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:     September 30, 2000

                                       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 incorporation  (IRS employer identification no.)
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  3,387,019  shares  of  common  stock,  $0.001  par  value,
outstanding at November 13, 2000.



<PAGE>


               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES


                                TABLE OF CONTENTS


PART I.   FINANCIAL INFORMATION
-------------------------------

<TABLE>
<S>                                                                                                        <C>


Item 1.  Financial Statements (Unaudited)

         Condensed Consolidated Balance Sheets as of September 30, 2000 and January 1, 2000...............  3

         Condensed Consolidated Statements of Operations for the 13 Weeks
             Ended September 30, 2000 and October 2, 1999.................................................  5

         Condensed Consolidated Statements of Operations for the 39 Weeks
             Ended September 30, 2000 and October 2, 1999.................................................  6

         Condensed Consolidated Statements of Cash Flows for the 39 Weeks
             Ended September 30, 2000 and October 2, 1999.................................................  7

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

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations............ 17

Item 3.  Quantitative and Qualitative Disclosure about Market Risk........................................ 23


PART II.   OTHER INFORMATION
----------------------------

Item 1.   Legal Proceedings...............................................................................24

Item 6.   Exhibits and Reports on Form 8-K................................................................24

</TABLE>


<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.    Financial Statements


               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
                 (in thousands, except share and per share data)

                                     ASSETS
<TABLE>
<CAPTION>


                                                                                         September 30,         January 1,
                                                                                             2000                  2000
                                                                                         -------------         ----------
<S>                                                                                     <C>                     <C>

CURRENT ASSETS:
    Cash and cash equivalents                                                           $    1,296              $   4,919
    Accounts receivable, net of allowance for doubtful accounts
       of $398 and $111, respectively                                                        4,480                  4,767
    Amounts due from franchisees and licensees, net of allowance
       for doubtful accounts of $881 and $821, respectively                                  3,779                  3,236
    Inventories                                                                              4,396                  4,977
    Prepaid rent and other                                                                   1,345                    697
    Deferred income tax assets                                                               1,360                  1,360
                                                                                        ----------              ---------

                Total current assets                                                        16,656                 19,956
                                                                                        ----------              ---------

PROPERTY AND EQUIPMENT, at cost:
    Leasehold improvements                                                                  29,672                 26,698
    Equipment and fixtures                                                                  23,398                 22,540
    Land                                                                                       240                    240
                                                                                        ----------              ---------
                                                                                            53,310                 49,478
    Less accumulated depreciation and amortization                                         (27,992)               (20,813)
                                                                                        ----------              ---------

                Net property and equipment                                                  25,318                 28,665
                                                                                        ----------              ---------

DEFERRED INCOME TAX ASSETS                                                                   2,139                  2,139
                                                                                        ----------              ---------

GOODWILL, net of accumulated amortization of
    $28,774 and $21,310, respectively                                                      123,899                133,025
                                                                                        ----------              ---------

TRADEMARKS AND OTHER INTANGIBLES, net of accumulated
    amortization of $4,568 and $3,700, respectively                                         12,194                 13,062
                                                                                        ----------              ---------

DEFERRED LOAN COSTS, net of accumulated amortization of
    $6,909 and $4,523, respectively                                                         10,726                 12,618
                                                                                        ----------              ---------

OTHER ASSETS                                                                                   713                    652
                                                                                        ----------              ---------

                                                                                        $  191,645              $ 210,117
                                                                                        ==========              =========

</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)
                 (in thousands, except share and per share data)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>


                                                                                   September 30,         January 1,
                                                                                       2000                 2000
                                                                                   -------------         ----------
<S>                                                                                  <C>                 <C>

CURRENT LIABILITIES:
    Current portion of long-term debt                                                $      676          $      781
    Current portion of capital lease obligations                                            914                 842
    Borrowings under line of credit                                                       2,050                   -
    Accounts payable                                                                      6,402              10,514
    Accrued liabilities                                                                   6,176               7,291
    Current portion of store closure reserve                                              2,384               3,665
    Accrued interest payable                                                              4,764               1,380
                                                                                     ----------          ----------

              Total current liabilities                                                  23,366              24,473

LONG-TERM DEBT, net of current portion                                                  180,583             176,672

STORE CLOSURE RESERVE, net of current portion                                             2,516               3,529

CAPITAL LEASE OBLIGATIONS, net of current portion                                         2,536               3,107
                                                                                     ----------          ----------

              Total liabilities                                                         209,001             207,781
                                                                                     ----------          ----------

MANDATORILY  REDEEMABLE  CUMULATIVE  PREFERRED
    STOCK of PTI (a wholly owned subsidiary), aggregate
    liquidation preference of $1,070 at January 1, 2000                                       -               1,070
                                                                                     ----------          ----------

MINORITY INTEREST                                                                           117                 111
                                                                                     ----------          ----------

STOCKHOLDERS' EQUITY (DEFICIT):
    Common stock, $.001 par value; 5,000,000 shares authorized
       and 3,387,019 shares outstanding                                                       3                   3
    Warrants to purchase common stock                                                     2,895               2,895
    Additional paid-in capital                                                           35,711              35,711
    Deferred compensation expense                                                          (385)               (385)
    Accumulated deficit                                                                 (55,616)            (37,069)
    Accumulated other comprehensive loss                                                    (81)                  -
                                                                                     ----------          ----------

              Total stockholders' equity (deficit)                                      (17,473)              1,155
                                                                                     ----------          ----------

                                                                                     $  191,645          $  210,117
                                                                                     ==========          ==========
</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 share and per share data)

<TABLE>
<CAPTION>


                                                                            13 Weeks Ended          13 Weeks Ended
                                                                         September 30, 2000         October 2, 1999
                                                                         ------------------         ---------------

<S>                                                                        <C>                       <C>

REVENUES:
    Net store and food sales                                               $      34,814             $     35,350
    Franchising                                                                    6,060                    6,520
    Management fee                                                                 3,100                        -
    Licensing                                                                      1,216                      499
                                                                           -------------             ------------
       Total revenues                                                             45,190                   42,369
                                                                           -------------             ------------

OPERATING COSTS AND EXPENSES:
    Selling and store occupancy costs                                             17,802                   19,222
    Cost of sales                                                                 11,581                   10,599
    General and administrative                                                     8,683                    5,367
    Store closure benefit                                                           (321)                       -
    Depreciation and amortization                                                  5,515                    5,441
                                                                           -------------             ------------
       Total operating costs and expenses                                         43,260                   40,629
                                                                           -------------             ------------

          Income from operations                                                   1,930                    1,740
                                                                           -------------             ------------

OTHER INCOME (EXPENSE), net:
    Interest expense                                                              (6,117)                  (5,821)
    Interest income                                                                   12                       37
    Other, net                                                                      (175)                    (193)
                                                                           -------------             ------------
       Total other expense, net                                                   (6,280)                  (5,977)
                                                                           -------------             ------------
          Loss before provision for income taxes, preferred stock
             accretion and dividends of subsidiaries and minority
             interest                                                             (4,350)                  (4,237)

PROVISION FOR INCOME TAXES                                                            (5)                      (6)
                                                                           -------------             ------------

          Loss before preferred stock accretion and dividends of
              subsidiaries and minority interest                                  (4,355)                  (4,243)

PREFERRED STOCK ACCRETION AND DIVIDENDS OF SUBSIDIARIES                                -                     (111)

MINORITY INTEREST                                                                      9                       (8)
                                                                           -------------             ------------

          Net loss                                                         $      (4,346)            $     (4,362)
                                                                           =============             ============

          Basic and diluted net loss per common share                      $       (1.28)            $      (1.33)
                                                                           =============             ============
          Weighted average number of common shares outstanding                 3,387,019                3,285,599
                                                                           =============             ============

COMPREHENSIVE LOSS:
          Net loss                                                         $      (4,346)            $     (4,362)
          Foreign currency translation adjustment                                     (6)                       -
                                                                           -------------             ------------
          Comprehensive loss                                               $      (4,352)            $     (4,362)
                                                                           =============             ============


</TABLE>

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

                                       5
<PAGE>



               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                 (in thousands, except share and per share data)

<TABLE>
<CAPTION>



                                                                             39 Weeks Ended         39 Weeks Ended
                                                                          September 30, 2000        October 2, 1999
                                                                          ------------------        ---------------

<S>                                                                          <C>                     <C>

REVENUES:
    Net store and food sales                                                 $    101,249            $    107,265
    Franchising                                                                    18,103                  18,082
    Management fee                                                                  4,433                       -
    Licensing                                                                       1,577                   1,187
                                                                             ------------            ------------
       Total revenues                                                             125,362                 126,534
                                                                             ------------            ------------

OPERATING COSTS AND EXPENSES:
    Selling and store occupancy costs                                              54,509                  60,340
    Cost of sales                                                                  33,582                  32,455
    General and administrative                                                     20,143                  16,317
    Store closure benefit                                                            (521)                      -
    Depreciation and amortization                                                  17,527                  16,727
                                                                             ------------            ------------
       Total operating costs and expenses                                         125,240                 125,839
                                                                             ------------            ------------

          Income from operations                                                      122                     695
                                                                             ------------            ------------

OTHER INCOME (EXPENSE), net:
    Interest expense                                                              (18,585)                (17,185)
    Interest income                                                                    57                     115
    Other, net                                                                       (110)                   (303)
                                                                             ------------            ------------
       Total other expense, net                                                   (18,638)                (17,373)
                                                                             ------------            ------------

          Loss before provision for income taxes, preferred stock
             accretion and dividends of subsidiaries and minority
             interest                                                             (18,516)                (16,678)

PROVISION FOR INCOME TAXES                                                            (20)                   (216)
                                                                             ------------            ------------

          Loss before preferred stock accretion and dividends of
              subsidiaries and minority interest                                  (18,536)                (16,894)

PREFERRED STOCK ACCRETION AND DIVIDENDS OF SUBSIDIARIES                                 -                    (333)

MINORITY INTEREST                                                                      (6)                    (12)
                                                                             ------------            ------------

          Net loss                                                           $    (18,542)           $    (17,239)
                                                                             ============            ============

          Basic and diluted net loss per common share                        $      (5.47)           $      (5.25)
                                                                             ============            ============
          Weighted average number of common shares outstanding                  3,387,019               3,285,599
                                                                             ============            ============

COMPREHENSIVE LOSS:
          Net loss                                                           $    (18,542)           $    (17,239)
          Foreign currency translation adjustment                                     (81)                      -
                                                                             ------------            ------------
          Comprehensive loss                                                 $    (18,623)           $    (17,239)
                                                                             ============            ============
</TABLE>

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

                                       6
<PAGE>

               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                                  39 Weeks Ended        39 Weeks Ended
                                                                               September 30, 2000      October 2, 1999
                                                                               ------------------      ---------------

<S>                                                                                <C>                   <C>

Increase (Decrease) in Cash and Cash Equivalents

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                        $  (18,542)           $  (17,239)
   Adjustments to reconcile net loss to net cash provided by operating
     activities:
         Depreciation and amortization                                                 17,527                16,727
         Amortization of discount on notes                                              4,376                 3,767
         Amortization of deferred loan costs                                            2,386                 1,953
         Deferred compensation expense                                                      -                   101
         Loss on sale of assets                                                           366                   285
         Preferred stock accretion and dividends of subsidiaries                            -                   333
         Minority interest                                                                  6                    12
         Changes in operating assets and liabilities:
               Accounts receivable, net                                                  (185)                  333
               Amounts due from franchisees and licensees, net                            (71)                1,653
               Inventories                                                                581                   516
               Prepaid rent and other                                                    (648)                  372
               Accounts payable                                                        (4,112)               (1,596)
               Bank overdraft                                                               -                 4,038
               Store closure reserve                                                   (2,294)               (1,840)
               Accrued liabilities                                                     (1,115)                 (484)
               Accrued interest payable                                                 3,384                 3,879
               Other                                                                      (66)                  751
                                                                                   ----------            ----------
                  Net cash provided by operating activities                             1,593                13,561
                                                                                   ----------            ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net cash paid for acquisition expenses                                                  -                  (100)
    Purchase of property and equipment                                                 (4,363)               (3,401)
                                                                                   ----------            ----------
                  Net cash used in investing activities                                (4,363)               (3,501)
                                                                                   ----------            ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net borrowings under line of credit                                                 2,050                 1,400
    Reduction of long-term debt                                                          (570)               (5,244)
    Payment of debt financing costs                                                      (494)               (1,741)
    Principal payments on capital lease obligations                                      (688)                 (793)
    Proceeds for exercise of stock options                                                  -                   148
    Payments for repurchase of common stock                                                 -                  (292)
    Reduction in preferred stock                                                       (1,070)                 (525)
                                                                                   ----------            ----------
                  Net cash used in financing activities                                  (772)               (7,047)
                                                                                   ----------            ----------
    Effect of foreign exchange rates                                                      (81)                    -
                                                                                   ----------            ----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                   (3,623)                3,013

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD                                    4,919                 4,759
                                                                                   ----------            ----------

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD                                     $    1,296            $    7,772
                                                                                   ==========            ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid for interest                                                        $   12,827            $   11,353
                                                                                   ==========            ==========
     Cash paid for income taxes                                                    $      219            $      224
                                                                                   ==========            ==========

</TABLE>

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

                                       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") 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 September 30, 2000,  and the related  results of
operations  and cash flows for the periods  presented  herein.  These  unaudited
condensed  consolidated  financial statements should be read in conjunction with
the  consolidated  financial  statements  and notes  thereto for the fiscal year
ended January 1, 2000 contained in Mrs. Fields' Holding's registration statement
on Form S-4, which was declared effective on May 16, 2000.

     The results of operations for the 13 and 39 weeks ended  September 30, 2000
are not  necessarily  indicative  of the results  that may be  expected  for the
remainder of the fiscal year ending December 30, 2000.

     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").

     All dollar amounts presented are stated in thousands.


(2)  RECLASSIFICATIONS
     -----------------

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


(3)  STORE CLOSURE AND PROPERTY AND EQUIPMENT IMPAIRMENT RESERVES
     ------------------------------------------------------------

     Mrs.  Fields'  Holding's  management  reviews the  historical and projected
operating   performance   of  its  stores  on  a  periodic   basis  to  identify
underperforming stores for impairment of net property investment or for targeted
closing.  Mrs. Fields'  Holding'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, Mrs. Fields' Holding accrues the costs
of closing the store, which are predominantly estimated lease termination costs.
Lease termination costs include both one-time  settlement payments and continued
contractual  payments  over time under the original  lease  agreements  where no
settlement  can be reached with the landlord.  As a result,  although all stores
under the  current  exit plans will be exited by at least the end of fiscal year
2000, a portion of the store closure reserve will remain until all cash payments
have been made. No operating  losses have been accrued.  The  classification  of
some stores to be closed or franchised may be changed and the store removed from
the exit plan if that store's operations change positively, or if the Company is
unable to negotiate a settlement  with the landlord.  If and when a reserve that
was  established  as part of purchase  accounting  is not fully  utilized,  Mrs.
Fields'  Holding  reduces the reserve to zero,  and goodwill is adjusted for the
corresponding  amount.  Any excess  reserve that was not  established as part of
purchase accounting is adjusted through the statement of operations.



                                       8
<PAGE>




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



The  following  table  presents a summary of the  activity in the store  closure
reserve during the 39 weeks ended September 30, 2000 and October 2, 1999:

<TABLE>
<CAPTION>


                         Mrs. Fields Inc. and
                            Original Cookie                 H & M                  Pretzel Time              Great American
                         -----------------------  ------------------------  --------------------------  -------------------------

                          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  Acquisition   Adjustments  Acquisitions
                        ----------- ------------  ----------- ------------   -----------  ------------- -----------  ------------


<S>                        <C>       <C>           <C>         <C>              <C>          <C>          <C>          <C>
Balance, January 1, 2000.  $ 1,614   $  1,581      $  536      $    294         $   109      $     86     $  1,674     $  545

Reversal during the 39
  weeks ended
  September 30, 2000.....      (70)         -           -           (26)              -           (44)           -       (151)

Utilization for the 39
  weeks ended
  ended September 30,
  2000...................     (466)      (439)        (89)         (141)            (33)            -         (405)      (160)
                           -------   --------      ------      --------         -------      --------     --------     ------

Balance, September 30,
  2000...................  $ 1,078   $  1,142      $  447      $    127         $    76      $     42     $  1,269     $  234
                           =======   ========      ======      ========         =======      ========     ========     ======


Balance, January 2, 1999.  $ 3,728   $  4,674      $  981      $    367         $   493      $    264     $  3,399     $  305

Reversal for the 39
   weeks ended
   October 2, 1999.......     (540)         -        (212)            -            (191)            -         (852)         -

Utilization for the 39
   weeks ended
   October 2, 1999.......   (1,019)      (789)          -           (79)              -           (48)        (457)         -
                           -------   --------      ------      --------         -------      --------     --------     ------

Balance, October 2, 1999.  $ 2,169   $  3,885      $  769      $    288         $   302      $    216     $  2,090     $  305
                           =======   ========      ======      ========         =======      ========     ========     ======


</TABLE>


<PAGE>


               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)
<TABLE>
<CAPTION>




                                     Pretzelmaker                          Consolidated
                              --------------------------   ------------------------------------------
                                                             Total          Total
                               Business       Company-       Business      Company-
                              Combination      Owned       Combination      Owned       Total Business
                                  and          Stores          and          Stores       Combinations
                               Subsequent    Unrelated to   Subsequent    Unrelated to   and Company-
                               Adjustments   Acquisition   Adjustments    Acquisitions   Owned Stores
                              ------------   ------------  -----------    ------------  --------------

<S>                              <C>           <C>           <C>            <C>           <C>
Balance, January 1, 2000.        $    105      $     650     $  4,038       $  3,156      $    7,194

Reversal during the 39
  weeks ended
  September 30, 2000.....               -           (230)         (70)          (451)           (521)

Utilization for the 39
  weeks ended
   September 30, 2000....             (23)           (17)      (1,016)          (757)         (1,773)
                                 --------      ---------     --------       --------      ----------

Balance, September 30,
   2000..................        $     82      $     403     $  2,952       $  1,948      $    4,900
                                 ========      =========     ========       ========      ==========


Balance, January 2, 1999.        $    500      $       -     $  9,101       $  5,610      $   14,711

Reversal for the 39
   weeks ended
   October 2, 1999.......            (368)             -       (2,163)             -          (2,163)

Utilization for the 39
  weeks ended
  October 2, 1999........               -              -       (1,476)          (916)         (2,392)
                                 --------      ---------     --------       --------      ----------

Balance, October 2, 1999.        $    132      $       -     $  5,462       $  4,694      $   10,156
                                 ========      =========     ========       ========      ==========
</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 39 weeks ended September 30, 2000 and October 2, 1999. This
table does not include a summary of activity  for stores  Mrs.  Fields'  Holding
intends to close or franchise that were not originally  identified in connection
with a business combination.

<TABLE>
<CAPTION>


                                               Mrs. Fields Inc.
                                                     and
                                               Original  Cookie              H&M             Pretzel Time
                                               ----------------      ------------------    -------------------
                                               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          -         -           -          -

Stores closed, franchised or removed
   for the 39 weeks ended
   September 30, 2000.................           -         (12)         -         -           -          -
                                               ---        ----        ---       ---         ---         --

Balance, September 30, 2000 ..........           -           2          -         -           -          -
                                               ===        ====        ===       ===         ===         ==


Balance, January 2, 1999..............          23          36          6         7           3          -

Stores closed, franchised, or removed
    for the 39 weeks ended
    October 2, 1999...................         (14)        (14)        (4)       (4)         (3)         -
                                               ---        ----        ---       ---         ---         --

Balance, October 2, 1999 .............           9          22          2         3           -          -
                                               ===        ====        ===       ===         ===         ==

</TABLE>


<PAGE>
<TABLE>
<CAPTION>




                                                    Great American           Pretzelmaker           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..............            6              1          -           -            6         15

Stores closed, franchised or removed
    for the 39 weeks ended
    September 30, 2000................           (3)            (1)         -           -           (3)       (13)
                                               ----            ---        ---         ---         ----       ----

Balance, September 30, 2000 ..........            3              -          -           -            3          2
                                               ====            ===        ===         ===         ====       ====


Balance, January 2, 1999..............           43             11          7           -           82         54

Stores closed, franchised, or removed
   for the 39 weeks ended
    October 2, 1999...................          (22)            (1)        (4)          -          (47)       (19)
                                               ----            ---        ---         ---         ----       ----

Balance, October 2, 1999 .............           21             10          3           -           35         35
                                               ====            ===        ===         ===         ====       ====
</TABLE>




                                       10
<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 Mrs.  Fields'
Holding intends to close or franchise that were not originally  identified to be
closed or franchised in connection with a business  combination for the 39 weeks
ended September 30, 2000, and October 2, 1999:

<TABLE>
<CAPTION>


                                               Mrs. Fields Inc.
                                                     and
                                               Original  Cookie              H&M             Pretzel Time
                                               ----------------      ------------------    -------------------
                                               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

Stores closed, franchised or removed
   for the 39 weeks ended
   September 30, 2000.................          (1)         (2)         -         -           -         (1)
                                               ---        ----        ---       ---         ---         --

Balance, September 30, 2000 ..........           2           2          -         -           -          -
                                               ===        ====        ===       ===         ===         ==


Balance, January 2, 1999..............          28          14          2         1           3          1

Stores closed, franchised, or removed
    for the 39 weeks ended
    October 2, 1999...................         (20)         (7)        (2)        -          (1)        (1)
                                               ---        ----        ---       ---         ---         --

Balance, October 2, 1999 .............           8           7          -         1          (2)         -
                                               ===        ====        ===       ===         ===         ==

</TABLE>


<PAGE>
<TABLE>
<CAPTION>




                                                    Great American            Consolidated
                                               -----------------------     -------------------
                                                To Be        To Be         To Be      To Be
                                               Closed      Franchised      Closed   Franchised
                                               ------      ----------      ------   ----------

<S>                                            <C>             <C>          <C>         <C>
Balance, January 1, 2000..............            -              -             3           5

Stores closed, franchised or removed
    for the 39 weeks ended
    September 30, 2000................            -              -            (1)         (3)
                                               ----            ---          ----        ----

Balance, September 30, 2000 ..........            -              -             2           2
                                               ====            ===          ====        ====


Balance, January 2, 1999..............            4              -            37          16

Stores closed, franchised, or removed
   for the 39 weeks ended
    October 2, 1999...................           (2)             -           (25)         (8)
                                               ----            ---          ----        ----

Balance, October 2, 1999 .............            2              -            12           8
                                               ====            ===          ====        ====
</TABLE>

                                       11



<PAGE>

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




     The  following  table  presents a summary of  changes in the  property  and
equipment  impairment  reserves that were  established  in  connection  with the
applicable  business  combination  for the 39 weeks ended September 30, 2000 and
October 2, 1999 for stores to be closed and franchised:
<TABLE>
<CAPTION>


                                                          Mrs. Fields,
                                                            Inc. and
                                                            Original                      Great
                                                           Cookie Co.        H&M         American       Pretzelmaker    Consolidated
                                                          ------------       ---         --------       ------------    ------------


<S>                                                          <C>           <C>            <C>             <C>             <C>
Balance, January 1, 2000...........................          $  2,246      $   640        $ 1,427         $   169         $ 4,482
Addition to impairment for the 39 weeks ended
   September 30, 2000 related to stores to be closed               42            -             89               -             131

Addition to impairment for the 39 weeks ended
   September 30, 2000 related to stores to be
   franchised......................................               129            5            251               -             385
Utilization for the 39 weeks ended September 30,
   2000 related to stores to be closed.............              (666)         (17)          (264)              -            (947)
Utilization for the 39 weeks ended September 30,
   2000 related to stores to be franchised.........               (98)         (85)             -               -            (183)
                                                             --------      -------        -------         -------         -------
Balance, September 30, 2000........................          $  1,653      $   543        $ 1,503         $   169         $ 3,868
                                                             ========      =======        =======         =======         =======



Balance, January 2, 1999...........................          $  3,844      $ 1,380        $ 2,877         $   327         $ 8,428
Utilization for the 39 weeks ended October 2, 1999
   related to stores to be closed..................            (1,137)        (405)        (1,190)           (157)         (2,889)
Utilization for the 39 weeks ended October 2, 1999
   related to stores to be franchised..............              (694)        (332)            (5)              -          (1,031)
                                                             --------      -------        -------         -------         -------
Balance, October 2, 1999...........................          $  2,013      $   643        $ 1,682         $   170         $ 4,508
                                                             ========      =======        =======         =======         =======

</TABLE>





                                       12
<PAGE>
               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)

(4)  TCBY MANAGEMENT AGREEMENT
     -------------------------

     On February  9, 2000,  Capricorn  Investors  III,  L.P.,  an  affiliate  of
Capricorn  Investors II, L.P.,  Mrs.  Fields'  Holding's  majority  shareholder,
entered into an agreement to acquire TCBY Enterprises,  Inc. ("TCBY"),  a retail
snack food company.  This acquisition (the "TCBY  Transaction") was completed on
June 1, 2000.

     In connection  with the TCBY  Transaction,  on June 1, 2000,  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 the  transfer  of the  management
function from Little Rock,  Arkansas to Salt Lake City, Utah), in exchange for a
management fee that will be paid by TCBY  semi-monthly.  Revenue  generated from
the management fee is reported under the caption "Management fee revenue" on the
statement of operations.

    In connection with the TCBY  Transaction,  Mrs.  Fields' Holding  received a
$300 acquisition  advisory fee for its services  rendered in connection with the
acquisition and for partial  reimbursement of  out-of-pocket  costs and expenses
totaling  approximately  $725 incurred and expensed by Mrs.  Fields'  Holding in
connection with its performance of acquisition  advisory services.  Mrs. Fields'
Holding  will  receive a  reimbursement  from TCBY for  costs  incurred  by Mrs.
Fields' Holding  related to the transfer of the management  function from Little
Rock,  Arkansas  to Salt Lake  City,  Utah upon  TCBY's  successful  sale of its
existing  dairy  processing  plant for net  proceeds  sufficient  to retire debt
associated with the plant. Reimbursable expenses through September 30, 2000 were
approximately  $1,400.  This  reimbursement,  will be  reflected  as a  one-time
increase in the Management Fee upon receipt.  Mrs. Fields' Holding's  management
expects that the revenues  from the TCBY  Management  Fee and any fees earned in
connection  with a sale of the TCBY  dairy  processing  plant will  exceed  Mrs.
Fields costs related to this agreement.

     In  accordance  with  the  terms  and  conditions  of the  TCBY  Management
Agreement,  Mrs.  Fields'  Holding and TCBY will share cost  savings that may be
obtained  through the joint purchase of  ingredients,  supplies and services and
Mrs.  Fields'  Holding will be eligible to receive a portion of the  anticipated
cost savings in connection  with the expected  outsourcing  of TCBY's yogurt and
ice cream manufacturing requirements. The TCBY Transaction will also provide the
opportunity for Mrs. Fields' Holding and its eligible franchisees to become TCBY
franchisees  and for eligible TCBY  franchisees  to become  franchisees  of Mrs.
Fields' Holding or its subsidiaries.


(5)  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  and  sales  of its  mail  order  business.  The
franchising and licensing  segment consists of cookie and pretzel stores,  which
are owned and operated by third parties who pay Mrs. Fields 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.


                                       13
<PAGE>

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


     Mrs.  Fields'  Holding  evaluates  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,
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, as most of Mrs. Fields' employees support both companies,  therefore the
activity  for  managing  TCBY is not  reported  as a separate  segment.  Segment
revenue and contribution margin are presented in the following table.
<TABLE>
<CAPTION>


                                                     Company-Owned Stores,       Franchising
                                                      including Mail Order      and Licensing          Total
                                                     ---------------------      -------------          -----

<S>                                                         <C>                   <C>               <C>

13 weeks ended September 30, 2000
---------------------------------
Segment revenues                                            $  34,814             $  7,276          $  42,090
Contribution margin                                             7,861                4,846             12,707

13 weeks ended October 2, 1999
------------------------------
Segment revenues                                               35,350                7,019             42,369
Contribution margin                                             7,893                4,655             12,548

39 weeks ended September 30, 2000
---------------------------------
Segment revenues                                              101,249               19,680            120,929
Contribution margin                                            20,247               12,591             32,838

39 weeks ended October 2, 1999
------------------------------
Segment revenues                                              107,265               19,269            126,534
Contribution margin                                            22,119               11,620             33,739
</TABLE>


                                       14
<PAGE>



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

      The reconciliation of contribution margin to net loss is as follows:

<TABLE>
<CAPTION>


                                     13 Weeks Ended        13 Weeks Ended     39 Weeks Ended     39 Weeks Ended
                                   September 30, 2000     October 2, 1999   September 30, 2000   October 2, 1999
                                   ------------------     ---------------   ------------------   ---------------

<S>                                       <C>                 <C>               <C>                 <C>
Contribution margin                       $ 12,707            $ 12,548          $  32,838           $  33,739
Management fee revenue                       3,100                   -              4,433                   -
General and
   administrative expense (1)               (8,683)             (5,367)           (20,143)            (16,317)
Store closure benefit                          321                   -                521                   -
                                          --------            --------          ---------           ---------
    EBITDA (1)(2)                            7,445               7,181             17,649              17,422
Depreciation and amortization               (5,515)             (5,441)           (17,527)            (16,727)
Interest expense                            (6,117)             (5,821)           (18,585)            (17,185)
Other income (expense), net                   (159)               (281)               (79)               (749)
                                          --------            --------          ---------           ---------
Net loss                                  $ (4,346)           $ (4,362)         $ (18,542)          $ (17,239)
                                          ========            ========          =========           =========
</TABLE>


(1)  Included  in general  and  administrative  expenses  for the 39 weeks ended
     September 30, 2000, were approximately  $1,400 of one-time transition costs
     associated  with  transferring  the  management  function from Little Rock,
     Arkansas,  to Salt  Lake  City.  When TCBY is  successful  in  selling  its
     existing dairy processing plant for net proceeds  sufficient to retire debt
     associated  with the plant,  Mrs.  Fields' will receive  reimbursement  for
     these transition costs.

(2)  EBITDA consists of earnings before  depreciation,  amortization,  interest,
     income taxes, minority interest, preferred stock accretion and dividends of
     subsidiaries  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
     assesses its financial performance and its capacity to service its debt.

     Geographic segment information is as follows:

<TABLE>
<CAPTION>

                                                Domestic       International      Domestic      International     Domestic
                                             Company-Owned     Company-Owned     Franchising     Franchising     Management
                                                 Stores          Stores         and Licensing   and Licensing   Fee Revenue
                                             -------------     -------------    -------------   -------------   -----------
<S>                                           <C>                   <C>            <C>               <C>            <C>

Total revenues
--------------
13 weeks ended September 30, 2000             $  34,814             $   -          $  7,187          $   89         $  3,100
13 weeks ended October 2, 1999                   35,350                 -             6,930              89                -

39 weeks ended September 30, 2000               101,249                 -             19,454            226            4,433
39 weeks ended October 2, 1999                  107,244                21             18,980            289                -

</TABLE>

     Revenues from  international  franchising  and licensing are generated from
Canada and Australia with no other  countries  having  material  representation.
During the year ended January 1, 2000 all remaining international  company-owned
stores were closed.

     No customers  accounted for more than 10 percent of Mrs. Fields'  Holding's
total revenues or individual segment's revenues.


                                       15
<PAGE>




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


(6)  SUBSEQUENT EVENT
     ----------------

    On October 30, 2000, Mrs. Fields' Holding Company,  Inc., purchased the area
development   rights,   and  20  Pretzel  Time  stores  from  a  franchisee  for
approximately  $3.8 million.  Mrs. Fields' Holding  Company,  Inc plans to enter
into a management agreement with Mrs. Fields to manage and operate these stores.


                                       16
<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"). 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) Ltd., H&M Canada,  and Pretzelmaker of Canada; and
three partially owned subsidiaries.

     Mrs.  Fields'  Holding,  through  its  Mrs.  Fields  subsidiary,  primarily
operates  and  franchises  retail  stores,  which sell  freshly  baked  cookies,
brownies,  pretzels and other food products through six specialty retail chains.
As of  September  30, 2000,  Mrs.  Fields'  Holding  owned and operated 126 Mrs.
Fields Cookies  stores,  82 Original  Cookie Company  stores,  90 Great American
Cookies  stores,  46 Hot Sam  Pretzels  stores,  78  Pretzel  Time  stores and 5
Pretzelmaker stores in the United States. Additionally, Mrs. Fields' Holding has
franchised or licensed 858 stores in the United States and 112 stores in several
other  countries.  As of September  30, 2000,  Mrs.  Fields'  Holding  owned and
operated  427  continuing  stores and 9 stores which are in the process of being
closed or  franchised.  All of the  stores  in the  process  of being  closed or
franchised  are  expected to be closed or  franchised  by the end of fiscal year
2000.

     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.  Mrs.  Fields'  Holding  experiences its highest
revenues in the fourth quarter of the calendar year due to the holiday season.

     All dollar amounts presented herein are stated in thousands.

                                       17
<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  reflects  the  consolidated
results of Mrs. Fields' Holding for the 13 and 39 weeks ended September 30, 2000
and the 13 and 39 weeks ended October 2, 1999.
<TABLE>
<CAPTION>


                                                                       %CHG                                     %CHG
                                                                       FROM                                     FROM
                                          For the 13 Weeks Ended     1999 to      For the 39 Weeks Ended       1999 to
                                        Sep. 30, 2000  Oct. 2, 1999    2000     Sept.30,2000    Oct. 2. 1999     2000
                                        -------------  ------------  -------    ----------------------------   -------
                                                                    (Dollars in thousands)

<S>                                        <C>        <C>            <C>        <C>            <C>               <C>

Statement of Operations Data:

Revenues:
     Net store and food sales..........    $ 34,814   $  35,350       (1.5)%    $ 101,249      $   107,265        (5.6)%
     Franchising.......................       6,060       6,520       (7.1)        18,103           18,082          .1
     Management fee revenue............       3,100         -          N/A          4,433               -          N/A
     Licensing.........................       1,216         499      143.7          1,577            1,187        32.9
                                           --------   ---------                 ---------      -----------
       Total revenues..................      45,190      42,369        6.7        125,362          126,534         (.9)
                                           --------   ---------                 ---------      -----------

Operating Costs and Expenses:
     Selling and store occupancy costs.      17,802      19,222       (7.4)        54,509           60,340        (9.7)
     Cost of sales.....................      11,581      10,599        9.3         33,582           32,455         3.5
     General and administrative........       8,683       5,367       61.8         20,143           16,317        23.4
     Store closure benefit.............        (321)        -          N/A           (521)               -         N/A
     Depreciation and amortization.....       5,515       5,441        1.4         17,527           16,727         4.8
                                           --------   ---------                 ---------      -----------
       Total operating costs and
       expenses                              43,260      40,629        6.5        125,240          125,839         (.5)
                                           --------   ---------                 ---------      -----------


Other Income (Expense):
     Interest expense..................      (6,117)     (5,821)       5.1        (18,585)         (17,185)        8.1
     Interest income...................          12          37      (67.6)            57              115       (50.4)
     Other income (expense), net.......        (171)       (318)     (46.2)          (136)            (864)      (84.3)
                                           --------   ---------                 ---------      -----------
       Total other expense, net              (6,276)     (6,102)       2.9        (18,664)         (17,934)        4.1
                                           --------   ---------                 ---------      -----------
       Net loss........................    $ (4,346)  $  (4,362)       (.4)%    $ (18,542)     $   (17,239)       (7.6)%
                                           ========   =========                 =========      ===========


</TABLE>

13 Weeks Ended September 30, 2000 Compared to the 13 Weeks Ended October 2, 1999

         As of September 30, 2000, there were 427  Company-owned  stores and 970
franchised or licensed stores in operation.  The store activity for the 13 weeks
ended September 30, 2000 and October 2, 1999 is summarized as follows:

<TABLE>
<CAPTION>


    Company-owned and Franchised or Licensed Store Activity          September 30, 2000       October 2, 1999
                                                                  ---------------------    ---------------------
                                                                  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         967          492        1,001
         Stores opened (including relocations)                        3          20            1          25
         Stores closed (including relocations)                       (8)        (18)          (5)        (72)
         Stores sold to franchisees                                  (1)          1           (5)          5
         Non-continuing (exit plan) stores closed                     -          (1)          (2)          -
         Non-continuing (exit plan) stores franchised                (1)          1           (3)          3
         Stores acquired from franchisees                             -           -            1          (1)
                                                                    ---         ---          ---        -----
       Stores open as of the end of the 13 weeks ended              427         970          479          961
                                                                    ===         ===          ===        =====
</TABLE>



                                       18
<PAGE>


Revenues

         Net Store and Food Sales.  Total net store sales decreased $536, or 1.5
percent,  from  $35,350 to $34,814  for the 13 weeks  ended  September  30, 2000
compared to the 13 weeks ended  October 2, 1999.  The decrease was due primarily
to 52, or 10.9  percent,  fewer  stores open at September  30, 2000  compared to
October 2, 1999.  Sales  increased .6 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  September 30, 2000 increased  $1,944,  or 183.9 percent,
compared  to the 13  weeks  ended  October  2,  1999.  The  increase  was due to
increased  mail  order  sales and the  direct  sales of frozen  cookie  dough in
supermarkets that in the prior year had been marketed by an outside licensee.

         Franchising  Revenues.  Franchising  revenues  decreased  $460,  or 7.1
percent,  from  $6,520 to  $6,060  for the 13 weeks  ended  September  30,  2000
compared  to the 13 weeks  ended  October 2,  1999.  Franchising  revenues  were
negatively  impacted  primarily by lower initial  franchise  fees in the current
period. 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
$3,100  during the  current  quarter to manage  TCBY,  which was  acquired by an
affiliate  of the  Company's  parent  on June 1,  2000.  Under  the terms of the
management  agreement,  the Company will receive monthly  payments of $1,033 for
managing and operating TCBY's  business.  When TCBY is successful in selling its
existing  dairy  processing  plant for net  proceeds  sufficient  to retire debt
associated  with  the  plant,  Mrs.  Fields'  will  receive   reimbursement  for
approximately  $1,400 of one-time  transition costs associated with transferring
the  management  function from Little Rock,  Arkansas,  to Salt Lake City.  This
reimbursement will be reflected as a one-time increase in the Management Fee.

         Licensing  Revenues.   Licensing  revenues  increased  $717,  or  143.7
percent,  from $499 to $1,216 for the 13 weeks ended September 30, 2000 compared
to the 13 weeks ended  October 2, 1999.  The increase in licensing  revenues was
primarily attributable to the signing of new licensees in the current year.


Operating Costs and Expenses

         Selling and Store  Occupancy  Costs.  Total selling and store occupancy
costs decreased $1,420, or 7.4 percent, from $19,222 to $17,802 for the 13 weeks
ended  September 30, 2000  compared to the 13 weeks ended  October 2, 1999.  The
decrease is attributable to 52, or 10.9 percent,  fewer stores open at September
30, 2000 compared to October 2, 1999.

         Cost of Sales. Total food cost of sales increased $982, or 9.3 percent,
from $10,599 to $11,581 for the 13 weeks ended  September  30, 2000  compared to
the 13 weeks ended  October 2, 1999.  This  increase was primarily the result of
increased mail order and batter  facility sales and sales of frozen cookie dough
to retail  outlets in 2000  compared  to 1999.  These  sales have a lower  gross
profit  percentage  than regular  food store sales.  Cost of goods sold for mall
stores  decreased  $758 or 8.8 percent due primarily to fewer stores open during
the 13 weeks ended  September 30, 2000,  compared to the prior  period.  Cost of
sales as percentage of sales for mall stores decreased from 25.1 percent for the
13 weeks ended October 2, 1999, to 24.7 percent for the 13 weeks ended September
30, 2000.

         General  and  Administrative   Expenses.   General  and  administrative
expenses  increased  $3,316,  or 61.8 percent,  from $5,367 to $8,683 for the 13
weeks ended  September  30, 2000 compared to the 13 weeks ended October 2, 1999.
The increase in general and administrative  expenses was primarily  attributable
to costs associated with managing TCBY under the management  agreement discussed
above,  and to  increased  bad debt  expense.  The Company  expects  general and
administrative costs to continue at the current quarter's level in the future as
it manages and operates TCBY's business.  However, these increased costs will be
offset by the management fee revenue received from TCBY.

         Store  Closure  Benefit.  The  Company  recorded a $321  store  closure
benefit in the current period. The Company was able to close certain stores at a
cost less than what had been  provided for in the plan.  There was no comparable
benefit or provision in 1999. See Note 3 to the Condensed Consolidated Financial
Statements for a detailed explanation of the store closure reserve.

         Depreciation  and  Amortization.  Total  depreciation  and amortization
expense increased by $74, or 1.4 percent, from $5,441 to $5,515 for the 13 weeks
ended  September 30, 2000  compared to the 13 weeks ended  October 2, 1999.  The
increase is primarily due to  depreciation  on the newly installed point of sale
and  other  computer  equipment,  depreciation  of new  equipment  installed  in
continuing  stores and the acceleration of depreciation on stores in the process
of being closed.


                                       19
<PAGE>


         Total Other  Expense.  Total other  expense  increased by $174,  or 2.9
percent,  from  $6,102 to  $6,276  for the 13 weeks  ended  September  30,  2000
compared to the 13 weeks ended October 2, 1999. The increase resulted  primarily
from higher interest  expense  resulting from higher  interest rates,  partially
offset by no preferred stock accretion in the current quarter.


39 Weeks Ended September 30, 2000 Compared to the 39 Weeks Ended October 2, 1999

     As of  September  30,  2000,  there were 427  Company-owned  stores and 970
franchised or licensed stores in operation.  The store activity for the 39 weeks
ended September 30, 2000 and October 2, 1999 is summarized as follows:

<TABLE>
<CAPTION>

    Company-owned and Franchised or Licensed Store Activity          September 30, 2000       October 2, 1999
                                                                  ---------------------    ---------------------
                                                                  Company-   Franchised    Company-   Franchised
                                                                  Owned     or Licensed     Owned    or Licensed
                                                                  --------  -----------    --------  -----------

       <S>                                                          <C>        <C>          <C>        <C>


       Stores open as of the beginning of the 39 weeks ended        462         981         566         972
         Stores opened (including relocations)                        7          97          11          74
         Stores closed (including relocations)                      (29)       (116)        (12)       (110)
         Stores sold to franchisees                                  (7)          7          (5)          5
         Non-continuing (exit plan) stores closed                    (3)         (2)        (61)          -
         Non-continuing (exit plan) stores franchised                (4)          4         (24)         24
         Stores acquired from franchisees                             1          (1)          4          (4)
                                                                    ---        ----         ----       ----
       Stores open as of the end of the 39 weeks ended              427         970         479         961
                                                                    ===        ====         ===         ===
</TABLE>


Revenues

         Net Store and Food Sales.  Total net store sales decreased  $6,016,  or
5.6 percent, from $107,265 to $101,249 for the 39 weeks ended September 30, 2000
compared to the 39 weeks ended  October 2, 1999.  The decrease was due primarily
to 52, or 10.9  percent,  fewer  stores open at September  30, 2000  compared to
October 2,  1999.  For  stores  that had been open one year or more,  mall store
sales  decreased .3 percent when  compared to the same period in the prior year.
Mail order sales for the 39 weeks ended September 30, 2000 increased  $3,730, or
113.4 percent,  compared to the 39 weeks ended October 2, 1999. The increase was
due to increased mail order sales and the direct sales of frozen cookie dough in
supermarkets that in the prior year had been marketed by an outside licensee.

         Franchising  Revenues.   Franchising  revenues  increased  $21,  or  .1
percent,  from  $18,082 to $18,103  for the 39 weeks  ended  September  30, 2000
compared to the 39 weeks ended October 2, 1999.  Increased sales of cookie dough
to Great American  franchisees  was partially  offset by lower royalty  revenues
resulting from lower initial  franchise fees during the 39 weeks ended September
30, 2000, compared to the 39 weeks ended October 2, 1999.

         Management Fee Revenue. The Company has received management fee revenue
of $4,133 since June 1, 2000 to manage TCBY,  which was acquired by an affiliate
of the  Company's  parent on June 1,  2000.  The  Company  also  received a $300
acquisition  advisory  fee as part of the  acquisition.  Under  the terms of the
management  agreement,  the Company will receive monthly  payments of $1,033 for
managing and operating TCBY's  business.  When TCBY is successful in selling its
existing  dairy  processing  plant for net  proceeds  sufficient  to retire debt
associated  with  the  plant,  Mrs.  Fields'  will  receive   reimbursement  for
approximately  $1,400 of one-time  transition costs associated with transferring
the  management  function from Little Rock,  Arkansas,  to Salt Lake City.  This
reimbursement will be reflected as a one-time increase in the Management Fee.

         Licensing Revenues. Licensing revenues increased $390, or 32.9 percent,
from $1,187 to $1,577 for the 39 weeks ended  September 30, 2000 compared to the
39 weeks ended  October 2, 1999.  The increase in licensing  revenues for the 39
weeks ended  September 30, 2000 was  primarily  attributable  to new  agreements
during the third  quarter of 2000.  This  increase was  partially  offset by the
agreement  with the  licensee of frozen  cookie  dough for sale to  supermarkets
which was in effect during the first nine months of 1999, but not during 2000.



                                       20
<PAGE>

Operating Costs and Expenses

         Selling and Store  Occupancy  Costs.  Total selling and store occupancy
costs decreased $5,831, or 9.7 percent, from $60,340 to $54,509 for the 39 weeks
ended  September 30, 2000  compared to the 39 weeks ended  October 2, 1999.  The
decrease is primarily  attributable to 52, or 10.9 percent, fewer stores open at
September  30,  2000  compared to October 2, 1999.

         Cost of  Sales.  Total  food  cost of sales  increased  $1,127,  or 3.5
percent,  from  $32,455 to $33,582  for the 39 weeks  ended  September  30, 2000
compared to the 39 weeks ended October 2, 1999.  This increase was primarily the
result of  increased  mail order and batter  facility  sales and sales of frozen
cookie  dough to retail  outlets in 2000  compared  to 1999.  These sales have a
lower gross profit  percentage  than regular food store sales and the mail order
business  incurred  large   advertising  costs  that  negatively   impacted  its
contribution  in the 39 weeks ended  September  30, 2000,  compared to the prior
year period. Cost of goods sold for mall stores decreased $2,948 or 11.2 percent
due to fewer stores open during the 39 weeks ended September 30, 2000,  compared
to the prior year period. Cost of sales as a percentage of sales for mall stores
decreased  from 25.3  percent  for the 39 weeks ended  October 2, 1999,  to 24.8
percent for the 39 weeks ended September 30, 2000.

         General  and  Administrative   Expenses.   General  and  administrative
expenses  increased $3,826, or 23.4 percent,  from $16,317 to $20,143 for the 39
weeks ended  September  30, 2000 compared to the 39 weeks ended October 2, 1999.
The increase in general and administrative  expenses was primarily  attributable
to costs  incurred by the Company in conjunction  with Capricorn  Investors III,
L.P.'s  acquisition  of TCBY,  and to increased  bad debt  expense.  Included in
general  and  administrative  expenses  were  approximately  $1,400 of  one-time
transition  costs  associated  with  transferring  the management  function from
Little Rock, Arkansas, to Salt Lake City. When TCBY is successful in selling its
existing  dairy  processing  plant for net  proceeds  sufficient  to retire debt
associated with the plant,  Mrs. Fields' Holding will receive  reimbursement for
these transition costs. Also included in general and administrative expenses are
costs associated with managing TCBY's ongoing business.  These costs were offset
by the $300  acquisition  advisory  fee and the $4,133  management  fee  revenue
discussed  above.  This  increase was  partially  offset by lower legal and risk
management  insurance  expenditures  in the  current  year  period.  The Company
expects general and administrative  costs to continue at increased levels in the
future as it manages and operates  TCBY's  business.  However,  these  increased
costs will be offset by the management fee revenue received from TCBY.

         Store  Closure  Benefit.  The  Company  recorded a $521  store  closure
benefit in the current nine month period.  The Company was able to close certain
stores at a cost less than what had been provided for in the plan.  There was no
comparable   benefit  or  provision  in  1999.  See  Note  3  to  the  Condensed
Consolidated  Financial  Statements  for a  detailed  explanation  of the  store
closure reserve.

         Depreciation  and  Amortization.  Total  depreciation  and amortization
expense  increased  by $800 or 4.8  percent,  from $16,727 to $17,527 for the 39
weeks ended  September  30, 2000 compared to the 39 weeks ended October 2, 1999.
The increase is primarily due to  depreciation  on the newly  installed point of
sale and other computer  equipment,  depreciation of new equipment  installed in
continuing  stores and the acceleration of depreciation on stores in the process
of being closed.

         Total Other  Expense.  Total other  expense  increased by $730,  or 4.1
percent,  from  $17,934 to $18,664  for the 39 weeks  ended  September  30, 2000
compared  to the 39  weeks  ended  October  2,  1999.  Higher  interest  expense
resulting  from higher  interest  rates,  were  partially  offset by a lower tax
provision and no preferred stock accretion in the current year period.


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 September 30, 2000, Mrs.
Fields'  Holding  has  $1,296 of cash and cash  equivalents  on hand and  $5,738
additional  borrowings  available  under its  revolving  credit  facility.  Mrs.
Fields' Holding expects to use its existing cash, cash flows from operations and
its credit facility to provide working capital, finance capital expenditures and
to meet debt  service  requirements,  including  the  December 1, 2000  interest
payment of  approximately  $7  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.


                                       21
<PAGE>

     September 30, 2000 Compared to January 1, 2000

     As of September 30, 2000, Mrs.  Fields' Holding had liquid assets (cash and
cash equivalents and accounts receivable) of $9,555, a decrease of 26.1 percent,
or $3,367, from January 1, 2000 when liquid assets were $12,922.  Cash decreased
$3,623, or 73.7 percent,  to $1,296 at September 30, 2000 from $4,919 at January
1, 2000. Cash decreased  primarily from the retirement of the preferred stock of
Pretzel Time, the purchase of capital assets with cash rather than using capital
lease financing, and the payment of expenses incurred in 1999, but not due until
2000.  Total  receivables  at  September  30,  2000  were  higher  due to slower
collections.

     Mrs. Fields' Holding's working capital decreased by $2,193 or 48.6 percent,
to a deficit  $6,710 at September  30, 2000 from a deficit  $4,517 at January 1,
2000.  This  decrease is due  primarily to lower cash  balances at September 30,
2000.

     Long-term assets decreased  $15,172 or 8.0 percent to $174,989 at September
30, 2000 from  $190,161 at January 1, 2000.  This  decrease  was  primarily  the
result of scheduled  depreciation  and  amortization  of property and equipment,
goodwill and deferred loan costs.

     Mrs. Fields' Holding's operating activities provided cash of $1,593 for the
39 weeks ended September 30, 2000, primarily from non-cash charges and increased
accrued interest balances.  This increase was partially offset by lower accounts
payable balances.

     Mrs. Fields utilized $4,363 of cash in investing  activities  during the 39
weeks ended September 30, 2000, primarily for capital  expenditures  relating to
store remodels and renovations.

     Mrs. Fields used $772 in cash for financing  activities during the 39 weeks
ended September 30, 2000. Cash was used to redeem the Preferred stock of Pretzel
Time, and for payment of capital lease and long-term debt obligations.

     The specialty cookie and pretzel  businesses do not require the maintenance
of  significant  receivables  or  inventories;  however,  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,  which are key to generating current sales,  reduce Mrs.
Fields' Holding's working capital.  During the 39 weeks ended September 30, 2000
and  October  2,  1999,   Mrs.  Fields  expended  cash  of  $4,363  and  $3,401,
respectively,  for capital assets and expects to expend a total of approximately
$9,500 in 2000.  Capital  expenditures  are  expected  to increase in the fourth
quarter due to construction  costs  associated with the opening of approximately
10 new stores.  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 133"). SFAS 133, as amended by SFAS
137 and SFAS 138, is effective for the  Company's  fiscal year  beginning  2001.
SFAS  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 does not expect the adoption of SFAS 133, as amended, to have a material
impact on the Company's results of operations, financial position or liquidity.


                                       22
<PAGE>


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  January  1,  2000  year.  For  more  information,   please  read  the
consolidated  financial  statements and notes thereto  included in Mrs.  Fields'
Holding's  registration  statement  on Form S-4,  for the year ended  January 1,
2000, which was declared effective on May 16, 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  operations,   capital   expenditures,   the  ability  to  refinance
indebtedness,  and the sale of  assets.  These  forward-looking  statements  are
subject to risks, uncertainties and assumptions, including the following:

o         Our ability to combine the businesses of companies acquired during the
          year with Mrs.  Fields'  Holding and to realize the expected  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.


                                       23
<PAGE>




                           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

Exhibit No.       Description
-----------       -----------

    27.1          Financial data schedule (for SEC use only)

(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                                             November 14, 2000
---------------------------------------------                  -----------------
Larry A. Hodges, President & CEO                                     Date


/s/Michael B. Malan                                            November 14, 2000
---------------------------------------------                  -----------------
Michael B. Malan, Vice President & Controller                        Date
(Principal Accounting Officer)


                                       24