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:     July 1, 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                (IRS employer identification no.)
incorporation or organization)


2855 East Cottonwood Parkway, Suite 400
       Salt Lake City, Utah                                84121-7050
---------------------------------------        ---------------------------------
(Address of principal executive offices)                   (Zip code)


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

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

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

                                  X yes         no

The  registrant  had  3,387,019  shares  of  common  stock,  $0.001  par  value,
outstanding at August 15, 2000.



<PAGE>


               MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES


                                TABLE OF CONTENTS


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

<TABLE>
<CAPTION>


Item 1.   Financial Statements (Unaudited)

<S>                                                                                                        <C>

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

         Condensed Consolidated Statements of Operations for the 13 Weeks
             Ended July 1, 2000 and July 3, 1999..........................................................  5

         Condensed Consolidated Statements of Operations for the 26 Weeks
             Ended July 1, 2000 and July 3, 1999..........................................................  6

         Condensed Consolidated Statements of Cash Flows for the 26 Weeks
             Ended July 1, 2000 and July 3, 1999..........................................................  7

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

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations........... 16


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

Item 1.   Legal Proceedings............................................................................... 22

Item 6.   Exhibits and Reports on Form 8-K................................................................ 22

</TABLE>

                                       2
<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>


                                                                     July 1,        January 1,
                                                                      2000             2000
                                                                     -------        ----------
<S>                                                                <C>              <C>

CURRENT ASSETS:
    Cash and cash equivalents                                      $    1,775       $   4,919
    Accounts receivable, net of allowance for doubtful accounts
       of $230 and $111, respectively                                   3,823           4,295
    Amounts due from franchisees and licensees, net of allowance
       for doubtful accounts of $700 and $821, respectively             3,838           3,708
    Inventories                                                         4,701           4,977
    Prepaid rent and other                                                883             697
    Deferred income tax assets, current portion                         1,360           1,360
                                                                   ----------       ---------

                Total current assets                                   16,380          19,956
                                                                   ----------       ---------

PROPERTY AND EQUIPMENT, at cost:
    Leasehold improvements                                             29,018          26,698
    Equipment and fixtures                                             22,666          22,540
    Land                                                                  240             240
                                                                   ----------       ---------
                                                                       51,924          49,478
    Less accumulated depreciation and amortization                    (26,171)        (20,813)
                                                                   ----------       ---------

                Net property and equipment                             25,753          28,665
                                                                   ----------       ---------

DEFERRED INCOME TAX ASSETS, net of current portion                      2,154           2,139
                                                                   ----------       ---------

GOODWILL, net of accumulated amortization of
    $26,170 and $21,310, respectively                                 126,708         133,025
                                                                   ----------       ---------

TRADEMARKS AND OTHER INTANGIBLES, net of accumulated
    amortization of $4,276 and
    $3,700, respectively                                               12,486          13,062
                                                                   ----------       ---------

DEFERRED LOAN COSTS, net of accumulated amortization of
    $6,114 and $4,523, respectively                                    11,501          12,618
                                                                   ----------       ---------

OTHER ASSETS                                                              688             652
                                                                   ----------       ---------

                                                                   $  195,670       $ 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>


                                                                     July 1,        January 1,
                                                                      2000             2000
                                                                     -------        ----------
<S>                                                                <C>              <C>

CURRENT LIABILITIES:
    Current portion of long-term debt                              $      695       $     781
    Current portion of capital lease obligations                          952             842
    Line of credit                                                      3,550              -
    Accounts payable                                                    8,369          10,514
    Accrued liabilities                                                 2,112           2,851
    Current portion of store closure reserve                            3,016           3,665
    Accrued salaries, wages and benefits                                3,107           3,180
    Accrued interest payable                                            1,181           1,380
    Sales taxes payable                                                   745           1,128
    Deferred credits                                                      112             132
                                                                   ----------       ---------

              Total current liabilities                                23,839          24,473

LONG-TERM DEBT, net of current portion                                179,239         176,672

STORE CLOSURE RESERVE, net of current portion                           2,853           3,529

CAPITAL LEASE OBLIGATIONS, net of current portion                       2,729           3,107
                                                                   ----------       ---------

              Total liabilities                                       208,660         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                                                         126             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                                               (51,265)        (37,069)
    Cumulative foreign currency translation adjustment                    (75)             -
                                                                   ----------       ---------

              Total stockholders' equity (deficit)                    (13,116)          1,155
                                                                   ----------       ---------

                                                                   $  195,670       $ 210,117
                                                                   ==========       ==========

</TABLE>



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

                                       4
<PAGE>
<TABLE>
<CAPTION>


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

                                                                           13 Weeks Ended          13 Weeks Ended
                                                                             July 1, 2000            July 3, 1999
                                                                           --------------           -------------

REVENUES:
<S>                                                                         <C>                      <C>
    Net store and food sales                                                $      32,639            $     34,786
    Franchising                                                                     6,097                   5,146
    Management fee                                                                  1,333                       -
    Licensing                                                                         201                     241
                                                                           --------------           -------------
       Total revenues                                                              40,270                  40,173
                                                                           --------------           -------------

OPERATING COSTS AND EXPENSES:
    Selling and store occupancy costs                                              18,387                  19,725
    Cost of sales                                                                  11,034                   9,925
    General and administrative                                                      6,339                   5,571
    Store closure benefit                                                            (200)                      -
    Depreciation and amortization                                                   6,342                   5,877
                                                                           --------------           -------------
       Total operating costs and expenses                                          41,902                  41,098
                                                                           --------------           -------------

          Loss from operations                                                     (1,632)                   (925)
                                                                           --------------           -------------

OTHER INCOME (EXPENSE), net:
    Interest expense                                                               (6,330)                 (5,715)
    Interest income                                                                    22                      40
    Other, net                                                                         97                      (3)
                                                                           --------------           -------------
       Total other expense, net                                                    (6,211)                 (5,678)
                                                                           --------------           -------------
          Loss before provision for income taxes, preferred stock
             accretion and dividends of subsidiaries and minority
             interest                                                              (7,843)                 (6,603)

PROVISION FOR INCOME TAXES                                                             (7)                   (106)
                                                                           --------------           -------------

          Loss before preferred stock accretion and dividends of
              subsidiaries and minority interest                                   (7,850)                 (6,709)

PREFERRED STOCK ACCRETION AND DIVIDENDS OF SUBSIDIARIES
                                                                                        -                    (111)

MINORITY INTEREST                                                                     (12)                     (3)
                                                                           --------------           -------------

          Net loss                                                          $      (7,862)          $      (6,823)
                                                                           ==============           =============

          Basic and diluted net loss per common share                       $       (2.32)          $       (2.08)
                                                                           ==============           =============
          Weighted average number of common shares outstanding                  3,387,019               3,285,599
                                                                           ==============           =============

COMPREHENSIVE LOSS:
          Net loss                                                           $     (7,862)           $     (6,823)
          Foreign currency translation adjustments                                    (75)                       -
                                                                           --------------           -------------
          Comprehensive loss                                                 $     (7,937)           $     (6,823)
                                                                           ==============           =============


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

                                      5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


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

                                                                             26 Weeks Ended         26 Weeks Ended
                                                                              July 1, 2000           July 3, 1999
                                                                         -----------------       ----------------

REVENUES:
<S>                                                                         <C>                      <C>
    Net store and food sales                                                $      66,435            $     71,915
    Franchising                                                                    12,043                  11,562
    Management fee                                                                  1,333                       -
    Licensing                                                                         361                     688
                                                                           --------------           -------------
       Total revenues                                                              80,172                  84,165
                                                                           --------------           -------------

OPERATING COSTS AND EXPENSES:
    Selling and store occupancy costs                                              36,707                  41,118
    Cost of sales                                                                  22,001                  21,856
    General and administrative                                                     11,460                  10,950
    Store closure benefit                                                            (200)                      -
    Depreciation and amortization                                                  12,012                  11,286
                                                                           --------------           -------------
       Total operating costs and expenses                                          81,980                  85,210
                                                                           --------------           -------------

          Loss from operations                                                     (1,808)                 (1,045)
                                                                           --------------           -------------

OTHER INCOME (EXPENSE), net:
    Interest expense                                                              (12,468)                (11,364)
    Interest income                                                                    45                      78
    Other, net                                                                         65                    (110)
                                                                           --------------           -------------
       Total other expense, net                                                   (12,358)                (11,396)
                                                                           --------------           -------------

          Loss before provision for income taxes, preferred stock
             accretion and dividends of subsidiaries and minority
             interest                                                             (14,166)                (12,441)

PROVISION FOR INCOME TAXES                                                            (15)                   (210)
                                                                           --------------           -------------

          Loss before preferred stock accretion and dividends of
              subsidiaries and minority interest                                  (14,181)                (12,651)

PREFERRED STOCK ACCRETION AND DIVIDENDS OF SUBSIDIARIES
                                                                                        -                    (222)

MINORITY INTEREST                                                                     (15)                     (4)
                                                                           --------------           -------------

          Net loss                                                           $    (14,196)           $    (12,877)
                                                                           ==============           =============

          Basic and diluted net loss per common share                        $      (4.19)           $      (3.92)
                                                                           ==============           =============
          Weighted average number of common shares outstanding                  3,387,019               3,285,599
                                                                           ==============           =============

COMPREHENSIVE LOSS:
          Net loss                                                            $   (14,196)            $   (12,877)
          Foreign currency translation adjustments                                    (75)                       -
                                                                           --------------           -------------
          Comprehensive loss                                                  $   (14,271)            $   (12,877)
                                                                           ==============           =============
</TABLE>

  The accompanying notes to condensed consolidated financial statements are an
                       integral part of these statements.
                                       6
<PAGE>
<TABLE>
<CAPTION>
                                          MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
                                      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                                            (in thousands)


                                                                                 26 Weeks Ended       26 Weeks Ended
                                                                                  July 1, 2000         July 3, 1999
                                                                                  -----------            ----------
Decrease in Cash and Cash Equivalents

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                  <C>                   <C>
   Net loss                                                                          $(14,196)             $(12,877)
   Adjustments to reconcile net loss to net cash (used in) provided by
     operating activities:
         Depreciation and amortization                                                 12,012                11,286
         Amortization of discount on notes                                              2,895                 2,474
         Amortization of deferred loan costs                                            1,591                 1,151
         Deferred compensation expense                                                      -                    77
         Loss on sale of assets                                                           511                   117
         Preferred stock accretion and dividends of subsidiaries                            -                   222
         Minority interest                                                                 15                     4
         Changes in assets and liabilities:
               Accounts receivable, net                                                   472                 1,638
               Amounts due from franchisees and licensees, net                           (130)                1,329
               Inventories                                                                276                   590
               Prepaid rent and other                                                    (186)                  202
               Other assets                                                               (36)                  918
               Accounts payable and accrued liabilities                                (2,884)               (1,006)
               Bank overdraft                                                               -                (1,231)
               Store closure reserve                                                   (1,325)               (1,311)
               Accrued salaries, wages and benefits                                       (73)                  (90)
               Accrued interest payable                                                  (199)                  111
               Sales taxes payable                                                       (383)                 (584)
               Deferred credits                                                           (35)                 (126)
                                                                                  -----------            ----------
                  Net cash (used in) provided by operating activities                  (1,675)                2,894
                                                                                    ----------            ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net cash paid for acquisition expenses                                                  -                  (100)
    Purchase of property and equipment                                                 (2,529)               (2,604)
                                                                                   ----------             ---------
                  Net cash used in investing activities                                (2,529)               (2,704)
                                                                                   ----------             ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net borrowings under line of credit                                                 3,550                 7,000
    Reduction of long-term debt                                                          (414)               (5,340)
    Payment of debt financing costs                                                      (474)               (1,175)
    Principal payments on capital lease obligations                                      (457)                 (572)
    Proceeds for exercise of stock options                                                  -                   148
    Payments for repurchase of common stock                                                 -                  (292)
    Reduction in preferred stock                                                       (1,070)                  (43)
                                                                                   ----------           -----------
                  Net cash provided by (used in) financing activities                   1,135                  (274)
                                                                                   ----------           ------------
    Effect of foreign exchange rates                                                      (75)                      -
                                                                                  -----------           -------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                              (3,144)                  (84)

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

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD                                       $  1,775              $  4,675
                                                                                   ==========              ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid for interest                                                          $  7,817              $  7,588
                                                                                   ==========              ========
     Cash paid for income taxes                                                   $       124             $     166
                                                                                  ===========             =========
</TABLE>

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

                                       7
<PAGE>


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


(1)  Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have
been prepared by Mrs.  Fields' Holding  Company,  Inc. and  subsidiaries  ("Mrs.
Fields' Holding") 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 July 1, 2000 and January 1, 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 26 weeks ended July 1, 2000 are
not necessarily indicative of the results that may be expected for the remainder
of the fiscal year ending  December 30, 2000. All dollar  amounts  presented are
stated in thousands.

     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").


(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 income statement.


                                       8
<PAGE>

<TABLE>
<CAPTION>

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

The  following  table  presents a summary of the  activity in the store  closure
reserve during the 26 weeks ended July 1, 2000 and July 3, 1999:



                             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 SubsequentUnrelated to Subsequent  Unrelated toSubsequent     Unrelated
                            Adjustments Adjustments Adjustments Acquisition Adjustments Acquisitions 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 26
  weeks ended July 1, 2000         -          -           -          -          -            -           -              -
Utilization for the 26 weeks
  ended July 1, 2000            (218)      (312)        (57)      (120)       (22)           -        (233)          (130)
                              ------     ------        ----       ----       ----        -----      ------          -----
Balance, July 1, 2000         $1,396     $1,269        $479       $174       $ 87        $  86      $1,441          $ 415
                              ======     ======        ====       ====       ====        =====      ======          =====

Balance, January 2, 1999      $3,728     $4,674        $981       $367       $493        $ 264      $3,399          $ 305
Utilization for the 26 weeks
 ended July 3, 1999             (813)      (504)          -        (43)         -          (67)       (288)             -
                              ------     ------        ----       ----       ----        -----       -----          -----
Balance, July 3, 1999...      $2,915     $4,170        $981       $324       $493        $ 197      $3,111          $ 305
                              ======     ======        ====       ====       ====        =====      ======          =====
</TABLE>
<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 26
  weeks ended July 1, 2000        -        (200)            -        (200)          (200)
Utilization for the 26 weeks
  ended July 1, 2000            (16)        (17)         (546)       (579)        (1,125)
                               ----       -----        ------       ------       -------
Balance, July 1, 2000          $ 89       $ 433        $3,492       $2,377       $ 5,869
                               ====       =====        ======       ======       =======

Balance, January 2, 1999       $500       $   -        $9,101       $5,610       $14,711
Utilization for the 26 weeks
  ended July 3, 1999              -           -        (1,101)        (614)       (1,715)
                               ----       -----        ------       ------       -------
Balance, July 3, 1999...       $500       $   -        $8,000       $4,996       $12,996
                               ====       =====        ======       ======       =======
</TABLE>
                                       9
<PAGE>
<TABLE>
<CAPTION>
                                       MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
                                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                                           (Unaudited)

     The following  table  presents a summary of activity for stores  originally
identified to be closed or franchised in connection with the applicable business
combination  for the 26 weeks  ended July 1, 2000 and July 3,  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.

                                         Mrs. Fields Inc.
                                               and
                                        Original Cookie             H&M           Pretzel Time       Great American
                                        ------------------   -----------------   ----------------   ------------------
                                         To Be      To Be     To Be     To Be    To Be     To Be     To Be     To Be
                                        Closed   Franchised  Closed  Franchised  Closed Franchised  Closed   Franchised

<S>                                       <C>       <C>        <C>       <C>      <C>       <C>      <C>        <C>
Balance, January 1, 2000..............       -        14          -         -        -         -        6          1

Stores closed, franchised or removed
  for the 26 weeks ended July 1, 2000.       -       (11)         -         -        -         -       (2)        (1)
                                           ---       ---        ---       ---      ---       ---   -  ---        ---

Balance, July 1, 2000 ................       -         3          -         -        -         -        4          -
                                           ===       ===        ===       ===      ===       ===      ===        ===

Balance, January 2, 1999..............      23        36          6         7        3         -       43         11

Stores closed, franchised or removed
  for the 26 weeks ended July 3, 1999.     (13)      (13)        (4)       (4)      (3)        -      (21)        (1)
                                           ---       ---        ---       ---      ---       ---      ---        ---

Balance, July 3, 1999 ................      10        23          2         3        -         -       22         10
                                           ===       ===        ===       ===      ===       ===      ===        ===
</TABLE>
<TABLE>
<CAPTION>
                                                    Pretzelmaker      Consolidated
                                                  ----------------   --------------
                                                  To Be    To Be     To Be    To Be
                                                 Closed  Franchised Closed Franchised

<S>                                               <C>       <C>      <C>      <C>
Balance, January 1, 2000..............               -          -        6       15

Stores closed, franchised or removed
  for the 26 weeks ended July 1, 2000.               -          -       (2)     (12)
                                                   ---        ---      ---      ---

Balance, July 1, 2000 ................               -          -        4        3
                                                   ===        ===      ===      ===

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

Stores closed, franchised or removed
  for the 26 weeks ended July 3, 1999.              (4)         -      (45)     (18)
                                                   ---        ---      ---      ---

Balance, July 3, 1999 ................               3          -       37       36
                                                   ===        ===      ===      ===
</TABLE>
                                       10
<PAGE>
<TABLE>
<CAPTION>
                                          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 26 weeks
ended July 1, 2000, and July 3, 1999:


                                                               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 during the 26
  weeks ended July 1, 2000................................       (1)         (2)         -         -        -      (1)
                                                                ---         ---        ---       ---      ---     ---
Balance, July 1, 2000.....................................        2           2          -         -        -       -
                                                                ===         ===        ===       ===      ===     ===

Balance, January 2, 1999..................................       20          10          2         1        2       3
Stores closed, franchised or removed during the
  26 weeks ended July 3, 1999.............................      (19)         (4)        (2)        -       (1)     (2)
                                                                ---         ---        ---       ---      ---     ---
Balance, July 3, 1999.....................................        1           6          -         1        1       1
                                                                ===         ===        ===       ===      ===     ===
</TABLE>
<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 during the 26
  weeks ended July 1, 2000................................       -          -          (1)       (3)
                                                               ---        ---         ---       ---
Balance, July 1, 2000.....................................       -          -           2         2
                                                               ===        ===         ===       ===

Balance, January 2, 1999..................................       5         -           29        14
Stores closed, franchised or removed during the
  26 weeks ended July 3, 1999.............................      (1)        -          (23)       (6)
                                                               ---       ---          ---       ---
Balance, July 3, 1999.....................................       4         -            6         8
                                                               ===       ===          ===       ===
</TABLE>
                                       11
<PAGE>
<TABLE>
<CAPTION>
                                          MRS. FIELDS' HOLDING COMPANY, INC. AND SUBSIDIARIES
                                   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                                        (Dollars in thousands)
                                                              (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 26 weeks ended July 1, 2000 and July 3,
1999 for stores to be closed and franchised:

                                                          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 26 weeks ended
   July 1, 2000 related to stores to be closed.....                42             -             89               -           131
Addition to impairment for the 26 weeks ended
   July 1, 2000 related to stores to be franchised.               129             5            251               -           385
Utilization for the 26 weeks ended July 1, 2000
   related to stores to be closed..................              (605)          (17)          (209)              -          (831)
Utilization for the 26 weeks ended July 1, 2000
   related to stores to be franchised..............               (40)          (85)             -               -          (125)
                                                               ------       -------         ------            ----       -------
Balance, July 1, 2000..............................            $1,772       $   543         $1,558            $169       $ 4,042
                                                               ======       =======         ======            ====       =======

Balance, January 2, 1999...........................            $3,844        $1,380         $2,877            $327       $ 8,428
Addition to impairment for the 26 weeks ended
   July 3, 1999 related to stores to be closed.....                25             -              -               -            25
Addition to impairment for the 26 weeks ended
   July 3, 1999 related to stores to be franchised.               362             -              -               -           362
Utilization for the 26 weeks ended July 3, 1999
   related to stores to be closed..................            (1,114)         (405)        (1,166)           (157)       (2,842)
Utilization for the 26 weeks ended July 3, 1999
   related to stores to be franchised..............              (665)         (335)            (5)              -        (1,005)
                                                               ------       -------         ------            ----       -------
Balance, July 3, 1999..............................            $2,452       $   640         $1,706            $170       $ 4,968
                                                               ======       =======         ======            ====       =======
</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" in the
income  statement.  Mrs.  Fields'  Holding does not separate the costs  incurred
under the management  agreement from costs of operating Mrs. Fields' Holding, as
most of Mrs.  Fields' Holding  employees  support both companies,  therefore the
activity for managing TCBY is not reported as a separate segment.

     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.

     In connection with the TCBY  Transaction,  Mrs.  Fields' Holding received a
$300,000  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  $725,000  incurred by Mrs. Fields' Holding in
connection with its performance of acquisition  advisory services.  Mrs. Fields'
Holding  will  receive  a fee of up to  $1.5  million  from  TCBY  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'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
any costs not fully  reimbursed  by the  acquisition  advisory  fee and  related
reimbursement.


(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)
<TABLE>
<CAPTION>
     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.
Segment revenue and contribution margin are presented in the following table (in
thousands).

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

<S>                                                        <C>                       <C>              <C>
13 weeks ended July 1, 2000
Segment revenues                                           $32,639                   $6,298           $38,937
Contribution margin                                          5,659                    3,857             9,516

13 weeks ended July 3, 1999
---------------------------
Segment revenues                                            34,786                    5,387            40,173
Contribution margin                                          7,403                    3,120            10,523

26 weeks ended July 1, 2000
Segment revenues                                            66,435                   12,404            78,839
Contribution margin                                         12,386                    7,745            20,131

26 weeks ended July 3, 1999
---------------------------
Segment revenues                                            71,915                   12,250            84,165
Contribution margin                                         13,404                    7,787            21,191
</TABLE>
<TABLE>
<CAPTION>

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

                                         13 Weeks Ended     13 Weeks Ended     26 Weeks Ended     26 Weeks Ended
                                          July 1, 2000       July 3, 1999       July 1, 2000       July 3, 1999
                                         --------------     --------------     --------------     --------------
<S>                                           <C>                  <C>             <C>               <C>
Contribution margin                           $ 9,516              $10,523         $ 20,131          $ 21,191
Management fee revenue                          1,333                    -            1,333                 -
General and
   administrative expense                      (6,339)              (5,571)         (11,460)          (10,950)
Store closure benefit                             200                    -              200                 -
Depreciation and amortization                  (6,342)              (5,877)         (12,012)          (11,286)
Interest expense                               (6,330)              (5,715)         (12,468)          (11,364)
Other income (expense), net                       100                 (183)              80              (468)
                                              -------              -------         --------          --------
Net loss                                      $(7,862)             $(6,823)        $(14,196)         $(12,877)
                                              =======              =======         ========-         ========
</TABLE>
<TABLE>
<CAPTION>

     Geographic segment information is as follows (in thousands):

                                         Domestic        International        Domestic        International       Domestic
                                       Company-Owned     Company-Owned     Franchising and      Franchising    Management Fee
                                          Stores            Stores           Licensing        and Licensing       Revenue
                                       -------------    --------------     ---------------    -------------    --------------
Total revenues
<S>                                     <C>                 <C>                <C>                   <C>             <C>
13 weeks ended July 1, 2000             $32,639             $  -               $  6,242              $  56           $1,333
13 weeks ended July 3, 1999              34,786                -                  5,276                111              -

26 weeks ended July 1, 2000              66,435                -                 12,267                137            1,333
26 weeks ended July 3, 1999              71,894               21                 12,050                200              -
</TABLE>

                                       14
<PAGE>


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


     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.

     There  were no  customers  who  accounted  for more than 10 percent of Mrs.
Fields' Holding's total revenues or either segment's revenues.

                                       15
<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 July 1, 2000,  Mrs.  Fields'  Holding  owned and operated 126 Mrs.  Fields
Cookies stores,  89 Original Cookie Company  stores,  91 Great American  Cookies
stores,  47 Hot Sam Pretzels  stores,  77 Pretzel Time stores and 4 Pretzelmaker
stores in the United States.  Additionally,  Mrs. Fields' Holding has franchised
or  licensed  852  stores in the United  States and 115 stores in several  other
countries.  As of July 1, 2000,  Mrs.  Fields'  Holding  owned and  operated 423
continuing  stores and 11 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.  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.

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 26 weeks ended July 1, 2000 and
the 13 and 26 weeks ended July 3, 1999.
<TABLE>
<CAPTION>



                                                                     % CHG                                   % CHG
                                         For the 13 Weeks Ended      FROM       For the 26 Weeks Ended        FROM
                                        -------------------------   1999 TO  ----------------------------   1999 TO
                                        July 1, 2000  July 3,1999    2000    July 1, 2000    July 3, 1999     2000
                                        ------------  -----------   -------  ------------    ------------   -------
                                                                  (Dollars in thousands)
Statement of Operations Data:

Revenues:
<S>                                         <C>         <C>         <C>        <C>              <C>          <C>
     Net store and food sales..........     $32,639     $34,786      (6.2)%    $66,435          $71,915        (7.6)%
     Franchising.......................       6,097       5,146      18.5       12,043           11,562         4.2
     Management fee revenue............       1,333         -         N/A        1,333              -           N/A
     Licensing.........................         201         241     (16.6)         361              688       (47.5)
                                            -------     -------                -------          -------
       Total revenues..................       40,270     40,173        .2        80,172          84,165        (4.7)
                                            -------     -------                 -------          -------

Operating Costs and Expenses:
     Selling and store occupancy costs.      18,387      19,725      (6.8)      36,707           41,118       (10.7)
     Cost of sales.....................      11,034       9,925      11.2       22,001           21,856          .7
     General and administrative........       6,339       5,571      13.8       11,460           10,950         4.7
     Store closure benefit.............        (200)        -         -           (200)               -         -
     Depreciation and amortization.....       6,342       5,877       7.9       12,012           11,286         6.4
                                            -------     -------                 -------          -------
       Total operating costs and expenses    41,902      41,098       2.0       81,980           85,210        (3.8)
                                            -------     -------                 -------          -------


Other Income (Expense):
     Interest expense..................      (6,330)     (5,715)     10.8      (12,468)         (11,364)        9.7
     Interest income...................          22          40     (45.0)          45               78       (42.3)
     Other income (expense), net.......          78        (223)      N/A            35            (546)        N/A
                                            -------     -------                 -------          -------
       Total other expense, net              (6,230)     (5,898)      5.6      (12,388)         (11,832)        4.7
                                            -------     -------                 -------          -------
       Net loss........................    $ (7,862)   $ (6,823)     15.2%    $(14,196)        $(12,877)       10.2%
                                           ========-   ========-              ========-        ========-
</TABLE>
13 Weeks Ended July 1, 2000 Compared to the 13 Weeks Ended July 3, 1999

         As of July  1,  2000,  there  were  434  Company-owned  stores  and 967
franchised or licensed stores in operation.  The store activity for the 13 weeks
ended July 1, 2000 and July 3, 1999 is summarized as follows:
<TABLE>
<CAPTION>


    Company-owned and Franchised or Licensed Store Activity               July 1,              July 1,
                                                                            2000                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        446         980        516          991
         Stores opened (including relocations)                        1          42          4           18
         Stores closed (including relocations)                       (8)        (57)        (7)         (19)
         Stores sold to franchisees                                  (3)          3         (4)           4
         Non-continuing (exit plan) stores closed                    (2)         (1)       (10)           -
         Non-continuing (exit plan) stores franchised                 -           -         (8)           8
         Stores acquired from franchisees                             -           -          1           (1)
                                                                    ---         ---        ---        -----
       Stores open as of the end of the 13 weeks ended              434         967        492        1,001
                                                                    ===         ===        ===        =====
</TABLE>
                                       16
<PAGE>

Revenues

         Net Store and Food Sales.  Total net store sales decreased  $2,147,  or
6.2  percent,  from  $34,786  to  $32,639  for the 13 weeks  ended  July 1, 2000
compared to the 13 weeks ended July 3, 1999.  The decrease was due  primarily to
58, or 11.8 percent, fewer stores open at July 1, 2000 compared to July 3, 1999.
Sales  were  flat for mall  stores  that  had  been  open one year or more  when
compared to the same period in the prior year. Mail order sales for the 13 weeks
ended July 1, 2000 increased $871, or 77 percent, compared to the 13 weeks ended
July 3, 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  $951, or 18.5
percent,  from $5,146 to $6,097 for the 13 weeks ended July 1, 2000  compared to
the 13 weeks ended July 3, 1999.  Franchising  revenues were positively impacted
by the Easter holiday occurring in the second quarter in fiscal 2000 compared to
Easter  occurring  in the first  quarter in 1999.  Sales of cookie  dough to our
Great American franchisees also increased $166 during the 13 weeks ended July 1,
2000, compared to the 13 weeks ended July 3, 1999.

         Management Fee Revenue.  The Company received management fee revenue of
$1,033 in June of 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.

         Licensing Revenues.  Licensing revenues decreased $40, or 16.6 percent,
from $241 to $201 for the 13 weeks  ended July 1, 2000  compared to the 13 weeks
ended July 3, 1999.  The decrease in  licensing  revenues for the 13 weeks ended
July 1, 2000 was primarily attributable to a decrease in the number of licensees
with agreements in effect during the current quarter compared to 1999.

Operating Costs and Expenses

         Selling and Store  Occupancy  Costs.  Total selling and store occupancy
costs decreased $1,338, or 6.8 percent, from $19,725 to $18,387 for the 13 weeks
ended July 1, 2000 compared to the 13 weeks ended July 3, 1999.  The decrease is
attributable to 58, or 11.8 percent,  fewer stores open at July 1, 2000 compared
to July 3, 1999, and to cost cutting efforts.

         Cost of Sales.  Total  food  cost of sales  increased  $1,109,  or 11.2
percent,  from $9,925 to $11,034 for the 13 weeks ended July 1, 2000 compared to
the 13 weeks  ended July 3, 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 13 weeks  ended July 1, 2000,  compared  to the prior year  period.  Cost of
goods sold for mall stores  decreased $1,120 or 14.0 percent due to fewer stores
open during the 13 weeks ended July 1, 2000,  compared to the prior period. Cost
of sales as percentage of sales for mall stores  decreased from 25.6 percent for
the 13 weeks ended July 3, 1999,  to 24.0 percent for the 13 weeks ended July 1,
2000.
                                       17
<PAGE>

         General  and  Administrative   Expenses.   General  and  administrative
expenses increased $768, or 13.8 percent, from $5,571 to $6,339 for the 13 weeks
ended July 1, 2000 compared to the 13 weeks ended July 3, 1999.  The increase in
general and administrative expenses was primarily attributable to one-time costs
incurred by the Company in  conjunction  with Capricorn  Investors  III,  L.P.'s
acquisition of TCBY.  These costs were offset by the $300  acquisition  advisory
fee and the $1,033  management fee revenue  discussed  above.  This increase was
partially  offset by lower legal and risk management  insurance  expenditures in
the current  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 $200  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 its  closure  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 $465,  or 7.9  percent,  from $5,877 to $6,342 for the 13
weeks  ended July 1, 2000  compared  to the 13 weeks  ended  July 3,  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,  Net. Total other expense,  net increased by $332,
or 5.6  percent,  from  $5,898 to  $6,230  for the 13 weeks  ended  July 1, 2000
compared to the 13 weeks ended July 3, 1999.  The  increase  resulted  primarily
from higher interest  expense  resulting from higher  interest rates,  partially
offset by a lower tax provision and no preferred  stock dividends in the current
quarter.

         Net Loss.  The net loss  increased  by $1,039,  or 15.2  percent,  from
$6,823 to $7,862 for the 13 weeks  ended July 1, 2000  compared  to the 13 weeks
ended July 3, 1999 due to the combination of factors described above.


26 Weeks Ended July 1, 2000 Compared to the 26 Weeks Ended July 3, 1999
<TABLE>
<CAPTION>

         As of July  1,  2000,  there  were  434  Company-owned  stores  and 967
franchised or licensed stores in operation.  The store activity for the 26 weeks
ended July 1, 2000 and July 3, 1999 is summarized as follows:


    Company-owned and Franchised or Licensed Store Activity                 July 1,            July 1,
                                                                            2000                1999
                                                                 ---------------------  ---------------------
                                                                 Company-   Franchised  Company-   Franchised
                                                                  Owned    or Licensed   Owned    or Licensed
<S>                                                                 <C>         <C>         <C>         <C>
       Stores open as of the beginning of the 26 weeks ended        462         981         566         972
         Stores opened (including relocations)                        4          77          10          49
         Stores closed (including relocations)                      (21)        (98)        (23)        (38)
         Stores sold to franchisees                                  (6)          6          (7)          7
         Non-continuing (exit plan) stores closed                    (3)         (1)        (43)          -
         Non-continuing (exit plan) stores franchised                (3)          3         (14)         14
         Stores acquired from franchisees                             1          (1)          3          (3)
                                                                    ---         ---         ---       -----
       Stores open as of the end of the 26 weeks ended              434         967         492       1,001
                                                                    ===         ===         ===       =====
</TABLE>

Revenues

         Net Store and Food Sales.  Total net store sales decreased  $5,480,  or
7.6  percent,  from  $71,915  to  $66,435  for the 26 weeks  ended  July 1, 2000
compared to the 26 weeks ended July 3, 1999.  The decrease was due  primarily to
58, or 11.8 percent, fewer stores open at July 1, 2000 compared to July 3, 1999.
For stores that had been open one year or more,  mall store sales  decreased  .8
percent when compared to the same period in the prior year. Mail order sales for
the 26 weeks ended July 1, 2000 increased $1,786, or 80 percent, compared to the
26 weeks ended July 3, 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  $481,  or 4.2
percent, from $11,562 to $12,043 for the 26 weeks ended July 1, 2000 compared to
the 26 weeks ended July 3, 1999.  The increase was  primarily  from the sales of
cookie dough to our Great American franchisees during the 26 weeks ended July 1,
2000, compared to the 26 weeks ended July 3, 1999.

                                       18
<PAGE>



         Management Fee Revenue.  The Company received management fee revenue of
$1,033 in June of 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.

         Licensing Revenues. Licensing revenues decreased $327, or 47.5 percent,
from $688 to $361 for the 26 weeks  ended July 1, 2000  compared to the 26 weeks
ended July 3, 1999.  The decrease in  licensing  revenues for the 26 weeks ended
July 1, 2000 was primarily attributable to a decrease in the number of licensees
with  agreements in effect during the first six months of 2000 compared to 1999.
Also,  the  agreement  with the  licensee  of  frozen  cookie  dough for sale to
supermarkets  was in effect during the first six months of 1999,  but not during
2000.

Operating Costs and Expenses

         Selling and Store  Occupancy  Costs.  Total selling and store occupancy
costs  decreased  $4,411,  or 10.7  percent,  from $41,118 to $36,707 for the 26
weeks  ended July 1, 2000  compared  to the 26 weeks  ended  July 3,  1999.  The
decrease is primarily  attributable to 58, or 11.8 percent, fewer stores open at
July 1, 2000 compared to July 3, 1999, and to cost cutting efforts.  Selling and
store  occupancy  costs as a percentage of sales  decreased from 57.2 percent in
1999 to 55.3 percent in 2000.

         Cost of Sales.  Total food cost of sales increased $145, or .7 percent,
from  $21,856 to $22,001 for the 26 weeks ended July 1, 2000  compared to the 26
weeks ended July 3, 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 26
weeks ended July 1, 2000,  compared to the prior year period. Cost of goods sold
for mall stores decreased $2,109 or 12.4 percent due to fewer stores open during
the 26 weeks ended July 1, 2000,  compared to the prior period. Cost of sales as
percentage of sales for mall stores decreased from 25.2 percent for the 26 weeks
ended July 3, 1999, to 24.7 percent for the 26 weeks ended July 1, 2000.

         General  and  Administrative   Expenses.   General  and  administrative
expenses  increased  $510,  or 4.7  percent,  from $10,950 to $11,460 for the 26
weeks  ended July 1, 2000  compared  to the 26 weeks  ended  July 3,  1999.  The
increase in general and  administrative  expenses was primarily  attributable to
one-time costs incurred by the Company in conjunction  with Capricorn  Investors
III, L.P.'s acquisition of TCBY. These costs were offset by the $300 acquisition
advisory  fee and the  $1,033  management  fee  revenue  discussed  above.  This
increase  was  partially  offset by lower  legal and risk  management  insurance
expenditures   in  the  current   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 $200  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 $726,  or 6.4 percent,  from $11,286 to $12,012 for the 26
weeks  ended July 1, 2000  compared  to the 26 weeks  ended  July 3,  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,  Net. Total other expense,  net increased by $556,
or 4.7  percent,  from  $11,832 to $12,388  for the 26 weeks  ended July 1, 2000
compared to the 26 weeks ended July 3, 1999.  The  increase  resulted  primarily
from higher interest  expense  resulting from higher  interest rates,  partially
offset by a lower tax provision and no preferred  stock dividends in the current
year.

         Net Loss.  The net loss  increased  by $1,319,  or 10.2  percent,  from
$12,877 to $14,196 for the 26 weeks ended July 1, 2000  compared to the 26 weeks
ended July 3, 1999 due to the combination of factors described above.

                                       19

<PAGE>


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 July 1, 2000, Mrs. Fields'
Holding has $1,775 of cash and cash  equivalents  on hand and $4,366  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.
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.

     July 1, 2000 Compared to January 1, 2000

     As of July 1, 2000,  Mrs.  Fields' Holding had liquid assets (cash and cash
equivalents and accounts  receivable) of $9,436, a decrease of 27.0 percent,  or
$3,486,  from January 1, 2000 when liquid  assets were $12,922.  Cash  decreased
$3,144,  or 63.9  percent,  to $1,775 at July 1, 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 July 1,  2000 were  lower  due to lower  sales and
improved cash collection procedures.

     Mrs.  Fields'  Holding's  working  capital  decreased  by  $2,942,  or 65.1
percent,  to a negative $7,459 at July 1, 2000 from a negative $4,517 at January
1, 1999.  This  decrease is due  primarily to lower cash balances in the current
period.

     Long-term assets decreased $10,871,  or 5.7 percent, to $179,290 at July 1,
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' Holdings utilized $1,675 of cash for operating  activities for
the 26  weeks  ended  July 1,  2000,  primarily  due to lower  accounts  payable
balances and for cash payments to close stores.

     Mrs. Fields utilized $2,529 of cash in investing  activities  during the 26
weeks ended July 1, 2000, primarily for capital  expenditures  relating to store
remodels and renovations.

     Mrs. Fields received $1,135 in cash from financing activities during the 26
weeks ended July 1, 2000. The increase resulted from borrowings on the Company's
bank line of credit.  During the current period,  the preferred stock of Pretzel
Time was redeemed in full.

     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 26 weeks ended July 1, 2000 and
July 3, 1999, Mrs. Fields expended $2,529 and $2,604, respectively,  for capital
assets and expects to expend a total of approximately $9,500 in 2000. 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.


                                       20

<PAGE>


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.

                                       21
<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                                            August 15, 2000
---------------------------------------------                 ---------------
Larry A. Hodges, President & CEO                              Date


/s/Michael B. Malan                                           August 15, 2000
---------------------------------------------                 ---------------
Michael B. Malan, Vice President & Controller                 Date
(Principal Accounting Officer)

                                       22