##### Table of Contents





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 QUARTER ENDED March 4, 2008

COMMISSION FILE NUMBER 001-7323





FRISCHS RESTAURANTS,
INC.

(Exact name of registrant as specified in its charter)







|                                                              |  |                                    
|------------------------------------------------------------- |  | -----------------------------------
|OHIO                                                          |  | 31-0523213                         
|(State or other jurisdiction ofincorporation or organization) |  | (I.R.S. EmployerIdentification No.)
|                                                              | 
|2800 Gilbert Avenue, Cincinnati, Ohio                         |  | 45206                              
|(Address of principal executive offices)                      |  | (Zip Code)                         

Registrants telephone number, including area code 513-961-2660

Not Applicable

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.    YES  x    NO   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer
and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer   ̈            Accelerated Filer  x            Non-accelerated Filer   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES   ̈    NO  x

The total number of shares outstanding of the
issuers no par common stock, as of March 24, 2008 was: 5,128,405









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##### Table of Contents

TABLE OF CONTENTS



|                               |  |                                                                                      |  |        
|------------------------------ |  | ------------------------------------------------------------------------------------ |  | -------
|                               |  |                                                                                      |  | Page   
|PART I - FINANCIAL INFORMATION |  |                                                                                     
|                               |  |                                                                                     
|Item 1.                        |  | Financial Statements:                                                                |  |        
|                               |  |                                                                                     
|                               |  | Consolidated Statement of Earnings                                                   |  | 3      
|                               |  |                                                                                     
|                               |  | Consolidated Balance Sheet                                                           |  | 4 - 5  
|                               |  |                                                                                     
|                               |  | Consolidated Statement of Shareholders Equity                                       |  | 6      
|                               |  |                                                                                     
|                               |  | Consolidated Statement of Cash Flows                                                 |  | 7      
|                               |  |                                                                                     
|                               |  | Notes to Consolidated Financial Statements                                           |  | 8 - 26 
|                               |  |                                                                                     
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operation |  | 27 - 35
|                               |  |                                                                                     
|Item 3.                        |  | Quantitative and Qualitative Disclosures about Market Risk                           |  | 36     
|                               |  |                                                                                     
|Item 4.                        |  | Controls and Procedures                                                              |  | 36     
|                               | 
|PART II - OTHER INFORMATION    |  |                                                                                     
|                               |  |                                                                                     
|Item 1.                        |  | Legal Proceedings                                                                    |  | 37     
|                               |  |                                                                                     
|Item 1A.                       |  | Risk Factors                                                                         |  | 38 - 40
|                               |  |                                                                                     
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                          |  | 40     
|                               |  |                                                                                     
|Item 3.                        |  | Defaults Upon Senior Securities                                                      |  | 40     
|                               |  |                                                                                     
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                  |  | 40     
|                               |  |                                                                                     
|Item 5.                        |  | Other Information                                                                    |  | 40     
|                               |  |                                                                                     
|                               |  |                                                                                      |  |        
|                               |  |                                                                                     
|Item 6.                        |  | Exhibits                                                                             |  | 41 - 43
|                               |  |                                                                                     
|SIGNATURE                      |  |                                                                                      |  | 43     



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##### Table of Contents

Frischs Restaurants, Inc. and Subsidiaries

Consolidated Statement of Earnings

(Unaudited)



|                                          |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  
|----------------------------------------- |  | ----------------- | ----------- | - | ------------------ | - | ----------- | ------------ |  | - | ------------ | - |  | - | ---------- | -
|                                          |  | Forty weeks ended |             |   | Twelve weeks ended |  
|                                          |  | March 4,2008      |             |   | March 6,2007       |   |             | March 4,2008 |  |   | March 6,2007 |  
|Sales                                     |  | $                 | 225,358,248 |   |                    | $ | 221,968,379 |              |  | $ | 66,618,420   |   |  | $ | 65,451,505 |  
|                                          |  |                   |             |  
|Cost of sales                             |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  
|Food and paper                            |  |                   | 79,892,467  |   |                    |   | 77,213,602  |              |  |   | 23,940,021   |   |  |   | 22,824,288 |  
|Payroll and related                       |  |                   | 74,267,043  |   |                    |   | 73,403,437  |              |  |   | 21,777,293   |   |  |   | 21,910,389 |  
|Other operating costs                     |  |                   | 49,987,792  |   |                    |   | 48,745,320  |              |  |   | 14,429,120   |   |  |   | 13,986,988 |  
|                                          |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  
|                                          |  |                   | 204,147,302 |   |                    |   | 199,362,359 |              |  |   | 60,146,434   |   |  |   | 58,721,665 |  
|                                          |  |                   |             |  
|Gross profit                              |  |                   | 21,210,946  |   |                    |   | 22,606,020  |              |  |   | 6,471,986    |   |  |   | 6,729,840  |  
|                                          |  |                   |             |  
|Administrative and advertising            |  |                   | 11,043,003  |   |                    |   | 11,177,026  |              |  |   | 3,213,206    |   |  |   | 3,487,951  |  
|Franchise fees and other revenue          |  |                   | (967,519    | ) |                    |   | (965,337    | )            |  |   | (288,520     | ) |  |   | (275,625   | )
|Gains on sale of assets                   |  |                   | (524,354    | ) |                    |   | (250,069    | )            |  |   |             |   |  |   |           |  
|                                          |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  
|Operating profit                          |  |                   | 11,659,816  |   |                    |   | 12,644,400  |              |  |   | 3,547,300    |   |  |   | 3,517,514  |  
|                                          |  |                   |             |  
|Interest expense                          |  |                   | 1,830,939   |   |                    |   | 2,046,177   |              |  |   | 510,923      |   |  |   | 616,517    |  
|                                          |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  
|Earnings before income taxes              |  |                   | 9,828,877   |   |                    |   | 10,598,223  |              |  |   | 3,036,377    |   |  |   | 2,900,997  |  
|                                          |  |                   |             |  
|Income taxes                              |  |                   | 3,145,000   |   |                    |   | 3,603,000   |              |  |   | 971,000      |   |  |   | 986,000    |  
|                                          |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  
|Net Earnings                              |  | $                 | 6,683,877   |   |                    | $ | 6,995,223   |              |  | $ | 2,065,377    |   |  | $ | 1,914,997  |  
|                                          |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  
|Earnings per share (EPS) of common stock: |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  
|                                          |  |                   |             |  
|Basic net earnings per share              |  | $                 | 1.30        |   |                    | $ | 1.38        |              |  | $ | .40          |   |  | $ | .38        |  
|                                          |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  
|Diluted net earnings per share            |  | $                 | 1.28        |   |                    | $ | 1.35        |              |  | $ | .40          |   |  | $ | .37        |  
|                                          |  |                   |             |   |                    |   |             |              |  |   |              |   |  |   |            |  

The accompanying notes are an integral part of these statements.



3



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Frischs Restaurants, Inc. and Subsidiaries

Consolidated Balance Sheet

ASSETS



|                                                    |  |              |             |             |   |            
|--------------------------------------------------- |  | ------------ | ----------- | ----------- | - | -----------
|                                                    |  | March 4,2008 |             | May 29,2007
|                                                    |  | (unaudited)  |             |            
|Current Assets                                      |  |              |             |             |   |            
|Cash                                                |  | $            | 515,818     |             | $ | 321,200    
|Trade and other receivables                         |  |              | 1,745,092   |             |   | 1,405,892  
|Inventories                                         |  |              | 6,321,253   |             |   | 6,376,059  
|Prepaid expenses and sundry deposits                |  |              | 1,802,891   |             |   | 984,132    
|Prepaid and deferred income taxes                   |  |              | 1,930,701   |             |   | 1,930,701  
|                                                    |  |              |             |             |   |            
|Total current assets                                |  |              | 12,315,755  |             |   | 11,017,984 
|                                                    |  |             
|Property and Equipment                              |  |              |             |             |   |            
|Land and improvements                               |  |              | 68,830,435  |             |   | 64,518,917 
|Buildings                                           |  |              | 90,312,551  |             |   | 85,805,775 
|Equipment and fixtures                              |  |              | 90,167,710  |             |   | 87,948,798 
|Leasehold improvements and buildings on leased land |  |              | 29,365,771  |             |   | 29,153,070 
|Capitalized leases                                  |  |              | 5,054,200   |             |   | 5,054,200  
|Construction in progress                            |  |              | 586,853     |             |   | 7,435,071  
|                                                    |  |              |             |             |   |            
|                                                    |  |              | 284,317,520 |             |   | 279,915,831
|Less accumulated depreciation and amortization      |  |              | 126,697,039 |             |   | 120,629,146
|                                                    |  |              |             |             |   |            
|Net property and equipment                          |  |              | 157,620,481 |             |   | 159,286,685
|                                                    |  |             
|Other Assets                                        |  |              |             |             |   |            
|Goodwill                                            |  |              | 740,644     |             |   | 740,644    
|Other intangible assets                             |  |              | 1,000,340   |             |   | 1,216,620  
|Investments in land                                 |  |              | 2,634,890   |             |   | 2,249,890  
|Property held for sale                              |  |              | 370,452     |             |   | 1,470,920  
|Other                                               |  |              | 2,825,954   |             |   | 3,275,811  
|                                                    |  |              |             |             |   |            
|Total other assets                                  |  |              | 7,572,280   |             |   | 8,953,885  
|                                                    |  |              |             |             |   |            
|Total assets                                        |  | $            | 177,508,516 |             | $ | 179,258,554
|                                                    |  |              |             |             |   |            

The accompanying notes are an integral part of these statements.



4



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##### Table of Contents

LIABILITIES AND SHAREHOLDERS EQUITY



|                                                                                                                     |  |              |             |   |             |   |             |  
|-------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----------- | - | ----------- | - | ----------- | -
|                                                                                                                     |  | March 4,2008 |             |   | May 29,2007 |  
|                                                                                                                     |  | (unaudited)  |             |   |             |  
|Current Liabilities                                                                                                  |  |              |             |   |             |   |             |  
|Long-term obligations due within one year                                                                            |  |              |             |   |             |   |             |  
|Long-term debt                                                                                                       |  | $            | 9,727,791   |   |             | $ | 11,774,604  |  
|Obligations under capitalized leases                                                                                 |  |              | 2,374,024   |   |             |   | 2,480,419   |  
|Self insurance                                                                                                       |  |              | 745,795     |   |             |   | 716,443     |  
|Accounts payable                                                                                                     |  |              | 10,416,222  |   |             |   | 12,353,968  |  
|Accrued expenses                                                                                                     |  |              | 8,793,963   |   |             |   | 9,235,002   |  
|Income taxes                                                                                                         |  |              | 308,801     |   |             |   | 290,010     |  
|                                                                                                                     |  |              |             |   |             |   |             |  
|Total current liabilities                                                                                            |  |              | 32,366,596  |   |             |   | 36,850,446  |  
|                                                                                                                     |  |             
|Long-Term Obligations                                                                                                |  |              |             |   |             |   |             |  
|Long-term debt                                                                                                       |  |              | 23,724,477  |   |             |   | 25,009,540  |  
|Obligations under capitalized leases                                                                                 |  |              | 699,617     |   |             |   | 880,451     |  
|Self insurance                                                                                                       |  |              | 905,197     |   |             |   | 1,133,606   |  
|Deferred income taxes                                                                                                |  |              | 2,235,494   |   |             |   | 3,457,714   |  
|Deferred compensation and other                                                                                      |  |              | 4,087,374   |   |             |   | 4,057,022   |  
|                                                                                                                     |  |              |             |   |             |   |             |  
|Total long-term obligations                                                                                          |  |              | 31,652,159  |   |             |   | 34,538,333  |  
|Commitments                                                                                                          |  |              |            |   |             |   |            |  
|                                                                                                                     |  |             
|Shareholders Equity                                                                                                 |  |              |             |   |             |   |             |  
|Capital stock                                                                                                        |  |              |             |   |             |   |             |  
|Preferred stockauthorized, 3,000,000 shares without par value; none issued                                          |  |              |            |   |             |   |            |  
|Common stockauthorized, 12,000,000 shares without par value; issued, 7,580,263 and 7,568,680 sharesstated
value$1 |  |              | 7,580,263   |   |             |   | 7,568,680   |  
|Additional contributed capital                                                                                       |  |              | 64,395,973  |   |             |   | 63,838,824  |  
|                                                                                                                     |  |              |             |   |             |   |             |  
|                                                                                                                     |  |              | 71,976,236  |   |             |   | 71,407,504  |  
|                                                                                                                     |  |             
|Accumulated other comprehensive loss                                                                                 |  |              | (1,095,944  | ) |             |   | (1,214,704  | )
|Retained earnings                                                                                                    |  |              | 75,388,054  |   |             |   | 70,448,512  |  
|                                                                                                                     |  |              |             |   |             |   |             |  
|                                                                                                                     |  |              | 74,292,110  |   |             |   | 69,233,808  |  
|                                                                                                                     |  |             
|Less cost of treasury stock (2,445,758 and 2,445,764 shares)                                                         |  |              | (32,778,585 | ) |             |   | (32,771,537 | )
|                                                                                                                     |  |              |             |   |             |   |             |  
|Total shareholders equity                                                                                           |  |              | 113,489,761 |   |             |   | 107,869,775 |  
|                                                                                                                     |  |              |             |   |             |   |             |  
|Total liabilities and shareholders equity                                                                           |  | $            | 177,508,516 |   |             | $ | 179,258,554 |  
|                                                                                                                     |  |              |             |   |             |   |             |  



5



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##### Table of Contents

Frischs Restaurants, Inc. and Subsidiaries

Consolidated Statement of Shareholders Equity

Forty weeks ended March 4, 2008 and March 6, 2007

(Unaudited)



|                                                   |  |                                               |           |                              |   |            |                                            |  |    |                  |   |  |                |            |   |       |    |             |   |  |   |             |  
|-------------------------------------------------- |  | --------------------------------------------- | --------- | ---------------------------- | - | ---------- | ------------------------------------------ |  | -- | ---------------- | - |  | -------------- | ---------- | - | ----- | -- | ----------- | - |  | - | ----------- | -
|                                                   |  | Common stockat $1 per share -Shares andamount |           | Additionalcontributedcapital |   |            | Accumulatedothercomprehensiveincome (loss) |  |    | Retainedearnings |   |  | Treasuryshares |            |   | Total |   
|Balance at May 30, 2006                            |  | $                                             | 7,521,930 |                              | $ | 62,531,311 |                                            |  | $  |                 |   |  | $              | 63,420,622 |   |       | $  | (32,792,427 | ) |  | $ | 100,681,436 |  
|                                                   |  |                                               |           |                              |   |           
|Net earnings for forty weeks                       |  |                                               |          |                              |   |           |                                            |  |    |                 |   |  |                | 6,995,223  |   |       |    |            |   |  |   | 6,995,223   |  
|Stock options exercisednew shares issued          |  |                                               | 29,921    |                              |   | 510,192    |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 540,113     |  
|Stock options exercisedtreasury shares issued     |  |                                               |          |                              |   | 1,800      |                                            |  |    |                 |   |  |                |           |   |       |    | 4,475       |   |  |   | 6,275       |  
|Excess tax benefit from stock - based compensation |  |                                               |          |                              |   | 81,157     |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 81,157      |  
|Other treasury shares re-issued                    |  |                                               |          |                              |   | 12,465     |                                            |  |    |                 |   |  |                |           |   |       |    | 16,415      |   |  |   | 28,880      |  
|Stock-based compensation expense                   |  |                                               |          |                              |   | 231,120    |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 231,120     |  
|Employee stock purchase plan                       |  |                                               |          |                              |   | 4,088      |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 4,088       |  
|Cash dividends$.33 per share                      |  |                                               |          |                              |   |           |                                            |  |    |                 |   |  |                | (1,677,997 | ) |       |    |            |   |  |   | (1,677,997  | )
|                                                   |  |                                               |           |                              |   |            |                                            |  |    |                  |   |  |                |            |   |       |    |             |   |  |   |             |  
|Balance at March 6, 2007                           |  |                                               | 7,551,851 |                              |   | 63,372,133 |                                            |  |    |                 |   |  |                | 68,737,848 |   |       |    | (32,771,537 | ) |  |   | 106,890,295 |  
|                                                   |  |                                               |           |                              |   |           
|Net earnings for twelve weeks                      |  |                                               |          |                              |   |           |                                            |  |    |                 |   |  |                | 2,272,333  |   |       |    |            |   |  |   | 2,272,333   |  
|SFAS No. 158 adjustment net of tax                 |  |                                               |          |                              |   |           |                                            |  |    | (1,214,704       | ) |  |                |           |   |       |    |            |   |  |   | (1,214,704  | )
|Stock options exercisednew shares issued          |  |                                               | 16,829    |                              |   | 312,730    |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 329,559     |  
|Excess tax benefit from stock - based compensation |  |                                               |          |                              |   | 87,120     |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 87,120      |  
|Stock-based compensation expense                   |  |                                               |          |                              |   | 82,715     |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 82,715      |  
|Employee stock purchase plan                       |  |                                               |          |                              |   | (15,874    | )                                          |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | (15,874     | )
|Cash dividends$.11 per share                      |  |                                               |          |                              |   |           |                                            |  |    |                 |   |  |                | (561,669   | ) |       |    |            |   |  |   | (561,669    | )
|                                                   |  |                                               |           |                              |   |            |                                            |  |    |                  |   |  |                |            |   |       |    |             |   |  |   |             |  
|Balance at May 29, 2007                            |  |                                               | 7,568,680 |                              |   | 63,838,824 |                                            |  |    | (1,214,704       | ) |  |                | 70,448,512 |   |       |    | (32,771,537 | ) |  |   | 107,869,775 |  
|                                                   |  |                                               |           |                              |   |           
|Net earnings for forty weeks                       |  |                                               |          |                              |   |           |                                            |  |    |                 |   |  |                | 6,683,877  |   |       |    |            |   |  |   | 6,683,877   |  
|Other comprehensive gain, net of income tax        |  |                                               |          |                              |   |           |                                            |  |    | 118,760          |   |  |                |           |   |       |    |            |   |  |   | 118,760     |  
|Stock options exercisednew shares issued          |  |                                               | 11,583    |                              |   | 245,598    |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 257,181     |  
|Excess tax benefit from stockbased compensation   |  |                                               |          |                              |   | 28,215     |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 28,215      |  
|Treasury shares re-issued                          |  |                                               |          |                              |   | 15,829     |                                            |  |    |                 |   |  |                |           |   |       |    | 12,141      |   |  |   | 27,970      |  
|Treasury shares acquired                           |  |                                               |          |                              |   |           |                                            |  |    |                 |   |  |                |           |   |       |    | (19,189     | ) |  |   | (19,189     | )
|Stock based compensation expense                   |  |                                               |          |                              |   | 257,299    |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 257,299     |  
|Employee stock purchase plan                       |  |                                               |          |                              |   | 10,208     |                                            |  |    |                 |   |  |                |           |   |       |    |            |   |  |   | 10,208      |  
|Cash dividends$.34 per share                      |  |                                               |          |                              |   |           |                                            |  |    |                 |   |  |                | (1,744,335 | ) |       |    |            |   |  |   | (1,744,335  | )
|                                                   |  |                                               |           |                              |   |            |                                            |  |    |                  |   |  |                |            |   |       |    |             |   |  |   |             |  
|Balance at March 4, 2008                           |  | $                                             | 7,580,263 |                              | $ | 64,395,973 |                                            |  | ($ | 1,095,944        | ) |  | $              | 75,388,054 |   |       | ($ | 32,778,585  | ) |  | $ | 113,489,761 |  
|                                                   |  |                                               |           |                              |   |            |                                            |  |    |                  |   |  |                |            |   |       |    |             |   |  |   |             |  

The accompanying notes are an integral part of these statements.



6



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##### Table of Contents

Frischs Restaurants, Inc. and Subsidiaries

Consolidated Statement of Cash Flows

Forty weeks ended March 4, 2008 and March 6, 2007

(unaudited)



|                                                                             |  |              |             |   |              |   |             |  
|---------------------------------------------------------------------------- |  | ------------ | ----------- | - | ------------ | - | ----------- | -
|                                                                             |  | March 4,2008 |             |   | March 6,2007 |  
|Cash flows provided by (used in) operating activities:                       |  |              |             |   |              |   |             |  
|Net earnings                                                                 |  | $            | 6,683,877   |   |              | $ | 6,995,223   |  
|Adjustments to reconcile net earnings to net cash from operating activities: |  |              |             |   |              |   |             |  
|Depreciation and amortization                                                |  |              | 10,765,067  |   |              |   | 10,413,172  |  
|Gain on disposition of assets, net of abandonment losses                     |  |              | (237,952    | ) |              |   | (21,234     | )
|Stock-based compensation expense                                             |  |              | 257,299     |   |              |   | 231,120     |  
|                                                                             |  |              |             |   |              |   |             |  
|                                                                             |  |              | 17,468,291  |   |              |   | 17,618,281  |  
|Changes in assets and liabilities:                                           |  |              |             |   |              |   |             |  
|Accounts receivable                                                          |  |              | (339,200    | ) |              |   | (323,264    | )
|Inventories                                                                  |  |              | 54,806      |   |              |   | (694,321    | )
|Prepaid expenses and sundry deposits                                         |  |              | (638,819    | ) |              |   | (761,592    | )
|Other assets                                                                 |  |              | 433,494     |   |              |   | 190,060     |  
|Prepaid, accrued and deferred income taxes                                   |  |              | (1,236,394  | ) |              |   | (316,575    | )
|Excess tax benefit from stock-based compensation                             |  |              | (28,215     | ) |              |   | (81,157     | )
|Accounts payable                                                             |  |              | (1,937,746  | ) |              |   | (62,525     | )
|Accrued expenses                                                             |  |              | (441,039    | ) |              |   | (344,435    | )
|Self insured obligations                                                     |  |              | (199,057    | ) |              |   | (118,210    | )
|Deferred compensation and other liabilities                                  |  |              | 30,352      |   |              |   | 172,350     |  
|                                                                             |  |              |             |   |              |   |             |  
|                                                                             |  |              | (4,301,818  | ) |              |   | (2,339,669  | )
|                                                                             |  |              |             |   |              |   |             |  
|Net cash provided by operating activities                                    |  |              | 13,166,473  |   |              |   | 15,278,612  |  
|                                                                             |  |             
|Cash flows provided by (used in) investing activities:                       |  |              |             |   |              |   |             |  
|Additions to property and equipment                                          |  |              | (9,665,255  | ) |              |   | (13,123,681 | )
|Proceeds from disposition of property                                        |  |              | 1,717,229   |   |              |   | 409,035     |  
|Change in other assets                                                       |  |              | 35,225      |   |              |   | (118,437    | )
|                                                                             |  |              |             |   |              |   |             |  
|Net cash (used in) investing activities                                      |  |              | (7,912,801  | ) |              |   | (12,833,083 | )
|                                                                             |  |             
|Cash flows provided by (used in) financing activities:                       |  |              |             |   |              |   |             |  
|Proceeds from borrowings                                                     |  |              | 6,500,000   |   |              |   | 6,000,000   |  
|Payment of long-term debt and capital lease obligations                      |  |              | (10,119,104 | ) |              |   | (7,854,250  | )
|Cash dividends paid                                                          |  |              | (1,744,335  | ) |              |   | (1,677,997  | )
|Proceeds from stock options exercisednew shares issued                      |  |              | 257,181     |   |              |   | 540,113     |  
|Proceeds from stock options exercisedtreasury shares re-issued              |  |              |            |   |              |   | 6,275       |  
|Excess tax benefit from stock-based compensation                             |  |              | 28,215      |   |              |   | 81,157      |  
|Other treasury shares re-issued                                              |  |              | 27,970      |   |              |   | 28,880      |  
|Treasury shares acquired                                                     |  |              | (19,189     | ) |              |   |            |  
|Employee stock purchase plan                                                 |  |              | 10,208      |   |              |   | 4,088       |  
|                                                                             |  |              |             |   |              |   |             |  
|Net cash (used in) financing activities                                      |  |              | (5,059,054  | ) |              |   | (2,871,734  | )
|                                                                             |  |              |             |   |              |   |             |  
|Net increase (decrease) in cash and equivalents                              |  |              | 194,618     |   |              |   | (426,205    | )
|Cash and equivalents at beginning of year                                    |  |              | 321,200     |   |              |   | 815,346     |  
|                                                                             |  |              |             |   |              |   |             |  
|Cash and equivalents at end of quarter                                       |  | $            | 515,818     |   |              | $ | 389,141     |  
|                                                                             |  |              |             |   |              |   |             |  
|Supplemental disclosures:                                                    |  |              |             |   |              |   |             |  
|Interest paid                                                                |  | $            | 2,088,825   |   |              | $ | 2,223,278   |  
|Income taxes paid                                                            |  |              | 4,372,033   |   |              |   | 4,913,362   |  
|Income taxes refunded                                                        |  |              | 825         |   |              |   | 993,787     |  

The accompanying notes are an integral part of these statements.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Third Quarter Fiscal 2008, Ended March 4, 2008

NOTE A  ACCOUNTING
POLICIES

A summary of the Companys significant accounting policies consistently applied in the preparation of the accompanying consolidated financial
statements follows:

Description of the Business

Frischs Restaurants, Inc. and Subsidiaries (the Company) is a regional company that operates full service family-style restaurants under the name Frischs Big Boy. The Company also operates grill buffet style
restaurants under the name Golden Corral pursuant to certain licensing agreements. All Big Boy restaurants operated by the Company are currently located in various regions of Ohio, Kentucky and Indiana. Golden Corral restaurants
currently operate primarily in the greater metropolitan areas of Cincinnati, Columbus, Dayton, Toledo and Cleveland, Ohio, Louisville, Kentucky and Pittsburgh, Pennsylvania.

The Company owns the trademark Frischs and has exclusive, irrevocable ownership of the rights to the Big Boy trademark, trade name and service mark in the states of Kentucky and Indiana,
and in most of Ohio and Tennessee. All of the Frischs Big Boy restaurants also offer drive-thru service. The Company also licenses Big Boy restaurants to other operators, currently in certain parts of Ohio, Kentucky and Indiana. In
addition, the Company operates a commissary and food manufacturing plant near its headquarters in Cincinnati, Ohio that services all Big Boy restaurants operated by the Company, and is available to supply restaurants licensed to others.

Consolidation Practices

The accompanying unaudited consolidated
financial statements include all of the Companys accounts, prepared in conformity with generally accepted accounting principles in the United States of America (GAAP). Significant inter-company accounts and transactions have been eliminated in
consolidation. In the opinion of management, these interim financial statements include all adjustments (all of which were normal and recurring) necessary for a fair presentation of all periods presented.

Fiscal Year

The Companys fiscal year is the 52 week (364 days)
or 53 week (371 days) period ending on the Tuesday nearest to the last day of May. The first quarter of each fiscal year contains sixteen weeks, while the last three quarters each normally contain twelve weeks. Every fifth or sixth year, the
additional week needed to make a 53 week year is added to the fourth quarter, resulting in a thirteen week fourth quarter. The current fiscal year will end on Tuesday, June 3, 2008, a period of 53 weeks, which will include an additional week
added to the fourth quarter.

Use of Estimates and Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to use estimates and assumptions to measure certain items that affect the amounts reported. These judgments are based on knowledge
and experience about past and current events, and assumptions about future events. Although management believes its estimates are reasonable and adequate, future events affecting them may differ markedly from current judgment. Significant estimates
and assumptions are used to measure self insurance liabilities, deferred executive compensation obligations, net periodic pension cost and future pension obligations, the carrying values of property held for sale and for long-lived assets including
property and equipment, goodwill and other intangible assets.

Management considers the following accounting policies to be critical accounting policies
because the application of estimates to these policies requires managements most difficult, subjective or complex judgments: self-insurance liabilities, net periodic pension cost and future pension obligations, and the carrying values of
long-lived assets.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE A  ACCOUNTING POLICIES (CONTINUED)

Cash and Cash Equivalents

Funds in transit from credit card
processors are classified as cash. Highly liquid investments with original maturities of three months or less are considered as cash equivalents. Outstanding checks totaling $2,140,000 were included in accounts payable as of May 29, 2007.

Receivables

The Company values its trade notes and
accounts receivable on the reserve method. The reserve balance was $30,000 as of March 4, 2008 and May 29, 2007. The reserve is monitored for adequacy based on historical collection patterns and write-offs, and current credit risks.

Inventories

Inventories, comprised principally of
food items, are valued at the lower of cost, determined by the first-in, first-out method, or market.

Accounting for Rebates

Cash consideration received from certain food vendors is treated as a reduction of cost of sales and is recognized in the same period the Company sells the food.

Leases

Minimum scheduled lease payments on operating
leases, including escalating rental payments, are recognized as rent expense on a straight-line basis over the term of the lease, including option periods considered part of the lease term, as defined by Statement of Financial Accounting Standards
No. 13 (SFAS 13), Accounting for Leases, as amended. Contingent rentals, typically based on a percentage of restaurant sales in excess of a fixed amount, are expensed as incurred. SFAS 13 also requires rent expense to be recognized
during that part of the term of the lease when no rent is paid to the landlord, often referred to as a rent holiday, that generally occurs while the restaurant is being constructed on leased land. Rental costs associated with rent
holidays are recognized as rental expense. The Company does not typically receive leasehold incentives from landlords.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided principally on the straight-line method over the estimated service lives, which
range from ten to 25 years for new buildings or components thereof and five to ten years for equipment. Leasehold improvements are depreciated over the shorter of the useful life of the asset or the lease term as lease terms are defined in SFAS 13,
as amended. Property betterments are capitalized while the cost of maintenance and repairs is expensed as incurred.

The cost of land not yet in service is
included in construction in progress if construction has begun or if construction is likely within the next twelve months. No new Big Boy or Golden Corral construction was in progress as of March 4, 2008. Interest on borrowings is
capitalized during active construction periods of new restaurants. Capitalized interest was $95,000 and $38,000 respectively, for the 40 weeks ended March 4, 2008 and March 6, 2007, and was zero for each of the twelve week periods ended
March 4, 2008 and March 6, 2007. As of March 4, 2008, pending agreements were in place to acquire in fee three existing Big Boy restaurants pursuant to purchase privilege provisions in expired leases. Although the costs have yet to be
determined, the aggregate purchase price will not be less than $2,300,000. The Company is also currently in the process of acquiring the leasehold interests of two other existing Big Boy restaurants at an aggregate cost of $877,000. In addition, the
Company is currently under contracts totaling $1,640,000 to acquire two sites for future Big Boy development.

The cost of land on which construction is
not likely within the next twelve months is classified as Investments in land in the consolidated balance sheet. Certain surplus property is currently held for sale. All of the surplus property is stated at the lower of cost or market
and is classified as Property held for sale in the consolidated balance sheet. Market values are generally determined by real estate brokers and/or managements judgment.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE A  ACCOUNTING POLICIES (CONTINUED)

Capitalized computer software is depreciated on the straight-line method over the estimated service lives, which range from three to ten years. The Companys cost
capitalization policy with respect to computer software complies with the American Institute of Certified Public Accountants Statement of Position 98-1 (SOP 98-1), Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use. Software assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining service life.

Impairment of Assets

Management considers a history of cash flow losses on a restaurant-by-restaurant basis to be
its primary indicator of potential impairment of assets. Carrying values are reviewed for impairment when events or changes in circumstances indicate that the assets carrying values may not be recoverable from the estimated future cash flows
expected to result from the properties use and eventual disposition. When undiscounted expected future cash flows are less than carrying values, an impairment loss is recognized equal to the amount by which the carrying values exceed the net
realizable values of the assets. Net realizable values are generally determined by estimates provided by real estate brokers and/or the judgment of management based upon its experience in disposing of unprofitable restaurant properties.

No impairment losses were recorded during any of the periods presented in the accompanying consolidated financial statements.

Restaurant Closing Costs

Any liabilities associated with exit or
disposal activities are recorded in accordance with Statement of Financial Accounting Standards No. 146 (SFAS 146), Accounting for Obligations Associated with Disposal Activities. SFAS 146 requires that liabilities be recognized for
exit and disposal costs only when the liabilities are incurred, rather than upon the commitment to an exit or disposal plan. Its application has not materially impacted the Companys financial statements in any of the periods presented in the
accompanying consolidated financial statements.

Statement of Financial Accounting Standards No. 143 (SFAS 143), Accounting for Asset Retirement
Obligations, is applicable to legal obligations associated with the retirement of certain tangible long-lived assets. Its application has not materially impacted the Companys financial statements in any of the periods presented.
Financial Accounting Standards Board Interpretation No. 47, Accounting for Conditional Asset Obligations (FIN 47), requires that conditional obligations be included in the definition of an asset retirement obligation under SFAS 143
and therefore requires current recognition if fair value is reasonably estimable. The application of FIN 47 has had no material impact on the Companys financial statements.

Goodwill and Other Intangible Assets, Including Licensing Agreements

Acquired goodwill is tested annually for
impairment and also whenever an impairment indicator arises. Impairment losses are recorded when impairment is determined to have occurred. As of March 4, 2008 and May 29, 2007, the carrying amount of goodwill acquired in prior years was
$741,000.

Intangible assets having a finite useful life are subject to amortization, and are tested annually for impairment. The Companys other
intangible assets consist principally of initial franchise fees paid for each new Golden Corral restaurant the Company opens. Amortization of the $40,000 initial fee begins when the restaurant opens and is computed using the straight-line method
over the 15-year term of each individual restaurants franchise agreement. The fees are ratably amortized at $2,667 per year per restaurant. This equates to $93,000 per year in each of the next five years for the 35 Golden Corral restaurants
that were in operation as of March 4, 2008. Amortization for the 40 weeks ended March 4, 2008 and March 6, 2007 was $71,000 and $70,000 respectively, and was $22,000 and $21,000 respectively, for the twelve weeks ended March 4,
2008 and March 6, 2007.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE A  ACCOUNTING POLICIES (CONTINUED)

In April 2008, the Company amended its development agreement with Golden Corral Franchising Systems, Inc., terminating its rights to develop sixteen of the remaining 28
Golden Corral restaurants that had been covered by the agreement.

The remaining balance of other intangible assets, including fees paid for future Golden
Corral restaurants, is not currently being amortized because these assets have indefinite or as yet to be determined useful lives.

An analysis of other
intangible assets follows:



|                                                                                |  |                |       |   |             |   |       |  
|------------------------------------------------------------------------------- |  | -------------- | ----- | - | ----------- | - | ----- | -
|                                                                                |  | March 4,2008   |       |   | May 29,2007 |  
|                                                                                |  | (in thousands) |      
|Golden Corral initial franchise fees subject to amortization                    |  | $              | 1,400 |   |             | $ | 1,360 |  
|Less accumulated amortization                                                   |  |                | (498  | ) |             |   | (427  | )
|                                                                                |  |                |       |   |             |   |       |  
|Carrying amount of Golden Corral initial franchise fees subject to amortization |  |                | 902   |   |             |   | 933   |  
|Current portion of Golden Corral initial franchise fees subject to amortization |  |                | (93   | ) |             |   | (91   | )
|Golden Corral fees not yet subject to amortization                              |  |                | 135   |   |             |   | 320   |  
|Other intangible assets                                                         |  |                | 56    |   |             |   | 54    |  
|                                                                                |  |                |       |   |             |   |       |  
|Total other intangible assets                                                   |  | $              | 1,000 |   |             | $ | 1,216 |  
|                                                                                |  |                |       |   |             |   |       |  

The franchise agreements with Golden Corral Franchising Systems, Inc. also require the Company to pay fees based
on defined gross sales. These costs are charged to other operating costs as incurred.

Revenue Recognition

Revenue from restaurant operations is recognized upon the sale of products as they are sold to customers. All sales revenue is recorded on a net basis, which excludes
sales tax collected from sales and sales tax remitted from costs. Revenue from the sale of commissary products to Big Boy restaurants licensed to other operators is recognized upon shipment of product. Revenue from franchise fees, based on sales of
Big Boy restaurants licensed to other operators, is recorded on the accrual method as earned. Initial franchise fees are recognized as revenue when the fees are deemed fully earned and non-refundable, which occurs ordinarily upon the execution of
the license agreement in consideration of the Companys services to that time.

Revenue from the sale of gift cards is deferred for recognition until
redeemed by the customer, as service fees are assessed or the card otherwise expires. Except where prohibited by law, recognition of previously deferred revenue from paper gift certificates (no longer issued by the Company) occurs when the
probability is remote that customers will demand full performance.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE A  ACCOUNTING POLICIES (CONTINUED)

New Store Opening Costs

New store opening costs consist of new
employee training costs, the cost of a team to coordinate the opening and the cost of certain replaceable items such as uniforms and china. New store opening costs are charged to other operating costs as incurred:



|              |  |                |     |                |   |              |  |              |   |  |   |  
|------------- |  | -------------- | --- | -------------- | - | ------------ |  | ------------ | - |  | - | -
|              |  | 40 weeks ended |     | 12 weeks ended
|              |  | March 4,2008   |     | March 6,2007   |   | March 4,2008 |  | March 6,2007
|              |  |                |     | (in thousands) |   |             
|Golden Corral |  | $              | 228 |                | $ |             |  | $            |  |  | $ | 
|Big Boy       |  |                | 380 |                |   | 241          |  |              |  |  |   | 
|              |  |                |     |                |   |              |  |              |   |  |   |  
|              |  | $              | 608 |                | $ | 241          |  | $            |  |  | $ | 
|              |  |                |     |                |   |              |  |              |   |  |   |  

Benefit Plans

The Company has two qualified defined benefit pension plans covering all of its eligible employees. Qualified defined benefit pension plan benefits are based on years-of-service and other factors. The Companys funding policy is to
contribute at least the minimum annual amount sufficient to satisfy legal funding requirements plus such additional tax-deductible amounts deemed advisable under the circumstances. Contributions are intended to provide not only for benefits
attributed to service-to-date, but also for those expected to be earned in the future. (See Note E  Pension Plans.) Hourly restaurant employees hired after December 31, 1998 are ineligible to participate in the qualified defined benefit
pension plans. Instead, these employees are offered participation in a 401(k) savings plan (the hourly plan), a defined contribution plan, with a matching 40 percent employer cash contribution. The Companys match vests on a scale based on
length of service.

The executive officers of the Company and certain other highly compensated employees (HCEs) are disqualified from
participation in the Companys 401(k) savings plan (the salaried plan), a defined contribution plan that has a ten percent matching employer cash contribution with immediate vesting. A non-qualified savings plan  Frischs Executive
Savings Plan (FESP)  provides a means by which the HCEs may continue to defer a portion of their compensation. FESP allows deferrals of up to 25 percent of a participants salary into a choice of mutual funds or common stock of the
Company. Matching contributions are added to the first ten percent of salary deferred at a rate of ten percent for deferrals into mutual funds, while a fifteen percent match is added to deferrals into common stock. Although the Company owns the
mutual funds until the retirement of the participants, the funds are invested at the direction of the participants. The common stock is a phantom investment that may be paid in actual shares or in cash upon retirement of the
participants. The FESP liability to the participants is included in Deferred compensation and other long term obligations in the consolidated balance sheet.

The Company also has an unfunded non-qualified Supplemental Executive Retirement Plan (SERP) that was originally intended to provide a supplemental retirement benefit to the HCEs whose benefits under the
qualified defined benefit pension plans were reduced when their compensation exceeded Internal Revenue Code imposed limitations or when elective salary deferrals were made to FESP. In 2000, HCEs became ineligible to be credited with additional
benefits for service under the qualified defined benefit pension plans and the SERP (interest continues to accrue). Comparable pension benefits are provided through a non-qualified Nondeferred Cash Balance Plan. (See Note E  Pension Plans.)

Prepaid pension benefit costs (see Note E  Pension Plans) and FESP assets are the principal components of Other long-term assets in the
consolidated balance sheet.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE A  ACCOUNTING POLICIES (CONTINUED)

Self-Insurance

The Company self-insures its Ohio workers
compensation claims up to $300,000 per claim. Initial self-insurance liabilities are accrued based on prior claims history, including an amount developed for incurred but unreported claims. Active claims management and post accident drug testing in
recent years has effected vast improvements in claims experience. Management performs a comprehensive review each fiscal quarter and adjusts the self-insurance liabilities as deemed appropriate based on claims experience. Below is a summary of
reductions to the self-insurance liabilities that were credited to earnings:



| |  |                |     |                |   |              |  |              |     |  |   |    
| |  | -------------- | --- | -------------- | - | ------------ |  | ------------ | --- |  | - | ---
| |  | 40 weeks ended |     | 12 weeks ended
| |  | March 4,2008   |     | March 6,2007   |   | March 4,2008 |  | March 6,2007
| |  | (in thousands)
| |  | $              | 106 |                | $ | 554          |  | $            | 165 |  | $ | 127
| |  |                |     |                |   |              |  |              |     |  |   |    

The vast improvements in claims experience has allowed the Company to lower the rates used to accrue initial
self-insurance liabilities. The lower rates were implemented in fiscal year 2006, which should effect a continuation in the trend of reducing the size of total annual adjustments.

Fair Value of Financial Instruments

The carrying value of the Companys financial instruments approximates fair
value.

Income Taxes

Taxes are provided on all items
included in the statement of earnings regardless of when such items are reported for tax purposes. The provision for income taxes in all periods has been computed based on managements estimate of the effective tax rate for the entire year.

New Accounting Pronouncements

The Financial
Accounting Standards Boards (FASB) Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109, provides guidance for recognition and measurement on
financial statements of tax positions taken in tax returns or expected to be taken on a future tax return. The Company adopted the provisions of FIN 48 effective May 30, 2007, as required. No cumulative effect adjustment to retained earnings
resulted from the adoption of FIN 48 and there was no material change in the amount of unrecognized tax benefits. The Company does not expect that any changes that may occur in the amount of unrecognized tax benefits would have any significant
impact on it results of operations or financial position.

Statement of Financial Accounting Standards No. 157 (SFAS 157), Fair Value
Measurements, is effective for fiscal years beginning after November 15, 2007 (the Companys fiscal year that will end June 2, 2009). In addition to defining fair value, SFAS 157 provides a framework for the measurement of fair
value and expands disclosure requirements about fair value measurements. Statement of Financial Accounting Standards No. 159 (SFAS 159), The Fair Value Option for Financial Assets and Financial Liabilities, is also effective for
fiscal years beginning after November 15, 2007. It provides an option of whether to report selected financial assets and liabilities at fair value. The Company has yet to evaluate the impact that SFAS 157 and SFAS 159 will have on its financial
statements.



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##### Table of Contents

Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE B  LONG-TERM DEBT



|                             |  |                       |       |                      |   |                       |  |                      |        |  |   |       
|---------------------------- |  | --------------------- | ----- | -------------------- | - | --------------------- |  | -------------------- | ------ |  | - | ------
|                             |  | March 4, 2008         |       | May 29, 2007        
|                             |  | Payablewithinone year |       | Payableafterone year |   | Payablewithinone year |  | Payableafterone year
|                             |  |                       |       | (in thousands)       |   |                      
|Construction Draw Facility - |  |                       |       |                      |   |                       |  |                      |        |  |   |       
|Construction Phase Loans     |  | $                     |      |                      | $ | 2,000                 |  | $                    |       |  | $ |      
|Term Loans                   |  |                       | 8,234 |                      |   | 20,576                |  |                      | 8,826  |  |   | 23,111
|Revolving Credit Loan        |  |                       | 500   |                      |   |                      |  |                      | 2,000  |  |   |      
|Bullet Loan                  |  |                       | 994   |                      |   | 1,148                 |  |                      | 949    |  |   | 1,899 
|                             |  |                       |       |                      |   |                       |  |                      |        |  |   |       
|                             |  | $                     | 9,728 |                      | $ | 23,724                |  | $                    | 11,775 |  | $ | 25,010
|                             |  |                       |       |                      |   |                       |  |                      |        |  |   |       

The portion payable after one year matures as follows:



|                      |  |                |        |             |   |       
|--------------------- |  | -------------- | ------ | ----------- | - | ------
|                      |  | March 4,2008   |        | May 29,2007
|                      |  | (in thousands)
|Period ending in 2009 |  | $              |       |             | $ | 8,443 
|2010                  |  |                | 9,123  |             |   | 6,100 
|2011                  |  |                | 5,494  |             |   | 4,657 
|2012                  |  |                | 4,101  |             |   | 3,241 
|2013                  |  |                | 2,962  |             |   | 1,935 
|2014                  |  |                | 1,387  |             |   | 634   
|Subsequent to 2014    |  |                | 657    |             |   |      
|                      |  |                |        |             |   |       
|                      |  | $              | 23,724 |             | $ | 25,010
|                      |  |                |        |             |   |       

In September 2007, the Company amended and restated all of its loan agreements with its lender. The Construction
Draw Facility (the Facility), an unsecured draw credit line intended to finance new restaurant construction, was amended to increase the amount available to be borrowed from $2,500,000 to $15,000,000. The expiration for borrowing under the Facility
was extended from September 1, 2008 to September 1, 2010.

The Facility is subject to a commitment fee of .25 percent of the unused amount. Under
the terms of the Facility, funds borrowed are initially governed as a Construction Phase Loan, with interest determined by a pricing matrix that uses changeable basis points, determined by certain of the Companys financial ratios. The basis
points are added to or subtracted from one of various indices chosen by the Company. Interest is payable at the end of each specific rate period selected by the Company, which may be monthly, bi-monthly or quarterly. Within six months of the
completion and opening of each restaurant, the balance outstanding under each Construction Phase Loan must be converted to a Term Loan amortized over a period not to exceed seven years. The September 2007 amendment allows outstanding balances
converted to Term Loans after September 2007 to be amortized over a period between seven and twelve years as selected by the Company. The amendment also affords the Company with an option to extend the amortization period once during the term of any
Term Loan that is initiated after September 2007. Upon conversion, the Company may select a fixed interest rate over the chosen term or may choose among various adjustable rate options.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE B  LONG TERM DEBT (CONTINUED)

As of March 4, 2008, $74,000,000 borrowed under the Facility had been converted to Term Loans, the aggregate outstanding balance of which is $28,810,000. All of the
outstanding Term Loans are subject to fixed interest rates, the weighted average of which is 6.10 percent, all of which are being repaid in 84 equal monthly installments of principal and interest aggregating $875,000, expiring in various periods
ranging from July 2008 through November 2014. Prepayments of the Term Loans are permissible upon payment of sizeable prepayment fees and other amounts. As of March 4, 2008, the variable rate of interest on the $2,000,000 balance in the
Construction Phase (borrowed February 29, 2008) is 4.27 percent. Any outstanding amount in the Construction Phase of the Facility that has not been converted into a Term Loan by September 1, 2010 shall mature and be payable at that time,
as extended by the September 2007 amendment.

The Revolving Credit Loan is an unsecured line of credit that allows for borrowing of up to $5,000,000 to
fund temporary working capital needs through September 1, 2010, as extended by the September 2007 amendment. As of March 4, 2008, $500,000 was outstanding. As the loan is subject to a 30 consecutive day out-of-debt period each year, the
remaining balance must be reduced to zero no later than May 1, 2008. Interest, currently 5.25 percent, is determined by the same pricing matrix used for Construction Phase Loans under the Construction Draw Facility, the basis points from which
are added to or subtracted from one of various indices chosen by the Company. The loan is subject to a commitment fee of .25 percent of the unused amount. Interest is payable at the end of each specific rate period selected by the Company, which may
be monthly, bi-monthly or quarterly.

The Bullet Loan was converted into a term loan effective March 15, 2007. The provisions of the term loan require
36 equal monthly installments of $92,000 including principal and interest at a fixed 6.13 percent rate. The loan is secured by mortgages that encumber the real property of two Golden Corral restaurants, the approximate book value of which totaled
$4,065,000 as of March 4, 2008.

These loan agreements contain covenants relating to cash flows, debt levels, capitalization changes, asset
dispositions, investments and restrictions on pledging certain restaurant operating assets. The Company was in compliance with all loan covenants as of March 4, 2008. Compensating balances are not required by these loan agreements.

NOTE C  LEASED PROPERTY

The Companys policy is to own its
restaurant locations whenever possible, however, the Company occupies certain of its restaurants pursuant to lease agreements. Most of the leases are for fifteen or twenty years and contain renewal options for ten to twenty years, and/or have
favorable purchase options. As of March 4, 2008, 28 restaurants were in operation on non-owned premises, consisting of two capital leases (both of which are for Big Boy operations), three month-to-month arrangements and 23 operating leases
(fifteen are for Big Boy operations and eight are for Golden Corral operations). The month-to-month arrangements are for Big Boy restaurant facilities, the capital leases of which reached their normal expiration on October 31, 2007. These
facilities are continuing to be occupied until the Company executes its right to purchase the properties from the landlord. Although the purchase prices have yet to be determined, the aggregate cost will not be less than $2,300,000. The Company also
enjoys the privilege to purchase the two remaining capital leases, both of which expire in May 2008.

Office space is occupied under an operating lease
that expires during fiscal year 2013, which has renewal options available through fiscal year 2023. A purchase option is available in 2023 to acquire the office property in fee simple. Delivery and other equipment is held under capital leases
expiring during periods through fiscal year 2013.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE C  LEASED PROPERTY (CONTINUED)

Amortization of capitalized lease assets is computed on the straight-line method over the primary terms of the leases. An analysis of the capitalized leased property
follows:



|                              |  |                   |        |   |             |   |        |  
|----------------------------- |  | ----------------- | ------ | - | ----------- | - | ------ | -
|                              |  | Asset balances at |       
|                              |  | Mar. 4,2008       |        |   | May 29,2007 |  
|                              |  | (in thousands)    |       
|Restaurant facilities         |  | $                 | 3,496  |   |             | $ | 3,496  |  
|Equipment                     |  |                   | 1,558  |   |             |   | 1,558  |  
|                              |  |                   |        |   |             |   |        |  
|                              |  |                   | 5,054  |   |             |   | 5,054  |  
|Less accumulated amortization |  |                   | (4,182 | ) |             |   | (3,910 | )
|                              |  |                   |        |   |             |   |        |  
|                              |  | $                 | 872    |   |             | $ | 1,144  |  
|                              |  |                   |        |   |             |   |        |  

Rent expense under operating leases:



|                    |  |                |       |                |   |            |  |             |     |  |   |    
|------------------- |  | -------------- | ----- | -------------- | - | ---------- |  | ----------- | --- |  | - | ---
|                    |  | 40 weeks ended |       | 12 weeks ended
|                    |  | Mar. 4,2008    |       | Mar. 6,2007    |   | Mar 4,2008 |  | Mar. 6,2007
|                    |  | (in thousands)
|Minimum rentals     |  | $              | 1,584 |                | $ | 1,607      |  | $           | 510 |  | $ | 438
|Contingent payments |  |                | 41    |                |   | 37         |  |             | 11  |  |   | 11 
|                    |  |                |       |                |   |            |  |             |     |  |   |    
|                    |  | $              | 1,625 |                | $ | 1,644      |  | $           | 521 |  | $ | 449
|                    |  |                |       |                |   |            |  |             |     |  |   |    

Future minimum lease payments under capitalized leases and operating leases, including aggregate residual value
guarantees of $2,101,000 on certain of the capitalized leases, are summarized below:



|                             |  |                   |        |   |                 |   |       
|---------------------------- |  | ----------------- | ------ | - | --------------- | - | ------
|                             |  | Capitalizedleases |        |   | Operatingleases
|Period ending March 4,       |  |                  
|                             |  | (in thousands)   
|2009                         |  | $                 | 2,435  |   |                 | $ | 1,875 
|2010                         |  |                   | 287    |   |                 |   | 1,771 
|2011                         |  |                   | 262    |   |                 |   | 1,462 
|2012                         |  |                   | 190    |   |                 |   | 1,485 
|2013                         |  |                   | 38     |   |                 |   | 1,421 
|2014 to 2027                 |  |                   |       |   |                 |   | 14,784
|                             |  |                   |        |   |                 |   |       
|Total                        |  |                   | 3,212  |   |                 | $ | 22,798
|                             |  |                   |        |   |                 |   |       
|Amount representing interest |  |                   | (138   | ) |                 |   |       
|                             |  |                   |        |   |                 |   |       
|Present value of obligations |  |                   | 3,074  |   |                 |   |       
|Portion due within one-year  |  |                   | (2,374 | ) |                 |   |       
|                             |  |                   |        |   |                 |   |       
|Long-term obligations        |  | $                 | 700    |   |                 |   |       
|                             |  |                   |        |   |                 |   |       

Not included in the above table is a secondary liability for the performance of a ground lease that the Company
has assigned to a third party. The annual obligation of the lease approximates $48,000 through 2020. Should the third party default, the Company has the right to re-assign the lease.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE D  CAPITAL STOCK

The Company has two equity compensation plans adopted respectively in 1993 and 2003 under which certain employees and all non-employee directors of the Company are
eligible to receive stock option grants.

2003 Stock Option and Incentive Plan

Shareholders approved the 2003 Stock Option and Incentive Plan (the 2003 Incentive Plan or Plan) on October 6, 2003. The 2003 Incentive Plan provides for several forms of awards including
stock options, stock appreciation rights, stock awards including restricted and unrestricted awards of stock, and performance awards. The Plan is in full compliance with the American Jobs Creation Act of 2004 and Section 409A of the Internal
Revenue Code. No award shall be granted under the Plan on or after October 6, 2013 or after such earlier date on which the Board of Directors may terminate the Plan. The maximum number of shares of common stock that the Plan may issue is
800,000, subject, however, to proportionate and equitable adjustments determined by the Compensation Committee of the Board of Directors (the Committee) as deemed necessary following the event of any equity restructuring that may occur.

The Plan provides that the total number of shares of common stock covered by options plus the number of stock appreciation rights granted to any one individual may
not exceed 80,000 during any fiscal year. Additionally, no more than 80,000 shares of common stock may be issued in payment of performance awards denominated in shares, and no more than $1,000,000 in cash (or fair market value, if paid in shares)
may be paid pursuant to performance awards denominated in dollars, granted to any one individual during any fiscal year if the awards are intended to qualify as performance based compensation. Employees of the Company and non-employee directors of
the Company are eligible to be selected to participate in the Plan. Participation is based on selection by the Committee. Although there is no limit to the number of participants in the Plan, there are approximately 40 persons currently
participating in the Plan.

Options to purchase shares of the Companys common stock permit the holder to purchase a fixed number of shares at a fixed
price. When options are granted, the Committee determines the number of shares subject to the option, the term of the option which may not exceed ten years, the time or times when the option will become exercisable and the price per share that a
participant must pay to exercise the option. No option will be granted with an exercise price that is less than 100 percent of fair market value on the date of the grant. The option price and obligatory withholding taxes may be paid pursuant to a
cashless exercise/sale procedure involving the simultaneous sale by a broker of shares covered by the option.

Stock appreciation rights
(SARs) are rights to receive payment, in cash, shares of common stock or a combination of the two, equal to the excess of (1) the fair market value of a share of common stock on the date of exercise over (2) the price per share of
common stock established in connection with the grant of the SAR (the reference price). The reference price must be at least 100 percent of the common stocks fair market value on the date the SAR is granted. SARs may be granted by the
Committee in its discretion to any participant, and may have terms no longer than ten years.

Stock awards are grants of shares of common stock that may be
restricted (subject to a holding period or other conditions) or unrestricted. The Committee determines the amounts, vesting, if any, terms and conditions of the awards, including the price to be paid, if any, for restricted awards and any
contingencies related to the attainment of specified performance goals or continued employment or service.

The Committee may also grant performance awards
to participants. Performance awards are the right to receive cash, common stock or both, at the end of a specified performance period, subject to satisfaction of the performance criteria and any vesting conditions established for the award.

As of March 4, 2008, options to purchase 175,000 shares had been granted under the Plan, including 20,000 that belong to the President and Chief
Executive Officer (CEO). The Committee has determined that outstanding options belonging to the CEO vest six months from the date of grant, while outstanding options granted to other key employees vest in three equal annual installments. The
Committee has further determined that outstanding options granted to non-employee members of the Board of Directors vest one year



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE D  CAPITAL STOCK (CONTINUED)

from the date of grant. The Committee may, in its sole discretion, accelerate the vesting of all or any part of any awards held by a terminated participant, excluding,
however, any participant who is terminated for cause. As of March 4, 2008, 655,584 shares remain available to be optioned, including 30,584 shares granted that were subsequently forfeited, which are again available to be granted in accordance
with the Re-Use of Shares provision of the Plan. There were 133,421 options outstanding as of March 4, 2008.

No other awardsstock
appreciation rights, restricted stock award, unrestricted stock award or performance awardhave been granted under the 2003 Stock Option and Incentive Plan as of March 4, 2008.

1993 Stock Option Plan

The 1993 Stock Option Plan was not affected by the adoption of the 2003 Stock Option and
Incentive Plan. The 1993 Stock Option Plan originally authorized the grant of stock options for up to 562,432 shares (as adjusted for changes in capitalization in earlier years) of the common stock of the Company for a ten-year period beginning
May 9, 1994. Shareholders approved the Amended and Restated 1993 Stock Option Plan (Amended Plan) in October 1998, which extended the availability of options to be granted to October 4, 2008. The Amended Plan is in full compliance with the
American Jobs Creation Act of 2004 and section 409A of the Internal Revenue Code. As of March 4, 2008, 6,204 shares remained available to be optioned. Of the 556,228 cumulative shares optioned to date, 279,815 remain outstanding as of
March 4, 2008, including 211,478 that belong to the CEO.

All outstanding options under the 1993 Stock Option Plan, or the Amended Plan, were granted
at fair market value and expire ten years from the date of grant. Outstanding options to the CEO vested in six months, while options granted to non-employee directors vested after one year. Outstanding options granted to other key employees vest in
three equal annual installments. Stock appreciation rights are not provided for under the Amended Plan.

Outstanding and Exercisable Options

The changes in outstanding and exercisable options involving both the 1993 Stock Option Plan and the 2003 Stock Option and Incentive Plan are shown
below as of March 4, 2008:



|                                 |  |              |   |  |                              |       |                                        |            |                                        |   |      
|-------------------------------- |  | ------------ | - |  | ---------------------------- | ----- | -------------------------------------- | ---------- | -------------------------------------- | - | -----
|                                 |  | No. ofshares |   |  | Weighted avg.price per share |       | Weighted avg.RemainingContractual Term |            | AggregateIntrinsic Value(in thousands)
|Outstanding at beginning of year |  | 395,487      |   |  | $                            | 20.05 |                                        |            |                                        |   |      
|Granted                          |  | 45,250       |   |  | $                            | 30.59 |                                        |            |                                        |   |      
|Exercised                        |  | (11,583      | ) |  | $                            | 22.20 |                                        |            |                                        |   |      
|Forfeited or expired             |  | (15,918      | ) |  | $                            | 26.45 |                                        |            |                                        |   |      
|                                 |  |              |   |  |                              |       |                                        |            |                                        |   |      
|Outstanding at end of quarter    |  | 413,236      |   |  | $                            | 20.90 |                                        | 5.47 years |                                        | $ | 1,409
|                                 |  |              |   |  |                              |       |                                        |            |                                        |   |      
|Exercisable at end of quarter    |  | 353,721      |   |  | $                            | 19.58 |                                        | 4.89 years |                                        | $ | 1,409
|                                 |  |              |   |  |                              |       |                                        |            |                                        |   |      

The intrinsic value of stock options exercised during the 40 weeks ended March 4, 2008 and March 6, 2007
was $83,000 and $239,000, respectively.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE D  CAPITAL STOCK (CONTINUED)

Stock options outstanding and exercisable as of March 4, 2008 for the 1993 Stock Option Plan and the 2003 Stock Option and Incentive Plan are shown below:



|                                   |  |              |  |                                 |       |                                         |           
|---------------------------------- |  | ------------ |  | ------------------------------- | ----- | --------------------------------------- | ----------
|Range of Exercise Prices per Share |  | No. ofshares |  | Weighted averageprice per share |       | Weighted averageremaining life in years
|Outstanding:                       |  |              |  |                                 |       |                                         |           
|$ 8.31 to $13.00                   |  | 67,812       |  | $                               | 10.61 |                                         | 2.17 years
|$13.01 to $18.00                   |  | 49,667       |  | $                               | 13.79 |                                         | 3.31 years
|$18.01 to $24.20                   |  | 116,917      |  | $                               | 19.78 |                                         | 4.96 years
|$24.21 to $30.13                   |  | 178,840      |  | $                               | 27.50 |                                         | 7.65 years
|                                   |  |              |  |                                 |       |                                         |           
|$ 8.31 to $30.13                   |  | 413,236      |  | $                               | 20.90 |                                         | 5.47 years
|                                   |  |              | 
|Exercisable:                       |  |              |  |                                 |       |                                         |           
|$ 8.31 to $13.00                   |  | 67,812       |  | $                               | 10.61 |                                         | 2.17 years
|$13.01 to $18.00                   |  | 49,667       |  | $                               | 13.79 |                                         | 3.31 years
|$18.01 to $24.20                   |  | 115,750      |  | $                               | 19.75 |                                         | 4.93 years
|$24.21 to $30.13                   |  | 120,492      |  | $                               | 26.84 |                                         | 7.04 years
|                                   |  |              |  |                                 |       |                                         |           
|$ 8.31 to $30.13                   |  | 353,721      |  | $                               | 19.58 |                                         | 4.89 years

Employee Stock Purchase Plan

Shareholders approved the Employee Stock Option Plan (elsewhere referred to as Employee Stock Purchase Plan) in 1998. The Plan provides employees who have completed 90 days of continuous service with an opportunity to
purchase shares of the Companys common stock through payroll deduction. Immediately following the end of each semi-annual offering period, participant account balances are used to purchase shares of stock at the lesser of 85% of the fair
market value of shares at the beginning of the offering period or at the end of the offering period. The Plan authorizes a maximum of 1,000,000 shares that may be purchased on the open market or from the Companys treasury. As of
October 31, 2007 (latest available data), 126,339 shares had been cumulatively purchased through the Plan. Shares purchased through the Plan are held by the Plans custodian until withdrawn or distributed. As of October 31, 2007, the
custodian held 32,926 shares on behalf of employees.

Frischs Executive Savings Plan

A total of 58,492 common shares (as adjusted for changes in capitalization in earlier years) were reserved for issuance under the non-qualified Executive Savings Plan
(FESP) (see Benefit Plans in Note A  Accounting Policies) when it was established in 1993. As of March 4, 2008, 41,027 shares remained in the FESP reserve, including 5,762 shares allocated but not issued to participants.

There are no other outstanding options, warrants or rights.

Treasury
Stock

As of March 4, 2008, the Companys treasury held 2,445,758 shares of the Companys common stock. Most of the shares were acquired
in a series of repurchase programs authorized by the Board of Directors from 1998 through January 2002, and through a modified Dutch Auction self-tender offer in 1997.

In January 2008, the Board of Directors authorized a new repurchase program under which the Company may repurchase up to 500,000 shares of the Companys common stock in the open market or through block trades
over a two-year period that expires January 28, 2010. Through March 4, 2008, the company had acquired 900 shares under the program at a cost of approximately $19,000.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE D  CAPITAL STOCK (CONTINUED)

Earnings Per Share

Basic earnings per share is based on the weighted
average number of outstanding common shares during the period presented. Diluted earnings per share includes the effect of common stock equivalents, which assumes the exercise and conversion of dilutive stock options.



|                                                                                                                                                                                                                                  |  |                                    |  |                  |      |                            |         |                                    |           |     |   |     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------- |  | ---------------- | ---- | -------------------------- | ------- | ---------------------------------- | --------- | --- | - | ----
|                                                                                                                                                                                                                                  |  | Basic earnings per share           |  | Stockequivalents |      | Diluted earnings per share
|40 weeks ended:                                                                                                                                                                                                                   |  | Weighted averageshares outstanding |  | EPS              |      |                            |         | Weighted averageshares outstanding |           | EPS
|March 4, 2008                                                                                                                                                                                                                     |  | 5,130,957                          |  | $                | 1.30 |                            | 105,296 |                                    | 5,236,253 |     | $ | 1.28
|March 6, 2007                                                                                                                                                                                                                     |  | 5,085,488                          |  | $                | 1.38 |                            | 107,791 |                                    | 5,193,279 |     | $ | 1.35
|                                                                                                                                                                                                                                 
|Stock options to purchase 95,000 shares during the 40 weeks ended March 4, 2008 and 33,500 shares during the 40 weeks ended March 6, 2007 were excluded from the
calculation of diluted EPS because the effect was anti-dilutive.
|                                                                                                                                                                                                                                  |  |                                    |  |                  |     
|12 weeks ended:                                                                                                                                                                                                                   |  |                                    |  |                  |      |                            |         |                                    |           |    
|March 4, 2008                                                                                                                                                                                                                     |  | 5,134,822                          |  | $                | .40  |                            | 64,440  |                                    | 5,199,262 |     | $ | .40 
|March 6, 2007                                                                                                                                                                                                                     |  | 5,102,058                          |  | $                | .38  |                            | 132,573 |                                    | 5,234,631 |     | $ | .37 

Stock options to purchase 192,000 shares during the twelve weeks ended March 4, 2008 and 33,500 shares during
the twelve weeks ended March 6, 2007 were excluded from the calculation of diluted EPS because the effect was anti-dilutive.

Share-Based Payment
(Compensation Cost)

The Company adopted Statement of Financial Accounting Standards No. 123 (R) (SFAS 123 (R)), Share-Based
Payment on May 31, 2006. SFAS 123 (R) requires the fair value of stock options granted to be recognized as compensation cost. It applies to all awards granted on or after the adoption date, with compensation cost based on the fair
value of the award on the date of the grant. The cost is recognized in the consolidated statement of earnings on a straight-line basis over the vesting period of the award. In addition, because the Company elected the modified prospective
application transition method in adopting SFAS 123 (R), compensation cost is also recognized for the portion of outstanding options vesting in the period that were granted prior to, but not yet vested as of the adoption date, based on the fair value
of those awards as was calculated under the original provisions of SFAS 123 and the pro forma disclosures under Statement of Financial Accounting Standards No. 148 (SFAS 148), Accounting for Stock Based Compensation  Transition and
Disclosure.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE D  CAPITAL STOCK (CONTINUED)

Compensation cost arising from stock options granted are shown below:



|                                                |  |                |     |                |   |             |  |             |     |  |   |    
|----------------------------------------------- |  | -------------- | --- | -------------- | - | ----------- |  | ----------- | --- |  | - | ---
|                                                |  | 40 weeks ended |     | 12 weeks ended
|                                                |  | Mar. 4,2008    |     | Mar. 6,2007    |   | Mar. 4,2008 |  | Mar. 6,2007
|                                                |  | (in thousands)
|Charged to administrative and advertising       |  | $              | 258 |                | $ | 231         |  | $           | 83  |  | $ | 87 
|Tax benefit                                     |  |                | 83  |                |   | 79          |  |             | 27  |  |   | 30 
|                                                |  |                |     |                |   |             |  |             |     |  |   |    
|Total share-based compensation cost, net of tax |  | $              | 175 |                | $ | 152         |  | $           | 56  |  | $ | 57 
|                                                |  |                |     |                |   |             |  |             |     |  |   |    
|Effect on basic earnings per share              |  | $              | .03 |                | $ | .03         |  | $           | .01 |  | $ | .01
|                                                |  |                |     |                |   |             |  |             |     |  |   |    
|Effect on diluted earnings per share            |  | $              | .03 |                | $ | .03         |  | $           | .01 |  | $ | .01
|                                                |  |                |     |                |   |             |  |             |     |  |   |    

The fair value of each option award is estimated on the date of the grant using the modified Black-Scholes
option pricing model, developed using the assumptions shown in the next table. No options were granted during either the twelve weeks ended March 4, 2008 nor the twelve weeks ended March 6, 2007.



|                                       |  |             |         |   |             |   |         |  
|-------------------------------------- |  | ----------- | ------- | - | ----------- | - | ------- | -
|                                       |  | 40 weeks    |        
|                                       |  | Mar. 4,2008 |         |   | Mar. 6,2007 |  
|Weighted average fair value of options |  | $           | 8.39    |   |             | $ | 6.38    |  
|                                       |  |             |         |   |             |   |         |  
|Dividend yield                         |  |             | 1.50    | % |             |   | 1.80    | %
|Expected volatility                    |  |             | 27      | % |             |   | 25      | %
|Risk free interest rate                |  |             | 4.24    | % |             |   | 4.56    | %
|Expected lives                         |  |             | 5 years |   |             |   | 5 years |  

Dividend yield is based on the Companys current dividend yield as being the best estimate of projected
dividend yields within the contractual life of the options. Expected volatility is based on the historical volatility of the Companys stock using the month end closing price of the previous five years. Risk free interest rate is based on the
U. S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option. Expected life represents the period of time the options are expected to be outstanding based on historical exercise behavior.

As of March 4, 2008, there was $287,000 of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be
recognized over a weighted average period of .86 years.

SFAS 123 (R) also requires compensation cost to be recognized in connection with the
Companys Employee Stock Purchase Plan (described earlier). Compensation costs related to the Employee Stock Purchase Plan amounted to $21,000 and $29,000 respectively, during the 40 weeks ended March 4, 2008 and March 6, 2007.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE E  PENSION PLANS

As discussed more fully in Note A  Accounting Policies, the Company sponsors two qualified defined benefit pension plans plus an unfunded non-qualified
Supplemental Executive Retirement Plan (SERP) for highly compensated employees (HCEs). The following table shows the components of net periodic pension cost for all periods presented in these consolidated financial statements:



|                                                                  |  |                |        |   |                |   |        |             |  |   |             |   |  |   |      |  
|----------------------------------------------------------------- |  | -------------- | ------ | - | -------------- | - | ------ | ----------- |  | - | ----------- | - |  | - | ---- | -
|                                                                  |  | 40 weeks ended |        |   | 12 weeks ended |  
|Net periodic pension cost components                              |  | Mar. 4,2008    |        |   | Mar. 6,2007    |   |        | Mar. 4,2008 |  |   | Mar. 6,2007 |  
|                                                                  |  | (in thousands) |       
|Service cost                                                      |  | $              | 1,219  |   |                | $ | 1,172  |             |  | $ | 366         |   |  | $ | 352  |  
|Interest cost                                                     |  |                | 1,256  |   |                |   | 1,272  |             |  |   | 377         |   |  |   | 381  |  
|Expected return on plan assets                                    |  |                | (1,703 | ) |                |   | (1,504 | )           |  |   | (511        | ) |  |   | (451 | )
|Amortization of prior service cost                                |  |                | 13     |   |                |   | 23     |             |  |   | 4           |   |  |   | 7    |  
|Amortization of loss                                              |  |                | 167    |   |                |   | 348    |             |  |   | 50          |   |  |   | 104  |  
|                                                                  |  |                |        |   |                |   |        |             |  |   |             |   |  |   |      |  
|Net periodic pension cost                                         |  | $              | 952    |   |                | $ | 1,311  |             |  | $ | 286         |   |  | $ | 393  |  
|                                                                  |  |                |        |   |                |   |        |             |  |   |             |   |  |   |      |  
|                                                                  |  |                |        |  
|Weighted average discount rate                                    |  |                | 6.00   | % |                |   | 6.25   | %           |  |   | 6.00        | % |  |   | 6.25 | %
|Weighted average rate of compensation increase                    |  |                | 4.50   | % |                |   | 4.50   | %           |  |   | 4.50        | % |  |   | 4.50 | %
|Weighted average expected long-term rate of return on plan assets |  |                | 8.00   | % |                |   | 8.00   | %           |  |   | 8.00        | % |  |   | 8.00 | %

The Company anticipates making sufficient contributions to the two qualified defined benefit pension plans to
satisfy legal funding requirements for the year that will end June 3, 2008, plus additional tax deductible amounts that may be deemed advisable. Total contributions of $1,000,000 are currently planned. Obligations to participants in the SERP
are satisfied in the form of lump sum distributions upon the retirement of the participants.

Compensation expense (not included in the net periodic
pension cost described above) relating to the Non Deferred Cash Balance Plan (see Benefit Plans in Note A  Accounting Policies) was $171,000 and $261,000 respectively, during the 40 weeks ended March 4, 2008 and March 6, 2007, and
was $47,000 and $46,000 respectively, for the twelve weeks ended March 4, 2008 and March 6, 2007. Contributions of $219,000 and $308,000 respectively, were made to the Plan in December 2007 and December 2006. In addition, the President and
Chief Executive Officer (CEO) has an employment contract that allows additional annual contributions to be made for the CEOs benefit under the Non Deferred Cash Balance Plan when certain levels of annual pretax earnings are achieved.

The Company also sponsors two 401(k) defined contribution plans and a non-qualified Executive Savings Plan (FESP) for certain HCEs who have been
disqualified from participation in the 401(k) plans (see Benefit Plans in Note A  Accounting Policies). In the 40 weeks ended March 4, 2008 and March 6, 2007, matching contributions to the 401(k) plans amounted to $126,000 and
$120,000 respectively, and were $38,000 and $36,000 respectively, during the twelve weeks ended March 4, 2008 and March 6, 2007. Matching contributions to FESP were $20,000 and $19,000 respectively, during the 40 weeks ended March 4,
2008 and March 6, 2007, and were $5,000 and $5,000 respectively, during the twelve weeks ended March 4, 2008 and March 6, 2007.

The Company
does not sponsor post retirement health care plans.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE F  COMPREHENSIVE INCOME



|                                                              |  |                |       |                |             |   |             |  |   |             |   |  |   |      
|------------------------------------------------------------- |  | -------------- | ----- | -------------- | ----------- | - | ----------- |  | - | ----------- | - |  | - | -----
|                                                              |  | 40 weeks ended |       | 12 weeks ended
|                                                              |  | Mar. 4,2008    |       |                | Mar. 6,2007 |   | Mar. 4,2008 |  |   | Mar. 6,2007
|                                                              |  | (in thousands)
|Net earnings                                                  |  | $              | 6,684 |                |             | $ | 6,995       |  | $ | 2,065       |   |  | $ | 1,915
|Amortization of amounts included in net periodic pension cost |  |                | 180   |                |             |   |            |  |   | 54          |   |  |   |     
|Tax effect                                                    |  |                | (61   | )              |             |   |            |  |   | (20         | ) |  |   |     
|                                                              |  |                |       |                |             |   |             |  |   |             |   |  |   |      
|Comprehensive income                                          |  | $              | 6,803 |                |             | $ | 6,995       |  | $ | 2,099       |   |  | $ | 1,915
|                                                              |  |                |       |                |             |   |             |  |   |             |   |  |   |      

NOTE G  SEGMENT INFORMATION

The Company has two reportable segments within the restaurant industry: Big Boy restaurants and Golden Corral restaurants. Financial information by operating segment is as follows:



|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|-------------------------------- |  | -------------- | ------- | - | -------------- | - | ------- | ----------- |  | - | ----------- | - |  | - | ------ | -
|                                 |  | 40 weeks ended |         |   | 12 weeks ended |  
|                                 |  | Mar. 4,2008    |         |   | Mar. 6,2007    |   |         | Mar. 4,2008 |  |   | Mar. 6,2007 |  
|                                 |  | (in thousands) |        
|Sales                            |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Big Boy                          |  | $              | 146,897 |   |                | $ | 144,760 |             |  | $ | 43,071      |   |  |   | 42,751 |  
|Golden Corral                    |  |                | 78,461  |   |                |   | 77,208  |             |  |   | 23,547      |   |  |   | 22,701 |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|                                 |  | $              | 225,358 |   |                | $ | 221,968 |             |  | $ | 66,618      |   |  | $ | 65,452 |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Earnings before income taxes     |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Big Boy                          |  | $              | 16,540  |   |                | $ | 17,779  |             |  | $ | 4,767       |   |  | $ | 4,952  |  
|Opening expense                  |  |                | (380    | ) |                |   | (241    | )           |  |   |            |   |  |   |       |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Total Big Boy                    |  |                | 16,160  |   |                |   | 17,538  |             |  |   | 4,767       |   |  |   | 4,952  |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Golden Corral                    |  |                | (5      | ) |                |   | (151    | )           |  |   | 129         |   |  |   | 231    |  
|Opening expense                  |  |                | (228    | ) |                |   |        |             |  |   |            |   |  |   |       |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Total Golden Corral              |  |                | (233    | ) |                |   | (151    | )           |  |   | 129         |   |  |   | 231    |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Total restaurant level profit    |  |                | 15,927  |   |                |   | 17,387  |             |  |   | 4,896       |   |  |   | 5,183  |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Administrative expense           |  |                | (5,759  | ) |                |   | (5,958  | )           |  |   | (1,637      | ) |  |   | (1,941 | )
|Franchise fees and other revenue |  |                | 968     |   |                |   | 965     |             |  |   | 289         |   |  |   | 276    |  
|Gain on asset sales              |  |                | 524     |   |                |   | 250     |             |  |   |            |   |  |   |       |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Operating profit                 |  |                | 11,660  |   |                |   | 12,644  |             |  |   | 3,548       |   |  |   | 3,518  |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Interest expense                 |  |                | (1,831  | ) |                |   | (2,046  | )           |  |   | (512        | ) |  |   | (617   | )
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  
|Earnings before income taxes     |  | $              | 9,829   |   |                | $ | 10,598  |             |  | $ | 3,036       |   |  | $ | 2,901  |  
|                                 |  |                |         |   |                |   |         |             |  |   |             |   |  |   |        |  



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE G  SEGMENT INFORMATION (CONTINUED)



|                              |  |                |         |                |   |             |  |             |       |  |   |      
|----------------------------- |  | -------------- | ------- | -------------- | - | ----------- |  | ----------- | ----- |  | - | -----
|                              |  | 40 weeks ended |         | 12 weeks ended
|                              |  | Mar. 4,2008    |         | Mar. 6,2007    |   | Mar. 4,2008 |  | Mar. 6,2007
|Depreciation and amortization |  |                |         |                |   |             |  |             |       |  |   |      
|Big Boy                       |  | $              | 6,158   |                | $ | 5,951       |  | $           | 1,873 |  | $ | 1,880
|Golden Corral                 |  |                | 4,607   |                |   | 4,462       |  |             | 1,400 |  |   | 1,369
|                              |  |                |         |                |   |             |  |             |       |  |   |      
|                              |  | $              | 10,765  |                | $ | 10,413      |  | $           | 3,273 |  | $ | 3,249
|                              |  |                |         |                |   |             |  |             |       |  |   |      
|Capital expenditures          |  |                |         |                |   |             |  |             |       |  |   |      
|Big Boy                       |  | $              | 6,772   |                | $ | 10,865      |  | $           | 1,775 |  | $ | 2,929
|Golden Corral                 |  |                | 2,893   |                |   | 2,259       |  |             | 708   |  |   | 1,264
|                              |  |                |         |                |   |             |  |             |       |  |   |      
|                              |  | $              | 9,665   |                | $ | 13,124      |  | $           | 2,483 |  | $ | 4,193
|                              |  |                |         |                |   |             |  |             |       |  |   |      
|                              |  |                |        
|                              |  | As of          |         |                |   |            
|                              |  | Mar. 4,2008    |         | May 29,2007    |   |             |  |            
|Identifiable assets           |  |                |         |                |   |             |  |             |       |  |   |      
|Big Boy                       |  | $              | 94,185  |                | $ | 94,011      |  |             |       |  |   |      
|Golden Corral                 |  |                | 83,324  |                |   | 85,248      |  |             |       |  |   |      
|                              |  |                |         |                |   |             |  |             |       |  |   |      
|                              |  | $              | 177,509 |                | $ | 179,259     |  |             |       |  |   |      
|                              |  |                |         |                |   |             |  |             |       |  |   |      

NOTE H  COMMITMENTS AND CONTINGENCIES

Commitments

In the ordinary course of business, purchase commitments are entered into with certain of the
Companys suppliers. Most of these agreements are typically for periods of one year or less in duration; however, longer term agreements are also in place. Future minimum payments under these arrangements are $3,037,000, $2,619,000, $2,393,000,
$2,393,000 and $2,365,000 respectively, for the periods ending March 4, 2009, 2010, 2011, 2012 and 2013, with $347,000 to be paid thereafter. These agreements are intended to secure favorable pricing while ensuring availability of desirable
products. Management does not believe such agreements expose the Company to any significant risk.

Litigation

The construction of a Golden Corral restaurant in Canton, Ohio was halted in August 2001 in order to assess structural concerns. In March 2002, a final assessment of the
defects resulted in the Companys decision to construct a new building on another part of the lot. (The restaurant finally opened for business in January 2003.) In July 2002, the general contractor that built the defective building filed a
demand for arbitration against the Company seeking $294,000 plus interest, fees, and costs it claimed were owed by the Company under the construction contract. The Company denied the claim and filed a counterclaim against the general contractor that
alleged defective construction and claimed damages, lost profits, interest and costs in an amount exceeding $1,000,000. In August 2006, the arbitration panel that heard the case awarded the Company $538,000 and denied the general contractors
claim against the Company. The Company filed a Motion to Modify the award to increase the time period for which the Company was entitled to damages, including interest, believing the arbitration panel inadvertently failed to consider the full range
of time that was required for investigation and to obtain building permits and other approvals associated with the replacement structure. The general contractor also filed a Motion to Modify, which alleged that the panel misinterpreted the testimony
as to the calculation of lost profits. The arbitration panel rejected both Motions in November 2006. The Company immediately filed an Application in the local court system to confirm the arbitration panels original award. The general
contractor responded by filing a Motion with the same court to vacate the award. In April 2007, the Court granted the Companys Application and denied the general contractors Motion to vacate. The general contractor filed a Notice of
Appeal in May 2007. Oral arguments are scheduled to be heard in April 2008.



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##### Table of Contents

Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE H  COMMITMENTS AND CONTINGENCIES (CONTINUED)

In August 2002, the Company filed a separate lawsuit against the architect that designed the defective restaurant building that alleged negligent design and claimed
damages, lost profits, interest and costs exceeding $2,500,000. In July 2003, the Company resolved all claims, counterclaims and cross claims against the trial court defendants, including the architect and the architects structural engineering
consultant. The defendants agreed to pay the Company the sum of $1,700,000 in full and final settlement of all claims. The Company received the settlement funds in full in July 2004 and the case was dismissed. The resolution between the Company and
the trial court defendants is separate and apart from the on-going dispute between the general contractor and the Company.

The Company is subject to
various other claims and suits that arise from time to time in the ordinary course of business. Management does not currently believe that financial resources to resolve outstanding claims will exceed provisions already included in the consolidated
financial statements and therefore, the ultimate liability, if any, will not have a material impact on the Companys earnings, cash flows or financial position.

Other Contingencies

The Company self-insures a significant portion of expected losses under its workers
compensation program in the state of Ohio. Insurance coverage is purchased from an insurance company for individual claims that may exceed $300,000. (See Self Insurance in Note A  Accounting Policies.) Insurance coverage is maintained for
various levels of casualty and general and product liability.

The Company currently maintains two outstanding letters of credit totaling $135,000 in
support of its self-insurance program. There are no other outstanding letters of credit issued by the Company.

As of March 4, 2008, the Company
operated 28 restaurants on non-owned properties. (See Note C  Leased Properties.) Certain of the leases provide for contingent rental payments, typically based on a percentage of the leased restaurants sales in excess of a fixed amount.

The Company is secondarily liable for the performance of a ground lease that has been assigned to a third party. The annual obligation of the lease
approximates $48,000 through 2020. Since there is no reason to believe that the third party will default, no provision has been made in the consolidated financial statements for amounts that would be payable by the Company. In addition, the Company
has the right to re-assign the lease in the event of the third partys default.

NOTE I  RELATED PARTY TRANSACTIONS

The Chief Executive Officer of the Company (Craig F. Maier), who also serves as a director of the Company, owns a Big Boy restaurant licensed to him by the Company. A Big
Boy licensed restaurant is owned by certain family members of another director of the Company (Blanche F. Maier) and a Big Boy licensed restaurant is owned by certain children of such other director (excluding Craig F. Maier), one of whom is also an
officer and director of the Company (Karen F. Maier).

These three restaurants pay to the Company franchise and advertising fees, employee leasing and
other fees, and make purchases from the Companys commissary. The total paid to the Company by these three restaurants amounted to $3,755,000 and $3,753,000 respectively, during the 40 weeks ended March 4, 2008 and March 6, 2007, and
was $1,099,000 and $1,096,000 respectively, during the twelve weeks ended March 4, 2008 and March 6, 2007. The amount owed to the Company from these restaurants was $93,000 and $104,000 respectively, as of March 4, 2008 and
May 29, 2007. Amounts due are generally settled within 28 days of billing.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE I  RELATED PARTY TRANSACTIONS (CONTINUED)

All related party transactions described above were effected on substantially similar terms as transactions with persons having no relationship with the Company.

The Chairman of the Board of Directors (Jack C. Maier, deceased February 2005) from 1970 to 2005 had an employment agreement with a provision for deferred
compensation. The agreement provided that upon its expiration or upon the Chairmans retirement, disability, death or other termination of employment, the Company would become obligated to pay the Chairman or his survivors for each of the next
ten years the amount of $214,050, adjusted annually to reflect 50 percent of the annual percentage change in the Consumer Price Index (CPI). Monthly payments of $17,838 to the Chairmans widow (Blanche F. Maier), a director of the Company,
commenced on March 1, 2005. On March 1, 2008, the monthly payment was increased to $18,744 from $18,368 in accordance with the CPI provision of the agreement. The present value of the long-term portion of the obligation approximating
$1,167,000 is included in the consolidated balance sheet under the caption Deferred compensation and other. The present value of the current portion of the obligation approximating $153,000 is included in current liabilities in the
consolidated balance sheet.



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##### Table of Contents

ITEM 2. MANAGEMENTS DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS

SAFE HARBOR
STATEMENT under the PRIVATE SECURITIES LITIGATION REFORM ACT of 1995

Statements included in this Managements Discussion and Analysis of Financial
Condition and Results of Operations (MD&A) that are not historical facts are forward-looking statements as that item is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks, uncertainties and other factors that could cause actual results and performance to differ materially from anticipated results that may be expressed or implied by those statements. Factors that could cause such differences to occur
include, but are not limited to, those discussed in this Form 10-Q under Part II, Item 1A. Risk Factors. Forward-looking statements can generally be identified in sentences that contain words such as should,
would, could, may, plan(s), anticipate(s), project(s), believe(s), will, expect(s), estimate(s), intend(s),
continue, assumption(s), goal(s), target and similar words that are used to convey forward-looking statements that are not historical or present facts.

All forward-looking information in this MD&A is provided by the Company pursuant to the safe harbor established under the Private Securities Litigation Reform Act of
1995 and should be evaluated in the context of all risk factors. The Company undertakes no obligation to update any forward-looking statements that may be contained in this MD&A.

CORPORATE OVERVIEW

The operations of Frischs Restaurants, Inc. and Subsidiaries (the Company) consist of two
reportable segments within the restaurant industry: full service family-style Big Boy restaurants and grill buffet style Golden Corral restaurants. As of March 4, 2008, 89 Big Boy restaurants and 35 Golden Corral
restaurants were owned and operated by the Company, located in various regions of Ohio, Kentucky and Indiana, plus smaller areas in Pennsylvania and West Virginia.

The Companys Third Quarter of Fiscal 2008 consists of the twelve weeks ended March 4, 2008, and compares with the twelve weeks ended March 6, 2007, which constituted the Third Quarter of Fiscal 2007. The
First Three Quarters of Fiscal 2008 consists of the 40 weeks ended March 4, 2008, and compares with the 40 weeks ended March 6, 2007, which constituted the First Three Quarters of Fiscal 2007. The twelve-week third quarter is
a disproportionately smaller share of annual revenue and earnings because it spans most of the winter season from mid December through early March. References to Fiscal 2008 refer to the 53 week year that will end on June 3, 2008, the fourth
quarter of which will include thirteen weeks.

Sales reached $66,618,000 during the Third Quarter of Fiscal 2008, as sales rose $1,167,000 or 1.8 percent
higher than the Third Quarter of Fiscal 2007. Sales reached a record $225,358,000 during the First Three Quarters of Fiscal 2008, as sales rose 1.5 percent or $3,390,000 higher than the First Three Quarters of Fiscal 2007. The sales increases were
primarily achieved through new restaurant openings. Below is a summary of same store sales changes:



| |  | Big Boy same store sales were .5 percent below the Third Quarter of Fiscal 2007.
|- |  | --------------------------------------------------------------------------------



| |  | Golden Corral same store sales were .2 percent higher than the Third Quarter of Fiscal 2007.
|- |  | --------------------------------------------------------------------------------------------



| |  | Big Boy same store sales were .5 percent higher than the First Three Quarters of Fiscal 2007.
|- |  | ---------------------------------------------------------------------------------------------



| |  | Golden Corral same store sales were 1.6 percent below the First Three quarters of Fiscal 2007.
|- |  | ----------------------------------------------------------------------------------------------

Net earnings for the Third Quarter of Fiscal 2008 were $2,065,000, or diluted earnings per share (EPS) of $.40, which compares with $1,915,000, or diluted EPS of $.37 in
the Third Quarter of Fiscal 2007. Net earnings for the First Three Quarters of Fiscal 2008 were $6,684,000, or diluted EPS of $1.28, which compares with $6,995,000, or diluted EPS of $1.35 in the First Three Quarters of Fiscal 2007. In addition to
the sales changes noted above, other factors having a noteworthy impact on net earnings:



| |  | The escalating cost of food has placed a significant squeeze on operating margins. As a percentage of sales, food costs increased to 35.9 percent in the Third
Quarter of Fiscal 2008, up from 34.9 percent in the Third Quarter of Fiscal 2007. For the First Three Quarters of Fiscal 2008, food costs were 35.5 percent of sales, up from 34.8 percent during the First Three Quarters of Fiscal 2007.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | New store opening costs were $608,000 in the First Three Quarters of Fiscal 2008, or $367,000 higher than the First Three Quarters of Fiscal 2007.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Gains on the sale of real estate were $524,000 during the First Three Quarters of Fiscal 2008, which was $274,000 more than was credited to earnings the First Three
Quarters of Fiscal 2007.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Adjustments to self-insurance reserves - $106,000 was credited to earnings in the First Three Quarters of Fiscal 2008 versus $554,000 that was credited to earnings
during the First Three Quarters of Fiscal 2007.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Another significant factor affecting the Companys margins has been the annual
increase in the minimum wage as mandated by Ohio voters in the November 2006 election:



| |  | The minimum wage increased 33 percent from $5.15 per hour to $6.85 per hour beginning January 1, 2007. It was increased to $7.00 per hour effective
January 1, 2008 in accordance with the mandates annual provision to adjust automatically for the rate for inflation.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The minimum wage for tipped employees increased 61 percent from $2.13 per hour to $3.43 per hour beginning January 1, 2007. It was increased to $3.50 per hour
on January 1, 2008 in accordance with the inflation provision in the mandate.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company reacted to the mandate with two major
initiatives, as more than two-thirds of the Companys payroll costs are incurred in Ohio. First, the Company increased its menu prices in early January 2007 as follows: 2.4 percent for Big Boy and 2.1 percent for Golden Corral. The price
increases were designed to incorporate the regular semi-annual price changes that would have been implemented anyway in February 2007. The January 2007 price increases were also introduced in non-Ohio stores to offset the anticipated increase in the
federal minimum wage that ultimately was enacted later in the year (see discussion below). Secondly, an initiative was launched to limit the number of hours that workers were permitted to work in an effort to largely offset the effects of paying the
required higher hourly rate of pay.As a result, payroll and related costs were 32.7 percent of sales during the Third Quarter of Fiscal 2008, a reduction from 33.5 percent during the Third Quarter of Fiscal 2007. For the First Three Quarters
of Fiscal 2008, payroll and related costs were 33.0 percent of sales, slightly down from 33.1 percent in the First Three Quarters of Fiscal 2007. The mandated increase in the minimum wage that went into effect on January 1, 2008 is expected to
add $350,000 in annual payroll costs unless allowable work hours are reduced further.

Effective July 24, 2007, legislation increased the federal
minimum wage from $5.15 per hour to $5.85 per hour for non-tipped employees. The legislation includes scheduled increases to $6.55 per hour in July 2008 and to $7.25 per hour in July 2009. The rate for tipped employees was not changed by the federal
legislation, remaining at $2.13 per hour. Thus far, the effect of the federal legislation has been minimal as market conditions already dictate wage rates in excess of $5.85 per hour, and because the Ohio minimum wage already exceeds the Federal
requirement. It is currently estimated that the federal increase in the third year to $7.25 per hour could add as much as $500,000 in annual payroll costs if additional labor reductions are not implemented.



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RESULTS OF OPERATIONS

Sales

The Companys sales are primarily generated through the operation of Big Boy restaurants and Golden Corral restaurants. Big Boy
sales also include wholesale sales from the Companys commissary to restaurants licensed to other operators and the sale of Big Boys signature brand tartar sauce to grocery stores. Same store sales comparisons are a key metric that
management uses in the operation of the business. Same store sales are affected by changes in customer counts and menu price increases. Changes in sales also occur when new restaurants are opened and older restaurants are closed. Below is the detail
of consolidated restaurant sales:



|                              |  |                |        |                      |   |             |  |             |         |  |   |        
|----------------------------- |  | -------------- | ------ | -------------------- | - | ----------- |  | ----------- | ------- |  | - | -------
|                              |  | Third Quarter  |        | First Three Quarters
|                              |  | Mar. 4,2008    |        | Mar. 6,2007          |   | Mar. 4,2008 |  | Mar. 6,2007
|                              |  | (in thousands)
|Big Boy restaurant sales      |  | $              | 40,617 |                      | $ | 40,399      |  | $           | 139,021 |  | $ | 137,100
|Wholesale sales to licensees  |  |                | 2,023  |                      |   | 1,974       |  |             | 7,020   |  |   | 6,888  
|Other wholesale sales         |  |                | 431    |                      |   | 378         |  |             | 856     |  |   | 772    
|                              |  |                |        |                      |   |             |  |             |         |  |   |        
|Total Big Boy Sales           |  |                | 43,071 |                      |   | 42,751      |  |             | 146,897 |  |   | 144,760
|Golden Corral sales           |  |                | 23,547 |                      |   | 22,701      |  |             | 78,461  |  |   | 77,208 
|                              |  |                |        |                      |   |             |  |             |         |  |   |        
|Consolidated restaurant sales |  | $              | 66,618 |                      | $ | 65,452      |  | $           | 225,358 |  | $ | 221,968
|                              |  |                |        |                      |   |             |  |             |         |  |   |        

Higher Big Boy sales shown in the above table include a same store sales decrease of .5 percent in the Third
Quarter of Fiscal 2008 (on a customer count decrease of 2.8 percent) and a .5 percent increase for the First Three Quarters of Fiscal 2008 (on a 2.6 percent decrease in customer counts). Management believes a direct correlation continues to exist
between the lower customer counts that have been experienced over the last three fiscal years and the steep cost of gasoline. The Companys Midwest market areas are continuing to experience difficulty recovering from and adjusting to high gas
prices.

The same store sales comparisons include average menu price increases of 1.2 percent and 1.1 percent implemented respectively in September 2007
and September 2006. In addition, a 2.4 percent increase was put in place in January 2007 that was designed specifically to counter the effects of higher costs associated with mandated increases in the minimum wage. A 1.6 percent average price
increase was effective in February 2008.

The Company operated 89 Big Boy restaurants as of March 4, 2008, including two new ones that opened
respectively in June and July 2007 plus a third that opened in August 2007 that replaced an older facility that had closed in April 2007. Sites for two new Big Boy restaurants are expected to be acquired and under construction before the fiscal year
ends on June 3, 2008. Three low volume Big Boy restaurants ceased operations during the periods presented in this MD&A, closing respectively in January, April and June 2007. One existing Big Boy restaurant will be closed and razed in the
spring of 2008 to make room for a new facility to open in the 2008 summer season.

The first new Golden Corral restaurant to be constructed since November
2005 opened for business in July 2007. The Company now operates 35 Golden Corral restaurants. No other Golden Corral restaurants are currently planned to open over the next twelve months.

Higher sales at Golden Corral restaurants shown in the above table include a same store sales increase of .2 percent in the Third Quarter of Fiscal 2008 (on a customer
count decrease of 3.4 percent) and a 1.6 percent decrease in the First Three Quarters of Fiscal 2008 (on a 6.3 decrease in customer counts). Notwithstanding the .2 percent same store sales increase in the Third Quarter of Fiscal 2008, the Golden
Corral operating segment has suffered a same store sales decrease in sixteen of the last eighteen quarters. The same store sales comparisons include average menu price increases of 3.2 percent (October 2007), 4.2 percent (June 2007), 2.1 percent
(January 2007) and 3.2 percent (September 2006). The 2.1 percent increase implemented in January 2007 was put in place specifically to offset the effects of higher costs associated with minimum wage increases. In addition, an increase of .8 percent
went into place during the last week of March 2008.

Gross Profit

Gross profit for the Big Boy segment includes wholesale sales and cost of wholesale sales. Gross profit differs from restaurant level profit discussed in Note G (Segment Information) to the consolidated financial
statements, as advertising expense is charged against restaurant level profit. Gross profit for both operating segments is shown below:



|                           |  |                |       |                      |   |             |  |             |        |  |   |       
|-------------------------- |  | -------------- | ----- | -------------------- | - | ----------- |  | ----------- | ------ |  | - | ------
|                           |  | Third Quarter  |       | First Three Quarters
|                           |  | Mar. 4,2008    |       | Mar. 6,2007          |   | Mar. 4,2008 |  | Mar. 6,2007
|                           |  | (in thousands)
|Big Boy gross profit       |  | $              | 5,814 |                      | $ | 5,988       |  | $           | 19,697 |  | $ | 21,020
|Golden Corral gross profit |  |                | 658   |                      |   | 742         |  |             | 1,514  |  |   | 1,586 
|                           |  |                |       |                      |   |             |  |             |        |  |   |       
|Total gross profit         |  | $              | 6,472 |                      | $ | 6,730       |  | $           | 21,211 |  | $ | 22,606
|                           |  |                |       |                      |   |             |  |             |        |  |   |       



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The operating percentages shown in the following table are percentages of total sales, including Big Boy wholesale sales.
The table supplements the discussion that follows which addresses cost of sales for both the Big Boy and Golden Corral reporting segments, including food cost, payroll and other operating costs.



|                                                |  |                 |  |                 |  |                 |  |                  |  |        |  |       |  |       |  |        |  |       |  |       |  |        |  |      
|----------------------------------------------- |  | --------------- |  | --------------- |  | --------------- |  | ---------------- |  | ------ |  | ----- |  | ----- |  | ------ |  | ----- |  | ----- |  | ------ |  | -----
|                                                |  | 12 weeks 3/4/08 |  | 12 weeks 3/6/07 |  | 40 weeks 3/4/08 |  | 40 weeks 3/06/07
|                                                |  | Total           |  | BigBoy          |  | GC              |  | Total            |  | BigBoy |  | GC    |  | Total |  | BigBoy |  | GC    |  | Total |  | BigBoy |  | GC   
|Sales                                           |  | 100.0           |  | 100.0           |  | 100.0           |  | 100.0            |  | 100.0  |  | 100.0 |  | 100.0 |  | 100.0  |  | 100.0 |  | 100.0 |  | 100.0  |  | 100.0
|                                                |  |                 |  |                 |  |                 |  |                  |  |        |  |      
|Food and Paper                                  |  | 35.9            |  | 34.0            |  | 39.5            |  | 34.9             |  | 32.9   |  | 38.6  |  | 35.5  |  | 33.5   |  | 39.1  |  | 34.8  |  | 32.4   |  | 39.2 
|                                                |  |                 |  |                 |  |                 |  |                  |  |        |  |      
|Payroll and Related                             |  | 32.7            |  | 34.5            |  | 29.4            |  | 33.5             |  | 35.2   |  | 30.3  |  | 33.0  |  | 34.6   |  | 29.8  |  | 33.1  |  | 34.7   |  | 30.0 
|                                                |  |                 |  |                 |  |                 |  |                  |  |        |  |      
|Other Operating Costs (including opening costs) |  | 21.7            |  | 18.0            |  | 28.3            |  | 21.4             |  | 18.0   |  | 27.8  |  | 22.2  |  | 18.5   |  | 29.1  |  | 22.0  |  | 18.3   |  | 28.8 
|                                                |  |                 |  |                 |  |                 |  |                  |  |        |  |      
|Gross Profit                                    |  | 9.7             |  | 13.5            |  | 2.8             |  | 10.2             |  | 13.9   |  | 3.3   |  | 9.3   |  | 13.4   |  | 2.0   |  | 10.1  |  | 14.6   |  | 2.0  

The market for beef remains highly volatile, as import and export restrictions can and do cause wide cost
fluctuations. In addition, currency markets relative to the weakened U.S. Dollar together with high fuel costs have greatly increased the cost of the three major grains (corn, soybeans and wheat) that are the principal feed ingredients for
cattle, hogs and poultry. These unfavorable market conditions continue to pose a difficult environment in which to contain food costs. The effect of commodity price increases is actively managed with changes to the Big Boy menu mix and effective
selection and rotation of items served on the Golden Corral buffet, together with periodic increases in menu prices. Rapid escalations in costs for protein items such as poultry, pork, beef and fish products can be problematic to effective menu
management, as can be seen in the rising percentages in the above table despite higher prices being charged to customers. Food cost percentages in the Golden Corral segment are much higher than Big Boy because of the all-you-can-eat nature of the
Golden Corral concept, as well as its use of steak as a featured item on the buffet line.

Payroll and related cost percentages were lowered in both
operating segments for all periods presented in the above table. This achievement is an indicator that the mandated increases in the minimum wage have been effectively mitigated by the higher menu prices and managements resolve to reduce the
number of hours worked by hourly paid employees.

Quarterly reviews of self-insured workers compensation reserves during the First Three Quarters of
Fiscal 2008 have resulted in favorable adjustments to the reserves totaling $106,000. Favorable adjustments of $554,000 were recorded last year, mostly in the first quarter. Active claims management and post accident drug testing have resulted in
vast improvements in claims experience in recent years. This has allowed the Company to use lower rates (as a percentage of payroll) to accrue initial self-insured reserves since the beginning of fiscal year 2006. The continued use of these lower
rates should effect a continuation in the trend of reducing the size of total annual adjustments, which may sometimes result in unfavorable quarterly adjustments.

Net periodic pension cost (computed under Statement of Financial Accounting Standards No. 87, Employers Accounting for Pensions) was $286,000 and $393,000 respectively, in the Third Quarter of Fiscal 2008 and the Third
Quarter of Fiscal 2007. Net periodic pension cost was $952,000 and $1,311,000 respectively, in the First Three Quarters of Fiscal 2008 and the First Three Quarters of Fiscal 2007. The decreases are due principally to the combination of favorable
asset returns and favorable pay experience. Contributions to the two qualified defined benefit pension plans sponsored by the Company will satisfy legal funding requirements for the plan year ending June 3, 2008. Additional tax deductible
amounts may also be contributed as deemed advisable. Contributions are currently estimated at $1,000,000, including $300,000 contributed during the Third Quarter of Fiscal 2008.



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Other operating costs include occupancy costs such as maintenance, rent, depreciation, property tax, insurance and
utilities, plus costs relating to field supervision, accounting and payroll preparation, franchise fees for Golden Corral restaurants, new restaurant opening costs and many other operating costs. For the First Three Quarters of Fiscal 2008, opening
costs were $608,000 ($380,000 for Big Boy and $228,000 for Golden Corral). Opening costs were $241,000 (all of which was for Big Boy) in the First Three Quarters of Fiscal 2007. Since most of these expenses tend to be fixed costs, the percentages
shown in the above table are greatly affected by changes in same store sales levels. Other operating costs are a much higher percentage of sales for the Golden Corral segment as sales volumes remain well below expectation.

Operating Profit

To arrive at the measure of operating profit,
administrative and advertising expense is subtracted from gross profit while franchise fees and other revenue are added to it. Gains and losses from the sale of real property, if any, are then respectively added or subtracted.

Administrative and advertising expense decreased $275,000 and $134,000 respectively, in the Third Quarter of Fiscal 2008 and the First Three Quarters of Fiscal 2008 when
compared with comparable periods a year ago. The decreases are attributable primarily to lower compensation costs.

Revenue from franchise fees is based on
sales of Big Boy restaurants that are licensed to other operators. The fees are based principally on percentages of sales generated by the licensed restaurants and are recorded on the accrual method as earned. As of March 4, 2008 and
March 6, 2007, 28 Big Boy restaurants were licensed to other operators and were paying fees to the Company. No licensed Big Boy restaurants have opened or closed during any of the periods presented in this MD&A. Other revenue also includes
certain other fees earned from licensed restaurants along with miscellaneous rent and investment income.

Gains from the sale of real property amounted to
$524,000 during the First Three Quarters of Fiscal 2008. The gains resulted from the dispositions in the first quarter of fiscal 2008 of three low volume Big Boy restaurants that had ceased operations respectively in January, April and June 2007.
During the First Three Quarters of Fiscal 2007, a gain of $250,000 was recorded in connection with the sale of an older Big Boy restaurant that closed in October 2006. The restaurant closed in order to allow a new restaurant to be opened on a
superior site within the same neighborhood. No gains from the sale of real property were recorded during the Third Quarter of Fiscal 2008 nor the Third Quarter of Fiscal 2007.

No impairment of property and equipment assets was recorded during any of the periods presented in this MD&A. However, a charge of $160,000 was included in administrative and advertising expense to write-off the
deposit for development rights on sixteen Golden Corral sub-markets, which were terminated under an agreement signed in April 2008.

Interest Expense

Interest expense decreased in proportion with lower debt levels in both the Third Quarter of Fiscal 2008 and the First Three Quarters of Fiscal 2008
when compared with comparable Fiscal 2007 periods.

Income Tax Expense

Income tax expense as a percentage of pretax earnings was estimated at 32 percent throughout the First Three Quarters of Fiscal 2008 and was 34 percent throughout the First Three Quarters of Fiscal 2007. The effective
tax rate for Fiscal 2007 was ultimately lowered to 31.4 percent. These rates have been kept consistently low through the Companys use of tax credits, especially the federal credit allowed for Employer Social Security and Medicare Taxes Paid on
Certain Employee Tips.

LIQUIDITY and CAPITAL RESOURCES

Sources of Funds

Food sales to restaurant customers provide the Companys principal source of cash. The funds from sales are
immediately available for the Companys use, as substantially all sales to restaurant customers are received in cash or are settled by debit or credit cards. Net earnings plus depreciation provides the primary source of cash provided by
operating activities. Other sources of cash may include borrowing against credit lines, proceeds received when stock options are exercised and occasional sales of real estate. In addition to servicing debt, these cash flows are utilized for
discretionary objectives, including capital projects (principally restaurant expansion) and dividends.



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Working Capital Practices

The Company has historically maintained a strategic negative working capital position, a common practice in the restaurant industry. As significant cash flows are consistently provided by operations, and credit lines are readily available,
the use of this practice should not hinder the Companys ability to satisfactorily retire any of its obligations when due, including the aggregated contractual obligations and commercial commitments shown in the following table.

Aggregated Information about Contractual Obligations and Commercial Commitments

March 4, 2008



|                                         |  |                                       |        |        |   |        |  |        |        |        |   |        |  |                 |       |  |   |       |  |   |       
|---------------------------------------- |  | ------------------------------------- | ------ | ------ | - | ------ |  | ------ | ------ | ------ | - | ------ |  | --------------- | ----- |  | - | ----- |  | - | ------
|                                         |  | Payments due by period (in thousands)
|                                         |  | Total                                 |        | year 1 |   | year 2 |  | year 3 |        | year 4 |   | year 5 |  | morethan 5years
|Long-Term Debt                           |  | $                                     | 33,452 |        | $ | 9,728  |  | $      | 9,123  |        | $ | 5,494  |  | $               | 4,101 |  | $ | 2,962 |  | $ | 2,044 
|Rent due under Capital Lease Obligations |  |                                       | 3,212  |        |   | 2,435  |  |        | 287    |        |   | 262    |  |                 | 190   |  |   | 38    |  |   |      
|1 Rent due under Operating Leases        |  |                                       | 22,798 |        |   | 1,875  |  |        | 1,771  |        |   | 1,462  |  |                 | 1,485 |  |   | 1,421 |  |   | 14,784
|2 Unconditional Purchase Obligations     |  |                                       | 17,971 |        |   | 7,854  |  |        | 2,619  |        |   | 2,393  |  |                 | 2,393 |  |   | 2,365 |  |   | 347   
|3 Other Long-Term Obligations            |  |                                       | 1,621  |        |   | 225    |  |        | 228    |        |   | 231    |  |                 | 234   |  |   | 238   |  |   | 465   
|Total Contractual Cash Obligations       |  | $                                     | 79,054 |        | $ | 22,117 |  | $      | 14,028 |        | $ | 9,842  |  | $               | 8,403 |  | $ | 7,024 |  | $ | 17,640



|1 | Not included in the table is a secondary liability for the performance of a ground lease that has been assigned to a third party. The annual obligation of the lease approximates $48
through 2020. Should the third party default, the Company has the right to re-assign the lease. Operating leases include option periods considered to be part of the lease term under the provisions of Statement of Financial Accounting Statement
No. 13, Accounting for Leases, as amended.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | Primarily consists of commitments for certain food and beverage items, plus capital projects including commitments to purchase real property.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------

|3 | Deferred compensation liability.
|- | --------------------------------

The working capital deficit was
$20,051,000 as of March 4, 2008 and was $25,832,000 as of May 29, 2007. The improvement in the deficit is twofold. The decrease in accounts payable reflects the fact that no new restaurant construction was in progress as of March 4,
2008. Three Big Boys and one Golden Corral restaurant were at various stages of construction as of May 29, 2007, all of which opened for business during the first quarter of fiscal 2008. The other reason for improvement in the working capital
deficit is due to the current portion of long-term debt being more than $2,000,000 lower than it was at May 29, 2007.

In September 2007, the maximum
amount that may be borrowed under the terms of the Companys Construction Draw Credit Facility was increased by $12,500,000, which brought to $15,000,000 the amount available to be drawn upon. A $2,000,000 draft on February 29, 2008
lowered to $13,000,000 the amount available to be drawn before the facility expires on September 1, 2010. Additionally, $4,500,000 was available as of March 4, 2008 on a $5,000,000 working capital revolving line of credit that also expires
September 1, 2010. However, its $500,000 outstanding balance must be brought to zero no later than May 1, 2008 to comply with the 30 day resting period provision of the loan agreement.

Operating Activities

Operating cash flows were $13,166,000 in the
First Three Quarters of Fiscal 2008, which compares with $15,279,000 in the First Three Quarters of Fiscal 2007. The decrease in operating cash flows is primarily attributable to normal changes in assets and liabilities such as prepaid expenses,
inventories and accounts payable, all of which can and do often fluctuate widely. Management believes a better, more reliable gauge to measure cash flows from the operation of the business is to use the simple method of net earnings plus non-cash
expenses such as depreciation, losses (net of any gains) on dispositions of assets and stock based compensation expense. This method yields $17,468,000 in cash flows from operating activities for the First Three Quarters of Fiscal 2008. The
comparable amount in the First Three Quarters of Fiscal 2007 was $17,618,000.



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Investing Activities

Capital spending is the principal component of the Companys investing activities. Capital spending was $9,665,000 during the First Three Quarters of Fiscal 2008, a decrease of $3,458,000 from the First Three Quarters of Fiscal 2007.
This years capital spending includes $6,772,000 for Big Boy restaurants and $2,893,000 for Golden Corral restaurants. These capital expenditures consisted of new restaurant construction, remodeling existing restaurants including kitchen and
dining room expansions, routine equipment replacements and other capital outlays.

Proceeds from the disposition of property during the First Three
Quarters of Fiscal 2008 amounted to $1,717,000, primarily reflecting the sale of three low-volume Big Boy restaurants that ceased operations respectively in January, April and June 2007. The sales of the three properties generated an aggregate gain
of $524,000 in the quarter that ended September 18, 2007. The First Three Quarters of Fiscal 2007 included proceeds of $398,000 from the sale of a Big Boy restaurant that closed in October 2006, yielding a gain of $250,000 which was reported in
the quarter that ended December 12, 2006.

Financing Activities

Borrowing against credit lines amounted to $6,500,000 during the First Three Quarters of Fiscal 2008, $2,000,000 of
which was borrowed during the Third Quarter of Fiscal 2008. Scheduled and other payments of long-term debt and capital lease obligations amounted to $10,119,000 during the First Three Quarters of Fiscal 2008. Regular quarterly cash dividends paid to
shareholders totaled $1,744,000. The rate paid per share was increased from $.11 to $.12 per share effective with the dividend paid on January 10, 2008. The Companys 189thconsecutive quarterly dividend was declared on March 12, 2008 and is payable on April 10, 2008. The Company expects to continue its 47 year practice of paying regular
quarterly cash dividends.

During the First Three Quarters of Fiscal 2008, employees acquired approximately 11,600 shares of the Companys common
stock pursuant to the exercise of stock options, yielding proceeds to the Company of approximately $257,000. As of March 4, 2008, 413,000 shares granted under the Companys two stock option plans remain outstanding, including 354,000 fully
vested shares at a weighted average exercise price per share of $19.58. As of March 4, 2008, 662,000 shares remained available to be granted under these plans, which is net of 24,000 options granted to employees in June 2007 and 21,000 options
granted in October 2007 to non-employee members of the Board of Directors.

Other Information

The Companys 35thGolden Corral restaurant opened for business in July 2007. It was the first new restaurant to be opened by the Company since November 2005. The Company has the approval of Golden Corral Franchising Systems, Inc. to curtail development of
Golden Corral restaurants until operating performance improvements are achieved in existing restaurants. The curtailment allows management to focus on rebuilding same store sales, while cash flows and credit facilities are used to strengthen the
Companys balance sheet through debt reduction resulting in lower interest costs.

Although the Company continues to possess development rights for up
to 12 more Golden Corral restaurants, no further development is currently planned during Fiscal 2008 and there is no active search for sites on which to build. Five Golden Corral restaurants were renovated during the First Three Quarters of Fiscal
2008.

Two new Big Boy restaurants opened for business respectively in June and July 2007. A third Big Boy restaurant opened in August 2007 that was the
replacement on the same site of an older facility that closed and was razed in April 2007. The Company is currently under contract to acquire two sites for Big Boy development at an aggregate cost of $1,640,000. Several other sites are currently
being evaluated for future acquisition and development and one existing Big Boy is currently scheduled to close and be razed in the spring of 2008 that will be replaced with a new building.

Approximately one-fifth of the Companys Big Boy restaurants are routinely renovated or decoratively updated each year at an average cost of $75,000 per restaurant.
In addition, certain high-volume Big Boy restaurants are regularly evaluated to determine whether their kitchens should be redesigned for increased efficiencies and whether an expansion of the dining room is warranted. A typical kitchen redesign
costs approximately $125,000 and a dining room expansion can cost up to $500,000.



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Including land and land improvements, the cash required to build and equip each new Big Boy restaurant currently ranges
from $2,200,000 to $2,900,000. The actual cost depends greatly on the price paid for the land and the cost of land improvements, which can vary widely from location to location, and whether the land is purchased or leased.

The Companys policy is to own the land on which it builds new restaurants. However, it is becoming more frequently necessary to enter ground leases to obtain
desirable land on which to build. Eight of the 35 Golden Corral restaurants now in operation were built on leased land. Three Big Boy restaurants opened since 2003 were also built on leased land. All of these leases have been accounted for as
operating leases pursuant to Statement of Financial Accounting Standards No. 13 (SFAS 13), Accounting for Leases as amended. As of March 4, 2008, the Company occupied 28 restaurants on leased premises, two of which are capital
leases under the provisions of SFAS 13.

Normal lease expirations for three leased restaurants occurred on October 31, 2007. These properties are
continuing to be occupied on a month-to-month basis pending the execution of the Companys right to purchase the properties from the landlord. Although the costs have yet to be determined, the aggregate purchase price will not be less than
$2,300,000. In addition, the two capital leases identified above will terminate in April 2008 when the Company completes the process of acquiring the leasehold interests for a total of $877,000 as required under the terms of the leases.

APPLICATION of CRITICAL ACCOUNTING POLICIES

The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America requires management to use estimates and assumptions to measure certain items that affect the amounts reported in the financial
statements and accompanying footnotes. These judgments are based on knowledge and experience about past and current events, and assumptions about future events. Accounting estimates can and do change as new events occur and additional information
becomes available. Actual results may differ markedly from current judgment.

Two factors are required for an accounting policy to be deemed critical. The
policy must be significant to the fair presentation of a companys financial condition and its results of operations, and the policy must require managements most difficult, subjective or complex judgments. The Company believes the
following to be its critical accounting policies.

Self Insurance

The Company self-insures a significant portion of expected losses from its workers compensation program in the state of Ohio. The Company purchases coverage from an insurance company for individual claims in
excess of $300,000. Reserves for claims expense include a provision for incurred but not reported claims. Each quarter, the Company reviews claims valued by its third party administrator (TPA) and then applies experience and judgment to
determine the most probable future value of incurred claims. As the TPA submits additional new information, the Company reviews it in light of past history of claims for similar injuries, probability of settlement, and any other facts that might
provide guidance in determining ultimate value of individual claims. Unexpected changes in any of these or other factors could result in actual costs differing materially from initial projections.

Pension Plans

Pension plan accounting requires rate assumptions for
future compensation increases and the long term return on plan assets. A discount rate is also applied to the calculations of net periodic pension cost and projected benefit obligations. An informal committee consisting of executives from the
Finance Department and the Human Resources Department, with guidance provided by the Companys actuarial consulting firm, develops these assumptions each year. The consulting firm also provides services in calculating estimated future
obligations and net periodic pension cost.

Assets of the pension plans are targeted to be invested 70 percent in equity securities, as these investments
have historically provided the greatest long-term returns. To determine the long-term rate of return on plan assets, the committee looks at the target asset allocation of plan assets and determines the expected return on each asset class. The
expected returns for each asset class are combined and rounded to the nearest 25 basis points to determine the overall expected return on assets. The committee determines the discount rate by looking at the projected future benefit payments and
matches them to spot rates based on yields of high-grade corporate bonds. A single discount rate is selected, rounded to the nearest 25 basis points, which produces the same present value as the various spot rates.



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Long-Lived Assets

Long-lived assets include property and equipment, goodwill and other intangible assets. Property and equipment typically approximates 85 to 90 percent of the Companys total assets. Judgments and estimates are used to determine the
carrying value of long-lived assets. This includes the assignment of appropriate useful lives, which affect depreciation and amortization expense. Capitalization policies are continually monitored to assure they remain appropriate.

Management considers a history of cash flow losses on a restaurant-by-restaurant basis to be the primary indicator of potential impairment. Carrying values of property
and equipment are tested for impairment whenever events or circumstances indicate the carrying value may be impaired. When undiscounted expected future cash flows are less than carrying values, an impairment loss is recognized for the amount by
which carrying values exceed estimated realizable values. Future cash flows can be difficult to predict. Changing neighborhood demographics and economic conditions and many other factors may impact operating performance, which affect cash flow.
Estimated realizable values are provided by real estate brokers and/or the Companys past experience in disposing of property.

Sometimes it becomes
necessary to cease operating a certain restaurant due to poor performance. The final impairment amount can be significantly different from the initial charge, particularly if the eventual market price received from the disposition of the property
differs materially from initial estimates of realizable values.

Acquired goodwill and other intangible assets are tested for impairment annually or
whenever an impairment indicator arises.



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company has no significant market risk exposure to
interest rate changes as substantially all of its debt is currently financed with fixed interest rates. The Company does not currently use derivative financial instruments to manage its exposure to changes in interest rates. Any cash equivalents
maintained by the Company have original maturities of three months or less. The Company does not use foreign currency.

Big Boy restaurants utilize
centralized purchasing and food preparation provided through the Companys commissary and food manufacturing plant. The Company believes the commissary operation ensures uniform product quality and safety, timeliness of distribution to
restaurants and creates efficiencies that ultimately result in lower food and supply costs. The commissary operation does not supply Golden Corral restaurants.

Commodity pricing affects the cost of many of the Companys food products. Commodity pricing can be extremely volatile, affected by many factors outside of the Companys control, including import and export restrictions, the
impact of currency markets relative to the U.S Dollar, supply versus demand, production levels and the impact of weather on crop yields. Certain commodities purchased by the commissary, principally beef, chicken, pork, dairy products, fish, french
fries and coffee, are generally purchased based upon market prices established with vendors. Purchase contracts for some of these items may contain contractual provisions that limit the price to be paid. These contracts are normally for periods of
one year or less but may have longer terms if favorable long-term pricing becomes available. Food supplies are generally plentiful and may be obtained from any number of suppliers, which mitigates the Companys overall commodity price risk.
Quality, timeliness of deliveries and price are the principal determinants of source. The Company does not use financial instruments as a hedge against changes in commodity pricing.

Except for items such as bread, fresh produce and dairy products that are purchased from any number of local suppliers, the Golden Corral segment of the business currently purchases substantially all food, beverage
and other menu items from the same approved vendor that Golden Corral Franchising Systems, Inc. (the Franchisor) uses in its operations. Deliveries are made two times per week. Other vendors are available to provide products that meet the
Franchisors specifications at comparable prices should the Company wish or need to make a change.

ITEM 4. CONTROLS AND PROCEDURES

a) Evaluation of Disclosure Controls and Procedures. The Companys Chief
Executive Officer (CEO) and Chief Financial Officer (CFO) reviewed and evaluated the Companys disclosure controls and procedures (as defined in Rules 240.13a-15(e) and 240.15d-15(e) under the Securities Exchange Act of 1934 (the Exchange
Act)) as of March 4, 2008. Based on that evaluation, the CEO and CFO concluded that the Companys disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports
that the Company files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

b) Changes in Internal Control over Financial Reporting. The CEO and CFO have concluded that there were no changes in the Companys internal control over financial reporting (as defined in Rule 13a-15(f)
of the Exchange Act) during the fiscal quarter ended March 4, 2008 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART IIOTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is the owner of a Golden Corral Restaurant located in North Canton, Ohio. In 2001,
the Companys general contractor, Fortney & Weygandt, Inc. (Fortney) constructed a Golden Corral Restaurant at the original location on the North Canton site. Geological conditions at the site required that the restaurant
be built on a structural slab (platform), which rested upon driven piles. The foundation system for the building had been designed by a Houston, Texas engineering firm, Maverick Engineering, Inc. (Maverick), a subcontractor to the
Companys architect of record, LMH&T. Shortly before the scheduled opening of the restaurant, it was discovered that design and construction errors had caused the building to shift, separating the building from its underground plumbing
system. The Company elected to demolish the original structure, and subsequently built a new building on a different portion of the original parcel. The restaurants grand opening was, therefore, delayed until January 2003.

In July 2002, Fortney filed a Demand for Arbitration against the Company which sought recovery of its outstanding contract balance, in the sum of $293,638,
plus interest, fees, and costs. Fortney contended that the Company owed this money to Fortney under the terms of the General Construction Contract. The Company denied that it owed these monies to Fortney, and filed a counterclaim against Fortney
that alleged defective construction and claimed damages, lost profits, interest and costs, in an amount exceeding $1,000,000. The arbitration hearing before the American Arbitration Association concluded February 28, 2006, with closing
arguments held on June 30, 2006. On August 24, 2006, the arbitration panel awarded the Company $537,967 and denied Fortneys claim against the Company. The Company filed a Motion to Modify the award to increase the time period for
which the Company was entitled to damages, including interest, believing the arbitration panel inadvertently failed to consider the full range of time that was required for investigation and to obtain building permits and other approvals associated
with the replacement structure. Fortney also filed a Motion to Modify, alleging that the panel misinterpreted the testimony as to the calculation of lost profits. The arbitration panel rejected both Motions in November 2006. The Company immediately
filed an Application in the Cuyahoga County (Ohio) Court of Common Pleas to confirm the arbitration panels original award. Fortney responded by filing a Motion with the same court to vacate the award. On April 27, 2007, the Cuyahoga Court
of Common Pleas granted the Companys Application and denied Fortneys Motion to vacate. On May 1 2007, Fortney filed a Notice of Appeal. Oral arguments are scheduled to be heard on April 15, 2008 in the Court of Appeals, Eighth
Appellate District, Cuyahoga County, Ohio.

In August 2002, the Company filed a lawsuit in the Stark County (Ohio) Court of Common Pleas against its former
architect, LMH&T. The lawsuit alleged negligent design as a causal factor in the demise of the original structure. The Company sought damages including lost profits, interest, and costs exceeding $2,500,000. LMH&T brought into the lawsuit
its structural engineering consultant, Maverick, as well as the Companys soils consultant, Cowherd Banner Carlson Engineering, collectively, the trial court defendants. In July 2003, the Company resolved all claims, counterclaims, and
cross-claims, against and involving the trial court defendants when LMH&T and Maverick, agreed to pay to the Company the sum of $1,700,000 in full and final settlement of all claims. The Company received the settlement funds in full and the case
was dismissed. The resolution between the Company and the trial court defendants is separate and apart from the on-going dispute between Fortney and the Company.

The Company is subject to various other claims and suits that arise from time to time in the ordinary course of business. Management does not currently believe that financial resources to resolve outstanding claims will exceed provisions
already included in the consolidated financial statements and therefore, the ultimate liability, if any, will not have a material impact on the Companys earnings, cash flows or financial position.



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ITEM 1A. RISK FACTORS

The Company continually takes reasonable preventive measures to reduce its risks and uncertainties.
However, the nature of some risks and uncertainties provides little control to the Company. The materialization of any of the risks and uncertainties identified herein, together with those risks not specifically listed or those that are presently
unforeseen, could result in significant adverse effects on the Companys financial position, results of operations and cash flows, which could include the permanent closure of any affected restaurant(s) with an impairment of assets charge taken
against earnings, and could adversely affect the price at which shares of the Companys common stock trade.

Food Safety

Food safety is the most significant risk to any company that operates in the restaurant industry. It is the focus of increased government regulatory initiatives at the
local, state and federal levels. To limit the Companys exposure to the risk of food contamination, management rigorously emphasizes and enforces the Companys food safety policies in all of the Companys restaurants, and at the
commissary and food manufacturing plant that the Company operates for Big Boy restaurants. These policies are designed to work cooperatively with programs established by health agencies at all levels of government authority, including the federal
Hazard Analysis of Critical Control Points (HACCP) program. In addition, the Company makes use of ServSafe Training, a nationally recognized program developed by the National Restaurant Association. The ServSafe program provides accurate, up-to-date
science-based information to all levels of restaurant workers on all aspects of food handling, from receiving and storing to preparing and serving. All restaurant managers are required to be certified in ServSafe Training and are required to be
re-certified every five years.

Failure to protect the Companys food supplies could result in food borne illnesses and/or injuries to customers.
Publicity of such events in the past has caused irreparable damages to the reputations of certain operators in the restaurant industry. If any of the Companys customers become ill from consuming the Companys products, the affected
restaurants may be forced to close. An instance of food contamination originating at the commissary operation could have far reaching effects, as the contamination would affect substantially all Big Boy restaurants.

Economic Factors

The Companys operations are predominantly
located in Ohio, Indiana and Kentucky, where consumer confidence remains markedly below national average and other regions. The effects of higher gasoline prices in particular may impact discretionary consumer spending in restaurants. The
Companys costs are also affected by increasing energy prices. Petroleum based material is often used to package certain products for distribution. In addition, many suppliers have added surcharges for fuel to their invoices. The cost to
transport products from the commissary to restaurant operations will rise with each increase in gasoline prices. Higher natural gas prices have resulted in much higher costs to heat restaurant facilities and to cook food. Inflationary pressure,
particularly on food costs, labor costs (especially associated with increases in the minimum wage) and health care benefits, can also negatively impact the operation of the business. Shortages of qualified labor may also be experienced in certain
local economies. In addition, the loss of a key executive could pose a significant adverse effect on the Company.

Competition

The restaurant industry is highly competitive and many of the Companys competitors are substantially larger and possess greater financial resources than does the
Company. Both the Big Boy and Golden Corral operating segments have numerous competitors, including national chains, regional and local chains, as well as independent operators. None of these competitors, in the opinion of the Company, presently
dominates the family-style sector of the restaurant industry in the Companys operating markets. That could change at any time due to:



| |  | changes in economic conditions
|- |  | ------------------------------



| |  | changes in demographics in neighborhoods where the Company operates restaurants
|- |  | -------------------------------------------------------------------------------



| |  | changes in consumer perceptions of value, food and service quality
|- |  | ------------------------------------------------------------------



| |  | changes in consumer preferences, particularly based on concerns with nutritional content of food on the Companys menus
|- |  | -----------------------------------------------------------------------------------------------------------------------



| |  | new competitors that enter the Companys markets from time to time
|- |  | ------------------------------------------------------------------



| |  | increased competition from supermarkets and other non-traditional competitors
|- |  | -----------------------------------------------------------------------------



| |  | increased competition for quality sites on which to build restaurants
|- |  | ---------------------------------------------------------------------



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Development Plans

The Companys business strategy and development plans also face risks and uncertainties. These include the inherent risk of poor management decisions in the selection of sites on which to build restaurants, the ever rising cost and
availability of desirable sites and increasingly rigorous requirements on the part of local governments to obtain various permits and licenses. Other factors that could impede plans to increase the number of restaurants operated by the Company
include saturation in existing markets and limitations on borrowing capacity and the effects of higher interest rates.

The Supply and Cost of Food

Food purchases can be subject to significant price fluctuations that can considerably affect results of operations from quarter to quarter. Price
fluctuations can be due to seasonality or any number of factors. The market for beef, in particular, continues to be highly volatile due in part to import and export restrictions. The Company depends on timely deliveries of perishable food and
supplies. Any interruption in the continuing supply would harm the Companys operations.

Litigation and Negative Publicity

Employees, customers and other parties bring various claims against the Company from time to time. Defending such claims can distract the attention of senior level
management away from the operation of the business. In addition, negative publicity associated with any adverse judgment that may be rendered against the Company could harm the Companys reputation, which in turn could adversely affect
operating results. Other negative publicity such as that arising from rumor and innuendo can also create adverse effects on results of operations.

Governmental and Other Rules and Regulations

Governmental and other rules and regulations can pose significant risks to the Company.
Examples include:



| |  | changes in environmental regulations that would significantly add to the Companys costs
|- |  | ----------------------------------------------------------------------------------------



| |  | exposure to penalties for potential violations of numerous governmental regulations in general, and immigration (I-9) and labor regulations regarding the employment
of minors in particular
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | any future imposition by OSHA of costly ergonomics regulations on workplace safety
|- |  | ----------------------------------------------------------------------------------



| |  | legislative changes affecting labor law, especially increases in the federal or state minimum wage requirements
|- |  | ---------------------------------------------------------------------------------------------------------------



| |  | legislation or court rulings that result in changes to tax codes that are adverse to the Company
|- |  | ------------------------------------------------------------------------------------------------



| |  | changes in accounting standards imposed by governmental regulators or private governing bodies could adversely affect the Companys financial position
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | estimates used in preparing financial statements and the inherent risk that future events affecting them may cause actual results to differ markedly
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

Catastrophic Events

Unforeseen
catastrophic events could disrupt the Companys operations, the operations of the Companys suppliers and the lives of the Companys customers. The Big Boy segments dependency on the commissary operation in particular could
present an extensive disruption of products to restaurants should a catastrophe impair its ability to operate. Examples of catastrophic events include but are not limited to:



| |  | adverse winter weather conditions
|- |  | ---------------------------------



| |  | natural disasters such as earthquakes or tornadoes
|- |  | --------------------------------------------------



| |  | fires or explosions
|- |  | -------------------



| |  | criminal acts, including bomb threats, robberies, hostage taking, kidnapping and other violent crimes
|- |  | -----------------------------------------------------------------------------------------------------



| |  | acts of terrorists or acts of war
|- |  | ---------------------------------



| |  | civil disturbances and boycotts
|- |  | -------------------------------



| |  | disease transmitted across borders that may enter the food supply chain
|- |  | -----------------------------------------------------------------------

Technology and Information Systems

The strategic nature of technology and information systems is of vital importance
to the operation of the Company. Events that could pose threats to the Companys information systems that in turn could harm the operation of the business include:



| |  | catastrophic failure of certain information systems
|- |  | ---------------------------------------------------



| |  | security violations or any unauthorized access to information systems
|- |  | ---------------------------------------------------------------------



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| |  | difficulties that may arise in maintaining existing systems
|- |  | -----------------------------------------------------------



| |  | difficulties that may occur in the implementation of and transition to new systems
|- |  | ----------------------------------------------------------------------------------



| |  | financial stability of vendors to support software over the long term
|- |  | ---------------------------------------------------------------------

Golden Corral Operations

Golden Corral same-store sales declines have been experienced for sixteen of the last
eighteen quarters, during which cash flows from Golden Corral operations have deteriorated. The ability of the Company to identify the root cause of the downturn, thereby allowing corrective measures to be set in place, being critical to the
restoration of sales and margin growth, poses a significant risk to the Company.

ITEM 2. UNREGISTERED SALES of EQUITY SECURITIES and USE of PROCEEDS

In January 2008, the Board of Directors authorized a
program to repurchase up to 500,000 shares of the Companys common stock in the open market or through block trades over a two-year time frame that expires January 28, 2010. The following table shows information pertaining to the
Companys purchases of its common stock during its fiscal quarter that ended March 4, 2008:



|                                         |  |                                |  |                             |       |                                                                              |     |                                                                           |        
|---------------------------------------- |  | ------------------------------ |  | --------------------------- | ----- | ---------------------------------------------------------------------------- | --- | ------------------------------------------------------------------------- | -------
|Period                                   |  | Total Numberof SharesPurchased |  | Average PricePaid per Share |       | Total Number ofShares Purchasedas Part of PubliclyAnnounced Plansor Programs |     | MaximunNumber of Sharesthat May Yet BePurchased Underthe Plans orPrograms
|Dec. 12, 2007 through January 8, 2008    |  |                               |  |                             |      |                                                                              |    |                                                                           |       
|January 9, 2008 through February 5, 2008 |  |                               |  |                             |      |                                                                              |    |                                                                           |       
|February 6, 2008 through March 4, 2008   |  | 900                            |  | $                           | 21.32 |                                                                              | 900 |                                                                           | 499,100
|                                         |  |                                |  |                             |       |                                                                              |     |                                                                           |        
|Total                                    |  | 900                            |  | $                           | 21.32 |                                                                              | 900 |                                                                           | 499,100

ITEM 3. DEFAULTS upon SENIOR SECURITIES

Not applicable

ITEM 4. SUBMISSION of MATTERS to a VOTE of SECURITY HOLDERS

Not applicable

ITEM 5. OTHER INFORMATION

Not applicable



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ITEM 6. EXHIBITS

3 (i) Third Amended Articles of Incorporation, filed as Exhibit
(3) (a) to the Registrants Form 10-K Annual Report for 1993, is incorporated herein by reference.

3 (ii) Amended and
Restated Code of Regulations effective October 2, 2006, filed as Exhibit A to the Registrants Definitive Proxy Statement dated September 1, 2006, is incorporated herein by reference.

10 (a) Intellectual Property Use and Noncompete Agreement between the Registrant and Liggett Restaurant Enterprises LLC (now known as Big Boy
Restaurants International, LLC) dated January 8, 2001, filed as Exhibit 10 (a) to the Registrants Form 10-Q Quarterly Report for March 4, 2001, is incorporated herein by reference.

10 (b) Transfer Agreement between the Registrant and Liggett Restaurant Enterprises LLC (now known as Big Boy Restaurants International, LLC) dated
January 8, 2001, filed as Exhibit 10 (b) to the Registrants Form 10-Q Quarterly Report for March 4, 2001, is incorporated herein by reference.

10 (c) Agreement Regarding Use of Trademarks between the Registrant and Big Boy Restaurants International, LLC dated November 7, 2007, filed as Exhibit 10 (c) to the Registrants Form 10-Q
Quarterly Report for December 11, 2007, is incorporated herein by reference.

10 (d) 1) First Amended and Restated Loan Agreement
(Golden Corral Construction Facility) and Exhibit 10 (d) 2) Second Amended and Restated Loan Agreement (Revolving and Bullet Loans) between the Registrant and US Bank NA effective October 15, 2004, filed as exhibits 10 (c) 1 and 10
(c) 2 to the Registrants Form 10-Q Quarterly Report for September 19, 2004, are incorporated herein by reference.

10
(e) 1) Amendment No. 1 to First Amended and Restated Loan Agreement (Golden Corral Construction Facility) and Exhibit 10 (e) 2) Amendment No. 1 to Second Amended and Restated Loan Agreement (Revolving and Bullet Loans) between
the Registrant and US Bank NA effective September 27, 2005, filed as Exhibits 10 (d) 1) and 10 (d) 2) to the Registrants Form 10-Q Quarterly Report for September 18, 2005, are incorporated herein by reference.

10 (f) 1) Amendment No. 2 to First Amended and Restated Loan Agreement (Golden Corral Construction Facility) and Exhibit 10 (f) 2)
Amendment No. 3 to Second Amended and Restated Loan Agreement (Revolving and Bullet Loans) between the Registrant and US Bank, NA effective December 3, 2007, filed as Exhibits 10 (f) 1) and 10 (f) 2) to the Registrants Form
10-Q Quarterly Report for December 11, 2007, are incorporated herein by reference.

10 (g) Area Development Agreement, Termination
Agreement and Addendum effective July 20, 2004 between the Registrant and Golden Corral Franchising Systems, Inc., filed as Exhibit 10 (f) to the Registrants Form 10-K Annual Report for 2004, is incorporated herein by reference.

10 (h) Second Amendment to Area Development Agreement effective entered April 3, 2008 between the Registrant and Golden Corral
Franchising Systems, Inc. is filed herewith.

10 (i) Agreement to Purchase Stock between the Registrant and Frisch West Chester,
Inc. dated June 1, 1988, filed as Exhibit 10 (f) to the Registrants Form 10-Q Quarterly Report for September 19, 2006, is incorporated herein by reference.

10 (j) Agreement to Purchase Stock between the Registrant and Frisch Hamilton West, Inc. dated February 19, 1988, filed as Exhibit 10
(g) to the Registrants Form 10-Q Quarterly Report for September 19, 2006, is incorporated herein by reference.

10
(k) Employment Agreement between the Registrant and Craig F. Maier effective May 28, 2006, filed as Exhibit 99.1 to the Registrants Form 8-K Current Report dated March 14, 2006, is incorporated herein by reference. *



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10 (l) First Amendment to the Employment Agreement (see Exhibit 10 (j) above) between the
Registrant and Craig F. Maier effective May 28, 2006, filed as Exhibit 99.1 to the Registrants Form 8-K Current Report dated June 7, 2006, is incorporated herein by reference. *

10 (m) Frischs Executive Savings Plan effective November 15, 1993, filed as Exhibit 10 (a) to the Registrants Form 10-Q
Quarterly Report for September 17, 1995, is incorporated herein by reference. *

10 (n) Second Amendment to the Frischs
Executive Savings Plan effective July 28, 2004, filed as Exhibit 10 (h) to the Registrants Form 10-Q Quarterly Report for September 19, 2004, is incorporated herein by reference. *

10 (o) Third Amendment to the Frischs Executive Savings Plan effective June 7, 2005, filed as Exhibit 10 (j) to the Registrants
Form 10-Q Quarterly Report for September 18, 2005, is incorporated herein by reference. *

10 (p) Fourth Amendment to the
Frischs Executive Savings Plan effective August 30, 2005, filed as Exhibit 10 (k) to the Registrants Form 10-Q Quarterly Report for September 18, 2005, is incorporated herein by reference. *

10 (q) Frischs Executive Retirement Plan effective June 1, 1994, filed as Exhibit 10 (b) to the Registrants Form 10-Q Quarterly
Report for September 17, 1995, is incorporated herein by reference. *

10 (r) Amendment No. 1 to Frischs Executive
Retirement Plan (see Exhibit 10 (p) above) effective January 1, 2000, filed as Exhibit 10 (k) to the Registrants form 10-K Annual Report for 2003, is incorporated herein by reference. *

10 (s) 2003 Stock Option and Incentive Plan, filed as Appendix A to the Registrants Proxy Statement dated August 28, 2003, is incorporated
herein by reference. *

10 (t) Amendment # 1 to the 2003 Stock Option and Incentive Plan (see Exhibit 10 (r) above) effective
September 26, 2006, filed as Exhibit 10 (q) to the Registrants Form 10-Q Quarterly Report for September 19, 2006, is incorporated herein by reference. *

10 (u) Forms of Agreement to be used for stock options granted to employees and to non-employee directors under the Registrants 2003 Stock
option and Incentive Plan, filed as Exhibits 99.1 and 99.2 to the Registrants Form 8-K dated October 1, 2004, are incorporated herein by reference. *

10 (v) Amendments to the 2003 Stock Option and Incentive Plan (see Exhibit 10 (r) above) effective December 19, 2006, filed as Exhibit 99.2 to the Registrants Form 8-K Current Report dated
December 19, 2006, is incorporated herein by reference. *

10 (w) Amended and Restated 1993 Stock Option Plan, filed as Exhibit A
to the Registrants Proxy Statement dated September 9, 1998, is incorporated herein by reference. *

10 (x) Amendments to the
Amended and Restated 1993 Stock Option Plan (see Exhibit 10 (v) above)

Effective December 19, 2006, filed as Exhibit 99.1 to the
Registrants Form 8-K Current Report dated December 19, 2006, is incorporated herein by reference. *

10 (y) Employee Stock
Option Plan, filed as Exhibit B to the Registrants Proxy Statement dated September 9, 1998, is incorporated herein by reference. *

10 (z) Change of Control Agreement between the Registrant and Craig F. Maier dated November 21, 1989, filed as Exhibit 10 (g) to the Registrants Form 10-K Annual Report for 1990, is incorporated herein by reference. It
was also filed as Exhibit 99.2 to the Registrants Form 8-K Current Report dated March 17, 2006, which is also incorporated herein by reference. *

10 (aa) First Amendment to Change of Control Agreement (see Exhibit 10 (y) above) between the Registrant and Craig F. Maier dated March 17, 2006, filed as Exhibit 99.1 to the Registrants Form 8-K
Current Report dated March 17, 2006, is incorporated herein by reference. *



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10 (ab) Frischs Nondeferred Cash Balance Plan effective January 1, 2000, filed as Exhibit 10
(r) to the Registrants Form 10-Q Quarterly Report for December 10, 2000, is incorporated herein by reference, together with the Trust Agreement established by the Registrant between the Plans Trustee and Donald H. Walker
(Grantor). There are identical Trust Agreements between the Plans Trustee and Craig F. Maier, Karen F. Maier, Michael E. Conner, Louie Sharalaya, Lindon C. Kelley and certain other highly compensated employees (Grantors). *

10 (ac) First Amendment (to be effective June 6, 2006) to the Frischs Nondeferred Cash Balance Plan that went into effect
January 1, 2000 (see Exhibit 10 (aa) above), filed as Exhibit 99.2 to the Registrants Form 8-K Current Report dated June 7, 2006, is incorporated herein by reference. *

10 (ad) Senior Executive Bonus Plan effective June 2, 2003, filed as Exhibit 10 (s) to the Registrants Form 10-K Annual Report for 2003,
is incorporated herein by reference. *



|* | Denotes a compensatory plan or agreement
|- | ----------------------------------------



|     |  |                                                                                                     
|---- |  | ----------------------------------------------------------------------------------------------------
|15   |  | Letter re: unaudited interim financial statements, is filed herewith.                               
|     | 
|31.1 |  | Certification of Chief Executive Officer pursuant to rule 13a -14(a)/15d  14(a) is filed herewith. 
|     | 
|31.2 |  | Certification of Chief Financial Officer pursuant to rule 13a - 14(a)/15d  14(a) is filed herewith.
|     | 
|32.1 |  | Section 1350 Certification of Chief Executive Officer is filed herewith.                            
|     | 
|32.2 |  | Section 1350 Certification of Chief Financial Officer is filed herewith.                            

SIGNATURE

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



| |  |  |  |                            |  |  |  | 
| |  |  |  | -------------------------- |  |  |  | 
| |  | 
| |  |  |  | FRISCHS RESTAURANTS, INC.
| |  |  |  | (Registrant)              

|                   |  |    |  |                                                                                  
|------------------ |  | -- |  | ---------------------------------------------------------------------------------
|                   |  |   
|DATE April 5, 2008 |  | BY |  | /s/ Donald H. Walker                                                             
|                   |  |    |  | Donald H. Walker                                                                 
|                   |  |    |  | Vice President  Finance, Treasurer andPrincipal Financial and Accounting Officer



43