UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                            -------------------------

                                    FORM 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the quarterly period ended                           Commission file number
       June 15, 1999                                            000-22753

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
             (Exact Name of Registrant as Specified in its Charter)

         Delaware                                             52-2016614
(State or Other Jurisdiction of                            (I.R.S. Employer
Incorporation or Organization)                           Identification Number)

                            9300 East Central Avenue
                                    Suite 100
                              Wichita, Kansas 67206
               (Address of principal executive offices) (Zip code)

                                 (316) 634-0505
              (Registrant's telephone number, including area code)

     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

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

           Class                                    Outstanding at July 15, 1999
Common Stock, $.01 par value                             10,415,000 shares

<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.

                                      Index

                                                                           Page
                                                                          Number
                                                                          ------
PART I.   FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

     Condensed Consolidated Balance Sheets at
     June 15, 1999 and December 29, 1998                                     2

     Condensed Consolidated Statements of
     Operations for the twelve weeks ended
     June 15, 1999 and June 16, 1998                                         3

     Condensed Consolidated Statements of
     Operations for the twenty-four weeks ended
     June 15, 1999 and June 16, 1998                                         4

     Condensed Consolidated Statements of
     Cash Flows for the twenty-four weeks ended
     June 15, 1999 and June 16, 1998                                         5

     Notes to Condensed Consolidated
     Financial Statements                                                    6

Item 2.  Management's Discussion and
     Analysis of Financial Condition and
     Results of Operations                                                   7

Item 3.  Quantitative and Qualitative
     Disclosures About Market Risk                                          12

PART II.  OTHER INFORMATION

Item 2.  Changes in Securities                                              13

Item 4.  Submission of Matters to a Vote of Stockholders                    13

Item 6.  Exhibits and Reports on Form 8-K                                   14


                                      -1-
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                      Condensed Consolidated Balance Sheets
                                   (Unaudited)

                                                         June 15,   December 29,
                                                          1999          1998
                                                       -----------  ------------
                      ASSETS

Current assets:
   Cash and cash equivalents                           $ 2,542,906   $   945,861
   Inventories                                             965,040       854,686
   Pre-opening costs - net                                    --       1,789,740
   Other current assets                                    667,033       769,155
                                                       -----------   -----------
      Total current assets                               4,174,979     4,359,442

Property and equipment:
   Land                                                    600,000       600,000
   Buildings                                               655,795       655,795
   Leasehold improvements                               21,023,319    19,175,677
   Equipment                                            13,005,705    11,922,806
   Furniture and fixtures                                3,118,241     2,633,742
                                                       -----------   -----------
                                                        38,403,060    34,988,020
   Less accumulated depreciation and amortization        4,116,984     2,830,656
                                                       -----------   -----------
                                                        34,286,076    32,157,364
Other assets:
   Goodwill, net of accumulated amortization             4,280,931     4,393,621
   Deferred taxes                                          234,667          --
   Other assets                                            376,398       374,007
                                                       -----------   -----------
Total other assets                                       4,891,996     4,767,628
                                                       -----------   -----------
        Total assets                                   $43,353,051   $41,284,434
                                                       ===========   ===========
        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                     $2,071,849    $3,666,310
   Accounts payable - affiliates                              --          11,451
   Accrued payroll                                         607,506       465,519
   Accrued income taxes                                    912,356       358,583
   Other accrued liabilities                               860,597       804,257
                                                       -----------   -----------
        Total current liabilities                        4,452,308     5,306,120


Notes payable                                           15,320,000   $11,815,000
Deferred income taxes                                         --         427,537
Stockholders' Equity:
   Preferred stock                                            --            --
   Common stock                                            104,150       104,150
   Additional paid-in capital                           20,571,178    20,571,178
   Retained earnings                                     2,905,415     3,060,449
                                                       -----------   -----------
        Total stockholders' equity                      23,580,743    23,735,777
                                                       -----------   -----------
        Total liabilities and stockholders' equity     $43,353,051   $41,284,434
                                                       ===========   ===========

                             See accompanying notes.


                                      -2-
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

                                                 Twelve weeks     Twelve weeks
                                                     ended            ended
                                                 June 15, 1999    June 16, 1998
                                                 --------------   --------------
Net sales:
   Food and beverage                              $ 11,501,979    $  4,883,221
   Entertainment and other                           1,294,438         820,524
                                                  ------------    ------------
      Total net sales                               12,796,417       5,703,745
Costs and expenses:
   Costs of sales                                    3,551,724       1,524,743
   Restaurant operating expenses                     6,876,297       2,593,687
   Depreciation and amortization                       861,505         489,867
                                                  ------------    ------------
Entertainment and restaurant costs and expenses     11,289,526       4,608,297
                                                  ------------    ------------
Entertainment and restaurant operating income        1,506,891       1,095,448
General and administrative expenses                  1,003,924         553,589
Goodwill amortization                                   56,345          56,345
                                                  ------------    ------------
Income from operations                                 446,622         485,514

Other income (expense):
   Other income, principally interest                     --            33,259
   Interest expense                                   (241,717)           --
                                                  ------------    ------------
Income before income taxes                             204,905         518,773
Provision for income taxes                              76,218         191,735
                                                  ------------    ------------
Net income                                        $    128,687    $    327,038
                                                  ============    ============

Basic earnings per share                          $       0.01    $       0.03
                                                  ============    ============

Diluted earnings per share                        $       0.01    $       0.03
                                                  ============    ============

                             See accompanying notes.


                                      -3-
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

                                                  Twenty-four      Twenty-four
                                                  weeks ended      weeks ended
                                                 June 15, 1999    June 16, 1998
                                                 -------------    -------------

Net sales:
   Food and beverage                              $ 24,428,511    $ 10,625,203
   Entertainment and other                           2,751,425       1,853,125
                                                  ------------    ------------
      Total net sales                               27,179,936      12,478,328
Costs and expenses:
   Costs of sales                                    7,510,821       3,310,056
   Restaurant operating expenses                    13,984,596       5,449,484
   Depreciation and amortization                     1,658,061         954,609
                                                  ------------    ------------
Entertainment and restaurant costs and expenses     23,153,478       9,714,149
                                                  ------------    ------------
Entertainment and restaurant operating income        4,026,458       2,764,179
General and administrative expenses                  1,897,586       1,120,445
Goodwill amortization                                  112,690         112,690
                                                  ------------    ------------
Income from operations                               2,016,182       1,531,044

Other income (expense):
   Other income, principally interest                     --            65,433
   Interest expense                                   (471,888)           (178)
                                                  ------------    ------------
Income before income taxes                           1,544,294       1,596,299
Provision for income taxes                             571,792         590,420
                                                  ------------    ------------
Net income before cumulative effect of a
   change in accounting principle                      972,502       1,005,879

Cumulative effect of change in
   accounting principle (net of income tax)         (1,127,536)              0
                                                  ------------    ------------
Net (loss) income                                 $   (155,034)   $  1,005,879
                                                  ============    ============
Basic (loss) earnings per share:
   Net income before cumulative effect of a
      change in accounting principle              $       0.09    $       0.10
   Cumulative effect of change in
      accounting principle (net of income tax)           (0.11)           --
                                                  ------------    ------------
Basic (loss) earnings per share                   $      (0.02)   $       0.10
                                                  ============    ============

Diluted (loss) earnings per share:
   Net income before cumulative effect of a
      change in accounting principle              $       0.09    $       0.10
   Cumulative effect of change in
      accounting principle (net of income tax)           (0.11)           --
                                                  ------------    ------------
Diluted (loss) earnings per share                 $      (0.02)   $       0.10
                                                  ============    ============

                             See accompanying notes.


                                      -4-
<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                 Condensed Consolidated Statement of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                            Twenty-four    Twenty-four
                                                            weeks ended    weeks ended
                                                           June 15, 1999  June 16, 1998
                                                           -------------  -------------
<S>                                                        <C>            <C>
Cash flows from operating activities:
 Net (loss) income                                         $  (155,034)   $ 1,005,879
 Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
     Cumulative effect of change in accounting principle     1,127,536           --
     Depreciation and amortization                           1,770,751      1,084,031
     Net change in operating assets and liabilities:
         Change in operating assets                            (22,386)      (748,820)
         Change in operating liabilities                      (853,812)       690,839
                                                           -----------    -----------
         Net cash provided by operating activities           1,867,055      2,031,929

Cash flows from investing activities:
 Purchases of property and equipment                        (3,775,010)    (3,579,557)
 Proceeds from sale of marketable securities                      --        3,315,056
                                                           -----------    -----------
         Net cash used in investing activities              (3,775,010)      (264,501)

Cash flows from financing activities:
 Proceeds from revolving note payable to bank, net           3,505,000           --
                                                           -----------    -----------
         Net cash provided by financing activities           3,505,000           --
                                                           -----------    -----------
         Net increase in cash and cash equivalents           1,597,045      1,767,428

Cash and cash equivalents at beginning of period               945,861      1,220,598
                                                           -----------    -----------
Cash and cash equivalents at end of period                 $ 2,542,906    $ 2,988,026
                                                           ===========    ===========

Supplemental disclosure of cash flow information:
 Cash paid for interest                                    $   500,298    $       178
 Cash paid for income taxes                                     15,400        572,108
</TABLE>

                             See accompanying notes.


                                      -5-
<PAGE>


                      TOTAL ENTERTAINMENT RESTAURANT CORP.
              Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation and Description of Business

     The  unaudited  condensed   consolidated  financial  statements  have  been
prepared by the Company, pursuant to the rules and regulations of the Securities
and  Exchange  Commission.   The  information   furnished  herein  reflects  all
adjustments (consisting of normal recurring accruals and adjustments) which are,
in the opinion of management,  necessary to fairly present the operating results
for  the  respective  periods.  Certain  information  and  footnote  disclosures
normally  presented in annual financial  statements  prepared in accordance with
generally  accepted  accounting  principles  have been omitted  pursuant to such
rules and regulations.  These financial statements should be read in conjunction
with the Company's audited  consolidated  financial  statements in its 1998 Form
10-K. The results of the twelve weeks and twenty-four  weeks ended June 15, 1999
are not  necessarily  indicative of the results to be expected for the full year
ending December 28, 1999.

2. Stock Options

     During the twenty-four week period ended June 15, 1999, the Company granted
to certain key  employees  stock  options for 459,292  shares of Common Stock at
exercise  prices  ranging from $2.8125 to $4.7500 per share pursuant to its 1997
Incentive  and  Nonqualified  Stock  Option  Plan.  The Company  also granted to
certain  non-employee  Directors stock options for 40,000 shares of Common Stock
at exercise  prices  ranging from  $3.3750 to $4.3125 per share  pursuant to its
1997 Directors Stock Option Plan.

3. Earnings Per Share

     Basic earnings per share amounts are computed based on the weighted average
number of shares actually  outstanding.  The number of weighted  averaged shares
outstanding for all periods presented were 10,415,000.

     For  purposes of diluted  computations,  the number of shares that would be
issued  from the  exercise of stock  options  has been  reduced by the number of
shares which could have been  purchased  from the proceeds at the average market
price of the Company's stock or the price of the Company's stock on the exercise
date if options were exercised during the period presented. The number of shares
resulting  from this  computation  of diluted  earnings per share for the twelve
weeks ended June 15, 1999 and June 16, 1998 was  10,437,681  and  10,428,863 and
for the  twenty-four  weeks ended June 15, 1999 and June 16, 1998 was 10,478,502
and 10,426,032, respectively.

4. Recently Issued Accounting Standards

     The Company  adopted  Statement  of Position  98-5,  Reporting  on Costs of
Start-Up Activities,  which requires that preopening and other start-up costs be
expensed  as  incurred  rather  than  capitalized.  The  adoption  has been made
effective as of the beginning of the Company's  current fiscal year. As a result
of the adoption, the Company has begun to report preopening costs as part of its
entertainment and restaurant  operating  expenses,  which in turn will result in
lower future amortization  expense.  The Company had amortized  preopening costs
over a one-year period following the opening of its restaurants.  The cumulative
effect of the change in accounting,  which totaled approximately  $1,128,000 net
of taxes or $0.11 per share,  was recorded as a one-time charge in the Company's
first quarter results.


                                      -6-
<PAGE>

     In June 1998,  the FASB  issued  SFAS No. 133  "Accounting  for  Derivative
Instruments and Hedging Activities." SFAS No. 133 defines derivative instruments
and requires  that these items be  recognized  as assets or  liabilities  in the
statement of financial  position.  This  Statement is effective for fiscal years
beginning  after June 15, 1999.  As of June 15, 1999,  the Company does not have
any derivative instruments.

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

General

     The following  discussion and analysis  should be read in conjunction  with
the Financial Statements and Notes thereto included elsewhere in this Form 10-Q.

     As of June 15, 1999,  the Company owned and operated 36  entertainment  and
restaurant  locations  under the Fox and Hound  English  Pub & Grille  ("Fox and
Hound"),  Bailey's  Sports Grille and Bailey's Pub & Grille  ("Bailey's")  brand
names. The Company's  entertainment  restaurant  locations combine a comfortable
and  inviting  social   gathering  place,   full  menu  and  full-service   bar,
state-of-the-art  audio and video  systems  for sports and music  entertainment,
traditional  games of skill such as pocket  billiards  and a  late-night  dining
alternative,  all in a single  location.  As of June 15, 1999, the Company owned
and  operated  24 Fox and Hounds and 12 Bailey's  located in Alabama,  Arkansas,
Georgia,  Illinois,  Indiana,  Iowa,  Kansas,  Louisiana,   Michigan,  Missouri,
Nebraska,  North Carolina,  Ohio,  Pennsylvania,  South Carolina,  Tennessee and
Texas.  As of June 16, 1998, the Company owned and operated 8 Fox and Hounds and
10 Bailey's.

     The  components  of the  Company's  net  sales  are food and  non-alcoholic
beverages, alcoholic beverages, and entertainment and other. For the twenty-four
weeks ended June 15, 1999, food and non-alcoholic  beverages were 35.2% of total
sales, alcoholic beverages were 54.7% of total sales and entertainment and other
were 10.1% of total sales.  For the twenty-four  weeks ended June 16, 1998, food
and non-alcholic  beverages were 28.9% of total sales,  alcoholic beverages were
56.2% of total sales and entertainment and other were 14.9% of total sales.

     Components of restaurant  operating  expenses include operating payroll and
fringe benefits, occupancy, advertising and promotion. These costs are generally
variable and will  fluctuate with changes in sales volume and sales mix. All but
one of the Company's locations are leased and provide for a minimum annual rent,
with some  leases  calling  for  additional  rent  based on sales  volume at the
particular location of specified minimum levels.

     General   and   administrative   expenses   include   all   corporate   and
administrative  functions  that  support  existing  operations  and  provide  an
infrastructure  to support  future  growth.  In  addition,  certain  expenses of
recruiting and training unit management personnel are also included. Management,
supervisory and staff salaries,  employee benefits, travel, information systems,
training, rent and office supplies as well as accounting services fees are major
items of costs in this category.


                                      -7-
<PAGE>

Results of Operations

     The  following  table  sets  forth  for  the  periods   indicated  (i)  the
percentages which certain items included in the Condensed Consolidated Statement
of Operations bear to net sales, and (ii) other selected operating data:

<TABLE>
<CAPTION>
                                                                Twelve Weeks Ended(1)  Twenty-four Weeks Ended(1)
                                                                ---------------------  --------------------------
                                                                 June 15,    June 16,    June 15,      June 16,
                                                                   1999        1998        1999          1998
                                                                   ----        ----        ----          ----
<S>                                                               <C>         <C>         <C>          <C>
Operating Statement Data:
     Net sales                                                    100.0%      100.0%      100.0%       100.0%
     Costs and expenses:
         Costs of sales                                            27.8        26.7        27.6         26.5
         Restaurant operating expenses                             53.7        45.5        51.5         43.7
         Depreciation and amortization                              6.7         8.6         6.1          7.6
                                                               --------    --------    --------     --------
             Restaurant costs and expenses                         88.2        80.8        85.2         77.8
                                                               --------    --------    --------     --------
     Restaurant operating income                                   11.8        19.2        14.8         22.2
     General and administrative expenses                            7.8         9.7         7.0          9.0
     Goodwill amortization                                          0.5         1.0         0.4          0.9
                                                               --------    --------    --------     --------
     Income from operations                                         3.5         8.5         7.4         12.3
     Other income, principally interest                                        --           0.6       -- 0.5
     Interest expense                                               1.9        --           1.7         --
                                                               --------    --------    --------     --------
     Income before provision for income taxes and cumulative
         effect of a change in accounting principle                 1.6         9.1         5.7         12.8
     Provision for income taxes                                     0.6         3.4         2.1          4.7
                                                               --------    --------    --------     --------
     Income before cumulative effect of a change in
         accounting principle                                       1.0         5.7         3.6          8.1
     Cumulative effect of change in accounting principle           --          --          (4.2)        --
                                                               --------    --------    --------     --------
     Net (loss) income                                              1.0%        5.7%       (0.6)         8.1
                                                               ========    ========    ========     ========
Restaurant Operating Data (dollars in thousands):
     Annualized average weekly sales per location (2)          $  1,526    $  1,433    $  1,668     $  1,594
     Number of restaurants at end of the period                      36          18          36           18
</TABLE>

(1)  The Company  operates on a fifty-two or fifty-three week fiscal year ending
     the last Tuesday in December.  The fiscal  quarters for the Company consist
     of accounting  periods of twelve,  twelve,  twelve and sixteen or seventeen
     weeks, respectively.

(2)  Annualized  average  weekly sales per location are computed by dividing net
     sales for full  weeks  open  during  the period by the number of full weeks
     open and multiplying the result by fifty-two.

Twelve Weeks Ended June 15, 1999 Compared to Twelve Weeks Ended June 16, 1998

     Net sales increased $7,093,000 (124.4%) for the twelve weeks ended June 15,
1999 to  $12,796,000  from  $5,704,000 for the twelve weeks ended June 16, 1998,
which is  principally  attributable  to sales from the  nineteen  new  locations
opened  since June 1998.  Same store sales  increased  0.1% in the twelve  weeks
ended June 15, 1999 compared to the twelve weeks ended June 16, 1998.

     Costs of sales,  primarily food and beverages increased $2,027,000 (132.9%)
for the twelve weeks ended June 15, 1999 to  $3,552,000  from  $1,525,000 in the
twelve weeks ended June 16,  1998,  and  increased  as a percentage  of sales to
27.8% from 26.7%.  This increase is principally  attributable  to an increase in
the food sales mix,  which has a higher cost of sales  compared to beverages and
entertainment.


                                      -8-
<PAGE>

     Restaurant  operating expenses increased $4,282,000 (165.1%) for the twelve
weeks ended June 15, 1999 to  $6,876,000  from  $2,594,000  in the twelve  weeks
ended June 16, 1998,  and  increased as a percentage  of net sales to 53.7% from
45.5%.  Most of this increase is  attributable  to higher labor costs  resulting
from the increase in food sales mix,  which has a higher labor cost  compared to
beverages and entertainment.

     Depreciation  and  amortization  increased  $372,000 (75.9%) for the twelve
weeks ended June 15, 1999 to $862,000  from  $490,000 in the twelve  weeks ended
June 16, 1998,  and decreased as a percentage  of sales to 6.7% from 8.6%.  This
percentage  decrease is due  principally to the change in accounting  method for
preopening  expenses which,  prior to 1999, were  capitalized and then amortized
over a twelve month period. The preopening amortization expense included for the
twelve weeks ended June 16, 1998 was 2.6% of sales.

     General and  administrative  expenses  increased  $450,000  (81.3%) for the
twelve weeks ended June 15, 1999 to $1,004,000 from $554,000 in the twelve weeks
ended June 16, 1998,  and  decreased as a percentage of sales to 7.8% from 9.7%.
This percentage  decrease reflects the leveraging of sales from the nineteen new
units added since June 1998.

     The  interest  earned  during the twelve weeks ended June 16, 1998 was from
the  investment  of the net  proceeds  of the  initial  public  offering  of the
Company,  which commenced on July 17, 1997 (the "Initial Public Offering").  The
decrease in interest earned resulted from the prior  utilization of the proceeds
from the Initial  Public  Offering  to develop  additional  locations.  Interest
expense increased $242,000 for the twelve weeks ended June 15, 1999 to $242,000.
This increase  reflects the borrowings made to fund additional unit  development
since June 1998.

     The effective  income tax rate for the twelve weeks ended June 15, 1999 and
June 16, 1998 was 37.0%.

Twenty-four  Weeks Ended June 15, 1999 Compared to Twenty-four  Weeks Ended June
16, 1998

     Net sales increased  $14,702,000  (117.8%) for the twenty-four  weeks ended
June 15, 1999 to $27,180,000  from  $12,478,000 for the twenty-four  weeks ended
June 16, 1998, which is principally  attributable to sales from the nineteen new
locations  opened  since  June  1998.  Same store  sales  decreased  3.5% in the
twenty-four  weeks ended June 15, 1999 compared to the  twenty-four  weeks ended
June 16, 1998.

     Costs of sales,  primarily food and beverages increased $4,201,000 (126.9%)
for the  twenty-four  weeks ended June 15, 1999 to $7,511,000 from $3,311,000 in
the  twenty-four  weeks ended June 16, 1998,  and  increased as a percentage  of
sales to 27.6% from 26.5%.  This  increase  is  principally  attributable  to an
increase  in the food sales mix,  which has a higher  cost of sales  compared to
beverages and entertainment.

     Restaurant   operating  expenses  increased  $8,536,000  (156.6%)  for  the
twenty-four  weeks ended June 15, 1999 to  $13,985,000  from  $5,449,000  in the
twenty-four  weeks ended June 16, 1998,  and  increased  as a percentage  of net
sales to 51.5% from 43.8%. Most of this increase is attributable to higher labor
costs  resulting  from the increase in food sales mix,  which has a higher labor
cost compared to beverages and entertainment. This increase is also attributable
to the change in accounting method for preopening expenses which, prior to 1999,
were  capitalized and then amortized over a twelve month period.  The preopening
expenses  included in restaurant  operating  expenses for the  twenty-four  week
period ended June 15, 1999 was $463,000 or 1.7% of sales.


                                       -9-
<PAGE>

     Depreciation   and   amortization   increased   $703,000  (73.7%)  for  the
twenty-four  weeks  ended  June 15,  1999 to  $1,658,000  from  $955,000  in the
twenty-four weeks ended June 16, 1998, and decreased as a percentage of sales to
6.1% from 7.6%.  This  percentage  decrease is due  principally to the change in
accounting method for preopening expenses.  The preopening  amortization expense
included for the twenty-four weeks ended June 16, 1998 was 2.6% of sales.

     General and  administrative  expenses  increased  $777,000  (69.4%) for the
twenty-four  weeks  ended June 15, 1999 to  $1,898,000  from  $1,120,000  in the
twenty-four weeks ended June 16, 1998, and decreased as a percentage of sales to
7.0% from 9.0%. This percentage  decrease  reflects the leveraging of sales from
the  nineteen  new units  added  since June 1998.  For fiscal  1998 and  through
February  28,  1999,  certain   accounting  and  administrative   services  were
contracted  from Coulter  Enterprises,  Inc.  ("CEI"),  a restaurant  management
services company owned by the Company's  former Chairman of the Board,  Jamie B.
Coulter.   The  service   agreement   provided  for  specified   accounting  and
administrative  services to be provided on a cost pass-through basis. For fiscal
1998 and through  February 28, 1999, the fixed annual charge was $194,500,  plus
an additional fee of $466 per restaurant per 28-day accounting period.

     On October 19, 1998, Lone Star Steakhouse & Saloon,  Inc. ("Lone Star"),  a
restaurant  company of which Mr. Coulter is chairman and CEO,  purchased certain
assets and assumed  certain  liabilities of CEI,  including the former  services
agreement  with the Company.  From  October 19, 1998 to February 28, 1999,  such
services were provided by Lone Star.  Beginning  March 1, 1999,  these  services
were provided by Franchise Services Company ("FSC") at a market rate.

     The interest  earned during the  twenty-four  weeks ended June 16, 1998 was
from the  investment  of the net proceeds of the Initial  Public  Offering.  The
decrease in interest earned resulted from the prior  utilization of the proceeds
from the Initial  Public  Offering  to develop  additional  locations.  Interest
expense  increased  $472,000  for the  twenty-four  weeks ended June 15, 1999 to
$472,000.  This increase  reflects the borrowings  made to fund  additional unit
development since June 1998.

     The effective income tax rate for the twenty-four weeks ended June 15, 1999
and June 16, 1998 was 37.0%.

Quarterly Fluctuations, Seasonality and Inflation

     As a result of the revenues  associated with each new location,  the timing
of new unit  openings  will  result in  significant  fluctuations  in  quarterly
results.  The Company  expects  seasonality  to be a factor in the  operation or
results of its  business  in the future due to expected  lower  second and third
quarter  revenues  during the summer season.  The primary  inflationary  factors
affecting  the  Company's  operations  include  food,  liquor  and labor  costs.
Although a large number of the  Company's  restaurant  personnel are paid at the
federal minimum wage level, the majority of personnel are tipped employees,  and
therefore,  recent as well as future  minimum  wage  changes  are likely to have
little  effect on labor costs.  As costs of food and labor have  increased,  the
Company has historically  been able to offset these increases  through economies
of scale and improved  operating  procedures.  To date,  inflation has not had a
material impact on operating margins.


                                      -10-
<PAGE>

Liquidity and Capital Resources

     Cash flows from  operations  were  $1,867,000,  purchases  of property  and
equipment were  $3,775,000,  and net proceeds from the revolving note payable to
bank were $3,505,000 for the twenty-four week period ending June 15, 1999.

     At June 15, 1999, the Company had $2,543,000 in cash and cash  equivalents.
The Company intends to open no additional new locations  during the remainder of
1999 and  intends  to open up to 4 to 7  locations  in  2000.  Three  units  are
currently   under   non-binding   letters  of  intent  to  lease  with   pending
contingencies. The Company is currently evaluating locations in markets familiar
to its management team. However, the number of locations actually opened and the
timing  thereof  may vary  depending  upon the  ability of the Company to locate
suitable sites and negotiate  favorable  leases.  The Company  expects to expend
approximately  up to $9.0  million to open new  locations  over the next  twelve
months.  In order to fund new unit  development,  the Company has entered into a
$20 million line of credit with Intrust Bank,  N.A. (the  "Facility"),  of which
$4,680,000 is available at June 15, 1999.

     The Company  believes  the funds  available  from the Facility and its cash
flow from  operations  will be  sufficient  to satisfy its  working  capital and
capital expenditure  requirements for at least the next twelve months. There can
be no assurance,  however,  that changes in the Company's  operating  plans, the
acceleration or modification of the Company's expansion plans as outlined above,
lower than anticipated revenues,  increased expenses,  potential acquisitions or
other events will not cause the Company to seek additional financing sooner than
anticipated,  prevent  the Company  from  achieving  the goals of its  expansion
strategy or prevent any newly opened locations from operating profitably.  There
can be no  assurance  that  additional  financing  will be  available  on  terms
acceptable to the Company or at all.

Recently Issued Accounting Standards

     In June 1998,  the FASB  issued  SFAS No. 133  "Accounting  for  Derivative
Instruments and Hedging Activities." SFAS No. 133 defines derivative instruments
and requires  that these items be  recognized  as assets or  liabilities  in the
statement of financial  position.  This  Statement is effective for fiscal years
beginning after June 15, 1999. As of June 15, 1999 the Company does not have any
derivative instruments.

Year 2000 Compliance

     The Company utilizes and is dependent upon computer systems and software to
conduct its business.  In 1997, the Company initiated a review and assessment of
all hardware and  software to confirm  they will  function  properly in the year
2000. The systems and software  include those  developed and maintained by FSC's
in-house  computer  department  as well as  purchased  software  which is run on
in-house  computer systems,  including POS systems and back-of-house  systems in
the units.  FSC has informed the Company that the systems and software  utilized
by FSC are year 2000 compliant. The Company has recently completed an upgrade of
its POS and back-of-house  systems to allow for a seamless  interface with FSC's
accounting  systems.  Certain  back-of-house  applications  were  made year 2000
compliant as part of this upgrade.

     As noted above,  the Company believes it has completed all necessary phases
of the year 2000  project and believe that all systems and software are now year
2000 compliant. In the event the Company does not have systems and software that
are year 2000  compliant,  the Company might be unable to process  transactional
and financial  reporting  information.  In addition,  disruptions in the economy
generally  resulting from the year 2000 issues could also  materially  adversely
affect


                                      -11-
<PAGE>

the Company.  The Company  could be subject to litigation  for computer  systems
product  failure,  for example,  equipment  shutdown or failure to properly date
business records.  The amount of potential  liability and lost revenue cannot be
reasonably estimated at this time.

     The Company has contingency  plans for certain  applications and is working
on such plans for others. These contingency plans involve,  among other actions,
manual workarounds and adjusting staffing strategies.

Forward Looking Statements

     This report contains certain forward-looking  statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe  harbors  created  thereby.  Although  the  Company  believes  that the
assumptions  underlying  the  forward-looking  statements  contained  herein are
reasonable,  any of the assumptions could be inaccurate,  and, therefore,  there
can be no assurance that the forward-looking  statements included in this report
will prove to be accurate.  Factors  that could cause  actual  results to differ
from the results discussed in the forward-looking  statements  include,  but are
not limited to,  potential  increases in food and liquor costs,  competition and
the  inability  to find  suitable  new  locations.  In light of the  significant
uncertainties  inherent in the  forward-looking  statements included herein, the
inclusion of such information  should not be regarded as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Interest Rate Risk

     The Company's  Facility has a variable  rate which is directly  affected by
changes in U.S.  interest rates.  The average  interest rate of the Facility was
7.25% for the  twenty-four  weeks  ended  June 15,  1999.  The  following  table
presents the quantitative interest rate risks at June 15, 1999:

                     Principal Amount by Expected Maturity
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                             Fair
                                                                       There-               Value
     (dollars in thousands)    1999    2000   2001    2002     2003    after      Total    6/15/99
     ----------------------    ----    ----   ----    ----     ----    -----      -----    -------
<S>                            <C>    <C>     <C>    <C>      <C>      <C>       <C>       <C>
     Variable rate debt         --     --     $767   $4,800   $5,160   $4,593    $15,320   $15,320
     Average Interest Rate -
     1/2% below prime          7.25%  7.25%   7.25%    7.25%    7.25%    7.25%
</TABLE>


                                      -12-
<PAGE>

PART II. OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

Securities Sold

(c)  The following unregistered securities were issued by the Company during the
     twelve weeks ended June 15, 1999:

<TABLE>
<CAPTION>
                                                      Number of Shares
                               Description of       Sold/Issued/Subject      Offering/Exercise
     Date of Sale/Issuance    Securities Issued    to Options or Warrants     Price Per Share
        <S>                 <C>                            <C>                    <C>
        April 21, 1999      Common Stock Options           14,815                 $ 3.375
        April 28, 1999      Common Stock Options           16,667                 $ 3.000
        May 5, 1999         Common Stock Options           15,686                 $ 3.188
        June 3, 1999        Common Stock Options            5,000                 $ 3.000
</TABLE>

     All of the above options were granted to certain key employees  pursuant to
     the 1997 Incentive and  Nonqualified  Stock Option Plan or to  non-employee
     directors  pursuant to the  Directors  Stock Option  Plan.  The options for
     employees  have a vesting  period of three to five  years and a life of ten
     years and the options for  non-employee  directors have a vesting period of
     three years and a life of five years.

     The issuance of these securities is claimed to be exempt from  registration
     pursuant to Section  4(2) of the  Securities  Act of 1933,  as amended,  as
     transactions  by an issuer not involving a public  offering.  There were no
     underwriting  discounts or commissions paid in connection with the issuance
     of any of these securities.

Item 4. Submission of Matters to a Vote of Stockholders

     On May 25, 1999, the Company held its Annual Meeting of  Stockholders  (the
"Meeting").  At the Meeting, the stockholders elected Steven M. Johnson, Gary M.
Judd and John D.  Harkey,  Jr. to the Board of Directors to serve until the 2002
Annual Meeting of Stockholders and until their successors have been duly elected
and qualified. As to the new elected Directors, there were 7,793,931 votes "For"
and 50,450 votes  "Withheld" for Steven M. Johnson and 7,793,931 votes "For" and
50,450 votes  "Withheld"  for Gary M. Judd and 7,792,931  votes "For" and 51,450
votes  "Withheld"  for John D.  Harkey,  Jr. The  continuing  directors  and the
expiration of their current terms as directors are as follows:

     James K. Zielke ...........................................2000
     C. Wells Hall, III ........................................2000
     E. Gene Street ............................................2000
     Dennis L. Thompson ........................................2001
     Stephen P. Hartnett .......................................2001
     Thomas A. Hager ...........................................2001


                                      -13-
<PAGE>

In addition,  the stockholders ratified the appointment of Ernst & Young, LLP as
the Company's  independent auditors for the year ending December 28, 1999. As to
the  ratification of auditors there were 7,734,081 votes "For" and 105,200 votes
"Against",  and 5,100 votes "Abstained." In addition,  the stockholders ratified
the  increase  in the  number of  authorized  shares of common  stock  under the
Company's 1997 Incentive and Nonqualified Stock Option Plan by 100,000 shares to
1,600,000.  As to the ratification of the increases in shares authorized,  there
were  7,699,046  votes  "For",   140,135  votes   "Against",   and  5,200  votes
"Abstained".

Item 6. Exhibits and Reports on Form 8-K

Exhibits

The following exhibits are filed as part of this report:

     Exhibit No.

         27...............................Financial Data Schedule

Reports on Form 8-K

     None


                                      -14-

<PAGE>

                      TOTAL ENTERTAINMENT RESTAURANT CORP.

                                   SIGNATURES

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

                                            Total Entertainment Restaurant Corp.
                                            (Registrant)


    Date    July 27, 1999                    /s/ James K. Zielke
         -------------------                ------------------------------------
                                            James K. Zielke
                                            Chief Financial Officer,
                                            Secretary and Treasurer
                                            (Duly Authorized Officer)


                                      -15-