<PAGE>   1




                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ---------

                                   FORM 10-Q

(MARK ONE)


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

For the quarterly period ended  September 30, 1996
                                ------------------

                                       OR

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

For the transition period from                   to
                               -----------------    ----------------

Commission file number   1-9214
                         ------


                        Perkins Family Restaurants, L.P.
--------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          Delaware                                    62-1283091 
--------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF            (I.R.S. EMPLOYER IDENTIFICATION NO.) 
INCORPORATION OR ORGANIZATION)



     6075 Poplar Avenue, Suite 800, Memphis, Tennessee         38119-4709
--------------------------------------------------------------------------------
          (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)             (ZIP CODE)

                                 (901) 766-6400
--------------------------------------------------------------------------------
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


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

<PAGE>   2


                         PART I - FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                        PERKINS FAMILY RESTAURANTS, L.P.
                              STATEMENTS OF INCOME
                                  (Unaudited)
                      (In Thousands, Except Per Unit Data)


<TABLE>
<CAPTION>
                                           Three Months Ended        Nine Months Ended
                                              September 30             September 30
                                           --------   --------       --------   --------
                                            1996        1995           1996      1995
                                           --------   --------       --------   --------
<S>                                        <C>        <C>            <C>        <C>
REVENUES:
 Food sales                                $ 61,330   $ 61,555       $175,792   $171,116
 Franchise revenues                           4,887      4,779         13,914     12,974
                                           --------   --------       --------   --------
Total Revenues                               66,217     66,334        189,706    184,090
                                           --------   --------       --------   --------
COSTS AND EXPENSES:
Cost of Sales:
 Food cost                                   18,061     17,667         51,247     49,492
 Labor and benefits                          20,013     20,931         59,290     58,970
 Operating expenses                          12,351     12,667         36,147     35,547
General and administrative                    5,914      5,604         17,655     16,837
Depreciation and amortization                 4,001      3,688         11,748     10,581
Interest, net                                 1,271      1,267          3,841      3,541
Loss on/Provision for disposition of assets       -        498              -        518
Benefit from litigation settlement                -          -              -       (190)
Other, net                                     (266)      (188)          (721)      (518)
                                           --------   --------       --------   --------
Total Costs and Expenses                     61,345     62,134        179,207    174,778
                                           --------   --------       --------   --------
NET INCOME                                 $  4,872   $  4,200       $ 10,499   $  9,312
                                           ========   ========       ========   ========
WEIGHTED AVERAGE UNITS OUTSTANDING           10,289     10,267         10,289     10,267
NET INCOME PER UNIT                        $   0.47    $  0.40       $   1.01   $   0.90
CASH DISTRIBUTION DECLARED PER UNIT        $  0.325    $ 0.325       $  0.975   $  0.975
</TABLE>

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


                                      2
<PAGE>   3

                       PERKINS FAMILY RESTAURANTS, L.P.
                                 BALANCE SHEETS
                                  (Unaudited)
                      (In Thousands, Except Unit Amounts)


<TABLE>
<CAPTION>
                                               September 30,           December 31,  
                                                   1996                    1995
                                               -------------           ------------
                 ASSETS                                                
<S>                                             <C>                    <C>
CURRENT ASSETS:
Cash and cash equivalents                       $      338             $    1,825
Receivables, less allowance for
 doubtful accounts of $418 and $481                  6,173                  8,683
Inventories, at the lower of first-
 in, first-out cost or market                        4,119                  4,318
Prepaid expenses and other current assets            1,848                  1,505
                                                ----------             ----------
                 Total current assets               12,478                 16,331
                                                ----------             ----------
PROPERTY AND EQUIPMENT, at cost, net of
 accumulated depreciation and amortization         116,313                117,435
NOTES RECEIVABLE, less allowance for
 doubtful accounts of $10 and $14                      846                  1,883
INTANGIBLE AND OTHER ASSETS, net of
 accumulated amortization of $25,551
 and $25,259                                        25,311                 26,180
                                                ----------             ----------
                                                $  154,948             $  161,829
                                                ==========             ==========
</TABLE>


      The accompanying notes are an integral part of these balance sheets.


                                      3


<PAGE>   4

                        PERKINS FAMILY RESTAURANTS, L.P.
                                 BALANCE SHEETS
                                  (Unaudited)
                      (In Thousands, Except Unit Amounts)


<TABLE>
<CAPTION>
                                                 September 30,           December 31,  
                                                     1996                    1995
                                                 -------------           ------------
        LIABILITIES AND PARTNERS' CAPITAL
<S>                                               <C>                    <C>
CURRENT LIABILITIES:
 Current maturities of long-term debt             $   16,600             $    3,575
 Current maturities of capital lease obligations       1,814                  1,984
 Accounts payable                                      7,800                  7,525
 Accrued expenses                                     12,831                 13,099
 Distributions payable                                 3,475                  3,475
                                                  ----------             ----------
                     Total current liabilities        42,520                 29,658
                                                  ----------             ----------
CAPITAL LEASE OBLIGATIONS, less
 current maturities                                    8,949                  8,810
LONG-TERM DEBT, less current maturities               36,800                 57,850
OTHER LIABILITIES                                      4,821                  4,415
PARTNERS' CAPITAL:
General partner                                          619                    611
Limited partners (10,483,490 and 10,481,370 Units
 issued and outstanding)                              63,521                 63,373
Deferred compensation related to restricted Units     (2,282)                (2,888)
                                                  ----------             ----------
                     Total partners' capital          61,858                 61,096
                                                  ----------             ----------
                                                  $  154,948             $  161,829
                                                  ==========             ==========
</TABLE>

     The accompanying notes are an integral part of these balance sheets.


                                      4

<PAGE>   5

                       PERKINS FAMILY RESTAURANTS, L.P.
                           STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                       Three Months Ended             Nine Months Ended
                                                          September 30                  September 30
                                                        -----------------             -----------------
                                                         1996      1995                1996      1995
                                                        -------   -------             -------   -------
<S>                                                     <C>       <C>                 <C>       <C>
CASH FLOWS FROM OPERATING                                                    
 ACTIVITIES:                                                                 
Net income                                              $ 4,872   $ 4,200             $10,499   $ 9,312
Adjustments to reconcile net income to net cash                              
 provided by operating activities:                                           
  Depreciation and amortization                           4,001     3,688              11,748    10,581
  Benefit from litigation settlement                          -         -                   -      (190)
  Other noncash income and expense items                    448       316               1,467     1,207
  (Gain)/Loss on disposition of assets                        -       498                 (23)      518
  Changes in other operating assets and liabilities        (527)     (205)              1,866    (1,158)
                                                        -------   -------             -------   -------
   Total adjustments                                      3,922     4,297              15,058    10,958
                                                        -------   -------             -------   -------
Net cash provided by operating activities                 8,794     8,497              25,557    20,270
                                                        -------   -------             -------   -------

CASH FLOWS FROM INVESTING                                                    
  ACTIVITIES:                                                                                                         
Cash paid for property and equipment                     (2,277)   (4,644)             (9,282)  (20,943)
Proceeds from sales of property and equipment               190       739                 573       854
Payments on notes receivable                                 84       231               1,671       555
                                                        -------   -------             -------   -------
Net cash used in investing activities                    (2,003)   (3,674)             (7,038)  (19,534)
                                                        -------   -------             -------   -------

CASH FLOWS FROM FINANCING                                                    
  ACTIVITIES:                                                                
Proceeds from long-term debt                                  -     7,800              13,550    30,200
Payments on long-term debt                               (4,700)   (7,175)            (21,575)  (19,200)
Principal payments under capital lease obligations         (512)     (498)             (1,553)   (1,466)
Distributions to partners                                (3,475)   (3,478)            (10,428)  (10,391)
                                                        -------   -------             -------   -------
Net cash used in financing activities                    (8,687)   (3,351)            (20,006)     (857)
                                                        -------   -------             -------   -------
Net increase (decrease) in cash and cash equivalents     (1,896)    1,472              (1,487)     (121)
                                                        -------   -------             -------   -------
CASH AND CASH EQUIVALENTS:                                                   
Balance, beginning of period                              2,234         -               1,825     1,593
                                                        -------   -------             -------   -------
Balance, end of period                                  $   338   $ 1,472             $   338   $ 1,472
                                                        =======   =======             =======   =======
</TABLE>


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


                                      5

<PAGE>   6

                        PERKINS FAMILY RESTAURANTS, L.P.
                         NOTES TO FINANCIAL STATEMENTS

Basis of Presentation

The accompanying unaudited financial statements of Perkins Family Restaurants,
L.P. (the "Partnership") have been prepared in accordance with the instructions
to Form 10-Q and therefore do not include all information and notes necessary
for complete financial statements in conformity with generally accepted
accounting principles. The results for the periods indicated are unaudited but
reflect all adjustments (consisting only of normal recurring adjustments) which
management considers necessary for a fair presentation of the operating
results. Results of operations for the interim periods are not necessarily
indicative of a full year of operations. The notes to the financial statements
contained in the 1995 Annual Report to Unitholders should be read in
conjunction with these statements.

Certain prior year amounts have been reclassified to conform to current year
presentation.

The Partnership is managed by Perkins Management Company, Inc. ("PMC"). PMC is
also the general partner of Perkins Restaurants Operating Company, L.P.
("PROC"), the entity through which the operations of the Partnership are
conducted. As general partner of the Partnership and PROC, PMC does not receive
any compensation other than amounts attributable to its 1% general partner's
interest in each of the Partnership and PROC. The Partnership reimburses PMC
for all of its direct and indirect costs (principally general and
administrative costs) allocable to the Partnership.

Net Income Per Unit

Net Income Per Unit is computed as follows (in thousands, except per unit
amounts):




<TABLE>
<CAPTION>
                                           Three Months Ended          Nine Months Ended
                                              September 30               September 30
                                          ---------------------       --------------------
                                           1996          1995          1996          1995
                                          -------       -------       -------      -------
<S>                                       <C>           <C>           <C>          <C>
Net income as reported                    $ 4,872       $ 4,200       $10,499      $ 9,312
Less: 1% general partner's interest           (49)          (42)         (105)         (93)
                                          -------       -------       -------      -------
Net income applicable to units            $ 4,823       $ 4,158       $10,394      $ 9,219
                                          =======       =======       =======      =======
Weighted average units outstanding         10,289        10,267        10,289       10,267
Net income per unit                       $  0.47       $  0.40       $  1.01      $  0.90
</TABLE>


                                      6
                                      
<PAGE>   7


Weighted Average Units Outstanding

Weighted average units outstanding are computed as follows (in thousands):

<TABLE>
<CAPTION>
                                           Three Months Ended          Nine Months Ended
                                              September 30               September 30
                                          ---------------------       --------------------
                                           1996          1995          1996          1995
                                          -------       -------       -------      -------
<S>                                       <C>           <C>           <C>          <C>
Weighted average units                     10,284        10,265        10,284       10,265
Weighted average equivalent units               5             2             5            2 
                                          -------       -------       -------      -------
Weighted average units outstanding         10,289        10,267        10,289       10,267
                                          =======       =======       =======      =======
</TABLE>

Contingencies

The Partnership is a party to various legal proceedings in the ordinary course
of business.  Management does not believe it is likely that these proceedings,
either individually or in the aggregate, will have a materially adverse effect
on the Partnership's financial position or results of operations.

The Partnership has sponsored financing programs offered by certain lending
institutions to help its franchisees procure funds for the construction of new
franchised restaurants and to purchase and install the Perkins in-store bakery.
The Partnership provides a limited guaranty of the funds borrowed.  At
September 30, 1996, there were approximately $1,183,000 in borrowings
outstanding under these programs.  The Partnership has guaranteed $1,029,000 of
these borrowings which represents its minimum commitments.  The Partnership
does not anticipate its guaranties will exceed these minimums in the future.

The Partnership has entered into a separate agreement with one of the lending
institutions to assist a franchisee in obtaining lease financing to install
in-store bakeries in 28 existing restaurants operated by the franchisee.
Pursuant to the agreement, the Partnership will provide a declining limited
guaranty to the lender for payment of the franchisee's obligations between the
lender and the franchisee.  The Partnership's current maximum liability if the
maximum lease commitment is funded would be $945,000.  At September 30, 1996,
there were approximately $517,000 in borrowings outstanding under the program,
of which the Partnership has guaranteed approximately $362,000.


                                      7

<PAGE>   8

Supplemental Cash Flow Information

The increase or decrease in cash and cash equivalents due to changes in
operating assets and liabilities for the three and nine months ended September
30, consisted of the following (in thousands):


<TABLE>
<CAPTION>
                                  Three Months Ended             Nine Months Ended
                                    September 30,                  September 30,
                                  ------------------            -----------------
                                   1996       1995               1996      1995
                                  -------    -------            -------   -------
<S>                               <C>        <C>                <C>       <C>
(Increase) Decrease in:                                 
  Receivables                     $   774    $(1,104)           $ 1,774   $  (439)
  Inventories                        (248)       223                199       (27)
  Prepaid expenses and                                  
   other current assets                86       (207)              (926)     (969)
  Other assets                         32         24                250       274
Increase (Decrease) in:                                 
  Accounts payable                    274       (785)               274       246
  Accrued expenses                 (1,870)     1,157               (111)     (677)
  Other liabilities                   425        487                406       434
                                  -------    -------            -------   -------
                                  $  (527)   $  (205)           $ 1,866   $(1,158)
                                  -------    -------            -------   -------
</TABLE>

The Partnership paid interest of $1,303,000 and $1,468,000 during the third
quarters of 1996 and 1995, respectively, and $4,179,000 and $3,544,000 for the
nine months ended September 30, 1996 and 1995, respectively.



                                      8

<PAGE>   9

Federal Income Taxation

In 1987, tax legislation was enacted which will have the effect of taxing
publicly traded limited partnerships, such as the Partnership, as corporations
for tax years beginning after 1997.

In 1993, the Partnership recognized the cumulative effect of adopting Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109").  SFAS 109 requires the Partnership to recognize deferred tax assets and
liabilities for the expected future tax consequences of existing temporary
differences between the carrying amounts and the tax bases of assets and
liabilities that are projected to reverse after January 1, 1998, the date after
which the Partnership will become a taxable entity.

As of September 30, 1996, and December 31, 1995, the Partnership had deferred
tax assets related to existing temporary differences that are projected to
reverse after January 1, 1998.  However, management believes that a conclusion
as to the realizability of certain of those assets based upon current
circumstances is highly subjective, and has therefore established valuation
allowances as appropriate.  Accordingly, no deferred provision for income taxes
has been reflected in the accompanying financial statements.

The components of the Partnership's net deferred tax assets were as follows (in
thousands):



<TABLE>
<CAPTION>
                                           September 30,       December 31,
                                               1996               1995
                                           -------------       ------------
<S>                                          <C>                 <C>
Depreciation                                 $(1,445)            $(1,670)
Capitalized leases                             1,303               1,240
Reserve, store dispositions                      372                 795
Other, net                                       230                 210
                                             -------             -------
Total deferred tax assets                        460                 575
Valuation allowance                             (460)               (575)
                                             -------             -------
Net deferred tax assets                      $     -             $     -
                                             =======             =======
</TABLE>


                                      9

<PAGE>   10

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE THIRD QUARTER AND NINE MONTHS ENDED
SEPTEMBER 30, 1996

RESULTS OF OPERATIONS

Overview:

A summary of the Partnership's results for the third quarter and nine months
ended September 30 are presented in the following table. All revenues, costs
and expenses are expressed as a percentage of total revenues.  Certain prior
year amounts have been reclassified to conform to current year presentation.


<TABLE>
<CAPTION>
                                                 Three Months Ended                   Nine Months Ended
                                                    September 30                         September 30
                                                 ------------------                   ------------------
                                                 1996         1995                    1996         1995
                                                 -----        -----                   -----        -----
<S>                                              <C>          <C>                     <C>          <C>
Revenues:
 Food sales                                       92.6%        92.8%                   92.7%        93.0%
 Franchise revenues                                7.4          7.2                     7.3          7.0
                                                 -----        -----                   -----        -----
Total Revenues                                   100.0        100.0                   100.0        100.0
                                                 -----        -----                   -----        -----
Costs and Expenses:
 Cost of sales:
  Food cost                                       27.3         26.6                    27.0         26.9
  Labor and benefits                              30.2         31.6                    31.3         32.0
  Operating expenses                              18.7         19.1                    19.1         19.3
General and administrative                         8.9          8.4                     9.3          9.1
Depreciation and amortization                      6.0          5.6                     6.2          5.7
Interest, net                                      1.9          1.9                     2.0          1.9
Loss on / Provision for disposition of assets        -          0.8                       -          0.3
Benefit from litigation settlement                   -            -                       -         (0.1)
Other, net                                        (0.4)        (0.3)                   (0.4)        (0.2)
                                                 -----        -----                   -----        -----
Total Costs and Expenses                          92.6         93.7                    94.5         94.9
                                                 -----        -----                   -----        -----
Net Income                                         7.4%         6.3%                    5.5%         5.1%
                                                 =====        =====                   ======       =====
</TABLE>

Net income for the third quarter of 1996 was $4,872,000 or $.47 per limited
partnership unit versus $4,200,000 or $.40 per unit for the same period in
1995. For the nine months ended September 30, 1996, net income was $10,499,000
or $1.01 per unit compared to $9,312,000 or $.90 per unit in the prior year.


                                      10


<PAGE>   11

Revenues:

Total revenues for the third quarter of 1996 declined $117,000, or 0.2%,
compared with the same quarter last year.  The decrease in third quarter
revenues was primarily attributable to a net decline in restaurant food sales
due to the sale of four restaurants to franchisees and the closing of seven
underperforming restaurants in the past twelve months.  This decrease was
offset by the addition of new Partnership-operated restaurants and increased
sales from existing restaurants.

Total revenues for the first nine months of 1996 increased $5,616,000, or 3.1%,
compared with the same period in 1995 due primarily to higher restaurant food
sales, increased sales from Foxtail Foods ("Foxtail"), the Partnership's
manufacturing operation, and higher franchise revenues.

The addition of eleven new Partnership-operated restaurants since January 1,
1995, contributed $1,533,000 and $6,262,000 to the increases in restaurant food
sales over the three and nine months ended September 30, 1995. Same store
comparable sales increased 2.4% and 2.1% over the third quarter and first nine
months of 1995, respectively.  This improvement is primarily the result of an
effort to focus on marketing promotions which attract guests through new
product offerings at regular menu prices rather than discounting existing menu
items.  Increases in comparable guest visits and selective menu prices also
contributed to this sales growth.  These comparable stores accounted for
revenue increases of $764,000 for the third quarter and $3,917,000 for the nine
months.  These increases were offset by decreases of approximately $2,762,000
and $6,321,000 attributable to the eleven restaurants which have been closed or
franchised over the past twelve months.

Revenues from Foxtail increased 4.3% and 5.7% over the three and nine months
ended September 30, 1995 and constituted approximately 8.9% and 8.1% of the
Partnership's revenues for those periods.  The increase in Foxtail revenues can
be primarily attributed to increased production at the division's pie plant as
well as continued sales growth from in-store bakeries at franchised
restaurants.  Foxtail offers cookie dough, muffin batters, pancake mixes, pies
and other food products to Partnership-operated and franchised restaurants
through food service distributors in order to ensure consistency and
availability of Perkins' proprietary products to each unit in the system.
Additionally, Foxtail manufactures certain proprietary and non-proprietary
products for sale to non-Perkins operations.

Franchise revenues, which consist primarily of franchise royalties and sales
fees, increased 2.3% over the third quarter and approximately 7.2% over the
first nine months of 1995.  These increases are due to nineteen new franchised
restaurants that opened since September 30, 1995, partially offset by five
franchised units that were closed.

Costs and expenses:

Food cost:
In terms of total revenues, food cost for the three months ended September 30,
1996, increased 0.7 percentage points over the same period in 1995.  Restaurant
division food cost increased only slightly due to a reduction in discounted
price promotions that offset increases in the costs of certain key commodities.
Foxtail food cost increased 4.4 percentage points due primarily to raw
material cost increases and aggressive price competition on non-Perkins
products.


                                      11


<PAGE>   12

Food cost for the nine months ended September 30 increased 0.1 percentage
points over the same period last year.  Increases in Foxtail food costs due to
raw material cost increases and price competition were offset by a net decline
in key restaurant division commodity costs and a reduction in discounted price
promotions.

The Partnership expects raw material cost pressures at Foxtail to continue for
the remainder of 1996 and also anticipates that the current high level of dairy
and pork prices will put pressure on food cost margins in the restaurant
division for the remainder of the year.

Foxtail, functioning as a manufacturing operation, typically has higher food
cost as a percent of revenue than the Partnership's restaurants.  Although the
restaurants provide the majority of the Partnership's revenue, management
expects total food cost to increase as a percent of revenue as Foxtail becomes
a more significant source of revenues to the Partnership.


Labor and benefits:
Labor and benefits expense, as a percentage of total revenues, decreased 1.3
and 0.8 percentage points, respectively, for the three and nine months ended
September 30, 1996, primarily due to improved productivity in the Partnership's
restaurants.  These expenses also benefited from reduced claims costs
associated with the Partnership's group health and workers compensation
programs.  Labor and benefits expense for Foxtail, in terms of total Foxtail
revenues, also improved significantly from 1995 levels due to greater
productivity and improved efficiencies in its pie manufacturing facility.  As a
percent of revenue, Foxtail labor and benefit charges are significantly lower
than the Partnership's restaurants.  As Foxtail becomes a more significant
component of the Partnership's total operations, labor and benefits expense,
expressed as a percent of total revenues, should decrease.

The wage rates of the Partnership's hourly employees are impacted by Federal
and state minimum wage laws.  The recent legislation raising the Federal
minimum wage is expected to have a material impact on the Partnership's labor
costs.  In the past, the Partnership has been able to offset increases in labor
costs through selective menu price increases and improvements in productivity.
The Partnership anticipates that it can offset the majority of the current
increase through selective menu price increases.  However, there is no
guarantee that future wage increases can be mitigated through raising menu
prices.

Operating expenses:
Operating expenses for the third quarter and first nine months of 1996
decreased as a percentage of total revenues.  These decreases were primarily
attributable to management's emphasis on controlling operating costs in both
the restaurant and Foxtail divisions.

General and administrative:
General and administrative expenses, as a percentage of total revenues,
increased 0.5 and 0.2 percentage points for the third quarter and nine months
ended September 30, 1996, respectively.  These increases are primarily the
result of increased incentive compensation costs.  Costs associated with
enhanced administrative support for Foxtail also contributed to the increase
for the nine months.

Depreciation and amortization:
Depreciation and amortization for the three and nine months ended September 30,
1996, increased 8.5% and 11.0%, respectively, over the same periods last year
due primarily to refurbishments made to upgrade existing restaurants and the
addition of new Partnership-operated restaurants.


                                      12

<PAGE>   13

Interest, net:
Borrowings used for unit expansion and restaurant upgrades caused interest
expense for the first nine months of 1996 to exceed 1995 levels by 8.5%.  This
increase was partially offset by a decrease in interest expense associated with
capital lease obligations.  Interest expense for the third quarter did not
increase significantly due to a reduction in incremental borrowings to fund new
restaurant development and improved cash flows for the first nine months of the
year.

Other, net:
Other income increased approximately $78,000 and $203,000 in the third quarter
and first nine months of 1996 compared to the same periods last year due
primarily to rental income on four restaurant properties which were leased to
franchisees in late 1995 and 1996 and one property leased to another restaurant
chain in 1996.    Depreciation expense associated with these five properties
totaling $117,000 and $278,000 for the third quarter and first nine months,
respectively, is included in depreciation and amortization expense.



CAPITAL RESOURCES AND LIQUIDITY

Principal uses of cash during the third quarter and first nine months ended
September 30, 1996, were distributions paid to Unitholders, capital
expenditures, and a net reduction in long-term debt.  Capital expenditures
consisted primarily of remodels and refurbishments to existing restaurants and
building and equipment purchases for new Partnership-operated restaurants.  The
Partnership's primary source of funding was cash provided by operations.

The Partnership maintains a $40,000,000 revolving line of credit facility and a
$10,000,000 term loan agreement with three banks.  The revolving line of credit
contains a $6,000,000 sublimit for letters of credit and expires on June 30,
1997, at which time all amounts outstanding become payable.  As of September
30, 1996, $13,000,000 in borrowings and approximately $2,937,000 in letters of
credit were outstanding under the line of credit facility.  The borrowings
under the term loan agreement are due in quarterly installments through June
30, 1998.  As of September 30, 1996, $5,400,000 was outstanding under this
agreement.

The $13,000,000 in borrowings under the line of credit are classified as a
current liability as of September 30, 1996.  The Partnership believes that an
extension of this line will be granted or that it can refinance the line of
credit through other sources.

During the fourth quarter of 1995, the Partnership issued $20,000,000 of 7.19%
Unsecured Senior Notes due December 13, 2005, to an insurance company.  The
proceeds were used to repay outstanding borrowings under the Partnership's
revolving line of credit.  Principal payments on these notes begin December 13,
1997.  The note agreement also provides for a $15,000,000 Private Shelf Note
Facility which expires December 13, 1997.

As is typical in the restaurant industry, the Partnership ordinarily operates
with a working capital deficit since the majority of its sales are for cash,
while credit is received from its suppliers.  Therefore, operating with a
working capital deficit does not impair the Partnership's short-term liquidity.
At September 30, 1996, this deficit amounted to $30,042,000, which was
primarily the result of utilizing available cash for capital expenditures and
distributions to Unitholders.  The significant increase in the deficit since
December 31, 1995, is due to the classification of the revolving line of credit
as a current liability.


                                      13



<PAGE>   14

                          PART II - OTHER INFORMATION

                    Item 6. Exhibits and Reports on Form 8-K


(a)  Exhibits - Reference is made to the Index of Exhibits attached hereto
     as page 15 and made a part hereof.

(b)  Reports on Form 8-K - None

                                   Signature

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


                                           PERKINS FAMILY RESTAURANTS, L.P.
                                           BY: PERKINS MANAGEMENT COMPANY, INC.,
                                                       GENERAL PARTNER


DATE:  November 12, 1996                   BY: /s/ Steven R. McClellan
       -----------------                       -----------------------
                                               Steven R. McClellan
                                               Chief Financial Officer


                                           BY: /s/ Michael P. Donahoe
                                               --------------------------
                                               Michael P. Donahoe
                                               Vice President, Controller
                                               (Chief Accounting Officer)


                                      14


<PAGE>   15



                                 Exhibit Index


Exhibit No.                    Description
-----------                    -----------
    27          Financial Data Schedule (for SEC use only)































                                      15