UNITED STATES

SECURITIES & EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-K

(Mark One)

[  **X**  ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended **October 29, 2000**
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 registrantwas 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 informationstatements 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 6,432,791 shares of the registrant's common stock held by non-affiliates on January 16, 2001 was approximately $108,553,348.

At January 16, 2001 there were 6,763,488 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 2000 Annual Meeting of Shareholders ("the Proxy Statement") are incorporated herein by reference into Parts I and III.

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** 

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 under the names "Bakers Square" and "Village Inn," and franchises restaurants under the Village Inn brandname.  At October 29, 2000, the Company operated two hundred fifty-sixCompany-owned restaurants in fourteen states. Of the two hundred fifty-six Company-owned restaurants, one hundred forty-nine were Bakers Squares and one hundred seven were Village Inns, with an additional one hundred fifteen franchised Village Innrestaurants in twenty-one states.  The Company-owned and franchised restaurants are concentrated in Arizona, California, Florida, the Rocky Mountain region and the upper Midwest.  The Company operates a pie manufacturing division to support therestaurants, which operates under the name "VICOM".  VICOM has three production facilities located in Santa Fe Springs, California, Oak Forest, Illinois and Chaska, Minnesota.
*Company Operations*
The Village Inn concept is focused on breakfast food, offering homestyle entrees for breakfast, lunch and dinner.  Bakers Square emphasizes lunch and dinner with signature fresh baked pies in twenty-two, plus flavors.  Each conceptoffers a relatively standard core menu supplemented with daily and monthly entree and pie specials with an average guest check of six to eight dollars.

Store management typically consists of a general manager and two assistant managers.  The store managers are supported by regional managers, regional vice-presidents and the corporate office.  Incentives are provided to encourage storeand regional managers to maximize store sales and monitor controllable costs.

The Company believes the principal measure of success for the restaurants is the ability to provide the customer with a satisfying experience.  Attracting and retaining the best people, continuous employee development, regularcommunication of expectations, and constant performance feedback are central factors to ensure customer satisfaction.  Training programs are designed to meet these objectives and focus on outcome-based training, emphasizing the acquisition of basic skillsand 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 uniformquality specifications.  Management does not anticipate any difficulty in obtaining food products of adequate quantity or quality at acceptable prices.

The Company utilizes advertising to promote the restaurant concepts and gain market share.  Expenditures for marketing were 3.1% of Company-operated restaurant sales for fiscal 2000.

The Company-operated restaurants utilize point-of-sale and back-of-house computer systems.  These systems capture sales information, payroll data, and provide restaurant managers with analytical and reporting tools.

During fiscal 2000, the Company opened seven new restaurants and closed four restaurants, of which all were closed due to lease expiration.  The Company intends to open six to nine Company-operated restaurants during fiscal year 2001.
*Franchise Operations*
The initial term of a Village Inn Franchise Agreement is twenty-five years.  An initial franchise fee of $35,000 is due upon the grant of a franchise and ongoing royalty fees are 4% of gross sales.  The Company supports its franchiseeswith regular visits to the restaurants by Quality Assurance Consultants to help ensure the Company's high quality service and cleanliness standards are upheld. A franchise advisory board, consisting of seven franchisees elected by their peers every twoyears, meets with Company management four times per year.  The meetings provide a forum for the exchange of ideas, which enables the Company and the franchisees to maximize growth, sales and profits.

During fiscal year 2000, the Company established four new franchised Village Inn locations (three in Colorado and one in Alaska) and closed four franchised restaurants.  The Company plans to pursue franchise development as a source ofproviding a continued profitable revenue stream, as well as to gain market share, thus promoting the advancement of the Village Inn brandname.  The Company expects to develop from four to eight franchised units during fiscal 2001.
*Trademarks and Service Marks*
The Company owns the right to use the trademarks and service marks, which have been registered with various state and federal patent and trademark offices.  The Company considers the trademarks and service marks important to thebusiness and actively defends and enforces them.
*Competition*
The restaurant industry is highly competitive with regards to quality, value, location, service and price, and is often affected by changes in consumer tastes, local and national economic and real estate conditions, traffic patternsand demographic trends.  The Company competes directly and indirectly with all types of restaurants from national and regional chains to local establishments.  Competitors include corporations much larger than the Company, which have greater capitalresources and ability to withstand adverse business trends.
*Research and Development*
No material amounts were spent on Company sponsored research activities relating to the development or enhancement of products, services or techniques.
*Regulation*
The Company is subject to various federal, state and local laws governing the sale and preparation of food, zoning, sanitation, health and safety, minimum wage requirements, overtime, construction, environmental and sale of alcoholicbeverages.

The Federal Trade Commission, as well as state laws regulate franchise operations, including laws imposing registration and disclosure requirements for franchisors during the offer and sale of franchises and, in certain cases, applyingsubstantive standards to the relationship between the Company and the franchisee.
*Employees*
As of January 16, 2001 the Company had approximately 13,071 employees.  None of the Company's employees are represented by a labor union or are the subject of a collective bargaining agreement.*Executive Officers of the Company

The following table sets forth the names, ages, position and business experience of the executive officers of the Company.  Executive officers are appointed by the Board of Directors on an annual basis.  There are no familyrelationships between the executive officers.

Name
Age
Position
Charles R. Frederickson
63
Chairman of the Board
Joseph F. Trungale
59
Chief Executive Officer / President
Robert E. Kaltenbach
55
Chief Operating Officer
Richard E. Sabourin
50
Executive Vice President / Chief Financial Officer
Charles R. Frederickson has been a director of the Company since 1968, and Chairman of the Board since November 1986.

Joseph F. Trungale was appointed President of the Company on November 1, 1999, and subsequently Chief Executive Officer on May 8, 2000.  Previously, Mr. Trungale served as the President of the Bakers Square concept since August 1998.Mr. Trungale also served in various positions with operational responsibility over the Company's Bakers Square restaurants.  Prior to joining the Company, Mr. Trungale operated a family-owned real estate business from September 1995 through July 1997.For eight years preceding that, he was Vice President of Operations for Whataburger, Inc.

Robert E. Kaltenbach was appointed Chief Operating Officer on November 1, 2000 after serving as President of Village Inn since December 1994.  Previously, Mr. Kaltenbach served as Vice President of Franchise Operations since July 1988.

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

============================================================================================

 
**Item 2. Properties.**
The Company owns the corporate office complex located in Denver, Colorado and the bakery facilities in Oak Forest, Illinois and Chaska, Minnesota. The land and building at the Santa Fe Springs, California bakery are leased.

Company-operated Village Inn restaurants are concentrated in the Rocky Mountain region, the upper Midwest, Arizona and Florida, while Bakers Square restaurants are located primarily in the upper Midwest and California.  The Companyconsiders existing restaurant properties and equipment to be in good working condition.  During fiscal 2000, two idle properties were sold, six leases expired on idle and subleased properties and four leases for Company-operated locations were notrenewed.  The Company intends to lease, sublease or sell the five remaining idle properties. In fiscal 1999, the Company completed a sale leaseback transaction of the real estate related to twenty-one restaurant properties.  The following table sets forthrestaurant properties owned in fee, buildings owned on leased land, and leased locations as of October 29, 2000:
 
Village 
Bakers     
Inn 
Square 
Other 
Total
Company-operated restaurants:               
Properties owned in fee
17 
35 
-- 
52
Buildings owned on leased land
10 
10 
-- 
20
Leased locations
       80 
      104 
           -- 
      184 
     107 
     149 
           -- 
      256
Properties leased to franchisees :               
Properties owned in fee
2 
-- 
-- 
2
Buildings owned on leased land
-- 
-- 
-- 
--
Leased locations
        18 
          -- 
           -- 
        18 
        20 
          -- 
           -- 
        20
Properties held for disposal:               
Properties owned in fee
-- 
-- 
4 
4
Buildings owned on leased land
-- 
-- 
1 
1
Leased locations / subleased to others
          -- 
           -- 
         19 
        19 
          -- 
           -- 
         24 
        24**============================================================================================
**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 hourlaws 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.  On February 14, 2000, Kirk's motion for classcertification was denied.  Kirk filed an appeal of the denial on April 14, 2000.  The case has been stayed pending the appeal.

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 and regulations concerningthe payment of wages, tip pooling, reimbursement for uniform expenses, failure to remit tips, the improper charging of walkouts to servers and unfair competition.  Class certification is requested, as well as injunctive relief, damages in an unspecifiedamount, 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 BakersSquare restaurant.  The Plaintiff is seeking class certification damages, statutory penalties, declaratory relief, interest, attorneys' fees, and costs for alleged violations of California statutes and regulations concerning the payment of wages.  OnJanuary 3, 2000, the Court issued an order staying the case under the primary jurisdiction doctrine.

The Company believes the legal actions described above are similar to actions brought against other multi-location restaurant operators in the state of California.  Resolution of these matters may require a significant period of timeand is subject to substantial uncertainties common to the judicial process for class actions in general.  The Company believes it has not violated California statutes and regulations and has meritorious defenses to each of the claims in these actions.While the Company intends to vigorously defend against the allegations, it is possible that the Company will not prevail, or that decisions made in other similar cases may result in interpretations of the California statutes that are adverse to theCompany's position.  The cost of defense for these actions is being recognized as incurred.  No provision has been made for any judgements or settlements that might ultimately result.  While a contingency exists that any such judgement or settlement couldbe material to the results of operations of the Company for some future period or periods, the Company currently believes that resolution of these amounts will not have a material adverse effect on the Company's financial position.

===========================================================================================
**Item 4. Submission of Matters to a Vote of Security Holders.**
There were no matters submitted to the Company's security holders during the fourth quarter ended October 29, 2000.

============================================================================================
**	PART II

Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.**
The Company's common stock is traded on 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 16, 2001, theCompany had 385 shareholders of record.  The following table sets forth the high and low closing sales quotations per share of common stock as reported by NASDAQ during each of the Company's fiscal quarters:
  
Fiscal 
Quarter  
First
Second
Third
Fourth
2000:    
High 
$18
$21 3/4
$21 1/2
$19 5/8
Low
15 1/8
15 1/8
17 9/16
16 13/16     
1999:    
High 
$16
$16 3/4
$18 5/16
$18 3/8
Low
13 3/8
14 3/8
15 3/16
15 11/16
The range of high and low closing sales quotations contained in the foregoing table reflects inter-dealer prices, without retail mark-up, markdown or commissions, and may not represent actual transactions.

The Company has not paid cash dividends on common stock since 1986.  Future common stock dividend payments are dependent upon operating results, loan agreement restrictions and other financial and business considerations.  Under themost restrictive covenant of the Company's bank credit agreement, approximately $19,364,000 was unrestricted at October 29, 2000 as to the payment of dividends.

==========================================================================================
**Item 6.  Selected Financial Data.**
(dollars in thousands, except per share data)
2000
1999
1998
1997
1996
1995
1994**Results of operations       
System-wide sales including franchise sales
$516,247
$500,566
$482,506
$450,534
$456,352
$496,300
$529,982
Restaurant sales
368,726
355,781
342,654
322,188
339,937
370,116
409,297
Total revenues
372,047
359,046
346,173
325,527
343,280
373,838
412,644
Net income (loss)
14,671
17,327*
9,120
6,899
(929)*
(4,532)
(6,638)***Operating analysis       
Restaurant operating profit analysis as a       
percentage of restaurant sales:       
Costs and expenses:       
Food
29.7%
30.1%
30.8%
31.4%
32.9%
33.5%
30.1%
Labor
32.8%
32.8%
32.7%
32.4%
32.0%
33.7%
30.2%
Other operating
24.6%
24.6%
25.4%
25.9%
26.7%
28.3%
28.2%
Restaurant operating profit
12.9%
12.5%
11.1%
10.3%
8.3%
4.4%
11.4%
General and administrative expense       
as a percentage of revenues
7.4%
8.1%
7.5%
7.4%
7.3%
7.0%
8.7%
Interest expense as a percentage of revenues
.2%
.3%
.5%
.8%
1.2%
1.0%
.9%
Income before income taxes as a percentage         
of revenues
6.3%
5.2%*
4.2%
3.3%
.9%*
(2.4%)
2.5%*
Effective income tax rate
37.1%
6.5%
36.5%
36.0%
64.0%
50.0%
37.5%**Balance sheet data       
Total assets
$199,418
$228,271
$199,670
$194,990
$203,946
$228,161
$249,023
Long-term debt and capitalized lease obligations
3,133
4,588
5,783
19,465
33,585
42,179
42,554
Common shareholders' equity
126,697
151,848
138,007
129,919
122,269
123,098
134,866
Debt to total capitalization
3.6%
3.9%
5.2%
13.9%
22.3%
28.2%
24.7%**Cash flow data       
Cash provided by operations
$37,372
$29,405
$42,222
$28,568
$17,847
$7,309
$34,094
As a percentage of revenues
10.0%
8.2%
12.2%
8.8%
5.2%
2.0%
8.3%
Investment in property and equipment
$27,064
$32,996
$21,054
$16,410
$7,922
$13,234
$28,733**Per common share       
Diluted earnings (loss)
$2.05
$1.93
$.98
$.75
$(.10)
$(.49)
$(.69)
Book value
18.76
17.06
15.18
14.18
13.50
13.61
14.18
Market price at year-end
17
16 7/8
14 1/8
15 1/2
14 1/2
11
16 3/4
Weighted average common and dilutive       
common stock equivalents (000's omitted)
7,142
8,958
9,262
9,145
9,050
9,246
9,656**Number of restaurants at year-end       
Bakers Square
149
150
150
150
154
160
189
Company-operated Village Inn
107
102
99
97
98
99
112
Franchised Village Inn
115
116
110
108
108
106
107
Other Company-operated
--
--
--
--
1
5
6
Total
371
368
359
355
361
370
414
*       An asset impairment of $746,000 was included in results of operations for 1999.

*       A one-time tax benefit of approximately $5,400,000 from adjusting the valuation allowance relating to certain deferred tax assets was          included in net income for 1999.

*      An asset disposal charge of $5,800,000 was included in results of operations for 1996.

*      An asset disposal, impairment and restructuring charge of $23,000,000 and income of $1,918,000 from settlement of  litigation were           included in results of operations for 1994.

-      Fiscal 2000 and 1999 consisted of 364 days, while fiscal years 1998, 1997, 1996, 1995 and 1994, consisted of 366 days, 365 days, 366         days, 366 days  and 364 days, respectively.

-      The Company has not paid dividends on common stock since 1986.

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**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 and Supplementary Data (Item 8 of Part II).
**Results of Operations**
The following table sets forth selected operating statistics for the last three fiscal years (in thousands except restaurants at year-end).
 
2000
1999
1998**Bakers Square   
Restaurant sales
$      218,428 
$      215,431
$      207,251
Average sales per restaurant
1,468 
1,441
1,387
Restaurant operating profit
22,726
21,034
14,712
Restaurant operating profit %
10.4%
9.8%
7.1%
Divisional administrative costs (1)
4,794
5,653
5,320
Divisional operating profit
17,932
15,381
9,392
Restaurants at year-end
149
150
150    **Village Inn   
Restaurant sales
$      150,298 
$      140,350
$      135,403
Average sales per restaurant
1,445 
1,401
1,394
Restaurant operating profit
24,967
23,570
23,314
Restaurant operating profit %
16.6%
16.8%
17.2%
Franchise income
3,321
3,265
3,519
Divisional administrative costs
4,543
4,623
4,942
Divisional operating profit
23,745
22,212
21,891
Restaurants at year-end
107
102
99    **Consolidated   
Restaurant sales
$      368,726
$      355,781
$      342,654
Food cost %
29.7%
30.1%
30.8%
Labor cost %
32.8%
32.8%
32.7%
Other operating cost %
24.6%
24.6%
25.4%
Restaurant operating profit %
12.9%
12.5%
11.1%
Restaurant operating profit
47,693
44,604
38,026
Franchise income
3,321
3,265
3,519
Divisional  administrative costs
  9,337
10,276
10,262
Divisional operating profit
41,677
37,593
31,283
Unallocated general and   
administrative costs
18,029
18,716
15,756
Operating profit (2)
$       23,648
$       18,877
$       15,527
(1)
Certain executive compensation, which had been accounted for as Bakers Square divisional administrative costs in fiscal 1999, is accounted for as unallocated general and administrative costs in fiscal 2000.
(2)
Before asset impairment charge of $746,000 in 1999.
============================================================================================
*Fiscal year ended October 29, 2000 compared to the fiscal  year ended October 31, 1999*
Restaurant Sales

Consolidated restaurant sales increased 3.6% or $12,945,000 for the fiscal year ended October 29, 2000 compared to the fiscal year ended October 31, 1999.  The Company experienced an overall same store sales increase of 1.8% over theprior year period.

The following table sets forth the percent change over the prior year by concept for same store sales and same store guest counts, as well as year to date store operating margin:
  **Bakers Square   **Village Inn   
Same   
Same  
Same
Store
Store 
Same
Store
Store 
Store
Guest
Operating 
Store
Guest
Operating 
Sales
Counts
Margin 
Sales
Counts
Margin        
2000:
1.7%
0.4%
10.4% 
1.9%
(1.1%)
16.6%
1999:
4.6%
1.3%
9.8% 
0.9%
(1.5%)
16.8%
Fiscal 2000 Bakers Square restaurant sales increased $2,997,000 or 1.4% over fiscal 1999 sales as a result of the 1.7% increase in same store sales.  The Company was successful in capturing an additional $1,975,000 in sales during thekey holiday pie season in the first quarter of 2000 compared to the first quarter of 1999.

Fiscal 2000 Village Inn restaurant sales increased $9,948,000 or 7.1% due to the Company operating five additional Village Inn restaurants (during fiscal 2000 seven new restaurants were opened, one franchise operation was converted toa Company-operated restaurant and three restaurants were closed due to lease expiration).  Village Inn same store sales increased 1.9%, while same store customer counts decreased 1.1% over the prior year. The decrease in same store customer counts ispartially attributable to the initial impact of opening new stores in established market areas.

Restaurant Operating Profit

Consolidated restaurant operating profit increased 6.9% or $3,089,000 for fiscal year ended October 29, 2000 versus fiscal year ended October 31, 1999.

Bakers Square restaurant operating profit for fiscal year 2000 compared to fiscal year 1999 increased 8.0% or $1,692,000, while restaurant operating profit as a percent of sales increased to 10.4% from 9.8%.  The increase in therestaurant operating profit as a percent of sales was primarily a result of the significant improvement in the California region.  The restaurant operating profit as a percent of sales for the California region increased from 5.4% in fiscal 1999 to 7.5%for fiscal 2000.  The improvement of Bakers Square restaurant operating profit was also driven by a 1.7% increase in same stores sales, improved execution during the first quarter's key holiday pie season and effective food cost and other operatingexpense management at the store-level.

Village Inn restaurant operating profit for fiscal year 2000 compared to fiscal year 1999 increased 5.9% or $1,397,000 due primarily to the increased profit contribution of the seven stores opened during fiscal 1999.  Restaurantoperating profit as a percent of sales decreased slightly to 16.6% from 16.8% primarily as a result of increased marketing expenses and costs attributed to the seven new stores opened during fiscal 2000. Marketing expenses as a percent of sales increasedto 2.4% compared to 1.6% in the prior year.

Franchise Operations

Net franchise income increased 1.7% or $56,000 for fiscal 2000 compared to fiscal 1999.

General and Administrative Expenses

General and administrative expenses for fiscal 2000 were $27,366,000 compared to $28,992,000 for fiscal 1999.  The $1,626,000 or 5.6% decrease is attributable to various expense reductions, including areduction in Year 2000 related expenditures. Overall, general and administrative expenses decreased favorably as a percent of restaurant sales to 7.4% for fiscal 2000 compared to 8.1% for fiscal 1999.

Other Income

Other income for fiscal 2000 decreased $928,000 or 65.2% from the prior year, due primarily to a gain of $859,000 on the sale of a restaurant property during the fourth quarter of 1999.   Interestincome for fiscal 2000 was $324,000 compared to $239,000 in fiscal 1999.

Interest Expense

Interest expense declined 19.3% or $195,000 for fiscal 2000 compared to fiscal 1999.  The decrease was primarily due to twelve capital leases being paid in full during 1999 and $103,000 of interest expense capitalized under therequirements of Statement of Financial Accounting Standards No. 34, "Capitalization of Interest Cost" ("SFAS 34"), offset by interest incurred on line of credit draws.  The Company maintained an average draw on the line of creditduring fiscal 2000 of $1,813,000 compared to $3,022 for the prior year.

Effective Tax Rate

The Company's effective tax rate for fiscal 2000 was 37.1% compared to 6.5% for fiscal 1999.  During the fourth quarter of fiscal 1999, a one-time tax benefit of approximately $5,400,000 was recognized from adjusting the valuationallowance relating to certain deferred tax assets.  A significant portion of the fiscal 2000 and 1999 provision for income taxes represents the non-cash utilization of deferred tax assets established for remaining net operating loss carryforwards. Taxescurrently payable continue to be limited to Federal alternative minimum taxes and state income taxes.

The Company currently projects that remaining net operating loss carryforwards will be fully utilized during fiscal 2001 and tax credit carryforwards will be fully utilized over the next two fiscal years.  Thereafter, cash required topay income taxes is expected to more closely approximate income tax expense.

==========================================================================================
*Fiscal year ended October 31, 1999 compared to the fiscal  year ended November 1, 1998*
Restaurant Sales
**
Consolidated restaurant sales increased 3.8% in 1999 versus 1998.  The Company experienced an overall same store sales increase of 3.2% over the prior year period.

The following table sets forth the percent change over the prior year by concept for same store sales and same store guest counts, as well as year to date store operating margin:
  **Bakers Square   **Village Inn   
Same   
Same  
Same
Store
Store 
Same
Store
Store 
Store
Guest
Operating 
Store
Guest
Operating 
Sales
Counts
Margin 
Sales
Counts
Margin        
1999:
4.6%
1.3%
9.8% 
0.9%
(1.5%)
16.8%
1998:
8.3%
4.5%
7.1% 
4.3%
2.6%
17.2%
	 

Fiscal 1999 Bakers Square restaurant sales increased $8,180,000 or 3.9% over fiscal 1998 sales as a result of the 4.6% increase in same store sales.  Restaurant remodel programs to enhance the dining experience, broadened advertisingcoverage, special incentive programs at the local level, strengthened management ranks in the Midwest and Westcoast, and continued improved execution of the Bakers Square concept contributed to the improvement in sales.

Fiscal 1999 Village Inn restaurant sales increased $4,947,000 or 3.7% due to the Company operating three additional Village Inn restaurants (during fiscal 1999 seven new restaurants were opened, three Company-operated restaurants wereconverted to franchise operations, one restaurant was closed due to lease expiration).  Village Inn same store sales increased .9%, while same store customer counts decreased 1.5% over the prior year.  The decrease in same store customer counts ispartially attributable to the initial impact of opening new stores in established market areas. 

Restaurant Operating Profit

Consolidated restaurant operating profit increased 17.3% or $6,578,000 for fiscal year ended October 31, 1999 versus fiscal year ended November 1, 1998.

Bakers Square restaurant operating profit for fiscal year 1999 compared to fiscal year 1998 increased 43.0% or $6,322,000, while restaurant operating profit as a percent of sales increased to 9.8% in 1999 from 7.1% in 1998.  ImprovedBakers Square operating profit is due to a 4.6% increase in same store sales and programs developed to improve efficiencies, control food costs and minimize controllable operating costs.

Village Inn restaurant operating profit increased 1.1% or $256,000, while profit as a percent of sales decreased from 17.2% in 1998 to 16.8% in 1999 due to start-up costs associated with the seven new stores opened in 1999.

Franchise Operations

Net franchise income decreased 7.2% or $254,000 between 1999 and 1998 primarily as a result of increased general and administrative expenses associated with franchise operations.

General and Administrative Expenses

General and administrative expenses for fiscal 1999 were $28,992,000 compared to $26,018,000 for fiscal 1998.  The $2,974,000 or 11.4% increase was attributed to Year 2000 related expenses, increaseddivisional management expenses, higher incentive compensation, increased investment in store manager training, and increased depreciation associated with the Enterprise Resource Planning (ERP) system.  General and administrative expenses as a percent ofrestaurant sales increased .5% to 8.1% for fiscal 1999.

Other Income

Other income for 1999 increased $1,040,000 from 1998 due to a $859,000 gain on the sale of a restaurant property during the fourth quarter of 1999.  Interest income for fiscal 1999 was $239,000 compared to $184,000 in fiscal 1998.

Interest Expense

Interest expense declined 34.6%, or $535,000 between 1999 and 1998 due to a substantial reduction in long-term debt in 1998.

Effective Tax Rate

The Company's effective tax rate for fiscal 1999 was 6.5% compared to 36.5% for fiscal 1998.  During the fourth quarter of fiscal 1999, a one-time tax benefit of approximately $5,400,000 was recognized from adjusting the valuationallowance relating to certain deferred tax assets.  A significant portion of the fiscal 1999 and 1998 provision for income taxes represents the non-cash utilization of deferred tax assets established for remaining net operating loss carryforwards.  Taxescurrently payable were limited to Federal alternative minimum taxes and state income taxes.

==========================================================================================

Asset Disposal, Impairment and Related Costs

At October 29, 2000, the Company had twenty-four properties, which it was seeking to dispose of, five of these were idle and nineteen were subleased.  The Company owns four of the properties in fee and is the prime lessee on twentyleases. The Company estimates potential proceeds of $938,000 on the disposal of the fee properties. Two of the three remaining idle properties will be disposed of through lease terminations within a year. At October 29, 2000, loss reserves previouslyestablished for the disposal of these properties had a remaining balance of $3,058,000 including $1,220,000 to reduce the properties to realizable value and $1,838,000 to provide for carrying costs and sublease losses.  At present, the Company anticipatesthe reserves will be adequate to cover the future losses and operating costs for these properties.

During fiscal 2000, two idle properties were sold yielding $1,472,000 in proceeds.  The resulting loss of $1,096,000 was applied against the property disposal reserve previously established for this purpose.

Four Company-operated stores were closed during fiscal 2000, four during fiscal 1999 and two during fiscal 1998.  The operating results for these stores over the past three years is as follows:

2000
1999
1998**Bakers Square:
 Sales
$
255,000
$
970,000
$
986,000
 Restaurant operating profit / (loss)
(26,000)
(37,000)
(72,000)**Village Inn:
 Sales
$
1,231,000
$
4,634,000
$
6,459,000
 Restaurant operating profit / (loss)
60,000
116,000
338,000**Total:
  Sales
$
1,486,000
$
5,604,000
$
7,445,000
 Restaurant operating profit / (loss)
34,000
79,000
266,000
	The Company recorded a pre-tax charge of $746,000 in fiscal 1999 for the write down of certain restaurant properties. Management assessed various factors relevant to the assets, including projected negative cash flow losses andconcluded the historical performance trends were unlikely to improve materially, therefore an impairment of the assets was recognized.

==========================================================================================
**Liquidity and Capital Resources**
The Company's principal source of funds is internally generated cash from operations.  Net cash provided by operating activities during fiscal 2000 was $37,372,000 compared with $29,405,000 during fiscal 1999.  The $7,967,000increase was primarily due to the $5,517,000 or 30.0% increase in operating profit and a $2,744,000 or 23.0% increase in net income (excluding the $5,400,000 one-time tax benefit recognized in fiscal 1999), as well as effective working capital management.Cash provided by operations in fiscal 1999 decreased $12,817,000 over fiscal 1998.  The decrease was attributed to various working capital accounts.

The Company's investing activities for the fiscal year ended October 29, 2000 utilized $24,099,000 compared with $1,954,000 for the fiscal year ended October 31, 1999.  The $22,145,000 increase in cash used for investing activitiesduring fiscal 2000 was primarily attributable to the $28,700,000 in proceeds from the sale leaseback transaction on twenty-one properties completed during fiscal 1999.  Investing activities for fiscal 1999 decreased $16,634,000 over fiscal 1998.  This wasprimarily due to the sale leaseback transaction discussed above and higher capital spending.

Capital expenditures in 2000 totaled $27,064,000, which consisted of $13,686,000 for the completion of seven new restaurants, $8,037,000 for several remodel projects on existing restaurants and $5,341,000 for other support relatedprojects, including the purchase of the Chaska bakery facility to enhance production capabilities at VICOM.  Fiscal 2000 capital expenditures were $5,932,000 less than fiscal 1999 primarily as a result of the implementation of both the Enterprise ResourcePlanning and new back-of-house systems in fiscal 1999.   Fiscal 1998 capital expenditures totaled  $21,054,000.  Anticipated capital expenditures of $24,000,000 are planned for fiscal year 2001, including the opening of six to nine additional restaurants.

The Company's financing activities for fiscal 2000 utilized $41,251,000 compared with $4,526,000 for fiscal 1999.  The $36,725,000 increase was as a result of the tender offer concluded on December 22, 1999, and funded on December 29,1999 whereby 2,000,000 shares were purchased at $19.00 per share.  The transaction was funded using the $28,700,000 in net proceeds received from the sale leaseback transaction completed on October 28, 1999, as well as a $4,000,000 draw on the Company'scredit facility.  An additional 115,000 shares were repurchased in fiscal 2000 for $1,810,625, 232,925 shares in fiscal 1999 for $3,637,000 and 213,700 shares for $2,912,000 in fiscal 1998 under the Company's share repurchase plan. On October 2, 2000, theBoard of Directors authorized an increase in the Company's existing share repurchase program for up to 3,000,000 shares of common stock over the next 24 months.  Future purchases under the authorizations may be made from time to time in the open market orthrough privately negotiated transactions and will be dependent upon various business and financial considerations.  Net cash used for financing activities in fiscal 1999 decreased $10,310,000 over fiscal 1998.  During fiscal 1999, there were no draws onthe bank credit facility, while in fiscal 1998, $13,400,000 of debt under the bank facility was paid down.

On December 19, 1997, the Company executed 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 bank creditfacility was amended effective April 14, 2000 to extend the maturity date to February 28, 2003, as well as amend certain fee calculations and debt covenants.  As of October 29, 2000, the Company had $700,000 outstanding under the Company's line of creditand $700,000 in letters of credit issued in connection with its insurance programs.

Cash and cash equivalents at October 29, 2000, October 31, 1999 and November 1, 1998 were $5,209,000, $33,187,000 and $10,262,000, respectively.  The Company believes anticipated cash flow from operations, as well as the availabilityof funds under the $40,000,000 line of credit, and other financing sources will provide sufficient capital to meet current foreseeable cash needs, including working capital and capital expenditures.

The Company guaranteed certain leases for restaurant properties sold in 1986 and restaurant leases of certain franchisees.  Minimum future rental payments remaining under these leases were approximately $6,645,000 as of October 29,2000. These guarantees are included in the definition of financial instruments with off-balance-sheet risk of accounting loss.  In fiscal 1999, the Company took possession of one of these properties, which has since been subleased, and settled on adefaulted lease in the amount of $57,000 as a result of a sublessee bankruptcy filing.  The Company has no reason to believe that any material liability exists and believes it is impracticable to estimate the fair value of these financial guarantees(e.g., amounts the Company could pay to remove the guarantees).
****
As of October 29, 2000, the Company had federal net operating loss ("NOL") carryforwards totaling $6,283,000 which expire $2,526,000 in 2010 and $3,757,000 in 2011.  The Company also has FICA and Alternative Minimum Tax("AMT") credits in the amount of $9,596,000.

On October 28, 1999, the Company completed the sale and leaseback of the real estate related to twenty-one restaurant properties.  The Company received $28,700,000 in net proceeds with a resulting deferred gain of $16,500,000, which isbeing amortized to reduce future rent expenses over the terms of the operating leases.  The transaction allowed the Company to realize net operating loss carryforwards that were due to expire, as well as substantially fund the tender offer discussed below.

The Company concluded a tender offer on December 22, 1999, and funded the transaction on December 29, 1999 whereby 2,000,000 shares were purchased at $19.00 per share.  The tender offer was funded through cash proceeds realized fromthe sale-leaseback and a $4,000,000 draw on the line of credit.

==========================================================================================
**Management Outlook**
During fiscal 2000, the Board of Directors appointed an independent committee of Directors to evaluate various strategic alternatives to enhance shareholder value.  The independent committee retained Salomon Smith Barney as itsfinancial advisor.  On October 2, 2000, the special committee of the Board of Directors recommended and the Board authorized an increase in the Company's existing share repurchase program to cover up to 3,000,000 shares of common stock over the next 24months.  The purchases 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.

The Company's 2001 Plans call for continuation of moderate growth for Company-operated and franchise Village Inn restaurants within the existing markets.  The Company plans to open four to six Company-operated Village Inn restaurantsduring fiscal 2001.  In addition to a new Bakers Square, which opened in Chicago after fiscal 2000 year-end, two Bakers Square restaurants are under construction in the Chicago market and the Company anticipates building up to an additional two units inthe Midwest during fiscal 2001.

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 thesignificant 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, 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, althoughsuch 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-lookingstatements 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 describethe 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 actualresults 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 onsuch 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 orcircumstances.

==========================================================================================
**New Accounting Pronouncements**
In June 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 137 which delayed the effective date of Statement of Financial Accounting Standards No. 133,"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), until fiscal quarters of fiscal years beginning after June 15, 2000.  SFAS 133 requires all derivatives to be recognized as assets or liabilities on thebalance sheet and measured at fair value.  Changes in the fair value of derivatives should be recognized in either net income or other comprehensive income, depending on the designated purpose of the derivative.  The Company has concluded that theadoption of SFAS 133 will not materially impact the Company's financial statements.

In March 2000, the Financial Accounting Standards Board issued Interpretation No. 44 ("FIN 44"), "Accounting for Certain Transactions involving Stock Compensation - an interpretation of APB Opinion No. 25," with aneffective date of July 1, 2000.  The interpretation clarifies the application of Opinion 25 for certain issues, including the definition of employee for purposes of applying Opinion 25, the criteria for determining whether a plan qualifies as anoncompensatory plan, the accounting consequence of various modifications to the terms of a previously fixed stock option or award and the accounting for an exchange of stock compensation awards in a business combination, among others.  The adoption ofFIN 44 had no material impact on the Company's financial statements.

In December 1999, the Securities and Exchange Commission ("SEC") released Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements," which the Company is required toadopt no later than the fourth quarter of fiscal 2001.  SAB 101 provides the SEC's interpretation of existing Generally Accepted Accounting Principles relating to timing and method of revenue and expense recognition. At present, the Company isinvestigating the effect the adoption of this bulletin will have on the Company's results of operations, financial position and cash flows, if any.

==========================================================================================
**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 withgenerally 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 reportingprocess.

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 toperiodically 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 othersis adequate and appropriate.

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

/s/ Joseph F. Trungale 
/s/ Richard E. Sabourin
President and Chief 
Executive Vice President
Executive Officer 
and 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 October 29, 2000 and October 31, 1999, and the related statements of operations, shareholders' equity and cash flows for each ofthe three years in the period ended October 29, 2000. 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 auditing standards generally accepted in the United States.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare 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 madeby 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 October 29, 2000 and October 31, 1999, and the results of its operations andits cash flows for each of the three years in the period ended October 29, 2000, in conformity with accounting principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

Denver, Colorado,

December 7, 2000.

==========================================================================================
**VICORP Restaurants, Inc.

BALANCE SHEETS**
	
 
October 29, 2000
October 31, 1999
(in thousands)  
ASSETS  
Cash
$
5,209
$
33,187
Receivables, net (Note 3)
4,718
5,801
Inventories (Note 2)
10,107
9,989
Deferred income taxes (Note 11)
3,792
7,059
Prepaid expenses
1,664
1,253
Total current assets
25,490
57,289   
Property and equipment, net (Note 4)
136,266
128,753
Deferred income taxes (Note 11)
29,586
33,303
Long-term receivables (Note 3)
627
1,204
Other assets
7,449
7,722
Total assets
                $   199,418
                    $   228,271
LIABILITIES AND SHAREHOLDERS' EQUITY  
Current maturities of long-term debt  
and capitalized lease obligations (Notes 5 and 6)
1,607
1,582
Accounts payable, trade
18,519
18,054
Accrued compensation
7,684
7,616
Accrued taxes
11,022
11,008
Accrued insurance (Note 13)
1,925
2,246
Other accrued expenses 
6,318
6,528
Total current liabilities
47,075
47,034   
Long-term debt (Note 6)
700
40
Capitalized lease obligations (Note 5)
2,433
4,548
Non-current accrued insurance (Note 13)
1,570
2,757
Other non-current liabilities and credits (Note 7)
20,943
22,044
Commitments and contingencies      
Shareholders' equity (Note 8)  
Common Stock, $.05 par value, 20,000,000  
shares authorized, 6,751,179 and 8,845,581  
shares issued and outstanding
339
444
Paid-in capital
40,956
80,673
Retained earnings
85,402
70,731
Total shareholders' equity
126,697
151,848
Total liabilities and shareholders' equity
               $ 199,418
                     $ 228,271
The accompanying notes are an integral part of these financial statements.

==========================================================================================
**VICORP Restaurants, Inc.

STATEMENTS OF OPERATIONS**  
Year Ended  
October 29, 2000
October 31, 1999
November 1, 1998
(in thousands, except per share data)   
Revenues (Note 2):   
Restaurant operations
$368,726
$355,781
$342,654
Franchise operations
3,321
3,265
3,519 
372,047
359,046
346,173
Costs and expenses:   
Restaurant operations   
Food
109,496
106,991
105,416
Labor
121,109
116,571
112,047
Other operating
90,428
87,615
87,165
General and administrative
27,366
28,992
26,018
Asset impairment and related costs (Notes 2 and 10)
--
746
--
Operating profit
23,648
18,131
15,527
Interest expense
817
1,012
1,547
Other income, net
494
1,422
382
Income before income taxes
23,325
18,541
14,362
Provision for income taxes (Note 11)
8,654
1,214
5,242
Net income
                  $ 14,671 
                    $ 17,327 
                $  9,120    
Earnings per share (Note 2)   
Basic
$     2.07
$     1.94 
$     .99
Diluted
2.05
1.93
.98
The accompanying notes are an integral part of these financial statements.

==========================================================================================
**VICORP Restaurants, Inc.

STATEMENTS OF CASH FLOWS**  
Year ended  
October 29, 2000
October 31, 1999
November 1, 1998
(in thousands)   **Operations   
Net income
$   14,671
$   17,327
$      9,120
Reconciliation to cash provided by operations:   
Depreciation and amortization
17,880
19,647
19,486
Deferred income tax provision (benefit)
6,984
(1,198)
4,457
Asset impairment and related costs
--
746
269
(Gain) loss on disposition of assets
74
(850)
--
Amortization of deferred gain on sale leaseback
(1,599)
(497)
(521)
Long-term rent payable
(85)
(477)
(356)
Other, net
(5)
273
386    
Changes in assets and liabilities:   
Receivables
929
(2,983)
170
Inventories
(118)
(2,488)
(750)
Accounts payable, trade
465
(4,068)
7,764
Other current assets and liabilities
(637)
4,415
1,325
Non-current accrued insurance
(1,187)
(442)
872
Cash provided by operations
37,372
29,405
42,222**Investing activities   
Purchase of property and equipment
(27,064)
(32,996)
(21,054)
Sale (purchase) of other assets
(539)
(938)
125
Disposition of property
2,021
30,608
1,005
Collection of non-trade receivables
531
1,080
1,336
Other, net
952
292
--
Cash used for investing activities
(24,099)
(1,954)
(18,588)**Financing activities   
Proceeds from issuance of debt
16,150
--
1,300
Payments of debt and capital lease obligations
(17,252)
(1,004)
(15,186)
Purchase of common stock
(40,163)
(3,637)
(2,912)
Issuance of common stock
329
115
1,846
Other, net
(315)
--
116
Cash used for financing activities
(41,251)
(4,526)
(14,836)
Increase / (decrease) in cash
(27,978)
22,925
8,798
Cash at beginning of year
33,187
10,262
1,464
Cash at end of year
           $    5,209
             $ 33,187
         $    10,262    **Supplemental information   
Cash paid during the year:   
Interest (net of amount capitalized) 
$ 817
$     1,020
$     1,589
Income taxes
1,369
2,998
382
Non-cash transaction:

During fiscal 2000, the Company settled a franchisee receivable in the amount of $210,000 in exchange for property and equipment with a fair market value of $210,000.

___________________________________________________________________________________

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

==========================================================================================

 
**VICORP Restaurants, Inc.

NOTES TO FINANCIAL STATEMENTS****Note 1.  Description of Business**
VICORP Restaurants, Inc. ("the Company") operates family style restaurants under the names "Bakers Square" and "Village Inn," and franchises restaurants under the Village Inn brandname.  At October 29, 2000, VICORPoperated two hundred fifty-six Company-owned restaurants in fourteen states. Of the two hundred fifty-six Company-owned restaurants, one hundred forty-nine were Bakers Squares and one hundred seven were Village Inns, with an additional one hundred fifteenfranchised Village Inn restaurants in twenty-one states.  The Company-owned and franchised restaurants are concentrated in Arizona, California, Florida, the Rocky Mountain region and the upper Midwest.  The Company operates a pie manufacturing division tosupport the restaurants, which operates under the name "VICOM".  VICOM has three production facilities located in Santa Fe Springs, California, Oak Forest, Illinois and Chaska, Minnesota.
**Note 2.  Summary of Significant Accounting Policies***Fiscal Year

Effective fiscal 1999, the Company adopted reporting on a 52 / 53 week fiscal year ending on the last Sunday in October.  In conjunction with that change, the Company's fourth quarter consists of sixteen weeks and all otherquarters consist of twelve weeks.  Prior to 1999, the Company utilized a fiscal year which ended on the last day in October.  Fiscal quarters in 1998 consisted of three months.
*Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions.  These estimates and assumptionsaffect 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.
*Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid instruments with original maturities of three months or less.
*Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market and consist of food, paper, products and supplies.  Inventories at year-end were as follows (in thousands):
  
October 29, 2000 
October 31, 1999
Inventories at production facilities    
and third party storage locations:    
        Raw materials
$
2,287
$
2,401
        Finished goods 
     5,699 
    5,192  
     7,986 
    7,593
Restaurant inventories 
     2,121 
    2,396 
$
10,107
$
9,989*Prepaid Expenses*
Prepaid expenses consist primarily of prepaid rent, supplies, contracts and prior to fiscal year 1999 restaurant pre-opening costs.  Pre-opening costs consisted of salaries and other direct expenses incurred in connection withthe set-up and stocking of stores, employee training and general store management costs incurred prior to the opening of new stores.  Effective November 2, 1998, the Company early adopted the provisions of the American Institute of Certified PublicAccountants ("AICPA") Statement of Position 98-5, "Reporting on the Costs of Start-up Activities" ("SOP 98-5").  All pre-opening expenses in fiscal 2000 and 1999 were expensed as incurred in accordance with SOP 98-5.  Thecumulative effect of the change in accounting principle was not significant to the Company's financial position or results of operations.
*Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation and amortization.  The provision for depreciation and amortization has been calculated using the straight-line method.  The useful lives of assets rangefrom twenty to forty years for buildings and three to ten years for equipment and improvements.  Leasehold improvements and leasehold rights are amortized over the lesser of the useful life or the lease term.  Property and equipment additions includeacquisitions of building and equipment and costs incurred in the development and construction of new stores.  Expenditures for maintenance and repairs are charged to expense as incurred.

The Company accounts for the cost of its information systems in accordance with Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use," which requires capitalizationof external and internal costs incurred during the application development stage.  Costs incurred during the preliminary project stage, post-implementation stage, training and application maintenance are expensed as incurred.
*Goodwill

The excess purchase price over net assets acquired is included in other assets and amortized over twenty-five years.
*Deferred Gain on Sale Leaseback

The deferred gain on a sale leaseback transaction is amortized to reduce future rent expenses over the terms of the operating leases in accordance with SFAS 98, "Accounting for Leases."
*Revenue Recognition

Revenue from Company stores is recognized in the period during which related food and beverage products are sold.

Initial franchise fees are recognized as income upon commencement of the franchise operation and completion of all material services and conditions by the Company. Continuing service fees are calculated as a percentage of thefranchisee gross sales and recognized in the period the sales are generated.  Property rental income is recognized on a straight-line basis over the life of the lease.  Interest income on franchisee notes receivable and equipment sales is recognized whenearned.

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

     2000
     1999
     1998
Continuing service fees
$ 4,052
$ 4,060
$ 3,979
Initial and renewal fees
146
145
63
Property rental income
332
116
184
Interest income on franchisee notes
120
147
167
Equipment sales income
(23)
93
18
Administrative expense
(1,306)
(1,296)
(892)
      Net franchise operations
$ 3,321
$ 3,265
$ 3,519*Advertising Costs

Advertising costs for television, radio, newspapers, direct mail and point-of-purchase materials are expensed in the period incurred.  Production costs are expensed upon initial usage of the advertising.  Advertising expensefor fiscal 2000, 1999 and 1998 was $11,311,000, $9,454,000 and $7,982,000, respectively.
*Fair value of Financial Instruments

The carrying value of cash and cash equivalents approximates fair value due to the length of maturity.  Notes receivable is valued at estimated fair market value based on the respective facts and circumstances of eachnon-publicly traded instrument.  The fair value of long-term debt approximates carrying value due to the variable, market-based interest rate feature.
*Income Taxes

Deferred income tax assets and liabilities are recognized for the expected future income tax consequences of carryforwards and temporary differences between the GAAP and tax basis of assets and liabilities.  Valuationallowances are established for deferred tax assets that are deemed unrealizable.
*Earnings Per Share

Basic earnings per share is calculated using the average number of common shares outstanding.  Diluted earnings per share is computed on the basis of the average number of common shares outstanding plus the effect ofpotentially dilutive common stock equivalents using the treasury stock method.

        2000
         1999
         1998
Weighted average common shares outstanding:
     Basic
7,086,346
8,930,045
9,209,628
     Effect of dilutive common stock equivalents
      55,304
      28,097
      52,521
     Diluted
 7,141,650 
 8,958,142
 9,262,149*Recoverability of Long-Lived Assets

The Company evaluates long-lived assets to be held and used in the business for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.  An impairment isdetermined by comparing estimated undiscounted future operating cash flows to the carrying amounts of assets. Assets are assessed on a restaurant by restaurant basis.  If impairment exists, the asset will be recorded at the lesser of its fair value or theestimated discounted future cash flows related to that asset.
*New Accounting Pronouncements

In June 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 137 which delayed the effective date of Statement of Financial Accounting Standards No. 133, "Accounting forDerivative Instruments and Hedging Activities" ("SFAS 133"), until fiscal quarters of fiscal years beginning after June 15, 2000. SFAS 133 requires all derivatives to be recognized as assets or liabilities on the balance sheet and measuredat fair value.  Changes in the fair value of derivatives should be recognized in either net income or other comprehensive income, depending on the designated purpose of the derivative.  The Company has concluded that the adoption of SFAS 133 will notmaterially impact the Company's financial statements.

In March 2000, the Financial Accounting Standards Board issued Interpretation No. 44 ("FIN 44"), "Accounting for Certain Transactions involving Stock Compensation - an interpretation of APB Opinion No. 25," with aneffective date of July 1, 2000.  The interpretation clarifies the application of Opinion 25 for certain issues, including the definition of employee for purposes of applying Opinion 25, the criteria for determining whether a plan qualifies as anoncompensatory plan, the accounting consequence of various modifications to the terms of a previously fixed stock option or award and the accounting for an exchange of stock compensation awards in a business combination, among others.  The adoption ofFIN 44 had no material impact on the Company's financial statements.

In December 1999, the Securities and Exchange Commission ("SEC") released Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements," which the Company is required toadopt no later than the fourth quarter of fiscal 2001.  SAB 101 provides the SEC's interpretation of existing GAAP relating to timing and method of revenue and expense recognition. At present the Company is investigating the effect the adoption of thisbulletin will have on the Company's results of operations, financial position and cash flows, if any.
*Reclassifications

Certain reclassifications have been made to the fiscal 1999 and 1998 amounts in the accompanying financial statements to conform with the fiscal 2000 presentation.
**Note 3.  Receivables**
Receivables represent billings to outside bakery sales customers and franchisee billings for continuing royalty service fees, initial and renewal fees, equipment sales, and property rental for franchisees and other sublessees.  Thetrade receivables are generally unsecured while notes receivable are typically secured by the property that gave rise to the transaction.

Year-end receivables consisted of the following:
  
October 29, 2000 
October 31, 1999
(in thousands)    
Trade receivables
$
4,880
$
5,910
Notes receivable 
855 
1,581
Discounts on notes receivable 
-- 
(14)
Allowance for doubtful accounts 
(390) 
(472)
Receivables, net 
5,345 
7,005
Less:  current portion 
4,718 
5,801
Long-term portion
$
627
$
1,204**Note 4.  Property and Equipment**
Property and equipment at fiscal years ended October 29, 2000 and October 31, 1999 were as follows. Certain amounts were reclassified between categories at October 31, 1999.

(in thousands)
October 29, 2000
October 31, 1999
Property and equipment used in operations:
Land
$ 24,826
$ 24,483
Buildings and improvements 
128,404
118,143
Equipment
130,330
121,639
Construction in progress
8,697
7,319
Restaurant property leased to others
2,177
4,049
Less:  accumulated depreciation
(161,257)
(152,234)
Net property and equipment used in operations
133,177
123,399
Capitalized lease buildings
9,498
9,668
Less:  accumulated amortization
(7,179)
(6,746)
Net capitalized lease buildings
2,319
2,922
Properties held for disposal, net
1,990
4,670
Less:  allowance for loss on disposal
(1,220)
(2,238)
Net properties held for disposal
770
2,432
Property and equipment, net
              $136,266
              $128,753
Depreciation and amortization expense was $17,345,000 in 2000, $18,635,000 in 1999, and $18,790,000 in 1998.

At October 29, 2000, all fee owned properties were free of mortgages, pledges or other liens.
**Note 5.  Leases**
The Company is the prime lessee under various land, building and equipment leases for Company-owned and franchised restaurants, bakery facilities and other non-Company operated locations.  The leases have initial terms ranging fromfifteen to thirty-five years and, in certain instances, provide for renewal options ranging from five to twenty years.  Many leases provide for purchase options at the end of the lease term and escalation clauses, either predetermined or based uponinflation.  When predetermined escalation clauses are present, the Company recognizes rental expense on a straight-line basis in accordance with SFAS 13, "Accounting for Leases."  Leases may also include additional rental payments contingentupon restaurant sales volume.  Under most leases, the Company is responsible for occupancy costs including taxes, insurance and maintenance.  Subleases to franchisees or other non-Company operators generally provide for similar terms as the prime lease,as well as an obligation for occupancy costs.  Implicit interest rates range from 7.2% to 13.8% on capital leases.

The following summarizes future minimum lease payments under capital and operating leases having an initial or remaining non-cancelable term of one year or more as of October 29, 2000:
   
Lease and 
Capital
Operating 
Sublease
(in thousands)
leases
leases
Rentals
2001
$   1,942
$   16,828
$   (2,063)
2002
1,306
12,905
(1,648)
2003
672
11,096
(1,193)
2004
430
10,040
(972)
2005
241
9,108
(822)
Later years
321
51,896
(1,974)
Total minimum lease payments
$   4,912
$ 111,873
$ (8,672)
Less amount representing interest
921  
Present value of minimum lease payments
3,991  
Current maturities of capitalized lease obligations
1,558  
Long-term capitalized lease obligations
          $   2,433  
Net rental expense consisted of the following:

(in thousands)
2000
1999
1998
Restaurant land and buildings:   
   Minimum rentals
$ 15,618
$ 13,591
$ 13,956
   Contingent rentals
2,576
2,537
2,556
Equipment
180
222
85
Gross rental expense
18,374
16,350
16,597
Less: lease and sublease rental income
3,023
3,212
3,368
Net rental expense
           $ 15,351   
           $ 13,138    
            $ 13,229
On October 28, 1999, the Company completed the sale leaseback transaction of the real estate related to twenty-one restaurant properties.  The Company received $28,700,000 in net proceeds with a resultingdeferred gain of $16,500,000, which is being amortized to reduce future rent expenses over the terms of the operating leases in accordance with SFAS 98, "Accounting for Leases." 
**Note 6.  Debt**
Long-term debt consisted of the following:
 
October 29, 2000
October 31, 1999
(in thousands)  
Other long-term debt
$    749
$     96
Less: current maturities
        49
       56
Long-term debt
                    $    700   
                        $     40
	

On December 19, 1997, the Company executed 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 creditagreement expires on February 28, 2001.  The bank credit facility was amended effective April 14, 2000 to extend the maturity date to February 28, 2003, as well as amend certain fee calculations and debt covenants.

		

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 lender's Eurodollar rate plus .75% to 1.50%. In addition, the Company is requiredto pay fees equal to .225 to .400 of 1% per annum on unused portions of the commitment, and .75% to 1.5% 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-adjusted consolidated earnings before interest, taxes, depreciation and rent ratio.

On October 28, 1999, the Company completed the sale leaseback transaction of the real estate related to twenty-one restaurant properties.  In conjunction with the transaction the Company received a waiver letter dated October 22, 1999,under which the lender waived any default caused by the sale leaseback transaction, and agreed not to enforce their rights or remedies under the loan document.  In consideration of the waiver, the Company agreed not to purchase any of its shares of commonstock or exchange shares of one class of capital stock for another in excess of the lesser of $30,000,000 or the net proceeds of the sale leaseback transaction without the prior written consent of the lender through the maturity date of the loanagreement.  The waiver does not constitute a waiver of any present or future violation of or noncompliance with any provision of the loan document.  The Company concluded a tender offer on December 22, 1999, and funded the transaction on December 29, 1999whereby 2,000,000 shares were purchased at $19.00 per share.  The Company received a waiver letter dated November 22, 1999 from the lender consenting to the transaction and amending certain covenants.

During fiscal 2000, the largest aggregate outstanding balance under the Company's bank facilities was $7,500,000.  The average balance outstanding was $1,813,000 with an average interest rate of 8.85%.  As of October 29, 2000, theCompany had $700,000 outstanding under the Company's line of credit and $700,000 in letters of credit issued in connection with its insurance programs.

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 capitalexpenditures, indebtedness, dividends, dispositions and acquisitions and franchise guarantees.

Principal amounts of other long-term debt outstanding as of October 29, 2000 due during each of the five succeeding fiscal years were $49,000 in fiscal 2001 and none in the next four years.

The Company incurred $920,000, $1,012,000, and $1,553,000 of interest charges in 2000, 1999 and 1998, respectively.  Of these amounts, $103,000,  $0 and $6,000 was capitalized in 2000, 1999 and 1998, respectively.

Deferred loan fees were $49,000 and $23,000 net of amortization at October 29, 2000 and October 31, 1999, respectively.  These amounts are included in other assets and are amortized over loan commitment period using the straight-linemethod.
**Note 7.  Other Non-current Liabilities and Credits**
Other non-current liabilities and credits at year-end were as follows (in thousands):
 
October 29, 2000
October 31, 1999
Deferred gain on sale leaseback
$15,901
$17,500
Deferred compensation liability
2,224
1,673
Disposal cost reserve (Note 10)
1,389
1,351
Long-term rent payable
1,326
1,412
Deposits
         103
         108
Other non-current liabilities and credits 
$20,943
$22,044**Note 8.  Shareholders' Equity**
Since August 1992, the Company's Board of Directors has authorized the repurchase of shares of the Company's common stock.  During fiscal 2000, the Company repurchased 115,000 shares at an aggregate cost of $1,810,625.  On October 2,2000, the Board of Directors authorized an increase in the Company's existing share repurchase program of up to 3,000,000 shares of common stock over the next 24 months.  Future purchases may be made in the open market or through privately negotiatedtransactions and will be dependent upon various business and financial considerations.

The Company concluded a tender offer on December 22, 1999, and funded the transaction on December 29, 1999 whereby 2,000,000 shares were purchased at $19.00 per share.

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 $38,500,000 and $19,364,000 was unrestricted at October 29, 2000, as to the repurchase of the Company's common stock and to declaration of cashdividends, respectively.  The following table summarizes shareholders' equity activity:

Total
Common Stock
Paid-in
Retained
Shareholders'
(in thousands, except shares)
Shares
Amount
Capital
Earnings
Equity**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 benefit
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
Net income
--
--
--
17,327
17,327
Common stock options exercised
including income tax benefit
2,000
--
27
--
27
Common stock issued under
the Directors Stock Plan
305
--
6
--
6
Employee Stock Purchase Plan
8,502
1
117
--
118
Purchase of common shares
(232,925)
(12)
(3,625)
--
(3,637)**Balances at October 31, 1999
8,845,581
444
80,673
70,731
151,848
Net income
--
--
--
14,671
14,671
Common stock options exercised
including income tax benefit
10,000
1
169
--
170
Common stock issued under
the Directors Stock Plan
1,885
--
35
--
35
Employee Stock Purchase Plan
8,713
--
136
--
136
Purchase of common shares
(2,115,000)
(106)
(39,705)
--
(39,811)
Tender Offer Costs
--
--
(352)
--
(352)**Balances at October 29, 2000
         6,751,179     
         $339      
        $40,956     
       $85,402    
        126,697**Note 9.  Stock Option, Stock Purchase, 401(k) Plan, Deferred Compensation Plan and Directors' Stock Plan 

Under terms of the Company's stock option plans, officers and certain other employees may be granted options to purchase the Company's common stock at exercise prices not less than the market value of the common stock on the date ofthe grant.  Options generally vest over three years and expire ten years after the date of grant or three months after employment termination, whichever occurs first.

The Company has elected to account for its stock-based compensation plans using the intrinsic value based method under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."  For pro formadisclosure purposes, the Company has computed the value of all options granted during 2000, 1999 and 1998 using the Black-Scholes option pricing model and the following assumptions:
 
     2000    
    1999     
     1998     
Risk-free weighted average interest rate  
6.40%
5.40%
4.90%
Expected dividend yield                            
0.00%
0.00%
0.00%
Expected weighted average lives             
6.54 yrs
6.50 yrs
6.28 yrs
Expected volatility                                     
39.10%
40.70%
44.30%
The aggregate estimated fair value of stock options granted in 2000, 1999 and 1998 was $1,495,000, $100,000 and $1,208,000, respectively.  For purposes of pro forma disclosure, the estimated fair value of options is amortized over theoptions' vesting period and previously recognized compensation expense is reversed for current year forfeitures of unvested options.  If the Company had accounted for its employee stock compensation plans in accordance with SFAS No. 123, "Accountingfor Stock-based Compensation," the Company's net income and pro forma net income per share would have been reported as follows:
 
October 29, 2000
October 31, 1999
November 1, 1998*Net Income:   
   As Reported
$ 14,671
$ 17,327
$  9,120
   Pro Forma
   13,717
   16,616
    8,966*Net Income per Common and Common Equivalent Share:  
   As Reported
$    2.05
$    1.93
$    0.98
   Pro Forma
  1.92
  1.85
  0.97
Following is a summary of the Company's stock option plans for fiscal years 2000, 1999 and 1998:
  
Weighted 
Weighted 
Weighted 
October 29,
Average
October 31,
Average
November 1,
Average 
2000
Exercise
1999
Exercise
1998
Exercise 
Options
Price
Options
Price
Options
Price       
Outstanding at beginning of year
398,000
$15.50
444,000
$15.68
641,518
$13.96
Grants
200,000
$18.55
16,000
$15.75
164,000
$15.81
Exercised
(10,000)
$15.75
(52,000)*
$16.86
(139,001)
$12.37
Canceled
(2,000)
$20.00
(10,000)
$17.00
(222,517)
$12.87       
Outstanding at end of year
586,000
$16.52
398,000
$15.50
444,000
$15.68
*	For 1999, includes 50,000 shares exercised by presenting 49,097 previously owned shares. The issuance of 903 incremental shares to the employee was deferred in 1999.  These shares are held in trust for the benefit of the employeeunder the terms of the Company's Deferred Compensation Plan described below.
** **
The following table summarizes information about the stock options outstanding and exercisable as of October 29, 2000:
  
Options Outstanding 
Options Excerisable
  
Weighted 
Number   
Average
Weighted
Exercisable
Weighted  
Remaining
Average
At
Average
Range of
Options
Contractual
Exercise
October 29,
Exercise
Exercise Prices
Outstanding
Life
Price
2000
Price      
$11.50-$14.25
214,000
6.84 years
$12.83
180,666
$12.57
$14.50-$16.75
118,000
7.02 years
$15.92
84,666
$15.59
$17.44-$20.00
214,000
8.81 years
$18.88
134,833
$18.38
$24.50-$25.50
28,000
0.78 years
$25.14
28,000
$25.14
$26.00
  12,000
2.45 years
$26.00
  12,000
$26.00      
$11.50-$26.00
586,000
7.21 years
$16.52
440,165
$16.10
			

In October 1996, the Company adopted an Employee Stock Purchase Plan (the "Plan") under which eligible employees completing twelve months of employment may contribute up to $25,000 of their annual earnings toward thequarterly purchase of the Company's common stock 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 terminateson September 30, 2001.   Under the Plan 8,713, 8,502 and 9,612 shares were issued in fiscal 2000, 1999 and 1998, respectively.

The Company has an Outstanding Common Stock Purchase Plan (the "Plan") under which eligible participants may elect to utilize incentive compensation that otherwise would be paid in cash to purchase the Company's common stockin the open market at prevailing prices.  If the participant owns these shares and is employed by the Company after two years from the purchase of the common shares, a cash bonus equal to 25% of the incentive compensation used to purchase the shares willbe paid to the participant.  The Plan expired on October 31, 1999, however elections prior to this date remain eligible for the bonus during the two-year holding period.  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 ofparticipants.  Full-time and part-time employees meeting a one thousand-hour service requirement are eligible to participate.  The Company contributed $616,000 and $529,000 for calendar plan years 1999 and 1998, and accrued $636,000 for fiscal 2000.

The Company has a Deferred Compensation Plan (the "Plan") that allows officers of the Company to voluntarily defer compensation.  All benefits under the Plan are unfunded obligations of the Company.  Compensation expense isrecorded for cash compensation deferred and a related liability is recognized.  Participants may elect designated investment options for the notional investment of their deferred compensation.  The recorded obligations are adjusted for deemed income orloss related to the investments selected.  The Company accounts for deferred cash compensation under Emerging Issues Task Force No. 97-14 ("EITF 97-14"), "Accounting for Deferred Compensation Arrangements Where Amounts Earned Are Held in aRabbi Trust and Invested."  On October 29, 2000 and October 31, 1999, the accrued obligation for deferred cash compensation and deemed earnings thereon was $2,080,000 and $1,553,000, respectively.  The Plan provides that participants who hold stockoptions may irrevocably elect to exercise the stock options and have their Plan account credited with a number of shares equal in value to the incremental difference between the exercise price and the closing price of the Company's common stock on thesurrender date.  Under EITF 97-5, "Accounting for the Delayed Receipt of Option Shares upon Exercise under APB Opinion No. 25," if the option holder presents "mature" shares (held for at least six months) that are deemed tendered forthe exercise price, and the ultimate payment to the employee is limited to the number of shares deferred, no compensation expense is recognized at the time of exercise, or subsequently.  If the employee has the right to receive cash or otherconsiderations from the Plan, the intrinsic value of the options at the date of exercise would be expensed as well as subsequent changes in the fair value of the shares held by the Company for the benefit of the employee, until finally distributed.  Todate, no compensation expense has been recognized related to the deferred issuance of Company shares.  Common shares held in trust by the Company totaled 29,495 for fiscal years 2000 and 1999.  These shares are accounted for in a manner similar totreasury stock, and consequently, under Colorado law, are treated as authorized but unissued shares.  Upon eligibility for retirement or termination of a participant's employment, the participant shall have a 100% vested interest in their Plan account.Distributions of the participant's account shall be made in single lump sum payments or equal installments over a period of no less than two and no more than fifteen years.

The Company has a common stock award plan for non-employee directors ("Directors Plan") under which the maximum number of shares of common stock which may be granted during the term of the Directors Plan will be 150,000shares.  Under the terms of the Directors Plan, on the last day of each calendar quarter effective July 1, 1999, the Company will automatically grant a number of shares of common stock equal to $5,000 to each director.  The fair market value is equal tothe average of the closing price on the common stock for the five business days immediately preceding the grant date.  A director may elect to defer receipt of the common stock until the expiration of five years from the date of such grant or thetermination of the director's status as a director.  Compensation expense is recognized for the fair value of the shares at the date of grant and adjusted for subsequent changes in their fair value until issued.  For fiscal 2000, 7,928 shares were grantedunder the plan at option prices ranging from $17.41 to $21.20. Since the inception of the Directors Plan, 10,368 shares have been granted, 2,190 shares issued and 8,178 deferred.
**Note 10.  Asset Disposal, Impairment and Related Costs**
The Company recorded a pre-tax charge of $746,000 in fiscal 1999 for the write down of certain restaurant properties.  Management assessed various factors relevant to the assets, including projected negative cash flow losses andconcluded the historical performance trends were unlikely to improve materially, therefore an impairment of the assets was recognized.

At October 29, 2000, the Company had twenty-four properties, which it was seeking to dispose of, five of these were idle and nineteen were subleased.  The Company owns four of the properties in fee and is the prime lessee on twentyleases. The Company estimates potential proceeds of $938,000 on the disposal of the fee properties.  Two of the three remaining idle properties will be disposed of through lease terminations within a year. At October 29, 2000, loss reserves previouslyestablished for the disposal of these properties had a remaining balance of $3,058,000 including $1,220,000 to reduce the properties to realizable value and $1,838,000 to provide for carrying costs and sublease losses.  At present, the Company anticipatesthe reserves will be adequate to cover the future losses and operating costs for these properties.

During fiscal 2000, two idle properties were sold yielding $1,472,000 in proceeds.  The resulting loss of $1,096,000 was applied against the property disposal reserve previously established for this purpose.
** 

Note 11.  Income Taxes**
The total provisions for income taxes consisted of the following:

(in thousands) 
2000 
1999 
1998
Current:      
Federal
$
434
$
668
$
254
States 
1,223 
1,742 
527  
1,657 
2,410 
781
Deferred:      
Federal 
6,657 
224 
4,008
States 
327 
(1,422) 
449  
6,984 
(1,198) 
4,457
Total provision for income taxes
$
    8,641
$
            1,212
$
    5,238
The components of the provision for income taxes included in the Company's statements of operations were as follows:

(in thousands)
2000
1999
1998
Current:   
Taxes on income before carryforwards
$ 8,708
$14,531
$ 6,064
Less benefit of loss carryforwards utilized
(7,485)
(12,789)
(5,537)
AMT Payable
434
668
254 
1,657
2,410
781
Deferred:   
Tax effect of net change in temporary differences
828
(12,458)
126
Utilization of tax net operating loss carryforwards
7,485
12,789
5,537
FICA tax credit
(916)
(924)
(698)
AMT credit
(444)
(666)
(254)
Expiration of net operating loss carryforwards
25
29,575
19,792
Expiration of tax credit carryforwards
1,633
781
1,009
Change in valuation allowance
(1,627)
(30,295)
(21,055) 
6,984
(1,198)
4,457
Tax effect of deduction for exercised stock   
options credited to paid-in capital
13
2
4
Income tax expense
          $  8,654 
           $ 1,214      
              $ 5,242
Income tax expense differs from the amounts computed by applying the federal income tax rate to income before income taxes as follows:

(in thousands)
2000
%
1999
%
1998
%
Computed federal income taxes using statutory rate
$ 8,164
35.0%
$ 6,489
35.0%
$ 5,027
35.0%
FICA tax credit
(916)
(3.9)
(924)
(5.0)
(698)
(4.9)
State income taxes net of federal income tax effect
1,009
4.3
1,565
8.4
1,003
6.9
Expiration of tax credit carryforwards
1,633
7.0
781
4.2
1,009
7.0
Expiration of tax NOL
25
0.1
29,575
159.5
19,792
137.9
Recognition of previously reserved assets
--
--
(5,754)
(31.0)
--
--
Change in valuation allowance
(1,627)
(6.9)
(30,295)
(163.4)
(21,055)
(146.6)
Other
366
1.5
(223)
(1.2)
164
1.2 
$ 8,654
37.1%
$ 1,214
6.5%
$ 5,242
36.5%
The Company had federal taxable income for tax purposes, before utilization of net operating loss carryforwards, and book income before income taxes as follows:

(in thousands)
2000
1999
1998
Federal taxable income
$21,208
$33,803
$14,051
Book income before income taxes
  23,325
  18,541
  14,362
The difference between federal taxable income and book income is due to state income taxes and temporary differences.  

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

(in thousands)
2000
1999
Deferred tax assets:  
Tax effect of net operating loss carryforwards
$  2,763
$10,273  
Tax credit carryforwards
420
2,053  
FICA tax credit
5,881
4,965  
Alternative minimum tax credits
3,713
3,269  
Accrued insurance claims not yet deductible
1,857
1,862  
Leasing transactions
7,108
7,128  
Property and equipment
7,855
7,877  
Other
3,865
4,649   
33,462
42,076  
Valuation allowance
(23)
(1,650)
Deferred tax assets, net of allowance
33,439
40,426  
Deferred tax liabilities
(61)
(64)
Net deferred tax assets
33,378
40,362  
Less: current portion
3,792
7,059  
Long-term portion
               $29,586    
             $33,303  
As of October 29, 2000, the Company had federal net operating loss ("NOL") carryforwards totaling $6,283,000 which expire $2,526,000 in 2010 and $3,757,000 in 2011.  The Company has not established a valuation allowancefor the deferred tax assets related to these carryforwards as they are expected to be realized.
**Note 12.  Operating Segments****
The Company has three reportable segments; Village Inn, Bakers Square and Franchising.  All amounts not attributed to segments relate to administrative functions and other non-reportable segments.  Certain asset balances at October31, 1999 were reclassified between the Company's segments.  Financial data related to the Company's reportable segments is as follows (in thousands):
         
Bakers Square
Village Inn
Franchising
Other
Total
Net sales:
2000
$218,428
$150,298
$        --
$        --
$368,726 
1999
215,431
140,350
--
--
355,781 
1998
207,251
135,403
--
--
342,654       
Operating profit /(loss):
2000
$ 22,726
$ 24,967
$ 3,321
$ (27,366)
$ 23,648 
1999
20,288
23,570
3,265
(28,992)
18,131 
1998
14,712
23,314
3,519
(26,018)
15,527       
Total assets:
2000
$ 88,232
$ 51,709
$ 3,331
$ 56,146 
$199,418 
1999
85,758
43,099
5,137
94,277
228,271** 

Note 13.  Commitments and Contingencies

Prior to fiscal 1998, the Company retained a significant portion of certain insurable risks in the medical, dental, workers' compensation, general liability and property areas.  Stop-loss coverage was obtained in order to limitexposure to any significant claims.  Provisions for losses expected under these programs were recorded based upon the Company's estimates of liabilities for claims incurred, including those not yet reported, the Company's historical performance andactuarial assumptions followed in the insurance industry.  Beginning in 1998, the Company obtained traditional insurance coverage for insurable risks other than medical and dental while maintaining stop-loss coverage for medical loss exposure.  TheCompany has provided letters of credit totaling $700,000 in connection with certain of these insurance programs.

The Company is involved in various lawsuits and claims arising from the conduct of its business and has guaranteed certain indebtedness and leases of its franchisees and others.   Management believes the ultimate disposition of thesematters 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 hourlaws 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.  On February 14, 2000, Kirk's motion for classcertification was denied.  Kirk filed an appeal of the denial on April 14, 2000.  The case has been stayed pending the appeal.

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 and regulations concerningthe 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, statutorypenalties, 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 BakersSquare restaurant.  The Plaintiff is seeking class certification damages, statutory penalties, declaratory relief,  interest, attorneys' fees, and costs for alleged violations of California statutes and regulations concerning the payment of wages.  OnJanuary 3, 2000, the Court issued an order staying the case under the primary jurisdiction doctrine.

The Company believes the legal actions described above are similar to plaintiff actions recently brought against other multi-location restaurant operators in the state of California.  Resolution of these matters may require asignificant period of time and is subject to substantial uncertainties common to the judicial process for class actions in general.  The Company believes it has not violated California statutes and regulations and has meritorious defenses to each of theclaims in these actions.  While the Company intends to vigorously defend against the allegations, it is possible that the Company will not prevail, or that decisions made in other similar cases may result in interpretations of the California statutes thatare adverse to the Company's position.  The cost of defense for these actions is being recognized as incurred.  No provision has been made for any judgements or settlements that might ultimately result.  While a contingency exists that any such judgementor settlement could be material to the results of operations of the Company for some future period or periods, the Company currently believes that resolution of these amounts will not have a material adverse effect on the Company's financial position.

VICORP guaranteed certain leases for restaurant properties sold in 1986 and restaurant leases of certain franchisees. Minimum future rental payments remaining under these leases were approximately $6,645,000 as of October 29, 2000.These guarantees are included in the definition of financial instruments with off-balance-sheet risk of accounting loss.  In fiscal 1999, the Company took possession of one of these properties, which has since been subleased, and settled on a defaultedlease in the amount of $57,000 as a result of a sublessee bankruptcy filing.  The Company has no reason to believe that any material liability exists and believes it is impracticable to estimate the fair value of these financial guarantees (e.g., amountsthe Company could pay to remove the guarantees).

Contractual obligations for restaurant construction amounted to approximately $2,350,000 as of October 29, 2000.
**Note 14.  Related Party Transactions**
John C. Hoyt, a director of the Company, and members of his family are the principal shareholders of Midwest Pancake Houses, Inc. ("MPH").  MPH has been a franchisee of the Company since 1970.  During fiscal 2000, MPH operatedseven Village Inn Restaurants in Oklahoma and paid franchise service fees in the amount of $163,000.  MPH additionally was indebted to the Company on its open account.  The largest aggregate amount outstanding on that open account at any time duringfiscal 2000 was $42,000.  As of October 29, 2000, MPH's open account was current.

MPH is also the managing partner for a franchised Village Inn Restaurant located in New Mexico.  In fiscal 2000, the franchisee, 3155 Associates Limited Partnership ("3155"), paid franchise service fees in the amount of $40,000.  Itwas also indebted to the Company on its open account.  The largest aggregate amount outstanding on that open account at any time during fiscal 2000 was $1,100.  As of October 29, 2000, 3155's open account was current.
**Note 15.  Quarterly Financial Data (unaudited)**
The Company's quarterly financial information is subject to seasonal fluctuation and may not be indicative of annual results.  Quarterly results of operations are summarized as follows (in thousands, except per share data):
 
Quarter Ended
  
January 23,
April 16,
July 9,
October 29, 
2000
2000
2000
2000
Revenues
$87,196
$85,300
$86,877
$112,674
Restaurant operating profit
11,627
11,414
11,460
13,192
Net income
3,726
3,662
3,747
3,536
Net income per share-diluted
.45
.54
.55
.51
 
 
Quarter Ended   
January 24,
April 18,
July 11,
October 31, 
1999
1999
1999
1999
Revenues
$84,093
$81,854
$83,709
$109,390
Restaurant operating profit
10,435
9,774
10,903
13,492
Net income 1
3,032
2,329
3,147
8,819
Net income per share-diluted
.33
.26
.35
.99
(1)  An asset impairment of $746,000 and a one-time tax benefit of approximately $5,400,000 from adjusting the valuation allowance relating to certain deferred tax assets was includedin net income for the fourth quarter ended October 31, 1999.
===========================================================================================
**Item 9.  Disagreements on Accounting and Financial Disclosure.**
None.

============================================================================================
**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 2000 Annual Meeting of Shareholders.  Such statement will be filed no later than 120 days after the close of the fiscal year covered by this Form10-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 ofDirectors", "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 Financial 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 - October 29, 2000 and October 31, 1999.

	Statements of Operations - Years ended October 29, 2000, October 31, 1999, and November 1, 1998.

	Statements of Cash Flows - Years ended October 29, 2000, October 31, 1999, and November 1, 1998.

	Statements of Shareholders' Equity - Years ended October 29, 2000, October 31, 1999, and November 1, 1998 	as presented in Note 8 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.

	Report of Independent Public Accountants on Financial Statement Schedule.

	Schedule II - Valuation and Qualifying Accounts for the years ended October 29, 2000, October 31, 1999, and 	November 1, 1998.

	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 	beenomitted.

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

		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 beincorporated 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.  Inthe 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 orproceedings) 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 courtof 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 2000:

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 auditing standards generally accepted in the United States, the financial statements of VICORP Restaurants, Inc. included in this Form 10-K and have issued our report thereon dated December 7, 2000.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 theSecurities 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 allmaterial respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

/s/ Arthur Andersen LLP

Denver, Colorado,

December 7, 2000.

==========================================================================================
**VICORP Restaurants, Inc.

Schedule II - VALUATION AND QUALIFYING ACCOUNTS

For the Three Years Ended October 29, 2000**
                      (in thousands)
      
Balance at
Charged
Charged  
Balance 
beginning
to costs
to other  
at end
Description
of period
and expenses
Accounts 
Deductions
of period
Year ended October 29, 2000:       
Allowance for doubtful accounts
$      472
$         --
$         -- 
$         (82) 
$       390 
Discounts and deferred gains
14
--
-- 
(14)
(1)
--
Allowance for loss on disposal
     2,239
           --
         -- 
     (1,019)
(1)
      1,220 
$   2,725
$         --
$         -- 
$   (1,115) 
$    1,610        
Year ended October 31, 1999:       
Allowance for doubtful accounts
$      643
$         --
$   189 
$       (360)
(1)
$       472
Discounts and deferred gains
68
--
-- 
(54)
(1)
14
Allowance for loss on disposal
     2,488
       330
        --
(2)
         (579)
(1)
      2,239 
$   3,199
$     330
$   189 
$       (993) 
$    2,725        
Year ended November 1, 1998:       
Allowance for doubtful accounts
$      676
$       22
$   220
(2)
$       (275)
(1)
$       643
Discounts and deferred gains
660
46
--
(2)
(638)
(1)
68
Allowance for loss on disposal
     4,800
         --
         -- 
      (2,312)
(1)
     2,488
$   6,136
$      68
$   220 
$    (3,225)
$   3,199
(1)	Charges to the accounts for purposes for which the reserves were established. 

(2)	Establishment of reserves by charges directly to income.

	 

Year-end balances are reflected in the Balance Sheets as follows:
 
October 29, 2000
October 31, 1999
Deducted from current receivables
$
329
$
391
Deducted from property and equipment 
1,220 
2,239
Deducted from long-term receivables 
                 61 
        95 
$
      1,610
$
    2,725
=========================================================================================
**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 andexhibit 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 as amended on November 18, 1998;  October 22, 1999;  November22, 1999  - Schedule 13E4 dated November 23, 1999, Exhibit 99.B.; and April 14, 2000 - Form 10-Q for the quarter ended April 16, 2000, Exhibit 10.

*(iii) Form of Purchase Agreement relating to the Sale and Leaseback of 21 restaurant properties on October 28, 1999 - Form 10-K for the year ended October 31, 1999, Exhibit 10(iii);

*(iv) Form of Lease relating to the Sale and Leaseback of 21 restaurant properties on October 28, 1999; Form 10-K for the year ended October 31, 1999, Exhibit 10(iv);
 
(v) 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)  Deferred Stock Plan for Directors - Form 10-Q for the quarter ended July 11, 1999, Exhibit 10. 

*(e)  Severance Agreement Charles R. Frederickson - Form 10-K for the year ended October 	 31, 1993, Exhibit 10(vi).

*(f)  Employment Agreement for Richard E. Sabourin dated July 25, 1996 - Form 10-Q for the quarter ended July 31, 1996, Exhibit 10(ii)(b).

*(g)  Stock Option Agreement for Richard E. Sabourin dated August 19, 1996 - Form 10-Q for the quarter ended July 31, 1996, Exhibit 10(ii)(d).

*(h)  Amended and Restated 1982 Stock Option Plan -  Form 10-K for the year ended October 31, 1997, Exhibit 10(iii)(j).

*(i)  Amended and Restated 1983 Stock Option Plan - Form 10-K for the year ended October 31, 1997, Exhibit 10(iii)(b).

*(j)  Form Severance Agreement (Executive Officers excluding Frederickson) - Form 10-Q for the quarter ended July 31, 1998, Exhibit 10(iii)(i).

*(k)  Stock Option Agreement for Robert E. Kaltenbach dated April 9, 1998 - Form 10-K for the year ended November 1, 1998, Exhibit 10(iii)(j).

*(l)  Stock Option Agreement for Robert E. Kaltenbach dated October 2, 1998 - Form 10-K for the year ended November 1, 1998, Exhibit 10(iii)(k).

*(m)  Stock Option Agreement for Joseph F.  Trungale dated October 2, 1998 - Form 10-K for the year ended November 1, 1998, Exhibit 10 (iii)(l).

*(n)  Stock Option Agreement for Joseph F. Trungale dated November 1, 1999 - Form 10-K for the year ended October 31, 1999, Exhibit 10(v)(q).

*(o)  Incentive Program Document Defined Positions of Officers and Directors dated December 9, 1999 - Form 10-K for the year ended October 31, 1999, Exhibit 10(v)(r).

*(p)  Stock Option Agreement for Charles R. Frederickson dated December 9, 1999 - Form 10-K for the year ended October 31, 1999, Exhibit (v)(s).

*(q)  Stock Option Agreement for Joseph F. Trungale dated May 8, 2000 - Form 10-Q for the quarter ended April 16, 2000, Exhibit 10.

*(r)  Indemnification Agreements for Directors - Form 10-Q for the quarter ended July 9, 2000, Exhibit 10.

(s)  Incentive Program Document Defined Positions of Officers and Directors dated October 30, 2000.

(t)  Stock Option Agreement for Robert E. Kaltenbach dated December 7, 2000.

(u)  Stock Option Agreement for Joseph F. Trungale dated December 7, 2000.

 

23- Consents of Accountants

24- Power of Attorney

==========================================================================================
**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 dulyauthorized, on the 18 day of January, 2001.

VICORP Restaurants, Inc. (Registrant) 
By  /s/ Joseph F. Trungale
Chief Executive Officer
and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on January 18, 2001 on behalf of the registrant and in the capacities indicated.

Signature
Title
/s/ Joseph F. Trungale *
Chief Executive Officer and President  
/s/ Richard E. Sabourin
Executive Vice President and Chief Financial Officer 
(Principal Financial and Accounting Officer)
* Joseph F. Trungale, as attorney-in-fact for Charles R. Frederickson, Carole Lewis Anderson, Bruce B. Brundage, John C. Hoyt, Robert T. Marto,  Dennis B. Robertson, Hunter Yager, and Arthur Zankel, constituting a majority of the Boardof Directors of the registrant.****************************************************************************************