $ 9,120             $ 6,899               $  (929)
Pro Forma                             $ 8,966             $ 6,472               $(1,402)

Net Income (Loss) per Common
 and Common Equivalent Share
As Reported                           $  0.98             $  0.75               $  (.10)
Pro Forma                             $  0.97             $  0.71               $  (.15)
</TABLE>

A summary of the status of the Company's stock option plans at November 1,
1998 and October 31, 1997 together with changes during the periods then
ended are presented in the following table:
<TABLE>
<CAPTION>

                                                              Years Ended

                                 November 1,                   October 31,                 October 31,
                                   1998                           1997                        1996
                                   ----                           ----                        ----
                                  Weighted                     Weighted                    Weighted
                                  Average                      Average                     Average
                                  Exercise                     Exercise                    Exercise
                     Options       Price        Options         Price       Options         Price
                    ------------------------------------------------------------------------------
<S>                  <C>          <C>           <C>             <C>         <C>             <C>
Outstanding at
 beginning of year   641,518      $13.96        868,300         $12.72      677,898         $16.88
Grants               164,000      $15.81         14,000         $12.25      534,000         $11.70
Exercised           (139,001)     $12.37       (122,900)*       $ 5.82      (11,000)        $ 7.69
Canceled            (222,517)     $12.87       (117,882)        $13.08     (332,598)        $21.09
                    ---------                  ---------                   ---------
Outstanding at
 end of year         444,000      $15.68        641,518         $13.96      868,300         $12.20
                    ========                    =======                     ======= 
</TABLE>

* Includes 40,000 shares exercised by presenting 14,285 previously owned
shares.  The issuance of 25,715 net shares to the employee has been
deferred.

The following table summarizes information about the stock options
outstanding and exercisable as of November 1, 1998:
<TABLE>
<CAPTION>
                                    Options Outstanding      Options Exercisable
                                    -------------------      -------------------

                                    Weighted                          Number
                                     Average     Weighted        Exercisable       Weighted
                                   Remaining      Average                 At        Average
Range of          Options        Contractual     Exercise        November 1,       Exercise
Exercise Prices   Outstanding           Life        Price               1998          Price
---------------   -----------           ----        -----               ----          -----
<S>                <C>            <C>              <C>               <C>             <C>  
$11.50             100,000        7.80 years       $11.50             50,000         $11.50
$12.25-$13.25       16,000        7.45 years       $12.38             16,000         $12.38
$14.25             100,000        9.92 years       $14.25                 --         $   --
$14.50-$17.00      122,000        3.31 years       $16.12            120,000         $16.15
$18.25-$26.00      106,000        6.96 years       $20.98             68,500         $22.48
                   -------                                           ------- 

$11.50-$26.00      444,000        6.83 years       $15.68            254,500         $16.70
                   =======                                           =======
</TABLE>

Note 8.  Asset disposal, impairment 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 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.

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.

As of the end of fiscal 1996, the Company had closed all the restaurants
related to the above mentioned disposal plans.  In 1996, the Company closed
its bakery facilities in Denver, Colorado and Orlando, Florida.
Additionally, in 1996 the Company closed two restaurants which were not
included in the disposal plans. In 1997, the Company closed six restaurants
which were not included in the disposal plans.  In 1998, the Company closed
one restaurant which was not included in the disposal plans.

Operating results for the closed restaurants for the past three fiscal years
were as follows (in thousands):
<TABLE>
<CAPTION>
                                          1998       1997        1996
                                         ------     ------      ------
<S>                                       <C>      <C>        <C> 
Sales                                     $146     $4,098     $14,534
Restaurant operating profit (loss)         (26)       (37)       (719)
</TABLE>

As of November 1, 1998, the Company had $3,582,000 of reserves remaining to
provide for the disposal of fifteen properties, including seven closed prior
to 1994.  The reserves consisted of $2,488,000 to reduce the disposal
property to net realizable value and $1,094,000 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 1998, $619,000 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:
<TABLE>
<CAPTION>
(in thousands)                            1998        1997        1996
-----------------------------------------------------------------------
<S>                                    <C>         <C>         <C> 
Current
 Federal                               $   300     $   200     $    75
 States                                    481         642         205
-----------------------------------------------------------------------       
                                           781         842         280
-----------------------------------------------------------------------
Deferred
 Federal                                 4,008       2,084      (2,063)
 States                                    449         623         113
-----------------------------------------------------------------------
                                         4,457       2,707      (1,950)
-----------------------------------------------------------------------
Total provision for income taxes       $ 5,238     $ 3,549     $(1,670)
=======================================================================
</TABLE>

The components of the provision for income taxes included in the Company's
statements of operations were as follows:
<TABLE>
<CAPTION>

(in thousands)                            1998        1997        1996
-----------------------------------------------------------------------
<S>                                     <C>        <C>         <C> 
Current
 Taxes on income before
 carryforwards                          $6,064      $3,876      $  280
 Less benefit of loss
 carryforwards utilized                 (5,283)     (3,034)         --
-----------------------------------------------------------------------
                                           781         842         280
-----------------------------------------------------------------------
Deferred
 Tax effect of net change in
 temporary differences                     126         234         858
 Utilization of (addition to)
 tax net operating loss carryforward     5,283       3,034      (1,734)
 FICA tax credit                          (698)       (815)       (999)
 AMT credit                               (254)       (109)        (75)
 Expiration of net operating
 loss carryforwards                     20,046          --          --
 Expiration of tax credit
 carryforwards                           1,009         363          --
 Change in valuation allowance         (21,055)         --          --
------------------------------------------------------------------------
                                         4,457       2,707      (1,950)
------------------------------------------------------------------------
Tax effect of deduction for
exercised stock options credited
to paid-in capital                           4         331          16
------------------------------------------------------------------------
Income tax expense (benefit)           $ 5,242      $3,880     $(1,654)
========================================================================
</TABLE>

Income tax expense (benefit) differs from the amounts computed by applying
the federal income tax rate to income before income taxes as follows:
<TABLE>
<CAPTION>

(in thousands)                            1998      %          1997      %        1996      %
-------------------------------------------------------------------------------------------------
<S>                                    <C>       <C>        <C>        <C>      <C>      <C>   
Computed federal income taxes
 using statutory rate                  $ 5,027   35.0%      $ 3,773    35.0%    $ (904)  (35.0%)
FICA tax credit                           (698)  (4.9)         (815)   (7.5)      (999)  (38.7)
AMT credit                                (300)  (2.0)         (109)   (1.0)       (75)   (2.9)
State income taxes net of federal
income tax effect                          605    4.2           822     7.6        207     8.0
Expiration of tax credit 
carryforwards                               --     --           363     3.4         --      --
Other                                      608    4.2          (154)   (1.5)       117     4.6
-------------------------------------------------------------------------------------------------
                                       $ 5,242   36.5%      $ 3,880    36.0%   $(1,654)  (64.0%)
=================================================================================================
</TABLE>

The Company had federal taxable income (loss) for tax purposes and book
income (loss) before income taxes as follows:
<TABLE>
<CAPTION>

(in thousands)                            1998         1997         1996
-------------------------------------------------------------------------
<S>                                    <C>          <C>         <C> 
Federal taxable income (loss)          $14,051      $ 6,894     $ (4,033)
Book income (loss) before income
taxes                                   14,362       10,779       (2,583)
</TABLE>

Federal taxable income is generally less than book income before income
taxes due to state income taxes and temporary differences.

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

<TABLE>
<CAPTION>
(in thousands)                                         1998        1997
------------------------------------------------------------------------
<S>                                                <C>         <C> 
Deferred tax assets
 Tax effect of net operating
 loss carryforwards                                $ 52,639    $ 77,968
 Tax credit carryforwards                             2,835       3,844
 FICA tax credit                                      4,041       3,343
 Alternative minimum tax credits                      2,603       2,349
 Accrued insurance claims not yet deductible          2,432       2,548
 Leasing transactions                                 2,552       3,169
 Property and equipment                               1,688         386
 Other                                                3,915       4,401
------------------------------------------------------------------------
                                                     72,705      98,008
 Valuation allowance                                (31,945)    (53,000)
------------------------------------------------------------------------
Deferred tax assets, net of allowance                40,760      45,008
------------------------------------------------------------------------
Deferred tax liabilities                             (1,596)     (1,389)
------------------------------------------------------------------------
Net deferred tax assets                              39,164      43,619
Current portion                                       3,617       5,000
------------------------------------------------------------------------
Long-term portion                                   $35,547     $38,619
========================================================================
</TABLE>

As of November 1, 1998, the Company had federal net operating loss ("NOL")
carryforwards totaling $140,371,000 which expire $112,880,000 in 1999,
$6,146,000 in 2001, $17,588,000 in 2010 and $3,757,000 in 2011.  The
Company also has investment tax credit ("ITC") carryforwards totaling
$2,289,000 which expire in 1999 and 2000.  The Company has established a
valuation allowance for the deferred tax assets related to these
carryforwards because the ITC carryforwards are not expected to be realized
and only a portion of the operating loss carryforwards are expected to be
applied against future taxable income before they expire.  The remaining
valuation allowance at November 1, 1998, is based on an assumption that the
Company will report taxable income in 1999 of approximately $34 million.  To
the extent actual taxable income for fiscal 1999 varies from the assumed
amount, an adjustment to the valuation allowance will be required.  Actual
taxable income for fiscal 1998 was approximately $14 million.  Management is
currently pursuing certain tax planning strategies it believes can be
implemented to increase taxable income currently projected for fiscal 1999
to at least $34 million.  However, there can be no assurance these tax
planning strategies will be successfully implemented and the adequacy of the
allowance is principally dependent on the actual amount of taxable income
ultimately reported for fiscal 1999.

Note 10.  Commitments and contingencies

Prior to fiscal 1998, the Company retained a significant portion of certain
insurable risks primarily in the medical, dental, workers' compensation,
general liability and property areas.  Traditional insurance coverage was
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 $1,850,000 in
connection with certain of these insurance programs.  For its fiscal 1998
the Company obtained traditional insurance coverages for its insurable
risks, with the exception of medical and dental coverage.

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.

On September 28, 1998, two class actions were commenced in the Superior
Court of Los Angeles County, California.

The first, Kirk v. VICORP Restaurants, Inc., Case No. BC-198202, was brought
by a former manager of a California Bakers Square Restaurant.  
Allegations in the amended complaint assert violations by VICORP of California
wage and hour laws and regulations concerning overtime wages.  The Plaintiff
is seeking class certification, injunctive relief, damages in an unspecified
amount, statutory penalties, interest, costs, and attorneys' fees.

The second, Schroeder v. VICORP Restaurants, Inc., Case No. BC-198203, was
brought by a former server at a California Bakers Square Restaurant.  The
Plaintiff alleges VICORP has violated California statutes or regulations
concerning the payment of wages, tip pooling, reimbursement for uniform
expenses, failure to remit tips, the improper charging of walkouts to
servers. Class certification is requested, as well as injunctive relief,
damages in an unspecified amount, statutory penalties, interest, costs, and
attorneys' fees.

On December 28, 1998, a third action was commenced in the Superior Court of
Los Angeles County, California, Ontiveros v. VICORP Restaurants, Inc., Case
No. BC-202962.  This action was brought by a former manager of California
Bakers Square Restaurant.  The Plantiff is seeking damages, statutory
penalties, injunctive and declaratory relief, the disgorgement of amounts by
which VICORP has been unjustly enriched, interest, attorneys' fees, and costs
for alleged violations of California statutes and regulations concerning the
payment of wages and of the California Business and Professional Code.

The Company believes it has meritorious defenses to each of the claims in
both actions and it intends to vigorously defend them.  Management believes
that the Company will ultimately prevail and that the final resolution of
the complaints will not have a material effect on its results of operations
or financial position. The cost of defense for these class actions will be
recognized as incurred.

VICORP has guaranteed certain leases for 21 restaurant properties sold to
others in 1986 and 18 restaurant leases of certain franchisees.  Minimum
future rental payments remaining under these leases were approximately $7.3
million and $9.5 million as of November 1, 1998 and October 31, 1997,
respectively.  These guarantees are included in the definition of financial
instruments with off-balance-sheet risk of accounting loss; however, the
Company has not been required to make payments with respect to these
guarantees and presently has no reason to believe any payments will be
required in the future.  The Company believes it is impracticable to
estimate the fair value of these financial guarantees (e.g., amounts the
Company could pay to remove the guarantees) because the Company has no
present intention or need to attempt settlement of any of the guarantees.

At November 1, 1998, the Company had contractual commitments for restaurant
construction of approximately $1,450,000.

Note 11. Quarterly financial data (unaudited)

The Company's quarterly results of operations are summarized as follows (in
thousands, except per share data):
<TABLE>
<CAPTION>
                                                      Quarter ended
                                 -------------------------------------------------------------
                                   January 31,      April 30,       July 31,      November 1,
                                          1998           1998           1998             1998
                                     (92 days)      (89 days)      (92 days)        (93 days)
----------------------------------------------------------------------------------------------
<S>                                   <C>            <C>            <C>              <C> 
Revenues                              $87,377        $82,946        $88,179          $87,671
Restaurant operating income             9,316          8,659         10,406            9,645
Net income                              2,291          1,899          2,787            2,143
Net income per share-diluted              .25            .21            .30              .23
==============================================================================================
</TABLE>
<TABLE>
<CAPTION>
                                                      Quarter ended
                                 -------------------------------------------------------------
                                   January 31,      April 30,       July 31,      October 31,
                                          1997           1997           1997             1997
                                     (92 days)      (89 days)      (92 days)        (92 days)
----------------------------------------------------------------------------------------------
<S>                                   <C>            <C>            <C>              <C> 
Revenues                              $83,930        $79,316        $81,575          $80,706
Restaurant operating income             8,678          8,237          8,398            7,974
Net income                              1,826          1,733          1,902            1,438
Net income per share-diluted              .20            .19            .21              .16
==============================================================================================
</TABLE>

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 1999 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 Statements of VICORP
        Restaurants, Inc. are filed as part of this report:

        Management's Report on Financial Statements.

        Report of Independent Public Accountants.

        Balance Sheets - November 1, 1998 and October 31, 1997.

        Statements of Operations - Years ended November 1, 1998, October 31,
        1997 and October 31, 1996.

        Statements of Cash Flows - Years ended November 1, 1998, October 31,
        1997 and October 31, 1996.

        Statements of Shareholders' Equity - Years ended November 1, 1998,
        October 31, 1997 and October 31, 1996 as presented in Note 6 of Notes
        to 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 33.

        Report of Independent Public Accountants on Financial Statement
        Schedule.

        Schedule II - Valuation and Qualifying Accounts for the years ended
        November 1, 1998, October 31, 1997 and October 31, 1996.

        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 36.

        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 1998:

           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 financial statements of VICORP Restaurants, Inc. included in this
form 10-K and have issued our report thereon dated December 11, 1998.  
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 index
above 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 11, 1998.

<TABLE>
<CAPTION>
                                         
                                          VICORP Restaurants, Inc.
                             Schedule II - VALUATION AND QUALIFYING ACCOUNTS
                                For the Three Years Ended November 1, 1998
                                              (in thousands)


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 November 1, 1998:
  Allowance for doubtful accounts      $    676        $    22      $   220 <F3>   $   275 <F1>     $    643
  Discounts and deferred gains              660             46           --            638 <F4>           68
  Allowance for loss on disposal          4,800             --           --          2,312 <F1>        2,488
  Accumulated amortization                6,705            772           --             70 <F1>        7,407
                                       ---------       --------     --------       --------         ---------
                                       $ 12,841        $   840      $   220        $ 3,295          $ 10,606
                                       =========       ========     ========       ========         =========

Year ended October 31, 1997:
  Allowance for doubtful accounts      $    704        $    42      $   175 <F3>   $   245 <F1>     $    676
  Discounts and deferred gains              687            (39)          12 <F3>        --               660
  Allowance for loss on disposal          5,806             --           --          1,006 <F1>        4,800
  Accumulated amortization                6,038            697           --             30 <F2>        6,705
                                       ---------       --------     --------       --------         ---------
                                       $ 13,235        $   700      $   187        $ 1,281          $ 12,841
                                       =========       ========     ========       ========         =========

Year ended October 31, 1996:
  Allowance for doubtful accounts      $  2,268        $    32      $   189 <F3>   $ 1,785 <F1>     $    704
  Discounts and deferred gains              750            (63)          --             --               687
  Allowance for loss on disposal          6,852          2,915           --          3,961 <F1>        5,806   
  Accumulated amortization                5,674            642           --            278 <F2>        6,038
                                       ---------       --------     --------       --------         ---------
                                       $ 15,544        $ 3,526      $   189        $ 6,024          $ 13,235
                                       =========       ========     ========       ========         =========
</TABLE>

<F1>  Charges to the accounts for purposes for which the reserves were created.
<F2>  Asset dispositions and write-offs of fully amortized assets.
<F3>  Establishment of reserves by charges directly to income.
<F4>  Recognition of deferred gain.

Year-end balances are reflected in the Balance Sheets as follows:
<TABLE>
<CAPTION>
                                            November 1,        October 31,
                                               1998               1997
                                            -----------        -----------
<S>                                         <C>                <C> 
Deducted from current receivables           $    562           $    567
Deducted from property and equipment           2,357              4,669
Deducted from long-term receivables              149                769
Deducted from other assets                     7,538              6,836
                                            ---------          ---------
                                            $ 10,606           $ 12,841
                                            =========          =========
</TABLE>
                                      
                                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.
                       
10          - Material Contracts
              *(i)  Franchise Operating Agreement - Registration Statement 
                    2-83326, Exhibit 10(b).
              *(ii) U. S. $40,000,000 Amended and Restated Credit Agreement
                    dated December 19, 1997 between Vicorp Restaurants, Inc.
                    and NationsBank of Texas, N.A. and U. S. Bank National
                    Association-Form 10-K for the year ended October 31, 1997.
              (iii) Executive Compensation Plans and Arrangements
                   *(a)  VICORP Restaurants, Inc. Outstanding Stock Purchase 
                         Plan (1989)
                         - Registration Statement 33-32608, Exhibit 4(h).
                   *(b)  VICORP Restaurants, Inc. Stock Purchase Plan
                         - Registration Statement 333-11003, Form S-8 dated 
                         August 28, 1996.
                   *(c)  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).
                   *(d)  Severance Agreement Charles R. Frederickson 
                         - Form 10-K for the year ended October 31, 1993, 
                         Exhibit 10(vi).
                   *(e)  Employment Agreement for Richard E. Sabourin dated 
                         July 25, 1996 - Form 10-Q for the quarter ended 
                         July 31, 1996, Exhibit 10(ii)(b).
                   *(f)  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).
                    (g)  Amended and Restated 1982 Stock Option Plan.
                    (h)  Amended and Restated 1983 Stock Option Plan.
                    (i)  Form Severance Agreement (Executive Officers excluding 
                         Frederickson) - Form 10-Q for the quarter ended 
                         July 31, 1998.
                    (j)  Stock Option Agreement of Robert E. Kaltenbach dated
                         April 9, 1998.


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
20th day of January, 1999.

                             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 20, 1999 on
behalf of the registrant and in the capacities indicated.

     Signature                              Title
     ---------                              -----

 /s/ Charles R. Frederickson                Chairman of the Board
 ---------------------------                President and Chief 
    (Charles R. Frederickson)               Executive Officer


 /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.