<Page>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

For the Quarterly Period Ended: JUNE 30, 2001

                                       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: 333-67393


                       MRS. FIELDS' HOLDING COMPANY, INC.
               (Exact name of registrant specified in its charter)

          DELAWARE                                        87-0563475
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS employer identification no.)
incorporation or organization)


2855 EAST COTTONWOOD PARKWAY, SUITE 400
        SALT LAKE CITY, UTAH                          84121-7050
---------------------------------------               ----------
(Address of principal executive offices)              (Zip code)


                                 (801) 736-5600
                                 ---------------
              (Registrant's telephone number, including area code)

                                      N/A
                                     -----
              (Former name, former address and former fiscal year,
                         if changed since last report)

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

                                /X/ yes    / / no

The registrant had 3,497,221 shares of common stock, $0.001 par value,
outstanding at August 14, 2001.

<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS

<Table>
<S>                                                                          <C>
PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements (Unaudited)

        Condensed Consolidated Balance Sheets as of June 30, 2001
          and December 30, 2000 ............................................   3

        Condensed Consolidated Statements of Operations for the 13 Weeks
          Ended June 30, 2001 and July 1, 2000 .............................   5

        Condensed Consolidated Statements of Operations for the 26 Weeks
          Ended June 30, 2001 and July 1, 2000 .............................   6

        Condensed Consolidated Statements of Cash Flows for the 26 Weeks
          Ended June 30, 2001 and July 1, 2000 .............................   7

        Notes to Condensed Consolidated Financial Statements ...............   8

ITEM 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations...........................................  14

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk ..........  20


PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings ..................................................  21

ITEM 6. Exhibits and Reports on Form 8-K ...................................  21

</Table>

                                       2
<Page>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

                                     ASSETS

<Table>
<Caption>
                                                                  JUNE 30,       DECEMBER 30,
                                                                    2001            2000
                                                                  ---------      -----------
<S>                                                               <C>            <C>
CURRENT ASSETS:
    Cash and cash equivalents ..............................      $   2,384       $   4,690
    Accounts receivable, net of allowance for
     doubtful accounts of $521 and $547, respectively ......          1,703           4,471
    Amounts due from franchisees and licensees, net
     of allowance for doubtful accounts of $491
     and $758, respectively ................................          5,110           4,353
    Amounts due from affiliates ............................          1,696             365
    Inventories ............................................          4,572           4,760
    Prepaid rent and other .................................          3,113             555
                                                                  ---------       ---------
                  Total current assets .....................         18,578          19,194
                                                                  ---------       ---------
PROPERTY AND EQUIPMENT, at cost:
    Leasehold improvements .................................         35,268          31,984
    Equipment and fixtures .................................         25,788          26,477
    Land ...................................................            240             240
                                                                  ---------       ---------
                                                                     61,296          58,701
    Less accumulated depreciation and amortization .........        (34,975)        (31,630)
                                                                  ---------       ---------
                  Net property and equipment ...............         26,321          27,071
                                                                  ---------       ---------
GOODWILL, net of accumulated amortization
    of $38,828 and $33,584, respectively ...................        114,869         121,000
                                                                  ---------       ---------
TRADEMARKS AND OTHER INTANGIBLES, net of
    accumulated amortization of $5,962 and
    $4,993, respectively ...................................         12,607          12,129
                                                                  ---------       ---------
DEFERRED LOAN COSTS, net of accumulated
    amortization of $8,057 and $7,684, respectively ........          8,039          10,044
                                                                  ---------       ---------
OTHER ASSETS ...............................................            734           1,440
                                                                  ---------       ---------
                                                                  $ 181,148       $ 190,878
                                                                  =========       =========
</Table>

      The accompanying notes to condensed consolidated financial statements
                  are an integral part of these balance sheets.

                                       3
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
          CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(CONTINUED)
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                      LIABILITIES AND STOCKHOLDERS' DEFICIT
<Table>
<Caption>


                                                                   JUNE 30,      DECEMBER 30,
                                                                    2001            2000
                                                                  ---------      -----------
<S>                                                               <C>            <C>
CURRENT LIABILITIES:
    Bank overdraft .........................................      $   6,753       $   2,920
    Line of credit .........................................          4,230              --
    Current portion of capital lease obligations ...........            965             970
    Current portion of long-term debt ......................          1,643           1,381
    Accounts payable .......................................          4,869          10,052
    Accrued liabilities ....................................          3,107           4,456
    Accrued salaries, wages and benefits ...................          3,746           3,936
    Accrued interest payable ...............................          1,215           1,142
    Current portion of store closure reserve ...............            842           1,498
    Sales tax payable ......................................            709           1,156
    Deferred credits .......................................            429             249
                                                                  ---------       ---------
                Total current liabilities ..................         28,508          27,760

LONG-TERM DEBT, net of current portion .....................        165,035         184,306

STORE CLOSURE RESERVE, net of current portion ..............          2,009           2,281

CAPITAL LEASE OBLIGATIONS, net of current portion ..........            927           1,412
                                                                  ---------       ---------
                Total liabilities ..........................        196,479         215,759
                                                                  ---------       ---------
MANDATORILY REDEEMABLE CUMULATIVE 16.5% PREFERRED
       STOCK, aggregate liquidation preference of
       $14,723, 20,000 shares authorized, 14,723 shares
       outstanding as of June 30, 2001 .....................         13,177              --
                                                                  ---------       ---------
MINORITY INTEREST ..........................................             37              51
                                                                  ---------       ---------
STOCKHOLDERS' DEFICIT:
    Common stock, $.001 par value; 5,000,000 shares
        authorized and 3,497,221 and 3,387,019
        shares outstanding, respectively ...................              4               3
    Additional paid-in capital .............................         41,211          38,816
    Deferred compensation expense ..........................            (95)           (118)
    Accumulated deficit ....................................        (69,545)        (63,547)
    Accumulated other comprehensive loss ...................           (120)            (86)
                                                                  ---------       ---------
                Total stockholders' deficit ................        (28,545)        (24,932)
                                                                  ---------       ---------
                                                                  $ 181,148       $ 190,878
                                                                  =========       =========
</Table>

      The accompanying notes to condensed consolidated financial statements
                  are an integral part of these balance sheets.

                                       4
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>

                                                                    13 WEEKS ENDED       13 WEEKS ENDED
                                                                    JUNE 30, 2001         JULY 1, 2000
                                                                    --------------       --------------
<S>                                                                 <C>                  <C>
REVENUES:
   Net store and food sales ................................         $    32,085          $    32,639
   Franchising .............................................               5,789                6,097
   Management fee ..........................................               2,910                1,333
   Licensing and other .....................................                 293                  201
                                                                     -----------          -----------
      Total revenues .......................................              41,077               40,270
                                                                     -----------          -----------
OPERATING COSTS AND EXPENSES:
   Selling and store occupancy costs .......................              18,506               18,387
   Cost of sales ...........................................              10,812               11,034
   General and administrative ..............................               7,357                6,339
   Store closure benefit ...................................                (175)                (200)
   Depreciation and amortization ...........................               6,581                6,342
                                                                     -----------          -----------
      Total operating costs and expenses ...................              43,081               41,902
                                                                     -----------          -----------
         Loss from operations ..............................              (2,004)              (1,632)
                                                                     -----------          -----------
OTHER INCOME (EXPENSE), net:
   Interest expense ........................................              (5,287)              (6,330)
   Interest income .........................................                  10                   22
   Other income, net .......................................                  95                   97
                                                                     -----------          -----------
      Total other expense, net .............................              (5,182)              (6,211)
                                                                     -----------          -----------
         Loss before provision for income taxes,
            minority interest and redeemable preferred stock
            dividends and accretion ........................              (7,186)              (7,843)
PROVISION FOR INCOME TAXES .................................                  (7)                  (7)
                                                                     -----------          -----------
         Loss before minority interest and redeemable
            preferred stock dividends and accretion ........              (7,193)              (7,850)
MINORITY INTEREST ..........................................                   2                  (12)
                                                                     -----------          -----------
         Loss before preferred stock dividends and
           accretion .......................................              (7,191)              (7,862)

LESS REDEEMABLE PREFERRED STOCK DIVIDENDS AND ACCRETION ....                (725)                  --
                                                                     -----------          -----------
         Net loss applicable to common shares ..,,..........         $    (7,916)         $    (7,862)
                                                                     ===========          ===========
BASIC AND DILUTED LOSS PER COMMON SHARE.....................         $     (2.26)         $     (2.32)
                                                                     ===========          ===========
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING ................................................               3,497                3,387
                                                                     ===========          ===========
COMPREHENSIVE LOSS:
   Net loss applicable to common shares.....................         $    (7,916)         $    (7,862)
   Foreign currency translation adjustment .................                 (34)                 (75)
                                                                     -----------          -----------
         Comprehensive loss ................................         $    (7,950)         $    (7,937)
                                                                     ===========          ===========

</Table>

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

                                       5
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                                     26 WEEKS ENDED       26 WEEKS ENDED
                                                                     JUNE 30, 2001         JULY 1, 2000
                                                                     --------------       --------------
<S>                                                                  <C>                  <C>
REVENUES:
   Net store and food sales .................................         $    65,387          $    66,435
   Franchising ..............................................              11,526               12,043
   Management fee ...........................................               6,275                1,333
   Licensing and other ......................................               2,505                  361
                                                                      -----------          -----------
      Total revenues ........................................              85,693               80,172
                                                                      -----------          -----------
OPERATING COSTS AND EXPENSES:
   Selling and store occupancy costs ........................              36,970               36,707
   Cost of sales ............................................              21,458               22,001
   General and administrative ...............................              14,752               11,460
   Store closure benefit ....................................                (175)                (200)
   Depreciation and amortization ............................              12,013               12,012
                                                                      -----------          -----------
      Total operating costs and expenses ....................              85,010               81,980
                                                                      -----------          -----------
         Income (loss) from operations ......................                 675               (1,808)
                                                                      -----------          -----------
OTHER INCOME (EXPENSE), net:
   Interest expense .........................................             (11,233)             (12,468)
   Interest income ..........................................                  35                   45
   Other income, net ........................................                 104                   65
                                                                      -----------          -----------
      Total other expense, net ..............................             (11,094)             (12,358)
                                                                      -----------          -----------
         Loss before provision for income taxes, minority
            interest, extraordinary item and redeemable
            preferred stock dividends and accretion .........             (10,419)             (14,166)
PROVISION FOR INCOME TAXES ..................................                 (13)                 (15)
                                                                      -----------          -----------
         Loss before minority interest, extraordinary
            item, and redeemable preferred stock
            dividends and accretion .........................             (10,432)             (14,181)
MINORITY INTEREST ...........................................                   4                  (15)
                                                                      -----------          -----------
         Loss before extraordinary item and preferred
            stock dividends and accretion ...................             (10,428)             (14,196)
EXTRAORDINARY GAIN ON EARLY EXTINGUISHMENT OF DEBT ..........               5,343                   --
                                                                      -----------          -----------
         Net loss ...........................................              (5,085)             (14,196)
LESS REDEEMABLE PREFERRED STOCK DIVIDENDS AND ACCRETION .....                (913)                  --
                                                                      -----------          -----------
         Net loss applicable to common shares ...............         $    (5,998)         $   (14,196)
                                                                      ===========          ===========
BASIC AND DILUTED LOSS PER COMMON SHARE:
         Net loss before extraordinary item .................         $     (3.29)         $     (4.19)
         Extraordinary item .................................                1.55                   --
                                                                      -----------          -----------
         Net loss per common share ..........................         $     (1.74)         $     (4.19)
                                                                      ===========          ===========
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING .................................................               3,457            3,387,019
                                                                      ===========          ===========
COMPREHENSIVE LOSS:
   Net loss applicable to common shares .....................         $    (5,998)         $   (14,196)
   Foreign currency translation adjustment ..................                 (34)                 (75)
                                                                      -----------          -----------
          Comprehensive loss ................................         $    (6,032)         $   (14,271)
                                                                      ===========          ===========
</Table>

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

                                       6
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<Table>
<Caption>


                                                                                           26 WEEKS ENDED    26 WEEKS ENDED
                                                                                           JUNE 30, 2001      JULY 1, 2000
                                                                                           --------------    --------------
<S>                                                                                        <C>               <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss .........................................................................         $ (5,085)         $(14,196)
   Adjustments to reconcile net loss to net cash
      used in operating activities:
           Extraordinary gain .......................................................           (5,343)               --
           Depreciation and amortization ............................................           12,013            12,012
           Amortization of deferred loan costs and discounts on notes ...............            4,513             4,486
           Deferred compensation ....................................................              261                --
           Gain on sale of assets ...................................................              (99)              511
           Minority interest ........................................................              (14)               15
           Changes in operating assets and liabilities: .............................                                 --
                 Accounts receivable, net ...........................................           (2,768)              472
                 Amounts due from franchisees and licensees, net ....................             (757)             (130)
                 Amounts due from affiliates ........................................           (1,331)               --
                 Inventories ........................................................             (188)              276
                 Prepaid rent and other .............................................           (2,558)             (186)
                 Accounts payable ...................................................           (5,183)           (2,884)
                 Store closure reserve ..............................................             (928)           (1,325)
                 Accrued liabilities ................................................           (1,350)               --
                 Accrued salaries, wages and benefits ...............................             (190)              (73)
                 Accrued interest payable ...........................................               73              (199)
                 Sales tax payable ..................................................             (447)             (383)
                 Deferred credits ...................................................              180               (35)
                 Other ..............................................................             (171)              (36)
                                                                                              --------          --------
                     Net cash used in operating activities ..........................           13,406            (1,675)
                                                                                              --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property and equipment ..............................................            5,191            (2,529)
    Proceeds from the sale of assets ................................................              439                --
                                                                                              --------          --------
                     Net cash used in investing activities ..........................           (4,752)           (2,529)
                                                                                              --------          --------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Reduction of long-term debt .....................................................          (15,948)             (414)
    Bank overdraft ..................................................................            3,833                --
    Borrowings under the line of credit .............................................            4,230             3,550
    Principal payments on capital lease obligations .................................             (490)             (457)
    Payment of debt financing costs .................................................             (226)             (474)
    Issuance (reduction) in preferred stock .........................................           14,541            (1,070)
                                                                                              --------          --------
                     Net cash provided by financing activities ......................            5,940             1,135
                                                                                              --------          --------

    Effect of foreign exchange rates ................................................              (34)              (75)
                                                                                              --------          --------

NET DECREASE IN CASH AND CASH EQUIVALENTS ...........................................           (2,306)           (3,144)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD ................................            4,690             4,919
                                                                                              --------          --------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD ......................................         $  2,384          $  1,775
                                                                                              ========          ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
      Cash paid for interest ........................................................         $  7,430          $  7,817
                                                                                              ========          ========
      Cash paid for income taxes ....................................................         $    157          $    124
                                                                                              ========          ========
</Table>

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

                                       7
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(1)  BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared by Mrs. Fields' Holding Company, Inc. and subsidiaries ("Mrs.
Fields' Holding" or the "Company") in accordance with the rules and regulations
of the Securities and Exchange Commission for Form 10-Q, and accordingly, do not
include all of the information and footnotes required by accounting principles
generally accepted in the United States. In the opinion of management, these
condensed consolidated financial statements reflect all adjustments, which
consist only of normal recurring adjustments, necessary to present fairly the
financial position of Mrs. Fields' Holding as of June 30, 2001 and December 30,
2000, and the results of its operations and its cash flows for the periods
presented. These unaudited condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto for the fiscal year ended December 30, 2000 contained in Mrs. Fields'
Holding's annual report on Form 10-K.

     The results of operations for the 13 and 26 weeks ended June 30, 2001 are
not necessarily indicative of the results that may be expected for the remainder
of the fiscal year ending December 29, 2001.

     Mrs. Fields' Holding is a majority owned subsidiary of Capricorn Investors
II, L.P. ("Capricorn"). Mrs. Fields' Holding is a holding company and does not
have any material operations other than ownership of all of the capital stock of
Mrs. Fields' Original Cookies, Inc. ("Mrs. Fields") and the operation of 20
Pretzel Time stores recently acquired from a franchisee.

(2)  RECLASSIFICATIONS

     Certain reclassifications have been made to the prior period's condensed
consolidated financial statements to conform with the current period's
presentation.

(3)  STORE CLOSURE RESERVE

     Mrs. Fields' Holding's management reviews the historical and projected
operating performance of its stores on a periodic basis to identify under-
performing stores for impairment of net property investment or for targeted
closing. The Company's policy is to recognize a loss for that portion of the net
property investment determined to be impaired. Additionally, when a store is
identified for targeted closing, either as part of a business combination or
ongoing operations, the Company's policy is to record a reserve for the costs of
closing the store, which are predominately estimated lease termination costs.
Lease termination costs include both one-time settlement payments and continued
contractual payments over the term of the original lease agreement where no
settlement can be resolved with the landlord. As a result, although the exit
plans were completed by the end of fiscal year 2000, a portion of the store
closure reserve will remain until all cash payments have been made. The Company
does not accrue for future expected operating losses. If and when a reserve that
was established as part of purchase accounting is not fully utilized, the
Company reduces the reserve to zero and goodwill is adjusted for the
corresponding amount. As of June 30, 2001, the remaining store closure reserve
was $2.9 million.

                                       8
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

     The following table presents a summary of the activity in the store closure
reserve during the 26 weeks ended June 30, 2001 and July 1, 2000:

<Table>
<Caption>
                              MRS. FIELDS INC. AND
                                ORIGINAL COOKIE                  H&M                   PRETZEL TIME          GREAT AMERICAN COOKIES
                           -------------------------  -------------------------  -------------------------  ------------------------

                             BUSINESS     COMPANY-      BUSINESS     COMPANY-     BUSINESS      COMPANY-      BUSINESS     COMPANY-
                           COMBINATION     OWNED      COMBINATION     OWNED      COMBINATION     OWNED      COMBINATION     OWNED
                               AND         STORES         AND        STORES          AND         STORES         AND        STORES
                           SUBSEQUENT   UNRELATED TO  SUBSEQUENT   UNRELATED TO  SUBSEQUENT   UNRELATED TO  SUBSEQUENT  UNRELATED TO
                           ADJUSTMENTS  ACQUISITIONS  ADJUSTMENTS  ACQUISITIONS  ADJUSTMENTS  ACQUISITIONS  ADJUSTMENTS ACQUISITIONS
                           -----------  ------------  -----------  ------------  -----------  ------------  -----------  -----------
<S>                        <C>          <C>           <C>          <C>           <C>          <C>           <C>         <C>
Balance,
 December 30, 2000 .....    $   863       $ 1,219       $   359       $    85       $    65       $    --      $ 1,113     $    --

Reversal during the
 26 weeks ended
 June 30, 2001 .........       (280)           (7)           (9)           (5)           (2)           --           --          --

Utilization for the
 26 weeks ended
 June 30, 2001 .........       (205)         (227)          (39)          (33)          (18)           --         (197)         --

Additional reserves
 for continuing
 company-owned and
 franchised stores
 targeted for closures..         20            34            --            --            --            --           --          --
                            -------       -------       -------       -------       -------       -------      -------     -------
Balance,
 June 30, 2001 .........    $   398       $ 1,019       $   311       $    47       $    45       $    --      $   916     $    --
                            =======       =======       =======       =======       =======       =======      =======     =======
Balance,
 January 1, 2000 .......    $ 1,164       $ 1,581       $   536       $   294       $   109       $    86      $ 1,674     $   545
Reversal during the
 26 weeks ended
 July 1, 2000 ..........         --            --            --            --            --            --           --          --

Utilization for the
 26 weeks ended
 July 1, 2000 ..........       (218)         (312)          (57)         (120)          (22)           --         (233)       (130)
                            -------       -------       -------       -------       -------       -------      -------     -------
Balance,
 July 1, 2000 ..........    $ 1,396       $ 1,269       $   479       $   174       $    87       $    86      $ 1,441     $   415
                            =======       =======       =======       =======       =======       =======      =======     =======

<Caption>

                                    PRETZELMAKER                        CONSOLIDATED
                             -------------------------   ------------------------------------------
                                                             TOTAL         TOTAL
                               BUSINESS      COMPANY-      BUSINESS      COMPANY-         TOTAL
                             COMBINATIONS     OWNED      COMBINATIONS     OWNED         BUSINESS
                                 AND          STORES         AND          STORES       COMBINATIONS
                             SUBSEQUENT    UNRELATED TO  SUBSEQUENT    UNRELATED TO    AND COMPANY-
                             ADJUSTMENTS   ACQUISITIONS  ADJUSTMENTS   ACQUISITIONS    OWNED STORES
                             -----------   -----------   -----------   ------------    ------------
<S>                          <C>           <C>           <C>           <C>             <C>
Balance,
 December 30, 2000 .....        $    75       $    --       $ 2,475       $ 1,304       $ 3,779

Reversal during the
 26 weeks ended
 June 30, 2001 .........             --            --          (291)          (12)         (303)

Utilization for the
 26 weeks ended
 June 30, 2001 .........            (14)          (20)         (473)         (280)         (753)
                                -------       -------       -------       -------       -------
Additional reserves
 for continuing
 company-owned and
 franchised stores
 targeted for closures..             --            74            20           108           128
Balance,
 June 30, 2001 .........        $    61       $    54       $ 1,731       $ 1,120       $ 2,851
                                =======       =======       =======       =======       =======
Balance,
 January 1, 2000 .......        $   105       $   650       $ 4,038       $ 3,156       $ 7,194
Reversal during the
 26 weeks ended
 July 1, 2000 ..........             --          (200)           --          (200)         (200)

Utilization for the
 26 weeks ended
 July 1, 2000 ..........            (16)          (17)         (546)         (579)       (1,125)
                                -------       -------       -------       -------       -------
Balance,
 July 1, 2000 ..........        $    89       $   433       $ 3,492       $ 2,377       $ 5,869
                                =======       =======       =======       =======       =======
</Table>

                                       9
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

     The following table presents a summary of activity for stores originally
identified to be closed or franchised in connection with the applicable business
combination for the 26 weeks ended July 1, 2000. All such stores were closed,
franchised or removed from the store closure plan during fiscal 2000.

<Table>
<Caption>
                                                     MRS. FIELDS INC.
                                                            AND
                                                      ORIGINAL COOKIE        GREAT AMERICAN COOKIES        CONSOLIDATED
                                                   ----------------------    ----------------------    ---------------------
                                                   TO BE         TO BE        TO BE        TO BE       TO BE        TO BE
                                                   CLOSED      FRANCHISED     CLOSED     FRANCHISED    CLOSED     FRANCHISED
                                                   ------      ----------    -------     ----------    ------     ----------
<S>                                                <C>         <C>           <C>         <C>           <C>        <C>
Balance, January 1, 2000 ....................         --          14            6            1            6           15
Stores closed, franchised, or removed
during the 26 weeks ended July 1, 2000 ......         --         (11)          (2)          (1)          (2)         (12)
                                                    ----         ---          ---          ---          ---          ---
Balance, July 1, 2000 .......................         --           3            4           --            4            3
                                                    ====         ===          ===          ===          ===          ===
</Table>

     The following table presents a summary of activity for stores Mrs. Fields'
Holding identified to be closed or franchised that were not originally
identified to be closed or franchised in connection with a business combination
for the 26 weeks ended July 1, 2000. All such stores were closed, franchised, or
removed from the store closure plan in fiscal 2000.

<Table>
<Caption>
                                                     MRS. FIELDS INC.
                                                            AND
                                                      ORIGINAL COOKIE             PRETZEL TIME             CONSOLIDATED
                                                   ----------------------    ----------------------    ---------------------
                                                   TO BE         TO BE        TO BE        TO BE       TO BE        TO BE
                                                   CLOSED      FRANCHISED     CLOSED     FRANCHISED    CLOSED     FRANCHISED
                                                   ------      ----------    -------     ----------    ------     ----------
<S>                                                <C>         <C>           <C>         <C>           <C>        <C>
Balance, January 1, 2000 ....................          3              4         --             1           3           5
Stores closed, franchised, or removed
during the 26 weeks ended July 1, 2000.......         (1)            (2)        --            (1)         (1)         (3)
                                                     ---            ---        ---           ---         ---         ---
Balance, July 1, 2000 .......................          2              2         --            --           2           2
                                                     ===            ===        ===           ===         ===         ===
</Table>

(4)  TCBY MANAGEMENT AGREEMENT

     In connection with the acquisition of TCBY Enterprises, Inc. (together
with its parent company and its parent company's subsidiaries, "TCBY") on
June 1, 2000, by Capricorn Investors III, L.P., an affiliate of Capricorn
Investors II, L.P. ("Capricorn"), the majority owner of Mrs. Fields' Holding
Company, entered into a Management Agreement (the "TCBY Management
Agreement") with TCBY, pursuant to which the corporate and administrative
functions of TCBY were transferred to the Company. The Company also oversees
the sale of new TCBY franchises and monitors the activities of TCBY
franchisees. Under the TCBY Management Agreement, the Company has agreed to
manage and operate TCBY's business and pay specified operating and other
costs of TCBY in exchange for an annual management fee of $12.4 million in
fiscal 2001. The management fee is paid by TCBY semi-monthly and adjusted
annually.

     In accordance with the terms and conditions of the TCBY Management
Agreement, Mrs. Fields' Holding and TCBY will share costs savings obtained
through the joint purchase of ingredients, supplies and services and Mrs.
Fields' Holding is eligible to receive a portion of certain costs savings
that may result from efficiencies introduced into the manufacturing process
for TCBY's yogurt and ice cream by Mrs. Fields' Holding.

     The Company will also be entitled to receive a fee of approximately $2.5
million from TCBY for reimbursement of expenses incurred on behalf of TCBY and
one-time transition costs incurred in the transfer of management functions of
TCBY from Little Rock, Arkansas to Salt Lake City, Utah, if TCBY is successful
in selling its existing dairy processing plant for net proceeds sufficient to
retire debt associated with the plant or upon sufficient cash being available
from the excess working capital of the dairy processing plant.

                                       10
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

     Amounts due from affiliates is comprised of amounts due from TCBY under the
Management Agreement and various marketing expenditures incurred on behalf of
TCBY's advertising fund.

     During the 26 weeks ended June 30, 2001, the Company capitalized
$60,000 of franchise fees paid to TCBY as intangible assets in connection
with the roll out of TCBY products in 12 company-owned stores.

(5)  PREFERRED STOCK ISSUANCE AND DEBT EXTINGUISHMENT

     In March 2001, the Company issued 14,723 shares of 16.5% Cumulative
Preferred Stock due 2006 (the "Preferred Stock") at a price of $1,000 per share
for net proceeds of approximately $14.5 million in a private offering (the
"Offering"). In connection with the Offering, the Company issued 110,201 shares
of common stock, which have been recorded as a discount to the Preferred Stock
based upon the relative fair values of the respective securities. Dividends are
cumulative and payable in arrears on January 30, April 30, July 30 and October
30 of each year. Dividends accrue at 16.5% per annum of the liquidation
preference and are payable through an increase in the liquidation preference.
The Preferred Stock matures on June 1, 2006 and will entitle the holder to cash
of $2,222 per preferred share, which will be the liquidation preference then in
effect, plus accumulated dividends. The Company's ability to retire such shares
at maturity is subject to its having sufficient funds available, as well as its
compliance with the Company's Indenture related to the Notes, and may be
restricted under other debt arrangements of the Company in effect at the time of
maturity.

     The net proceeds from the Offering were used to repurchase approximately
$27.1 million principal amount of the Company's 14% Senior Secured Discounts
Notes for approximately $14.5 million. Approximately $11.5 million of the
principal amount repurchased was purchased from the Company's majority
stockholder, who had recently acquired the notes from a third party. The balance
of the notes were purchased directly from a third party. The terms upon which
the notes were repurchased were substantially identical for both the Company's
majority stockholder and the third party. The Company recorded a $5.3 million
extraordinary gain on the retirement of all of the notes repurchased, net of the
write-off of the related debt issuance costs and original issue discount, during
the 26 weeks ended June 30, 2001.

(6)  REPORTABLE SEGMENTS

     Management evaluates performance at Mrs. Fields' Holding using two
reportable operating segments; namely, (1) company-owned stores and related
activity and (2) franchising and licensing activity. The segments are determined
by revenue source; direct sales or royalties and license fees. The company-owned
stores segment consists of both cookie and pretzel stores owned and operated by
Mrs. Fields' Holding and sales from its catalog / e-tailing business. The
franchising and licensing segment consists of cookie and pretzel stores, which
are owned and operated by third parties who pay Mrs. Fields' Holding an initial
franchise fee and monthly royalties based on a percentage of gross sales, sales
of cookie dough manufactured by the Company to its franchisees and other
licensing activity not related to cookie or pretzel stores. Sales and transfers
between segments are eliminated in consolidation.

     Mrs. Fields' Holding evaluates the performance of each segment based on
contribution margin. Contribution margin is computed as the difference between
the revenues generated by a reportable segment and the selling and store
occupancy costs and cost of sales related to that reportable segment. It is used
as a measure of the operating performance of an operating segment. Mrs. Fields'
Holding does not allocate any revenue generated from the TCBY management fee,
general and administrative expense, other income (expense), interest expense, or
depreciation and amortization of assets to its reportable operating segments.
Mrs. Fields' Holding does not separate the costs incurred while performing
activities for the TCBY management agreement from costs of operating Mrs.
Fields' Holding, as most of Mrs. Fields' Holding's employees support both
companies. Therefore the activity for managing TCBY is not reported as a
separate segment.

                                       11
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

Segment revenue and contribution margin are presented in the following table
(dollars in thousands).

<Table>
<Caption>
                                        COMPANY-OWNED     FRANCHISING,
                                      INCLUDING STORES,    LICENSING,
                                      CATALOG/E-TAILING     AND OTHER       TOTAL
                                      -----------------   ------------     -------
<S>                                   <C>                 <C>              <C>
13 WEEKS ENDED JUNE 30, 2001
Segment revenues ..................         $32,085         $ 6,082         $38,167
Contribution margin ...............           3,978           4,870           8,848

13 WEEKS ENDED JULY 1, 2000
Segment revenues ..................         $32,639         $ 6,298         $38,937
Contribution margin ...............           5,659           3,857           9,516

26 WEEKS ENDED JUNE 30, 2001
Segment revenues ..................         $65,387         $14,031         $79,418
Contribution margin ...............           9,071          11,919          20,989

26 WEEKS ENDED JULY 1, 2000
Segment revenues ..................         $66,435         $12,404         $78,839
Contribution margin ...............          12,386           7,745          20,131
</Table>

The reconciliation of contribution margin to net loss is as follows
(dollars in thousands):

<Table>
<Caption>
                                          13 WEEKS ENDED   13 WEEKS ENDED  26 WEEKS ENDED  26 WEEKS ENDED
                                           JUNE 30, 2001    JULY 1, 2000    JUNE 30, 2001   JULY 1, 2000
                                          --------------   --------------  --------------  --------------
<S>                                       <C>              <C>             <C>             <C>
Contribution margin ..................       $  8,848        $  9,516        $ 20,989        $ 20,131
Management fee revenue ...............          2,910           1,333           6,275           1,333
General and administrative expense ...         (7,182)         (6,139)        (14,577)        (11,260)
                                             --------        --------        --------        --------
    EBITDA (1) .......................          4,576           4,710          12,687          10,204
Depreciation and amortization ........         (6,581)         (6,342)        (12,013)        (12,012)
Interest expense .....................         (5,287)         (6,330)        (10,418)        (12,468)
Other, net ...........................           (624)            100          (1,597)             80
                                             --------        --------        --------        --------
    Net loss before extraordinary item         (7,916)         (7,862)        (11,341)        (14,196)
Extraordinary item ...................             --              --           5,343              --
                                             --------        --------        --------        --------
    Net loss .........................       $ (7,916)       $ (7,862)       $ (5,998)       $(14,196)
                                             ========        ========        ========        ========
</Table>

(1)  EBITDA consists of earnings before depreciation, amortization, interest,
     income taxes, minority interest and other income or expense. EBITDA is not
     intended to represent cash flows from operations as defined by accounting
     principles generally accepted in the United States and should not be
     considered as an alternative to net income (loss) as an indicator of
     operating performance or to cash flows as a measure of liquidity. EBITDA
     has been included in this presentation because it is one of the indicators
     by which Mrs. Fields' Holding assesses its financial performance and its
     capacity to service its debt.

                                       12
<Page>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


Geographic segment information is as follows (dollars in thousands):

<Table>
<Caption>
                                            DOMESTIC        INTERNATIONAL     DOMESTIC       INTERNATIONAL
                                            COMPANY-           COMPANY-      FRANCHISING      FRANCHISING
                                          OWNED STORES       OWNED STORES   AND LICENSING    AND LICENSING
                                          ------------      -------------   -------------    -------------
<S>                                   <C>                   <C>             <C>              <C>
TOTAL REVENUES
13 weeks ended June 30, 2001 ......          $32,085         $     --          $ 6,067          $    15
13 weeks ended July 1, 2000 .......           32,639               --            6,242               56
26 weeks ended June 30, 2001 ......           65,387               --           13,952               79
26 weeks ended July 1, 2000 .......           66,435               --           12,267              137
</Table>

     Revenues from international franchising and licensing are generated from
Canada and Australia with no other countries having material representation.
Revenues from international company-owned stores and income from foreign
operations are immaterial.

     One customer who manufactures and sells ready-to-eat cookies, under our
registered trademarks, accounted for 81.8 percent, or $2.3 million, of the
licensing and other revenue during the 26 weeks ended June 30, 2001. No
customers accounted for more than 10 percent of Mrs. Fields' Holding's total
revenues or individual segment's revenues during the 26 weeks ended July 1,
2000.

                                       13
<Page>

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

OVERVIEW

     Mrs. Fields' Holding Company, Inc. ("Mrs. Fields' Holding"), is a majority
owned subsidiary of Capricorn Investors II, L.P. ("Capricorn"). Mrs. Fields'
Holding is a holding company and does not have any material operations other
than ownership of all of the capital stock of Mrs. Fields' Original Cookies,
Inc. ("Mrs. Fields") and the operation of 20 Pretzel Time stores held in three
subsidiaries; namely, Peachtree Pretzel Time, Inc., Sunshine Pretzel Time, Inc.
and DMBC, Inc. Mrs. Fields has eight wholly owned operating subsidiaries;
namely, Great American Cookie Company, Inc., The Mrs. Fields' Brand, Inc.,
Pretzel Time, Inc., Pretzelmaker Holdings, Inc., Mrs. Fields' Cookies
Australia, Mrs. Fields' Cookies (Canada), H&M Canada, and Pretzelmaker of
Canada; and three partially owned subsidiaries.

     Mrs. Fields' Holding,  primarily through its Mrs. Fields subsidiary,
operates and franchises retail stores, which sell freshly baked cookies,
brownies, pretzels and other food products through six specialty retail chains.
As of June 30, 2001, Mrs. Fields' Holding owned and operated 150 Mrs. Fields
Cookies stores, 56 Original Cookie Company stores, 91 Great American Cookies
stores, 39 Hot Sam Pretzels stores, 92 Pretzel Time stores and 6 Pretzelmaker
stores in the United States. Additionally, Mrs. Fields' Holding has franchised
or licensed 830 stores in the United States and 117 stores in several other
countries.

     Capricorn Investors III, L.P., an affiliate of Capricorn Investors II,
L.P., Mrs. Fields' Holding's majority stockholder, acquired TCBY Enterprises,
Inc. ("TCBY"), a retail snack food company in 2000. In connection with the
acquisition, Mrs. Fields' Holding entered into a Management Agreement (the "TCBY
Management Agreement") with TCBY Holding Company, Inc., the parent company of
TCBY, and TCBY Systems, LLC, a wholly owned subsidiary of TCBY, pursuant to
which the corporate and administrative functions of TCBY were transferred to
Mrs. Fields' Holding. Under the TCBY Management Agreement, Mrs. Fields' Holding
has agreed to manage and operate TCBY's business, and pay specified operating
and other costs of TCBY (including specified costs associated with expenses
incurred on behalf of TCBY and the transfer of the management function from
Little Rock, Arkansas to Salt Lake City, Utah), in exchange for a management fee
paid by TCBY semi-monthly. Revenue generated from the management fee is reported
under the caption "Management fee revenue" is accompanying condensed
consolidated the statements of operations.

     Mrs. Fields' Holding's business follows seasonal trends and is also
affected by climate and weather conditions, which in turn affects mall
traffic. Because Mrs. Fields' Holding's stores are heavily concentrated in
shopping malls, Mrs. Fields' Holding's sales performance is significantly
dependent on the performance of those malls. Consumer traffic in the mall is
lower in 2001 than that experienced in 2000 with retailers attracting 8
percent to 12 percent fewer shoppers in June 2001 compared with prior year
levels. Mrs. Fields' Holding typically experiences its highest revenues in
the fourth quarter of the calendar year due to the holiday season.

                                       14
<Page>

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, certain
information relating to the operations of Mrs. Fields' Holding and percentage
changes from period to period. Data in the table reflect the consolidated
results of Mrs. Fields' Holding for the 13 and 26 weeks ended June 30, 2001 and
July 1, 2000 (dollars in thousands).

<Table>
<Caption>
                                                FOR THE 13 WEEKS ENDED         % CHANGE       FOR THE 26 WEEKS ENDED     % CHANGE
                                              --------------------------         FROM      ---------------------------      FROM
                                             JUNE 30, 2001  JULY 1, 2000     2000 TO 2001  JUNE 30, 2001  JULY 1, 2000  2000 TO 2001
                                             -------------  ------------     ------------  -------------  ------------  ------------
<S>                                          <C>            <C>              <C>           <C>            <C>           <C>
STATEMENT OF OPERATIONS DATA:

REVENUES:
  Net store and food sales ...............      $ 32,084       $ 32,639            (1.7)    $ 65,386       $ 66,435            (2.6)
  Franchising ............................         5,789          6,087            (4.9)      11,526         12,043            (4.3)
  Management fee revenue .................         2,910          1,333                        6,275          1,333
  Licensing and other ....................           293            201            45.8        2,505            361
                                                --------       --------                     --------       --------         -------
    Total revenues .......................        41,077         40,270             2.0       85,693         80,172             6.9
                                                --------       --------                     --------       --------         -------
OPERATING COSTS AND EXPENSES:
  Selling and store occupancy costs ......        18,507         18,387             0.7       36,971         36,707             0.7
  Cost of sales ..........................        10,812         11,034            (2.0)      21,458         22,001            (2.3)
  General and administrative .............         7,182          6,139            16.9       14,577         11,260            29.4
  Depreciation and amortization ..........         6,581          6,342             3.8       12,013         12,012
                                                --------       --------                     --------       --------         -------
    Total operating costs and expenses ...        43,081         41,902             2.8       85,018         81,980             3.8
                                                --------       --------                     --------       --------         -------
OTHER INCOME (EXPENSE):
  Interest expense .......................        (5,287)        (6,330)          (16.5)     (11,233)       (12,468)           (9.9)
  Interest income ........................            10             22            54.5           49             45            (8.9)
  Other, net .............................          (423)            78                         (832)            35
                                                --------       --------                     --------       --------         -------
    Total other, net .....................        (5,700)        (6,230)           (8.5)     (12,016)       (12,388)            3.0
                                                --------       --------                     --------       --------         -------
    Net loss before extraordinary item ...        (7,704)        (7,862)           (2.0)     (11,341)       (14,196)          (21.8)
  Extraordinary item .....................            --             --                        5,343             --
                                                --------       --------                     --------       --------         -------
    Net loss .............................      $ (7,704)      $ (7,862)           (2.0)    $ (5,998)      $(14,196)           59.5
                                                ========       ========                     ========       ========         =======
</Table>

13 WEEKS ENDED JUNE 30, 2001 COMPARED TO THE 13 WEEKS ENDED JULY 1, 2000

     As of June 30, 2001, there were 434 Company-owned stores and 947 franchised
or licensed stores in operation. The store activity for the 13 weeks ended June
30, 2001 and July 1, 2000 is summarized as follows:

<Table>
<Caption>
COMPANY-OWNED AND FRANCHISED OR LICENSED STORE ACTIVITY              JUNE 30, 2001               JULY 1, 2000
                                                                 ----------------------     ----------------------
                                                                 COMPANY-    FRANCHISED     COMPANY-    FRANCHISED
                                                                  OWNED     OR LICENSED      OWNED     OR LICENSED
                                                                 --------   -----------     --------   -----------
<S>                                                             <C>         <C>            <C>           <C>
Stores open as of the beginning of the 13 weeks ended ....          434           920           446           980
     Stores opened (including relocations) ...............            4            27             1            42
     Stores closed (including relocations) ...............           (6)          (18)           (8)          (57)
     Stores sold to franchisees ..........................           (1)            1            (3)            3
     Non-continuing (exit plan) stores closed ............           --            --            (2)           (1)
     Non-continuing (exit plan) stores franchised ........           --            --            --            --
     Stores acquired from franchisees ....................            3            (3)           --            --
                                                                   ----          ----          ----          ----
Stores open as of the end of the 13 weeks ended ..........          434           927           434           967
                                                                   ====          ====          ====          ====
</Table>

REVENUES

     NET STORE AND FOOD SALES. Total net store sales decreased $555,000, or 1.7
percent, from $32.6 million to $32.1 million for the 13 weeks ended June 30,
2001 compared to the 13 weeks ended July 1, 2000. Sales decreased 5.0 percent
for mall stores that had been open one year or more when compared to the same
prior year period. Mail order sales for the 13 weeks ended June 30, 2001
increased $585,000, or 34.1 percent, compared to the 13 weeks ended July 1,
2000.

     FRANCHISING REVENUES. Franchising revenues decreased $298,000, or 4.9
percent, from $6.1 million to $5.8 million for the 13 weeks ended June 30, 2001
compared to the 13 weeks ended July 1, 2000. Franchising revenues were

                                       15
<Page>

negatively impacted primarily by lower initial franchise fees in the current
period and 20, or 2.1 percent, fewer franchised stores open at June 30, 2001.
Sales of cookie dough to Great American franchisees were flat during the current
quarter when compared to the prior year period.

     MANAGEMENT FEE REVENUE. The Company received management fee revenue of $2.9
million during the current quarter to manage TCBY, which was acquired by an
affiliate of the Company on June 1, 2000. The management fee revenue during the
13 weeks ended July 1, 2000 was $1.3 million, representing one month of
management fee income.

     LICENSING AND OTHER REVENUES. Licensing revenues increased $92,000
from $201,000 to $293,000 for the 13 weeks ended June 30, 2001 compared
to the 13 weeks ended July 1, 2000. The increase was the result of
royalties received under licensing agreements of branded products.

OPERATING COSTS AND EXPENSES

     SELLING AND STORE OCCUPANCY COSTS. Total selling and store occupancy costs
increased $120,000, or 0.7 percent, from $18.4 million to $18.5 million for the
13 weeks ended June 30, 2001 compared to the 13 weeks ended July 1, 2000. The
increase is principally attributable to increased labor costs.

     COST OF SALES. Total cost of sales decreased $222,000, or 2.0 percent, from
$11.0 million to $10.8 million for the 13 weeks ended June 30, 2001 compared to
the 13 weeks ended July 1, 2000. Cost of sales as a percent of net store and
food sales remained consistent at 33.8 percent for the 13 weeks ended June 30,
2001 compared to the 13 weeks ended July 1, 2000.

     STORE CLOSURE BENEFIT. Store closure benefit was comparable for the 13
weeks ended June 30, 2001 compared to the 13 weeks ended July 1, 2000.

     GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $1.0 million, or 16.1 percent, from $6.3 million to $7.3 million for
the 13 weeks ended June 30, 2001 compared to the 13 weeks ended July 1, 2000.
The increase in general and administrative expenses was primarily attributable
to costs associated with managing TCBY under the management agreement discussed
above. The Company expects general and administrative costs to continue at the
current level as it manages and operates TCBY's business. However, these
increased costs will be offset by the management fee revenue received from TCBY.

     DEPRECIATION AND AMORTIZATION. Total depreciation and amortization expense
increased by $239,000, or 3.8 percent, from $6.3 million to $6.6 million for the
13 weeks ended June 30, 2001 compared to the 13 weeks ended July 1, 2000. The
increase is primarily due to the the acquisition of 20 stores from a franchisee
in late 2000.

     TOTAL OTHER. Interest expense for the 13 weeks ended June 30, 2001,
decreased by $1.0 million, or 16.5 percent, compared to the prior year period.
This was due to the early extinguishment of debt in March 2001 and to lower
interest rates incurred under the Company's line of credit. Interest income for
the 13 weeks ended June 30, 2001 was comparable to the 13 weeks ended July 1,
2000. Total other decreased by $530,000, from $78,000 of income to $423,000 of
expense for the 13 weeks ended June 30, 2001 compared to the 13 weeks ended July
1, 2000. The decrease is primarily attributable to $725,000 in expense related
to accretion of the preferred stock during the 13 weeks ended June 30, 2001.
There was no preferred stock accretion during the 13 weeks ended July 1, 2000.


                                       16
<Page>

26 WEEKS ENDED JUNE 30, 2001 COMPARED TO THE 26 WEEKS ENDED JULY 1, 2000

     As of June 30, 2001, there were 434 Company-owned stores and 947 franchised
or licensed stores in operation. The store activity for the 26 weeks ended June
30, 2001 and July 1, 2000 is summarized as follows:

<Table>
<Caption>
COMPANY-OWNED AND FRANCHISED OR LICENSED STORE ACTIVITY              JUNE 30, 2001               JULY 1, 2000
                                                                 ----------------------     ----------------------
                                                                 COMPANY-    FRANCHISED     COMPANY-    FRANCHISED
                                                                  OWNED     OR LICENSED      OWNED     OR LICENSED
                                                                 --------   -----------     --------   -----------
<S>                                                             <C>         <C>            <C>           <C>
Stores open as of the beginning of the 26 weeks ended ....          440           951           462           981
     Stores opened (including relocations) ...............            9            36             4            77
     Stores closed (including relocations) ...............          (15)          (40)          (21)          (98)
     Stores sold to franchisees ..........................           (4)            4            (6)            6
     Non-continuing (exit plan) stores closed ............           --            --            (3)           (1)
     Non-continuing (exit plan) stores franchised ........           --            --            (3)            3
     Stores acquired from franchisees ....................            4            (4)            1            (1)
                                                                   ----          ----          ----          ----
Stores open as of the end of the 26 weeks ended ..........          434           947           434           967
                                                                   ====          ====          ====          ====
</Table>

REVENUES

     NET STORE AND FOOD SALES: Total net store sales decreased $1.0 million, or
1.6 percent from $66.4 million to $65.4 million for the 26 weeks ended June 30,
2001 compared to the 26 weeks ended July 1, 2000. The decrease was due to having
6, or 14.0 percent, fewer stores open at the beginning of the period for fiscal
year 2001 compared to the fiscal period in 2000. Also sales decreased 4.5
percent for mall stores that had been open one year or more when compared to the
same prior year period. Mail order sales for the 26 weeks ended June 30, 2001
increased $1.2 million, or 38.2 percent, compared to the 26 weeks ended July 1,
2000.

     FRANCHISING REVENUES. Franchising revenues decreased $517,000 or 4.3
percent, from $12.0 million to $11.5 million for the 26 weeks ended June 30,
2001 compared to the 26 weeks ended July 1, 2000. Franchising revenues were
negatively impacted primarily by lower initial franchise fees in the current
period and 20, or 2.1 percent, fewer franchised stores open at June 30, 2001.
Sales of cookie dough to Great American franchises were flat during the current
period when compared to the prior year period.

     MANAGEMENT FEE REVENUE. The Company received management fee revenue of
$6.3 million during the 26 weeks ended June 30, 2001 to manage TCBY, which was
acquired by an affiliate of the Company on June 1, 2000. The management fee
revenue during the 26 week ended July 1, 2000 was $1.3 million representing one
month of management fee income.

     LICENSING AND OTHER REVENUES. Licensing revenues increased $2.1 million,
from $361,000 to $2.5 million for the 26 weeks ended June 30, 2001 compared to
the 26 weeks ended July 1, 2000. During the 26 weeks ended June 30, 2001, the
Company received $950,000 for the sale of certain recipes and royalty revenues
of $1.4 million under an agreement with a national manufacturer of cookies for
the sale of cookies branded under the Mrs. Fields name and sold through specific
retail channels and geographic locations. The remaining increase was the result
of royalties under other licensing agreements of branded products.

OPERATING COSTS AND EXPENSES

     SELLING AND STORE OCCUPANCY COSTS. Total selling and store occupancy costs
increased $264,000, or 0.7 percent, from $36.7 million to $36.9 million for the
26 weeks ended June 30, 2001 compared to the 26 weeks ended July 1, 2000. The
increase is attributable to increased labor costs.

     COST OF SALES. Total cost of sales decreased $509,000, or 2.3 percent, from
$22.0 million to $21.5 million for the 26 weeks ended June 30, 2001 compared to
the 26 weeks ended July 1, 2000. Cost of sales of net store and food sales
increased 0.3 percent from 33.1 percent to 32.8 percent for the 26 weeks ended
June 30, 2001 compared to the 26 weeks ended July 1, 2000. This increase was
principally due to a change in the product mix, including smoothies and other
products that have higher cost margins.

     STORE CLOSURE BENEFIT. Store closure benefit was comparable for the 26
weeks ended June 30, 2001 compared to the 26 weeks ended July 1, 2000.

     GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $3.3 million, or 28.8 percent, from $11.5 million to $14.8 million for
the 26 weeks ended June 30, 2001 compared to the 26 weeks ended July 1, 2000.
The increase in general and administrative expenses was primarily attributable
to costs associated with managing TCBY under the management agreement discussed
above. The Company expects general and administrative costs to continue at the
current level as it manages and operates TCBY's business. However, these
increased costs will be offset by the management fee revenue received from TCBY.

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     DEPRECIATION AND AMORTIZATION. Total depreciation and amortization
expense for the 26 weeks ended June 30, 2001 was comparable to the 26 weeks
ended July 1, 2000.

     TOTAL OTHER. Interest expense for the 26 weeks ended June 30, 2001
decreased $1.2 million, or 9.9 percent, compared to the prior period. This
was due to early extinguishment of debt in March 2001 and lower interest
rates incurred under the Company's line of credit. Interest income for the 26
weeks ended June 30, 2001 was comparable to the 26 weeks ended July 1, 2000.
Total other expense decreased by $372,000, from $12,388 to $12,016 for the 26
weeks ended June 30, 2001 compared to the 26 weeks ended July 1, 1000. The
decrease is primarily attributable to $913,000 of accretion on the preferred
stock issued during the 26 weeks ended June 30, 2001. There was no preferred
stock expense during the 26 weeks ended July 1, 2000.

     EXTRAORDINARY ITEM. The company recognized an extraordinary gain in the
amount of $5.3 million during the 26 weeks ended June 30, 2001 in
connection with the early extinguishment of debt.

LIQUIDITY AND CAPITAL RESOURCES

     GENERAL

     Mrs. Fields' Holding's principal sources of liquidity are cash flows from
operating activities, cash on hand and available borrowings under Mrs. Fields'
Holding's existing revolving credit facility. As of June 30, 2001, Mrs. Fields'
Holding had $2.4 million of cash and cash equivalents on hand and
approximately $4.1 million additional borrowings available under its
revolving credit facility. Mrs. Fields' Holding expects to use its existing
cash, cash flows from operating activities and its credit facility to provide
working capital, finance capital expenditures and to meet debt service
requirements, including the December 1, 2001 interest payment of approximately
$7.0 million on its long term debt. Based on current operations, Mrs. Fields'
Holding believes that its sources of liquidity will be adequate to meet its
anticipated requirements for working capital, capital expenditures, scheduled
debt service requirements and other general corporate purposes on both a short
and long-term basis. There can be no assurance, however, that Mrs. Fields'
Holding's business will continue to generate cash flows at or above current
levels.

JUNE 30, 2001 COMPARED TO DECEMBER 30, 2000

     As of June 30, 2001, Mrs. Fields' Holding had liquid assets (cash and cash
equivalents and receivables) of $10.9 million, a decrease of 17.0 percent,
or $3.0 million, from December 30, 2000 when liquid assets were $13.9
million. Cash decreased $2.3 million, or 49.2 percent, to $2.4 million at June
30, 2001 from $4.7 million at December 30, 2000.

     Mrs. Fields' Holding's working capital deficit increased by $1.3
million, or 15.9 percent, to a deficit of $9.9 million at June 30, 2001 from a
deficit of $8.6 million at December 30, 2000. The increase is due to a $616,000
decrease in current assets, primarily balances due from franchisees and
licensees and cash offset by an increase in prepaid rent, compared to a
$1.2 million increase in current liabilities, primarily bank overdraft and
borrowings under the line of credit less a decrease in accounts payable.

     Long-term assets decreased $9.2 million, or 5.4 percent, to $162.5
million at June 30, 2001 from $171.7 million at December 30, 2000. This decrease
was primarily the result of scheduled depreciation and amortization of property
and equipment, goodwill and deferred loan costs and the retirement of loan cost
due to the extinguishment of debt.

     Mrs. Fields' Holding's operating activities utilized cash of $13.5
million for the 26 weeks ended June 30, 2001, primarily from the payment of
expenses incurred during the busy holiday season in December 2000, but not paid
until January.

     Mrs. Fields' Holding utilized $4.8 million of cash in investing
activities during the 26 weeks ended June 30, 2001, primarily for capital
expenditures relating to store remodels and renovations.

     Mrs. Fields' Holding generated $5.9 million in cash from financing
activities during the 26 weeks ended June 30, 2001, primarily due to the
reduction in long-term debt and issuance of common and preferred stock.

     The specialty cookie and pretzel businesses do not require the maintenance
of significant receivables or inventories; however, the increase in Mrs. Fields'
franchise and license business does require the Company to carry a receivable
from our franchisees and licensees. Mrs. Fields' Holding continually invests in
its business by upgrading and remodeling stores and adding new stores, carts,
and kiosks as opportunities arise. Investments in these long-term assets,

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which are key to generating current sales, reduce Mrs. Fields' Holding's
working capital. During the 26 weeks ended June 30, 2001 and July 1, 2000,
Mrs. Fields' Holding expended cash of $5.2 million and $2.5 million,
respectively, for capital assets. The Company expects to expend a total of
approximately $14.0 million for capital assets in 2001. Management
anticipates that these expenditures will be funded with cash generated from
operating activities and short-term borrowings under its credit facility as
needed.

INFLATION

     The impact of inflation on the earnings of the business has not been
significant in recent years. Most of Mrs. Fields' Holding's leases contain
escalation clauses (however, such leases are accounted for on a straight-line
basis as required by accounting principles generally accepted in the United
States, which minimizes fluctuations in operating income) and many of Mrs.
Fields' Holding's employees are paid hourly wages at the Federal minimum wage
level. Minimum wage increases will negatively impact Mrs. Fields' Holding's
payroll costs in the short term, but management believes such impact can be
offset in the long term through operational efficiency gains and, if necessary,
through product price increases.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133, as amended
by SFAS No. 137 and SFAS No. 138, became effective for the Company's fiscal
year beginning 2001. SFAS No. 133 establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that the Company
recognize all derivative instruments as either assets or liabilities in the
condensed consolidated balance sheet and measure those instruments at fair
value. The Company adopted SFAS No. 133, as amended, during the first quarter of
fiscal 2001. The adoption did not have a material impact on the Company's
results of operations, financial position or liquidity.

     In June 2001, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 141, "Business Combinations". SFAS No. 141 requires
the use of the purchase method of accounting for all business combinations
initiated after June 30, 2001 and eliminates the pooling-of-interests method.
The Company does not believe that the adoption of SFAS No. 141 will have a
significant impact on its financial statements

     In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets," which changes the accounting treatment as it applies to
goodwill and other intangibles assets after the assets have been initially
recognized in the financial statements. These changes include
non-amortization of goodwill over a pre-determinable, finite life; rather the
goodwill and intangibles would have indefinite useful lives. The statement
requires annual assessment for any impairment of the carrying value of the
assets based upon an estimation of the fair value of the reporting unit to
which the assets pertain. The effective date of this statement is for fiscal
years beginning after December 15, 2001. The Company will adopt SFAS No. 142
for its fiscal year beginning December 30, 2001. Upon adoption of SFAS No.
142, the Company will stop amortization of goodwill that resulted from
business combinations initiated prior to the adoption of SFAS No. 141. The
Company will evaluate goodwill under the SFAS No. 142 transitional impairment
test. Any transitional impairment loss will be recognized as a change in
accounting principle. However, the Company does not expect any transitional
impairment loss to be recognized.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     There have been no significant changes in market risks since the end of the
Company's December 30, 2000 year. For more information, please read the
consolidated financial statements and notes thereto included in the Company's
Form 10-K for the year ended December 30, 2000.

FORWARD-LOOKING INFORMATION

     This report contains certain forward-looking statements based on our
current expectations and projections about future events, developed from the
information currently available to us. The forward-looking statements include,
among other things, our expectations and estimates about Mrs. Fields' Holding's
future financial performance, including growth in net sales and earnings, cash
flows from operating activities, capital expenditures, the ability to refinance
indebtedness. These forward-looking statements are subject to risks,
uncertainties and assumptions, including the following:

o    Our ability to continue integrating the businesses of companies acquired
     with Mrs. Fields' Holding and to realize the expected ongoing benefits and
     cost savings from our acquisitions;

o    Our ability to meet our debt and interest obligations,

o    Performance by franchisees and licensees;

o    Difficulties or delays in developing and introducing anticipated new
     products or failure of customers to accept new product offerings;

o    Changes in consumer preferences and our ability to adequately anticipate
     such changes;

o    The seasonal nature of our operations;

o    Changes in general economic and business conditions;

o    Actions by competitors, including new product offerings and marketing and
     promotional successes;

o    Claims which might be made against Mrs. Fields' Holding, including product
     liability claims;

o    Changes in business strategy, new product lines, changes in raw ingredient
     and employee labor costs;

o    Changes in our relationships with our franchisees and licensees; and

o    Changes in mall customer traffic.


     We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this report may not occur.

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                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     In the ordinary course of business, Mrs. Fields' Holding is involved in
routine litigation, including franchise disputes. Mrs. Fields' Holding is not a
party to any legal proceedings which, in the opinion of management of Mrs.
Fields' Holding, after consultation with legal counsel, is material to Mrs.
Fields' Holding's business, financial condition or results of operations beyond
amounts provided for in the accompanying financial statements.

     Mrs. Fields' Holding's stores and products are subject to regulation by
numerous governmental authorities, including, without limitation, federal, state
and local laws and regulations governing health, sanitation, environmental
protection, safety and hiring and employment practices.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

     None

(b)  FORMS 8-K

     None

                                   SIGNATURES

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.

MRS. FIELDS' HOLDING COMPANY, INC.




/s/ LARRY A. HODGES                                    AUGUST 14, 2001
-----------------------------------------              ---------------
LARRY A. HODGES, PRESIDENT AND CEO                     DATE



/s/ SANDRA M. BUFFA                                    AUGUST 14, 2001
-----------------------------------------              ---------------
SANDRA M. BUFFA, SR. VICE PRESIDENT, CFO               DATE
AND TREASURER (CHIEF FINANCIAL AND
PRINCIPAL ACCOUNTING OFFICER)


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