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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



Quarterly Report Pursuant to Section 13 or 15 (d)

of the Securities Exchange Act of 1934



|                                     |  |                                
|------------------------------------ |  | -------------------------------
|FOR QUARTER ENDED SEPTEMBER 18, 2005 |  | 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 an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).



YES   x    NO ̈



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 September 23, 2005 was: 5,063,274



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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 - 24 
|                               |  |                                                                                     
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operation |  | 25 - 33
|                               |  |                                                                                     
|Item 3.                        |  | Quantitative and Qualitative Disclosures about Market Risk                           |  | 33     
|                               |  |                                                                                     
|Item 4.                        |  | Controls and Procedures                                                              |  | 33-34  
|                               | 
|PART II - OTHER INFORMATION    |  |                                                                                     
|                               |  |                                                                                     
|Item 1.                        |  | Legal Proceedings                                                                    |  | 35     
|                               |  |                                                                                     
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                          |  | 35     
|                               |  |                                                                                     
|Item 3.                        |  | Defaults Upon Senior Securities                                                      |  | 35     
|                               |  |                                                                                     
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                  |  | 36     
|                               |  |                                                                                     
|Item 5.                        |  | Other Information                                                                    |  | 37     
|                               |  |                                                                                     
|Item 6.                        |  | Exhibits                                                                             |  | 37-39  
|                               | 
|SIGNATURE                      |  | 40                                                                                  



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##### Table of Contents

Frischs Restaurants, Inc. and Subsidiaries

Consolidated Statement of Earnings

(Unaudited)



|                                          |  |                     |            |   |                   |   |            |  
|----------------------------------------- |  | ------------------- | ---------- | - | ----------------- | - | ---------- | -
|                                          |  | Sixteen Weeks Ended |           
|                                          |  | September 18,2005   |            |   | September 19,2004 |  
|Sales                                     |  | $                   | 86,532,775 |   |                   | $ | 84,062,163 |  
|                                          |  |                    
|Cost of sales                             |  |                     |            |   |                   |   |            |  
|Food and paper                            |  |                     | 30,104,265 |   |                   |   | 29,414,304 |  
|Payroll and related                       |  |                     | 28,672,122 |   |                   |   | 27,992,646 |  
|Other operating costs                     |  |                     | 18,886,479 |   |                   |   | 17,554,540 |  
|                                          |  |                     |            |   |                   |   |            |  
|                                          |  |                     | 77,662,866 |   |                   |   | 74,961,490 |  
|                                          |  |                    
|Gross profit                              |  |                     | 8,869,909  |   |                   |   | 9,100,673  |  
|                                          |  |                    
|Administrative and advertising            |  |                     | 4,581,071  |   |                   |   | 4,324,761  |  
|Franchise fees and other revenue          |  |                     | (372,343   | ) |                   |   | (422,855   | )
|                                          |  |                     |            |   |                   |   |            |  
|Operating profit                          |  |                     | 4,661,181  |   |                   |   | 5,198,767  |  
|                                          |  |                    
|Interest expense                          |  |                     | 782,086    |   |                   |   | 806,096    |  
|                                          |  |                     |            |   |                   |   |            |  
|Earnings before income taxes              |  |                     | 3,879,095  |   |                   |   | 4,392,671  |  
|                                          |  |                    
|Income taxes                              |  |                     | 1,357,000  |   |                   |   | 1,494,000  |  
|                                          |  |                     |            |   |                   |   |            |  
|Net Earnings                              |  | $                   | 2,522,095  |   |                   | $ | 2,898,671  |  
|                                          |  |                     |            |   |                   |   |            |  
|Earnings per share (EPS) of common stock: |  |                     |            |   |                   |   |            |  
|Basic net earnings per share              |  | $                   | .50        |   |                   | $ | .58        |  
|                                          |  |                     |            |   |                   |   |            |  
|Diluted net earnings per share            |  | $                   | .49        |   |                   | $ | .56        |  
|                                          |  |                     |            |   |                   |   |            |  



The accompanying notes
are an integral part of these statements.



3



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##### Table of Contents

Frischs Restaurants, Inc. and Subsidiaries

Consolidated Balance Sheet



ASSETS



|                                                    |  |                   |             |              |   |            
|--------------------------------------------------- |  | ----------------- | ----------- | ------------ | - | -----------
|                                                    |  | September 18,2005 |             | May 29, 2005
|                                                    |  | (unaudited)       |             |             
|Current Assets                                      |  |                   |             |              |   |            
|Cash                                                |  | $                 | 314,885     |              | $ | 306,300    
|Trade Receivables                                   |  |                   | 1,474,241   |              |   | 1,220,320  
|Other Receivables                                   |  |                   | 179,441     |              |   | 169,655    
|Inventories                                         |  |                   | 4,279,248   |              |   | 4,592,093  
|Prepaid expenses and sundry deposits                |  |                   | 3,360,995   |              |   | 2,551,249  
|Prepaid and deferred income taxes                   |  |                   | 943,000     |              |   | 942,611    
|                                                    |  |                   |             |              |   |            
|Total current assets                                |  |                   | 10,551,810  |              |   | 9,782,228  
|                                                    |  |                  
|Property and Equipment                              |  |                   |             |              |   |            
|Land and improvements                               |  |                   | 60,605,232  |              |   | 56,830,344 
|Buildings                                           |  |                   | 83,479,445  |              |   | 81,434,781 
|Equipment and fixtures                              |  |                   | 86,849,526  |              |   | 84,240,573 
|Leasehold improvements and buildings on leased land |  |                   | 22,814,781  |              |   | 21,590,570 
|Capitalized leases                                  |  |                   | 7,131,603   |              |   | 7,131,603  
|Construction in progress                            |  |                   | 3,554,835   |              |   | 6,435,214  
|                                                    |  |                   |             |              |   |            
|                                                    |  |                   | 264,435,422 |              |   | 257,663,085
|Less accumulated depreciation and amortization      |  |                   | 112,005,444 |              |   | 109,461,135
|                                                    |  |                   |             |              |   |            
|Net property and equipment                          |  |                   | 152,429,978 |              |   | 148,201,950
|                                                    |  |                  
|Other Assets                                        |  |                   |             |              |   |            
|Goodwill                                            |  |                   | 740,644     |              |   | 740,644    
|Other intangible assets                             |  |                   | 1,436,236   |              |   | 1,400,659  
|Investments in land                                 |  |                   | 1,006,390   |              |   | 974,370    
|Property held for sale                              |  |                   | 1,857,244   |              |   | 1,857,244  
|Other                                               |  |                   | 2,577,712   |              |   | 2,642,289  
|                                                    |  |                   |             |              |   |            
|Total other assets                                  |  |                   | 7,618,226   |              |   | 7,615,206  
|                                                    |  |                   |             |              |   |            
|Total assets                                        |  | $                 | 170,600,014 |              | $ | 165,599,384
|                                                    |  |                   |             |              |   |            



The accompanying notes
are an integral part of these statements.



4



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LIABILITIES AND SHAREHOLDERS EQUITY



|                                                                                                                           |  |                   |             |              |   |            
|-------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | ------------ | - | -----------
|                                                                                                                           |  | September 18,2005 |             | May 29, 2005
|                                                                                                                           |  | (unaudited)       |             |             
|Current Liabilities                                                                                                        |  |                   |             |              |   |            
|Long-term obligations due within one year                                                                                  |  |                   |             |              |   |            
|Long-term debt                                                                                                             |  | $                 | 8,058,400   |              | $ | 7,598,182  
|Obligations under capitalized leases                                                                                       |  |                   | 487,801     |              |   | 533,016    
|Self insurance                                                                                                             |  |                   | 866,215     |              |   | 851,737    
|Accounts payable                                                                                                           |  |                   | 15,434,095  |              |   | 12,799,147 
|Accrued expenses                                                                                                           |  |                   | 8,843,986   |              |   | 8,763,971  
|Income taxes                                                                                                               |  |                   | 469,803     |              |   | 416,125    
|                                                                                                                           |  |                   |             |              |   |            
|Total current liabilities                                                                                                  |  |                   | 34,160,300  |              |   | 30,962,178 
|                                                                                                                           |  |                  
|Long-Term Obligations                                                                                                      |  |                   |             |              |   |            
|Long-term debt                                                                                                             |  |                   | 29,638,788  |              |   | 29,570,481 
|Obligations under capitalized leases                                                                                       |  |                   | 3,053,150   |              |   | 3,136,836  
|Self insurance                                                                                                             |  |                   | 1,946,320   |              |   | 1,981,342  
|Deferred income taxes                                                                                                      |  |                   | 4,372,000   |              |   | 4,195,867  
|Deferred compensation and other                                                                                            |  |                   | 3,691,760   |              |   | 3,583,120  
|                                                                                                                           |  |                   |             |              |   |            
|Total long-term obligations                                                                                                |  |                   | 42,702,018  |              |   | 42,467,646 
|                                                                                                                           |  |                  
|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, 7,510,597 and 7,505,176 shares - stated value - $1 |  |                   | 7,510,597   |              |   | 7,505,176  
|Additional contributed capital                                                                                             |  |                   | 62,352,032  |              |   | 62,226,047 
|                                                                                                                           |  |                   |             |              |   |            
|                                                                                                                           |  |                   | 69,862,629  |              |   | 69,731,223 
|Retained earnings                                                                                                          |  |                   | 56,667,494  |              |   | 55,258,495 
|                                                                                                                           |  |                   |             |              |   |            
|                                                                                                                           |  |                   | 126,530,123 |              |   | 124,989,718
|Less cost of treasury stock (2,447,323 and 2,449,394 shares)                                                               |  |                   | 32,792,427  |              |   | 32,820,158 
|                                                                                                                           |  |                   |             |              |   |            
|Total shareholders equity                                                                                                 |  |                   | 93,737,696  |              |   | 92,169,560 
|                                                                                                                           |  |                   |             |              |   |            
|Total liabilities and shareholders equity                                                                                 |  | $                 | 170,600,014 |              | $ | 165,599,384
|                                                                                                                           |  |                   |             |              |   |            



5



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Frischs Restaurants, Inc. and Subsidiaries

Consolidated Statement of Shareholders Equity

Sixteen weeks ended September 18, 2005 and September 19, 2004

(Unaudited)



|                                                    |  |                                               |           |                              |   |            |                  |  |   |                 |   |  |       |             |   |  |   |            |  
|--------------------------------------------------- |  | --------------------------------------------- | --------- | ---------------------------- | - | ---------- | ---------------- |  | - | --------------- | - |  | ----- | ----------- | - |  | - | ---------- | -
|                                                    |  | Common stockat $1 pershare - Sharesand amount |           | Additionalcontributedcapital |   |            | Retainedearnings |  |   | Treasury shares |   |  | Total |            
|Balance at May 30, 2004                             |  | $                                             | 7,490,845 |                              | $ | 61,976,027 |                  |  | $ | 42,920,243      |   |  | $     | (32,920,555 | ) |  | $ | 79,466,560 |  
|Net earnings for sixteen weeks                      |  |                                               |          |                              |   |           |                  |  |   | 2,898,671       |   |  |       |            |   |  |   | 2,898,671  |  
|Stock options exercised - new shares issued         |  |                                               | 3,165     |                              |   | 46,683     |                  |  |   |                |   |  |       |            |   |  |   | 49,848     |  
|Stock options exercised - treasury shares re-issued |  |                                               |          |                              |   | 896        |                  |  |   |                |   |  |       | 2,223       |   |  |   | 3,119      |  
|Tax benefit from stock options exercised            |  |                                               |          |                              |   | 10,138     |                  |  |   |                |   |  |       |            |   |  |   | 10,138     |  
|Other treasury shares re-issued                     |  |                                               |          |                              |   | 38,862     |                  |  |   |                |   |  |       | 33,542      |   |  |   | 72,404     |  
|Cash dividends - $.22 per share                     |  |                                               |          |                              |   |           |                  |  |   | (1,108,034      | ) |  |       |            |   |  |   | (1,108,034 | )
|                                                    |  |                                               |           |                              |   |            |                  |  |   |                 |   |  |       |             |   |  |   |            |  
|Balance at September 19, 2004                       |  |                                               | 7,494,010 |                              |   | 62,072,606 |                  |  |   | 44,710,880      |   |  |       | (32,884,790 | ) |  |   | 81,392,706 |  
|Net earnings for thirty-six weeks                   |  |                                               |          |                              |   |           |                  |  |   | 11,659,298      |   |  |       |            |   |  |   | 11,659,298 |  
|Stock options exercised - new shares issued         |  |                                               | 11,166    |                              |   | 158,422    |                  |  |   |                |   |  |       |            |   |  |   | 169,588    |  
|Stock options exercised - treasury shares re-issued |  |                                               |          |                              |   | (4,005     | )                |  |   |                |   |  |       | 93,730      |   |  |   | 89,725     |  
|Tax benefit from stock options exercised            |  |                                               |          |                              |   | 64,361     |                  |  |   |                |   |  |       |            |   |  |   | 64,361     |  
|Other treasury shares re-issued                     |  |                                               |          |                              |   | 1,103      |                  |  |   |                |   |  |       | 1,393       |   |  |   | 2,496      |  
|Treasury shares acquired                            |  |                                               |          |                              |   |           |                  |  |   |                |   |  |       | (30,491     | ) |  |   | (30,491    | )
|Employee stock purchase plan                        |  |                                               |          |                              |   | (66,440    | )                |  |   |                |   |  |       |            |   |  |   | (66,440    | )
|Cash dividends - $.22 per share                     |  |                                               |          |                              |   |           |                  |  |   | (1,111,683      | ) |  |       |            |   |  |   | (1,111,683 | )
|                                                    |  |                                               |           |                              |   |            |                  |  |   |                 |   |  |       |             |   |  |   |            |  
|Balance at May 29, 2005                             |  |                                               | 7,505,176 |                              |   | 62,226,047 |                  |  |   | 55,258,495      |   |  |       | (32,820,158 | ) |  |   | 92,169,560 |  
|Net earnings for sixteen weeks                      |  |                                               |          |                              |   |           |                  |  |   | 2,522,095       |   |  |       |            |   |  |   | 2,522,095  |  
|Stock options exercised - new shares issued         |  |                                               | 5,421     |                              |   | 89,770     |                  |  |   |                |   |  |       |            |   |  |   | 95,191     |  
|Tax benefit from stock options exercised            |  |                                               |          |                              |   | 12,117     |                  |  |   |                |   |  |       |            |   |  |   | 12,117     |  
|Other treasury shares re-issued                     |  |                                               |          |                              |   | 24,098     |                  |  |   |                |   |  |       | 27,731      |   |  |   | 51,829     |  
|Cash dividends - $.22 per share                     |  |                                               |          |                              |   |           |                  |  |   | (1,113,096      | ) |  |       |            |   |  |   | (1,113,096 | )
|                                                    |  |                                               |           |                              |   |            |                  |  |   |                 |   |  |       |             |   |  |   |            |  
|Balance at September 18, 2005                       |  | $                                             | 7,510,597 |                              | $ | 62,352,032 |                  |  | $ | 56,667,494      |   |  | ($    | 32,792,427  | ) |  | $ | 93,737,696 |  
|                                                    |  |                                               |           |                              |   |            |                  |  |   |                 |   |  |       |             |   |  |   |            |  



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

Sixteen weeks ended September 18, 2005 and September 19, 2004

(unaudited)



|                                                                             |  |                   |            |   |                   |   |            |  
|---------------------------------------------------------------------------- |  | ----------------- | ---------- | - | ----------------- | - | ---------- | -
|                                                                             |  | September 18,2005 |            |   | September 19,2004 |  
|Cash flows provided by (used in) operating activities:                       |  |                   |            |   |                   |   |            |  
|Net earnings                                                                 |  | $                 | 2,522,095  |   |                   | $ | 2,898,671  |  
|Adjustments to reconcile net earnings to net cash from operating activities: |  |                   |            |   |                   |   |            |  
|Depreciation and amortization                                                |  |                   | 3,847,077  |   |                   |   | 3,489,168  |  
|Loss on disposition of assets, including abandonments                        |  |                   | 23,528     |   |                   |   | 57,445     |  
|                                                                             |  |                   |            |   |                   |   |            |  
|                                                                             |  |                   | 6,392,700  |   |                   |   | 6,445,284  |  
|Changes in assets and liabilities:                                           |  |                   |            |   |                   |   |            |  
|Accounts receivable                                                          |  |                   | (263,707   | ) |                   |   | (244,257   | )
|Inventories                                                                  |  |                   | 312,845    |   |                   |   | (88,642    | )
|Prepaid expenses and sundry deposits                                         |  |                   | (809,746   | ) |                   |   | (474,003   | )
|Other assets                                                                 |  |                   | 79,452     |   |                   |   | (177,938   | )
|Prepaid, accrued and deferred income taxes                                   |  |                   | 229,422    |   |                   |   | 508,982    |  
|Tax benefit from stock options exercised                                     |  |                   | 12,117     |   |                   |   | 10,138     |  
|Accounts payable                                                             |  |                   | 2,077,988  |   |                   |   | (94,794    | )
|Accrued expenses                                                             |  |                   | 80,015     |   |                   |   | (1,118,270 | )
|Self insured obligations                                                     |  |                   | (20,544    | ) |                   |   | (401,915   | )
|Other liabilities                                                            |  |                   | 108,640    |   |                   |   | 108,929    |  
|                                                                             |  |                   |            |   |                   |   |            |  
|                                                                             |  |                   | 1,806,482  |   |                   |   | (1,971,770 | )
|                                                                             |  |                   |            |   |                   |   |            |  
|Net cash provided by operating activities                                    |  |                   | 8,199,182  |   |                   |   | 4,473,514  |  
|Cash flows provided by (used in) investing activities:                       |  |                   |            |   |                   |   |            |  
|Additions to property and equipment                                          |  |                   | (8,073,197 | ) |                   |   | (8,999,056 | )
|Proceeds from disposition of property                                        |  |                   |           |   |                   |   | 10,057     |  
|Change in other assets                                                       |  |                   | (107,909   | ) |                   |   | (138,055   | )
|                                                                             |  |                   |            |   |                   |   |            |  
|Net cash (used in) investing activities                                      |  |                   | (8,181,106 | ) |                   |   | (9,127,054 | )
|Cash flows provided by (used in) financing activities:                       |  |                   |            |   |                   |   |            |  
|Proceeds from borrowings                                                     |  |                   | 3,000,000  |   |                   |   | 7,500,000  |  
|Payment of long-term debt and capital lease obligations                      |  |                   | (2,600,375 | ) |                   |   | (2,155,145 | )
|Cash dividends paid                                                          |  |                   | (556,136   | ) |                   |   | (553,709   | )
|Proceeds from stock options exercised - new shares issued                    |  |                   | 95,191     |   |                   |   | 49,848     |  
|Proceeds from stock options exercised - treasury shares re-issued            |  |                   |           |   |                   |   | 3,119      |  
|Other treasury shares re-issued                                              |  |                   | 51,829     |   |                   |   | 72,404     |  
|                                                                             |  |                   |            |   |                   |   |            |  
|Net cash (used in) provided by financing activities                          |  |                   | (9,491     | ) |                   |   | 4,916,517  |  
|                                                                             |  |                   |            |   |                   |   |            |  
|Net increase in cash and equivalents                                         |  |                   | 8,585      |   |                   |   | 262,977    |  
|Cash and equivalents at beginning of year                                    |  |                   | 306,300    |   |                   |   | 294,410    |  
|                                                                             |  |                   |            |   |                   |   |            |  
|Cash and equivalents at end of quarter                                       |  | $                 | 314,885    |   |                   | $ | 557,387    |  
|                                                                             |  |                   |            |   |                   |   |            |  
|Supplemental disclosures:                                                    |  |                   |            |   |                   |   |            |  
|Interest paid                                                                |  | $                 | 880,427    |   |                   | $ | 911,684    |  
|Income taxes paid (net of refunds, if any)                                   |  |                   | 1,115,461  |   |                   |   | 974,880    |  
|Dividends declared but not paid                                              |  |                   | 556,960    |   |                   |   | 554,325    |  
|Lease transactions capitalized                                               |  |                   |           |   |                   |   | 537,777    |  



The accompanying notes
are an integral part of these statements.



7



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##### Table of Contents

Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

First Quarter Fiscal 2006, Ended September 18, 2005



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. (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 are currently located in various regions of Ohio, Kentucky and Indiana. Golden Corral restaurants currently operate primarily in the greater metropolitan areas of Cincinnati, Dayton, Toledo and Cleveland, Ohio,
Louisville, Kentucky and Pittsburgh, Pennsylvania. Plans are in place to expand the Golden Corral operation into markets in Morgantown, West Virginia, Columbus, Ohio, northern Indiana and southern Michigan.



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 consolidated financial statements include the accounts of Frischs Restaurants, Inc. and all of its subsidiaries. Significant inter-company accounts
and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior year information to conform to the current year presentation. 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 or 53 week period ending on the Sunday 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.



Use of Estimates



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. 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 believes the application of estimates to
its policies regarding the measurement of self insurance liabilities, net periodic pension cost and future pension obligations, and the carrying values of long-lived assets are critical accounting policies that require managements most
difficult, subjective or complex judgments.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A  ACCOUNTING POLICIES (CONTINUED)



Cash and Cash Equivalents



Highly liquid investments with original maturities of three months or less are considered to
be cash equivalents. Outstanding checks in the amounts of $321,000 and $933,000 were included in accounts payable as of September 18, 2005 and May 29, 2005, respectively.



Receivables



The Company values its trade notes and accounts receivable on the reserve method. The reserve balance was $30,000 as of September 18,
2005 and May 29, 2005. 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 that the Company sells the food.



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 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 Statement of Financial Accounting Standards No. 13 (SFAS 13), Accounting for Leases, as amended. Interest
on borrowings is capitalized during active construction periods of new restaurants. Capitalized interest for the sixteen weeks ended September 18, 2005 and September 19, 2004 was $57,000 and $25,000, respectively. 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. Estimated remaining expenditures for new restaurant construction
that was in progress as of September 18, 2005 totaled approximately $2,199,000 for two Golden Corral restaurants. 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 judgement.



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. The installation of an enterprise information system was completed in September 2004.
Preliminary project stage costs were expensed as incurred in fiscal years 2002 and 2003. Software acquisition costs, installation, configuration, implementation and testing costs were capitalized during the application development stage. The
capitalization of the project included interest costs together with payroll and payroll related costs for certain employees who worked on the implementation. Capitalized



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A  ACCOUNTING POLICIES (CONTINUED)



interest for the sixteen weeks ended September 18, 2005 and September 19, 2004 was zero and $20,000, respectively. Capitalized payroll and payroll
related costs for the sixteen weeks ended September 18, 2005 and September 19, 2004 were zero and $96,000, respectively. Net of accumulated depreciation, the capitalized cost of the enterprise information system was $4,249,000 and
$4,400,000, respectively, as of September 18, 2005 and May 29, 2005.



Impairment of Assets



Under Statement of Financial Accounting Standards No. 144 (SFAS 144), Accounting for the Impairment or Disposal of Long-Lived Assets, management
considers a history of cash flow losses on a restaurant-by-restaurant basis to be its primary indicator of potential impairment. 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 Companys past experience in
disposing of unprofitable restaurant properties.



No impairment losses were
recognized during either of the sixteen weeks ended September 18, 2005 or September 19, 2004.



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 to be part of the lease term, as defined by SFAS 13, 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 to be recognized during that part of term of the lease when no rent is paid to the landlord, often referred to as a rent holiday, that generally occurs while a restaurant is being constructed on leased land. Effective
September 19, 2005, the recognition of rent during rent holiday periods will no longer be capitalized and will instead be charged to expense.



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.



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.



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 September 18, 2005 and May 29, 2005, the carrying amount of goodwill acquired in prior years was $741,000, which is net of $308,000
amortized in prior years.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A  ACCOUNTING POLICIES (CONTINUED)



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, or approximately $85,000 per year in each of the next five years for the 32 Golden
Corral restaurants in operation as of September 18, 2005. Amortization was $25,000 and $22,000 respectively, for the sixteen weeks ended September 18, 2005 and September 19, 2004. 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:



|                                                                                |  |                   |       |   |             |   |       |  
|------------------------------------------------------------------------------- |  | ----------------- | ----- | - | ----------- | - | ----- | -
|                                                                                |  | September 18,2005 |       |   | May 29,2005 |  
|                                                                                |  | (in thousands)    |      
|Golden Corral initial franchise fees subject to amortization                    |  | $                 | 1,280 |   |             | $ | 1,200 |  
|Less accumulated amortization                                                   |  |                   | (274  | ) |             |   | (249  | )
|                                                                                |  |                   |       |   |             |   |       |  
|Carrying amount of Golden Corral initial franchise fees subject to amortization |  |                   | 1,006 |   |             |   | 951   |  
|Current portion of Golden Corral initial franchise fees subject to amortization |  |                   | (85   | ) |             |   | (83   | )
|Golden Corral fees not yet subject to amortization                              |  |                   | 355   |   |             |   | 365   |  
|Other intangible assets                                                         |  |                   | 160   |   |             |   | 168   |  
|                                                                                |  |                   |       |   |             |   |       |  
|Total other intangible assets                                                   |  | $                 | 1,436 |   |             | $ | 1,401 |  
|                                                                                |  |                   |       |   |             |   |       |  



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 operations as incurred.



Revenue Recognition



Revenue from restaurant operations is recognized upon receipt of payment from customers. Revenue from the sale of gift cards is deferred for recognition until redeemed by
the customer. 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, ordinarily upon the execution of the license agreement, in consideration of the Companys
services to that time.



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 expense as incurred. Opening costs for the sixteen weeks ended September 18, 2005 and
September 19, 2004 were $761,000 ($660,000 for Golden Corral and $101,000 for Big Boy) and $723,000 ($504,000 for Golden Corral and $219,000 for Big Boy), respectively.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A  ACCOUNTING POLICIES (CONTINUED)



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 annually amounts 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) with a matching 40 percent employer cash contribution.



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  ten percent matching employer cash contribution). A non-qualified savings plan  Frischs
Executive Savings Plan (FESP)  provides a means by which 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 the common stock option. Although the Company owns the
mutual funds until the retirement of the participants, the funds are invested at the direction of the participants. The FESP liability to the participants is included in Deferred compensation and other long term obligations in the
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 Non Deferred 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 balance sheet.



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. Claims experience has historically been reviewed each quarter, with a more comprehensive annual
review being performed during the first quarter of each fiscal year. The annual review would typically result in adjustments to the self-insurance liabilities to more closely match claims experience. Active claims management and post accident drug
testing in recent years has effected vast improvements in claims experience. As a result, management determined that a comprehensive review should be performed every quarter and that adjustments to the self-insurance liabilities should be recorded
as needed based on claims experience, beginning with the 3rdquarter of fiscal 2005 that ended March 6, 2005. A
lower rate is being used in the current fiscal year to accrue initial self-insurance liabilities, which should reduce future quarterly adjustments.



Self-insurance liabilities were lowered by $392,000 and $614,000 respectively, during the first quarters of fiscal 2006 and 2005. Further reductions of $349,000 and
$81,000 were recorded respectively in the third and fourth quarters of fiscal 2005.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A  ACCOUNTING POLICIES (CONTINUED)



Fair Value of Financial Instruments



With the exception of long-term debt (see Note B Long-Term Debt), 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.



Stock Based Compensation



The Company accounts for stock options using the intrinsic value method
of measuring compensation expense prescribed by Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees, as permitted by Statement of Financial Accounting Standards No. 123 (SFAS 123),
Accounting for Stock Based Compensation. No stock based employee compensation cost is included in net income, as all options granted have during the periods presented had an exercise price equal to the market value of the stock on the
date of the grant. In accordance with Statement of Financial Standards No. 148 (SFAS 148), Accounting for Stock Based Compensation  Transition and Disclosure, the following table presents the effect on net income and earnings
per share if the Company had accounted for stock options using the fair value recognition provisions of SFAS 123:



|                                                                                                                                        |  |                                       |       |                   |   |      
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | ----- | ----------------- | - | -----
|                                                                                                                                        |  | Sixteen weeks ended                  
|                                                                                                                                        |  | September 18,2005                     |       | September 19,2004
|                                                                                                                                        |  | (in thousands, except per share data)
|Net Income, as reported                                                                                                                 |  | $                                     | 2,522 |                   | $ | 2,899
|Deduct: total stock-based employee compensation expense determined under fair value based method for all grants (a), net of tax
effects |  |                                       | 96    |                   |   | 129  
|                                                                                                                                        |  |                                       |       |                   |   |      
|Pro forma net income                                                                                                                    |  | $                                     | 2,426 |                   | $ | 2,770
|                                                                                                                                        |  |                                       |       |                   |   |      
|Earnings per share                                                                                                                      |  |                                       |       |                   |   |      
|Basic  as reported                                                                                                                     |  | $                                     | .50   |                   | $ | .58  
|Basic  pro forma                                                                                                                       |  | $                                     | .48   |                   | $ | .55  
|Diluted  as reported                                                                                                                   |  | $                                     | .49   |                   | $ | .56  
|Diluted  pro forma                                                                                                                     |  | $                                     | .47   |                   | $ | .54  



|(a) | For a summary of options granted, refer to the stock option section of Note D  Capital Stock.
|--- | ----------------------------------------------------------------------------------------------



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A  ACCOUNTING POLICIES (CONTINUED)



The estimated total stock-based employee compensation expense was determined using the modified Black-Scholes option
pricing model with the following weighted average assumptions:



|                                               |  |                     |         |   |                   |   |         |  
|---------------------------------------------- |  | ------------------- | ------- | - | ----------------- | - | ------- | -
|                                               |  | Sixteen weeks ended |        
|                                               |  | September 18,2005   |         |   | September 19,2004 |  
|Dividend yield                                 |  |                     | 1.80    | % |                   |   | 1.61    | %
|Expected volatility                            |  |                     | 26      | % |                   |   | 29      | %
|Risk free interest rate                        |  |                     | 3.84    | % |                   |   | 3.86    | %
|Expected lives                                 |  |                     | 5 years |   |                   |   | 5 years |  
|Weighted average fair value of options granted |  | $                   | 6.11    |   |                   | $ | 8.25    |  



New Accounting Pronouncements



In December 2004, the Financial
Accounting Standards Board revised Statement of Financial Accounting Standards No. 123 (SFAS 123), Accounting for Stock Based Compensation. The revised SFAS 123 (SFAS 123(R)), Share-Based Payment, supersedes Accounting
Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees. SFAS 123(R) requires the fair value of stock options issued to be expensed. It is effective as of the beginning of the first annual reporting period
that begins after June 15, 2005, which will be the Companys fiscal year 2007 that begins May 29, 2006. The impact upon adoption is expected to be similar to the pro forma information required by SFAS 148 that is disclosed in Note A
 Accounting Policies.



Statement of Financial Accounting Standards
No. 151 (SFAS 151), Inventory Costs, clarifies accounting for abnormal amounts of idle facility expense, freight, handling costs and spoilage. SFAS 151 is effective for inventory costs incurred during fiscal years that begin after
June 15, 2005. Earlier application is permitted. Its adoption is not expected to have any material impact on the Companys earnings.



The Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. FAS 13-1, Accounting for Rental Costs Incurred during a Construction
Period, on October 6, 2005. This FSP requires rental costs associated with ground or building operating leases that are incurred during a construction period to be recognized as rental expense. The capitalization of such rental costs is
to cease upon application of the FSP to the first reporting period beginning after December 15, 2005. Earlier adoption being permitted, the Company elected to cease capitalizing such rental costs effective with the quarter that began
September 19, 2005 (see the discussion of Leases under Note A  Accounting Policies).



The Company reviewed all other significant newly issued accounting pronouncements, including Statements of Financial Accounting Standards Nos. 152 Accounting for Real Estate Time Sharing Transactions and
153 Exchanges of Nonmonetary Assets, and concluded that, other than those disclosed herein, no material impact is anticipated on the financial statements as a result of future adoption. Statement of Accounting Standards No. 154
Accounting Changes and Error Corrections  a replacement of APB Opinion No. 20 and FASB Statement No. 3 was issued in May 2005, effective for fiscal years beginning after December 15, 2005. No immediate material
impact is presently anticipated on the financial statements as a result its adoption.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE B  LONG-TERM DEBT



|                             |  |                       |       |                      |   |                       |  |                      |       |  |   |       
|---------------------------- |  | --------------------- | ----- | -------------------- | - | --------------------- |  | -------------------- | ----- |  | - | ------
|                             |  | September 18, 2005    |       | May 29, 2005        
|                             |  | Payablewithinone year |       | Payableafter oneyear |   | Payablewithinone year |  | Payableafter oneyear
|                             |  | (in thousands)       
|Construction Draw Facility - |  |                       |       |                      |   |                       |  |                      |       |  |   |       
|Construction Phase Loans     |  | $                     |      |                      | $ | 1,500                 |  | $                    |      |  | $ | 2,000 
|Term Loans                   |  |                       | 8,058 |                      |   | 25,139                |  |                      | 7,598 |  |   | 24,570
|Bullet Loan                  |  |                       |      |                      |   | 3,000                 |  |                      |      |  |   | 3,000 
|Revolving Credit Loan        |  |                       |      |                      |   |                      |  |                      |      |  |   |      
|                             |  |                       |       |                      |   |                       |  |                      |       |  |   |       
|                             |  | $                     | 8,058 |                      | $ | 29,639                |  | $                    | 7,598 |  | $ | 29,570
|                             |  |                       |       |                      |   |                       |  |                      |       |  |   |       



The
portion payable after one year matures as follows:



|                 |  |      |  |                   |        |             |   |       
|---------------- |  | ---- |  | ----------------- | ------ | ----------- | - | ------
|                 |  |      |  | September 18,2005 |        | May 29,2005
|                 |  |      |  | (in thousands)   
|Period ending in |  | 2007 |  | $                 | 9,083  |             | $ | 9,363 
|                 |  | 2008 |  |                   | 9,539  |             |   | 9,726 
|                 |  | 2009 |  |                   | 5,108  |             |   | 5,161 
|                 |  | 2010 |  |                   | 2,994  |             |   | 2,780 
|                 |  | 2011 |  |                   | 2,259  |             |   | 2,058 
|Subsequent to    |  | 2011 |  |                   | 656    |             |   | 482   
|                 |  |      |  |                   |        |             |   |       
|                 |  |      |  | $                 | 29,639 |             | $ | 29,570
|                 |  |      |  |                   |        |             |   |       



On September 27, 2005, 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 Golden Corral construction, was amended to increase the maximum that may be
borrowed from $61,500,000 to $76,500,000. As $57,500,000 had already been cumulatively drawn, the amount available to be borrowed was effectively increased from $4,000,000 to $19,000,000. The expiration for borrowing under the Facility was extended
from September 1, 2006 to September 1, 2008.



The Facility is subject
to a .25 percent unused commitment fee. 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. Upon conversion, the
Company may select a fixed interest rate over the chosen term or may choose among various adjustable rate options.



Fixed interest rates have been chosen for all of the Term Loans (original notes for $56,000,000), the weighted average of which is 6.09 percent, and all of the Term Loans
are being repaid in 84 equal monthly installments of principal and interest aggregating $832,000, expiring in various periods ranging from May 2006 through September 2012. Prepayments of the Term Loans are permissible upon payment of sizeable
prepayment fees and other amounts. As of September 18, 2005, $1,500,000 remained in the Construction Phase of the Facility, which was converted to Term Loan on October 1, 2005. An additional $2,000,000 was borrowed under the Facility on
September 30, 2005. Any outstanding Construction Phase Loan that has not been converted into a Term Loan shall mature and be payable in full on September 1, 2008, unless extended.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE B  LONG-TERM DEBT (CONTINUED)



The Bullet Loan bears interest at a fixed rate of 5.57 percent. It matures and is payable in one installment on
December 31, 2007. On September 27, 2005, four of six mortgages that had been held as collateral for the Bullet Loan were released pursuant to the amended and restated loan agreements. The approximate book value of the real property
secured by the two remaining mortgages is $4,327,000 as of September 18, 2005.



The Revolving Credit Loan allows for borrowing of up to $5,000,000 to fund temporary working capital needs. The loan, none of which was outstanding as of September 18, 2005, is subject to a 30 consecutive day out-of-debt period each
year. The amended and restated loan agreements extended its maturity from September 1, 2006 to September 1, 2008. Interest 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 .25 percent unused commitment fee. Interest is payable at the end of each specific rate period selected by the Company,
which may be monthly, bi-monthly or quarterly.



These loan agreements contain
covenants relating to tangible net worth, cash flow, 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
September 18, 2005. Compensating balances are not required by these loan agreements.



Being variable rated interest loans, the fair values of any outstanding balances in the Construction Phase of the Construction Draw Facility or the Revolving Credit Loan approximate carrying value as of
September 18, 2005 and May 29, 2005. The fair value of the Bullet Loan also approximates carrying value. The fair values of the fixed rate Term Loans shown in the following table are based on fixed rates that would be available for loans
with identical terms and maturities, if borrowed at September 18, 2005 and May 29, 2005.



|                             |  |                    |        |              |   |               |  |           |        |  |   |       
|---------------------------- |  | ------------------ | ------ | ------------ | - | ------------- |  | --------- | ------ |  | - | ------
|                             |  | September 18, 2005 |        | May 29, 2005
|                             |  | Carryingvalue      |        | Fairvalue    |   | Carryingvalue |  | Fairvalue
|                             |  | (in thousands)    
|Construction Draw Facility - |  |                    |        |              |   |               |  |           |        |  |   |       
|Term Loans                   |  | $                  | 33,197 |              | $ | 32,645        |  | $         | 32,169 |  | $ | 31,715



NOTE
C  LEASED PROPERTY



Although it is the Companys policy to own its
restaurant locations whenever possible, the Company occupies certain of its restaurants pursuant to lease agreements. The majority of the leases are for fifteen or twenty years and contain renewal options for ten to fifteen years, and/or have
favorable purchase options. As of September 18, 2005, 30 restaurants were in operation on leased premises, ten of which are capital leases. Delivery equipment is also held under capitalized leases expiring during periods through 2012.
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 |       
|                              |  | September 18,2005 |        |   | May 29,2005 |  
|                              |  | (in thousands)    |       
|Restaurant facilities         |  | $                 | 5,967  |   |             | $ | 5,967  |  
|Equipment                     |  |                   | 1,165  |   |             |   | 1,165  |  
|                              |  |                   |        |   |             |   |        |  
|                              |  |                   | 7,132  |   |             |   | 7,132  |  
|Less accumulated amortization |  |                   | (5,957 | ) |             |   | (5,841 | )
|                              |  |                   |        |   |             |   |        |  
|                              |  | $                 | 1,175  |   |             | $ | 1,291  |  
|                              |  |                   |        |   |             |   |        |  



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE C  LEASED PROPERTY (CONTINUED)



As of September 18, 2005, twenty of the Companys restaurant properties are occupied pursuant to operating
leases, six of which are ground leases for Golden Corral restaurants. The Company is also obligated to two other Golden Corral ground leases for restaurants to open in October and November 2005. The Company also occupies office space under an
operating lease that expires during 2013, with renewal options available through 2023. The Company has the option to purchase the office property in 2023.



Rent expense under operating leases for the sixteen weeks ended:



|                    |  |                   |     |                   |   |    
|------------------- |  | ----------------- | --- | ----------------- | - | ---
|                    |  | September 18,2005 |     | September 19,2004
|                    |  | (in thousands)   
|Minimum rentals     |  | $                 | 554 |                   | $ | 485
|Contingent payments |  |                   | 13  |                   |   | 14 
|                    |  |                   |     |                   |   |    
|                    |  | $                 | 567 |                   | $ | 499
|                    |  |                   |     |                   |   |    



Future minimum lease payments under
capitalized leases and operating leases, including residual value guarantees on certain of the capitalized leases, having an initial or remaining term of one year or more follow:



|                             |  |                   |       |   |                 |   |       
|---------------------------- |  | ----------------- | ----- | - | --------------- | - | ------
|Period ending September 18,  |  | Capitalizedleases |       |   | Operatingleases
|                             |  | (in thousands)   
|2006                         |  | $                 | 846   |   |                 | $ | 1,734 
|2007                         |  |                   | 617   |   |                 |   | 1,725 
|2008                         |  |                   | 2,478 |   |                 |   | 1,722 
|2009                         |  |                   | 119   |   |                 |   | 1,669 
|2010                         |  |                   | 87    |   |                 |   | 1,459 
|2011 to 2025                 |  |                   | 156   |   |                 |   | 16,627
|                             |  |                   |       |   |                 |   |       
|Total                        |  |                   | 4,303 |   |                 | $ | 24,936
|                             |  |                   |       |   |                 |   |       
|Amount representing interest |  |                   | (762  | ) |                 |   |       
|                             |  |                   |       |   |                 |   |       
|Present value of obligations |  |                   | 3,541 |   |                 |   |       
|Portion due within one-year  |  |                   | (488  | ) |                 |   |       
|                             |  |                   |       |   |                 |   |       
|Long-term obligations        |  | $                 | 3,053 |   |                 |   |       
|                             |  |                   |       |   |                 |   |       



Not included in the above table are
certain leases of former operating properties that the Company has assigned or sub-let to third parties. The average annual obligations of these leases approximate $50,000 over the next five years. The Company remains contingently liable for the
performance of these leases. In the event of default by the assignees or sub-lessees, the Company generally retains the right to re-assign or sub-let the properties.



NOTE D  CAPITAL STOCK



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 will continue in effect until
terminated by the Board of Directors. Subject to adjustment for changes in capitalization, the maximum number of shares of common stock that the Plan may issue is 800,000. 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



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE D  CAPITAL STOCK (CONTINUED)



(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
Compensation Committee (the Committee) of the Board of Directors. 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 10 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.



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 10 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 September 18,
2005, options to purchase 78,500 shares had been granted to date, none of which had yet to vest. No other awards - stock appreciation rights, restricted stock award, unrestricted stock award or performance award - had been granted under the 2003
Stock Option and Incentive Plan.



Other
Stock Option Plans



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. As of
September 18, 2005, 6,204 shares remained available to be optioned. Of the 556,228 cumulative shares optioned to date, 364,156 remain outstanding as of September 18, 2005, 211,478 of which belong to the President and Chief Executive
Officer.



Shares may be optioned to employees at not less than 75% of fair
market value on the date granted. The Amended Plan added a provision for automatic, annual stock option grants of 1,000 shares to each of the Companys non-employee directors. The per share exercise price for options granted to non-employee
directors must equal 100 percent of fair market value on the date of grant. The Amended Plan also added a Company right to repurchase shares acquired on exercise of options if an optionee chooses to dispose of such shares. Stock appreciation rights
are not provided for under the Amended Plan. All outstanding options under the 1993 Plan were granted at fair market value and expire 10 years from the date of grant. Outstanding options to the President and Chief Executive Officer generally vest in
six months, while options granted to non-employee directors vest after one year. Outstanding options granted to other key employees vest in three equal annual installments.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE D  CAPITAL STOCK (CONTINUED)



The changes in outstanding and exercisable options involving both the 1993 Stock Option Plan and the 2003 Stock
Option and Incentive Plan:



|                                   |  |                     |   |                    |                              |       |              |         |   |                              |   |      
|---------------------------------- |  | ------------------- | - | ------------------ | ---------------------------- | ----- | ------------ | ------- | - | ---------------------------- | - | -----
|                                   |  | Sixteen weeks ended
|                                   |  | September 18, 2005  |   | September 19, 2004
|                                   |  | No. ofshares        |   |                    | Weighted avg.price per share |       | No. ofshares |         |   | Weighted avg.price per share
|Outstanding at beginning of year   |  | 376,577             |   |                    | $                            | 18.90 |              | 319,993 |   |                              | $ | 15.97
|Granted during the sixteen weeks   |  | 71,500              |   |                    | $                            | 24.54 |              | 74,000  |   |                              | $ | 29.74
|Exercised during the sixteen weeks |  | (5,421              | ) |                    | $                            | 17.56 |              | (3,331  | ) |                              | $ | 15.90
|Expired during the sixteen weeks   |  |                    |   |                    |                              |      |              |        |   |                              |   |     
|Forfeited during the sixteen weeks |  |                    |   |                    |                              |      |              | (1,919  | ) |                              | $ | 18.94
|                                   |  |                     |   |                    |                              |       |              |         |   |                              |   |      
|Outstanding at end of quarter      |  | 442,656             |   |                    | $                            | 19.83 |              | 388,743 |   |                              | $ | 18.58
|                                   |  |                     |   |                    |                              |       |              |         |   |                              |   |      
|Exercisable at beginning of year   |  | 283,903             |   |                    | $                            | 17.04 |              | 227,314 |   |                              | $ | 13.21
|                                   |  |                     |   |                    |                              |       |              |         |   |                              |   |      
|Exercisable at end of quarter      |  | 328,153             |   |                    | $                            | 17.95 |              | 265,240 |   |                              | $ | 15.29
|                                   |  |                     |   |                    |                              |       |              |         |   |                              |   |      



Stock options outstanding and
exercisable as of September 18, 2005 for the 1993 Stock Option Plan and the 2003 Stock Option and Incentive Plan:



|                                  |  |               |  |                                 |       |                                         |           
|--------------------------------- |  | ------------- |  | ------------------------------- | ----- | --------------------------------------- | ----------
|Range of ExercisePrices per Share |  | No. of shares |  | Weighted averageprice per share |       | Weighted averageremaining life in years
|Outstanding:                      |  |               |  |                                 |       |                                         |           
|$  8.31 to $13.00                 |  | 72,229        |  | $                               | 10.62 |                                         | 4.61 years
|$13.01 to $18.00                  |  | 59,252        |  | $                               | 13.73 |                                         | 5.80 years
|$18.01 to $24.20                  |  | 166,675       |  | $                               | 19.56 |                                         | 7.41 years
|$24.21 to $30.13                  |  | 144,500       |  | $                               | 27.23 |                                         | 9.22 years
|$  8.31 to $30.13                 |  | 442,656       |  | $                               | 19.83 |                                         | 7.33 years
|Exercisable:                      |  |               |  |                                 |       |                                         |           
|$  8.31 to $13.00                 |  | 72,229        |  | $                               | 10.62 |                                         |          
|$13.01 to $18.00                  |  | 59,252        |  | $                               | 13.73 |                                         |          
|$18.01 to $24.20                  |  | 145,332       |  | $                               | 19.42 |                                         |          
|$24.21 to $30.13                  |  | 51,340        |  | $                               | 28.93 |                                         |          
|$  8.31 to $30.13                 |  | 328,153       |  | $                               | 17.95 |                                         |          



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 April 30, 2005 (latest available data), 107,744 shares had been purchased through
the plan. Shares purchased through the Plan are held by the Plans custodian until withdrawn or distributed. As of April 30, 2005, the custodian held 40,676 shares on behalf of employees.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE D  CAPITAL STOCK (CONTINUED)



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 (see Note A  Accounting Policies) when it was established in 1993. As of September 18, 2005, 49,172 shares remained in the reserve, including 8,723 shares allocated but not issued to
participants.



There are no other outstanding
options, warrants or rights.



Treasury
Stock



As of September 18, 2005, the Companys treasury held
2,447,323 shares of the Companys common stock. From September 1998 through January 2002, 1,135,286 shares of the Companys common stock were repurchased at a cost of $12,162,000 pursuant to repurchase programs authorized by the
Companys Board of Directors. No shares were repurchased under the authorization that expired on October 7, 2004.



Most of the remaining shares held in the treasury were acquired in 1997 pursuant to the terms of a modified Dutch Auction self-tender offer.



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           |  | Stock equivalents |     | Diluted earnings per share
|                   |  | Weighted averageshares outstanding |  | EPS               |     |                            | Weighted averageshares outstanding |  | EPS      
|September 18, 2005 |  | 5,057,673                          |  | $                 | .50 |                            | 104,175                            |  | 5,161,848 |  | $ | .49
|September 19, 2004 |  | 5,034,866                          |  |                   | .58 |                            | 124,322                            |  | 5,159,188 |  |   | .56



Stock options to purchase 100,000
shares in the quarter ended September 18, 2005 and 73,500 in the quarter ended September 19, 2004 were excluded from the calculation because the effect was anti-dilutive.



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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 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
three plans for the sixteen weeks ended September 18, 2005 and September 19, 2004:



|                                                                  |  |                     |      |   |                   |   |      |  
|----------------------------------------------------------------- |  | ------------------- | ---- | - | ----------------- | - | ---- | -
|                                                                  |  | Sixteen weeks ended |     
|                                                                  |  | September 18,2005   |      |   | September 19,2004 |  
|Net periodic pension cost components                              |  |                     |      |   |                   |   |      |  
|Service cost                                                      |  | $                   | 593  |   |                   | $ | 621  |  
|Interest cost                                                     |  |                     | 449  |   |                   |   | 484  |  
|Expected return on plan assets                                    |  |                     | (583 | ) |                   |   | (628 | )
|Amortization of prior service cost                                |  |                     | 20   |   |                   |   | 23   |  
|Amortization of loss                                              |  |                     | 143  |   |                   |   | 120  |  
|                                                                  |  |                     |      |   |                   |   |      |  
|Net periodic pension cost                                         |  | $                   | 622  |   |                   | $ | 620  |  
|                                                                  |  |                     |      |   |                   |   |      |  
|Weighted average discount rate                                    |  |                     | 6.0  | % |                   |   | 6.5  | %
|Weighted average rate of compensation increase                    |  |                     | 4.5  | % |                   |   | 5.0  | %
|Weighted average expected long-term rate of return on plan assets |  |                     | 8.5  | % |                   |   | 8.5  | %



Contributions to the Plans are
expected to approximate $2,000,000 during fiscal 2006. In addition, $703,000 from fiscal 2005 was contributed to the plans after May 29, 2005.



Compensation expense (not included in the net periodic pension cost described above) relating to the Non Deferred Cash Balance Plan (see Note A  Accounting
Policies) was $159,000 and $151,000 respectively, during the sixteen weeks ended September 18, 2005 and September 19, 2004. Fiscal 2006s contribution to the Non-Deferred Cash Balance Plan is expected to approximate $485,000.



The Company also sponsors two 401(k) plans and a non-qualified Executive
Savings Plan for certain HCEs who have been disqualified from participation in the 401(k) plans (see Note A  Accounting Policies). In the sixteen weeks ended September 18, 2005 and September 19, 2004, matching contributions to
the 401(k) plans amounted to $49,000 and $53,000 respectively. Matching contributions to the Executive Savings Plan were $7,000 and $8,000 respectively, during the sixteen weeks ended September 18, 2005 and September 19, 2004.



The Company does not sponsor post retirement health care
benefits.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE F  SEGMENT INFORMATION



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



|                                 |  |                     |         |   |                   |   |         |  
|-------------------------------- |  | ------------------- | ------- | - | ----------------- | - | ------- | -
|                                 |  | Sixteen weeks ended |        
|                                 |  | September 18,2005   |         |   | September 19,2004 |  
|                                 |  | (in thousands)      |        
|Sales                            |  |                     |         |   |                   |   |         |  
|Big Boy                          |  | $                   | 55,135  |   |                   | $ | 55,192  |  
|Golden Corral                    |  |                     | 31,398  |   |                   |   | 28,870  |  
|                                 |  |                     |         |   |                   |   |         |  
|                                 |  | $                   | 86,533  |   |                   | $ | 84,062  |  
|                                 |  |                     |         |   |                   |   |         |  
|Earnings before income taxes     |  |                     |         |   |                   |   |         |  
|Big Boy                          |  | $                   | 6,381   |   |                   | $ | 6,253   |  
|Opening expense                  |  |                     | (101    | ) |                   |   | (219    | )
|                                 |  |                     |         |   |                   |   |         |  
|Total Big Boy                    |  |                     | 6,280   |   |                   |   | 6,034   |  
|                                 |  |                    
|Golden Corral                    |  |                     | 1,258   |   |                   |   | 1,614   |  
|Opening expense                  |  |                     | (659    | ) |                   |   | (504    | )
|                                 |  |                     |         |   |                   |   |         |  
|Total Golden Corral              |  |                     | 599     |   |                   |   | 1,110   |  
|                                 |  |                    
|Total restaurant level profit    |  |                     | 6,879   |   |                   |   | 7,144   |  
|                                 |  |                    
|Administrative expense           |  |                     | (2,590  | ) |                   |   | (2,368  | )
|Franchise fees and other revenue |  |                     | 372     |   |                   |   | 423     |  
|                                 |  |                     |         |   |                   |   |         |  
|Operating profit                 |  |                     | 4,661   |   |                   |   | 5,199   |  
|                                 |  |                    
|Interest expense                 |  |                     | (782    | ) |                   |   | (806    | )
|                                 |  |                     |         |   |                   |   |         |  
|                                 |  | $                   | 3,879   |   |                   | $ | 4,393   |  
|                                 |  |                     |         |   |                   |   |         |  
|Depreciation and amortization    |  |                     |         |   |                   |   |         |  
|Big Boy                          |  | $                   | 2,287   |   |                   | $ | 2,196   |  
|Golden Corral                    |  |                     | 1,560   |   |                   |   | 1,293   |  
|                                 |  |                     |         |   |                   |   |         |  
|                                 |  | $                   | 3,847   |   |                   | $ | 3,489   |  
|                                 |  |                     |         |   |                   |   |         |  
|Capital expenditures             |  |                     |         |   |                   |   |         |  
|Big Boy                          |  | $                   | 2,801   |   |                   | $ | 3,227   |  
|Golden Corral                    |  |                     | 5,272   |   |                   |   | 5,772   |  
|                                 |  |                     |         |   |                   |   |         |  
|                                 |  | $                   | 8,073   |   |                   | $ | 8,999   |  
|                                 |  |                     |         |   |                   |   |         |  
|                                 | 
|                                 |  | As of               |        
|                                 |  | September 18,2005   |         |   | May 29,2005       |  
|Identifiable assets              |  |                     |         |   |                   |   |         |  
|Big Boy                          |  | $                   | 83,852  |   |                   | $ | 83,077  |  
|Golden Corral                    |  |                     | 86,748  |   |                   |   | 82,522  |  
|                                 |  |                     |         |   |                   |   |         |  
|                                 |  | $                   | 170,600 |   |                   | $ | 165,599 |  
|                                 |  |                     |         |   |                   |   |         |  



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE G  CONTINGENCIES



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.) On
July 30, 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 claims is owed by the Company under the construction contract. The
Company denies the claim and has filed a counterclaim against the general contractor alleging defective construction and claiming damages, lost profits, interest and costs in an amount exceeding $1,000,000. The Company is vigorously prosecuting this
claim and believes that it will ultimately prevail in the matter, which is currently before the American Arbitration Association.



On August 29, 2002, the Company filed a separate lawsuit against the architect that designed the defective building alleging negligent design and claiming 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.



A group of current and former employees of one of the Companys Golden Corral
restaurants filed a collective action against the Company in December 2003 alleging multiple violations of the Fair Labor Standards Act. The parties are currently negotiating a settlement agreement that will dismiss the case in U. S. District Court
and submit the matter to arbitration. The proposed settlement will include provisions for opt-in notices to be sent to all current and former employees of the restaurant who are eligible to participate in the arbitration. While it is not possible to
ascertain the ultimate legal and financial liability of the Company with respect to this matter, the Company has set aside a reserve that it believes is a reasonable estimate for the probable resolution of the matter. The charge against earnings to
establish a reserve during the quarter ended September 18, 2005 did not have a material adverse impact on the Companys earnings or financial position.



The Company is subject to various other claims and suits that arise in the ordinary course of business. The Company does not believe that
any ultimate liability for such claims will have a material impact on its earnings, cash flows or financial position.



Other Contingencies



The Company is contingently 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. Should the third party default, the Company has the right to re-assign the lease.



As of September 18, 2005, the Company has two outstanding letters of credit totaling $164,000 in support of its self- insurance program (See Note A  Accounting Policies). The Company also has an outstanding
letter of credit for $162,000 that supports an environmental remediation plan for the restoration of certain land that the Company no longer owns, which was contaminated by a previous owner who can not be located. There are no other outstanding
letters of credit issued by the Company.



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Frischs Restaurants, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE H  LIFE INSURANCE BENEFIT



The Company owned a number of life insurance policies on the Chairman of the Board of
Directors (formerly President and Chief Executive Officer of the Company), who died on February 2, 2005. As the primary beneficiary of these policies, the Company filed claims for death benefits aggregating $9,659,000. Estimates of the cash
surrender value of the policies totaling $4,719,000 had previously been recorded in the balance sheet as Net cash surrender value  life insurance policies. The excess of the proceeds over the cash surrender value amounted to
$4,440,000, which is net of $500,000 that was due another beneficiary (see Note I  Related Party Transactions), was credited to earnings as a non-taxable benefit during the third quarter of fiscal 2005. All of the death benefit proceeds have
been collected in full.



NOTE I  RELATED
PARTY TRANSACTIONS



A Big Boy licensed restaurant owned by an officer and
director of the Company and two Big Boy licensed restaurants owned by children and other family members of another director of the Company 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 $1,489,000 and $1,488,000 respectively, during the sixteen weeks ended September 18, 2005 and September 19, 2004. The amount owed to the
Company from these restaurants was $124,000 and $106,000 respectively, as of September 18, 2005 and May 29, 2005. Amounts due are generally settled within 28 days of billing.



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



One of the life insurance policies that the
Company owned on the Chairman of the Board (see Note H  Life Insurance Benefit) was a split dollar policy that provided for the sum of $500,000 to be paid to the Chairmans widow, who is a director of the Company.



The Chairman of the Board had an employment agreement that had 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, which is to be adjusted annually to reflect 50 percent of the annual percentage change in the Consumer Price Index. The present value of the obligation has been historically reflected in the balance sheet as a long
term obligation under the caption Deferred compensation and other. The current portion of the obligation is included in current liabilities, as monthly payments of $17,838 to the Chairmans widow commenced on March 1, 2005.



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|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
|------- | ------------------------------------------------------------------------------------



SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995



Certain statements included in this Managements Discussion and Analysis of Financial
Condition and Results of Operation (MD&A) are forward-looking statements (as that item is defined in the Private Securities Litigation Reform Act of 1995) that are subject to risks, uncertainties and other factors that could cause
actual results and performance to differ materially from those expressed or implied by those statements. Factors that could cause such differences to occur include, but are not limited to, those discussed in this MD&A under the caption
Risk Factors. Forward-looking statements can generally be identified in sentences that contain words that are used to convey the fact that the statement being made is prospective rather than strictly relating to historical or
present facts. Such words include, but are not limited to, those shown below:



|         |  |        |  |          |  |              |  |           |  |           
|-------- |  | ------ |  | -------- |  | ------------ |  | --------- |  | ----------
|should |  | may  |  | plan   |  | anticipate |  | project |  | believe 
|         |  |        |  |          | 
|could  |  | will |  | expect |  | estimate   |  | intend  |  | continue



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 Companys
First Quarter of Fiscal 2006 consists of the sixteen weeks ended September 18, 2005, and compares with the sixteen weeks ended September 19, 2004, which constituted the First Quarter of Fiscal 2005. The first quarter of the Companys
fiscal year normally accounts for a disproportionate share of annual revenue and earnings because it contains sixteen weeks, whereas the following three quarters normally contain only twelve weeks each. Operations consist of two reportable segments
within the restaurant industry: Big Boy restaurants and Golden Corral restaurants.



It should be noted that certain reclassifications to the consolidated statement of earnings for the First Quarter of Fiscal 2005 have been made to conform to the current year presentation for the First Quarter of
Fiscal 2006.



Sales reached a record $86,533,000 for the First Quarter of
Fiscal 2006, as sales rose $2,471,000 higher than the First Quarter of Fiscal 2005. The 2.9 percent increase was well below expectation, however, as same store sales decreased in both the Big Boy and Golden Corral segments of the business. Net
earnings for the First Quarter of Fiscal 2006 were $2,522,000, or diluted earnings per share (EPS) of $.49, compared with $2,899,000, or diluted EPS of $.56 in the First Quarter of Fiscal 2005.



Results for the first quarters of both years were positively impacted by favorable claims
experience in the Companys self-insurance program. Self insurance reserves were lowered by $392,000 ($255,000 net after income tax, or $.05 per diluted share) in the First Quarter of Fiscal 2006, while the First Quarter of Fiscal 2005 received
the benefit of a $614,000 adjustment ($405,000 net after income tax, or $.08 per diluted share).



In addition to the same store sales decreases and the lower impact of the self-insurance adjustment this year, other factors, which in the aggregate significantly contributed to the reduction in net earnings, include
higher utility costs, higher opening expenses related to opening new restaurants and a charge to establish a reserve to cover the probable settlement of a legal action against the Company. The adverse effect of these factors on net earnings was
partly offset by improvement in Golden Corrals food cost as a percentage of sales, chiefly reflecting lower beef costs.



RESULTS OF OPERATION



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



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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:



|                                  |  |                |        |      |   |       
|--------------------------------- |  | -------------- | ------ | ---- | - | ------
|                                  |  | 1st Quarter   
|                                  |  | 2006           |        | 2005
|                                  |  | (in thousands)
|Big Boy restaurants               |  | $              | 52,263 |      | $ | 52,847
|Wholesale sales to licensees      |  |                | 2,679  |      |   | 2,173 
|Wholesale sales to grocery stores |  |                | 193    |      |   | 172   
|                                  |  |                |        |      |   |       
|Total Big Boy sales               |  |                | 55,135 |      |   | 55,192
|Golden Corral restaurants         |  |                | 31,398 |      |   | 28,870
|                                  |  |                |        |      |   |       
|Consolidated restaurant sales     |  | $              | 86,533 |      | $ | 84,062
|                                  |  |                |        |      |   |       



The $584,000 decline in Big Boy
restaurant sales can be traced to a same store sales decline of .8 percent (reflecting a 2.8 percent drop in customer counts) and to a restaurant that closed in November 2004. Big Boy same store sales have now declined for two consecutive quarters.
During the fourth quarter of the last fiscal year, same store sales declined .1 percent on a decrease in customer counts of 1.4 percent.



Before the last quarter of last year began, the Company had achieved Big Boy same store sales increases in 29 of the last 30 quarters. Management believes a direct
correlation exists between the lower customer counts that have been experienced over the last two quarters and the steep cost of gasoline. It is noteworthy that a gallon of gasoline first crossed the mark of $2.00 per gallon in the Companys
market regions in March 2005, which coincided with the start of last years fourth quarter.



The effects of the lower customer counts have been somewhat softened by higher average guest checks which have been primarily driven by menu price increases. An increase of 1.5 percent was implemented shortly before
last years first quarter ended, 1.0 percent was put in place near the end of last years third quarter and menu prices were increased 1.4 percent near the end of this years first quarter. Another menu price increase is likely in
February 2006.



The Company currently operates 89 Big Boy restaurants,
including one that re-opened in August 2005 following its reconstruction. It had been temporarily closed since May 2005. No other new Big Boy restaurants were opened during the last twelve months. One older, very low volume Big Boy ceased operations
in November 2004. A brand new Big Boy is currently scheduled to open in February 2006. Two existing Big Boys are currently scheduled to be relocated to better sites within the same markets that will involve no interruption of sales, the first of
which is scheduled to open in March 2006, the other in October 2006.



The
$2,528,000 increase in Golden Corral sales was entirely due to more restaurants in operation:



|                                     |  |                   |  |                  
|------------------------------------ |  | ----------------- |  | -----------------
|                                     |  | First Quarter2006 |  | First Quarter2005
|In operation at beginning of year    |  | 30                |  | 26               
|Opened during the first quarter      |  | 2                 |  | 1                
|In operation at end of first quarter |  | 32                |  | 27               
|Total sales weeks                    |  | 498               |  | 424              



Two Golden Corral restaurants were
under construction as of September 18, 2005 that are scheduled to open respectively in October and November 2005. Current plans call for three Golden Corrals to open respectively in July, September and November 2006.



The decline in Golden Corral same store sales continued in the First Quarter of Fiscal 2006,
decreasing 11.2 percent on a 13.8 percent drop in customer counts. Golden Corral restaurants have now suffered eight consecutive quarters of same store sales decreases, including 33 consecutive weekly declines, most of which have been double-digit



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declines. This pattern has not been halted thus far into the second quarter. Management believes that sharp increases in gasoline prices have been especially
harsh on Golden Corral restaurants, as the correlation between the cost of gasoline and lower customer counts is more well defined than is the correlation for Big Boy restaurants. But steep gasoline prices are clearly not the entire reason for
Golden Corrals poor performance, as its declining sales began well before the spike in gasoline costs. Market research is currently underway to identify the various causes of the decline in sales so that appropriate responses can be developed.
Management is eager to take appropriate action to eliminate the source of the problem or at least mitigate its effects, thereby reversing the sales declines. Price increases of 1.8 percent and 2.3 percent were implemented respectively in May 2005
and May 2004.



Gross Profit



Gross profit for the Big Boy segment includes commissary operations. Gross profit differs
from restaurant level profit discussed in Note F (Segment Information) to the consolidated financial statements, as advertising expense is charged against restaurant level profit. Gross profit for both operating segments is highlighted below:



|                                  |  |                |       |      |   |      
|--------------------------------- |  | -------------- | ----- | ---- | - | -----
|                                  |  | 1st Quarter   
|                                  |  | 2006           |       | 2005
|                                  |  | (in thousands)
|Big Boy gross profit              |  | $              | 7,600 |      | $ | 7,366
|Golden Corral gross profit        |  |                | 1,270 |      |   | 1,735
|                                  |  |                |       |      |   |      
|Total pre-tax earnings by segment |  | $              | 8,870 |      | $ | 9,101
|                                  |  |                |       |      |   |      



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 concerning cost of sales for both the Big Boy and Golden Corral reporting segments, including food cost, payroll and
other operating costs.



|                                                |  |                  |  |                  |  |       |  |       |  |         |  |      
|----------------------------------------------- |  | ---------------- |  | ---------------- |  | ----- |  | ----- |  | ------- |  | -----
|                                                |  | 1st Quarter 2006 |  | 1st Quarter 2005
|                                                |  | Total            |  | Big Boy          |  | GC    |  | Total |  | Big Boy |  | GC   
|Sales                                           |  | 100.0            |  | 100.0            |  | 100.0 |  | 100.0 |  | 100.0   |  | 100.0
|Food and Paper                                  |  | 34.8             |  | 32.6             |  | 38.6  |  | 35.0  |  | 32.5    |  | 39.8 
|Payroll and Related                             |  | 33.1             |  | 34.5             |  | 30.7  |  | 33.3  |  | 34.7    |  | 30.7 
|Other Operating Costs (including opening costs) |  | 21.8             |  | 19.1             |  | 26.7  |  | 20.9  |  | 19.5    |  | 23.5 
|Gross Profit                                    |  | 10.3             |  | 13.8             |  | 4.0   |  | 10.8  |  | 13.3    |  | 6.0  



The lower food and paper cost
percentage in the Golden Corral segment for the First Quarter of Fiscal 2006 is primarily the result of moderating beef costs. The market for beef remains highly volatile, as import and export restrictions can cause wide cost fluctuations. The food
and paper cost percentages for the Golden Corral segment are much higher than the Big Boy segment because of the all-you-can-eat nature of the Golden Corral concept.



Self-insured claims experience has historically been reviewed each quarter, with a comprehensive review during the first quarter each year,
when the self-insured reserves would be reduced to more closely reflect claims experience. The Company has been able to take significant adjustments to the reserves during the first quarters of recent years because of active claims management and
post accident drug testing. Beginning with the third quarter of fiscal 2005, management determined that comprehensive reviews were warranted each quarter, and that the self-insured reserves should be adjusted as necessary based on claims experience.



The review of insurance reserves during the First Quarter of Fiscal 2006
resulted in a favorable adjustment to the insurance reserve of $392,000, much lower than the First Quarter of Fiscal 2005 when the favorable adjustment



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was $614,000. A lower percentage of payroll is being used in the current fiscal year to accrue initial self-insurance reserves, which should reduce the size
of future quarterly adjustments.



The payroll and related cost percentage moved
slightly downward in the First Quarter of Fiscal 2006 for the Big Boy segment, the result of a reduction in the number of hours worked. Golden Corral management achieved significant reductions in hours worked commensurate with its lower sales,
keeping its ratio of payroll dollars to sales about even with last year. There has been no appreciable change in average pay rates for either Big Boy or Golden Corral.



Although congressional efforts continually mount to increase the federal minimum wage, the Company believes it is unlikely that such federal
legislation will be enacted in the near term. However, the Company believes legislation at the state level is a greater possibility. If such legislation were to be enacted, the Company would counter the effects with higher menu prices, together with
tighter payroll standards and a reduction in hours worked. New overtime pay rules initiated by the U.S. Department of Labor went into effect in August 2004. The new rules had a negligible impact on the Company.



Net periodic pension cost (computed under Statement of Financial Accounting Standards
No. 132 R) was $622,000 and $620,000 respectively, in the First Quarter of Fiscal 2006 and the First Quarter of 2005. The discount rate used to measure net periodic pension cost was 6.0 percent in the First Quarter of Fiscal 2006 versus a rate
6.5 percent in the First Quarter of Fiscal 2005. The reduction in the rate had the effect of offsetting recent improvements in investment returns on equity investments that are held by the Companys defined benefit pension plans. Contributions
to these plans for Fiscal 2006 have not been finalized, but are expected to approximate $2,000,000.



Other operating costs include occupancy costs such as maintenance, rent, depreciation, property tax, insurance and utilities; field supervision; accounting and payroll preparation costs; franchise fees for Golden
Corral restaurants; opening costs and many other restaurant operating expenses. As most of these expenses tend to be more fixed in nature, same store sales decreases cause these costs to be a higher percentage of sales, as reflected in the above
table for the Golden Corral segment. Higher energy costs also adversely affected other operating costs.



Operating Profit



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



Administrative and advertising expense increased $256,000 during the First Quarter of Fiscal 2006, or 5.9 percent higher than the First Quarter of Fiscal 2005. The increase is attributable to the combination of higher legal costs,
procurement costs in connection with hiring the Companys new Chief Operating Officer and a charge to set aside a reserve to cover the likely settlement of a legal action against the Company.



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 September 18, 2005, 28 Big Boy restaurants were licensed to other operators
and paying fees to the Company. Other revenue also includes certain other fees from licensed restaurants along with miscellaneous rent and investment income.



There were no gains or losses from the sale of real property in either the First Quarter of Fiscal 2006 or the First Quarter of Fiscal 2005, nor were any impairment of
assets recorded during those periods.



Other Expense



Despite lower levels of debt, interest expense
is only down 3.0 percent during the First Quarter of Fiscal 2006, the result of higher average interest rates.



Income tax expense as a percentage of pretax earnings was estimated at 35 percent in the First Quarter of Fiscal 2006 and was 34 percent in the First Quarter of Fiscal 2005. These rates have been kept consistently low
through the Companys use of tax credits, principally the federal credit allowed for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips, and to a lesser degree, the federal Work Opportunity Tax Credit (WOTC).



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LIQUIDITY AND CAPITAL RESOURCES



Sources of Funds



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 provide the primary source of cash
provided by operating activities. Other sources of cash may include borrowing against credit lines, proceeds received when employees exercise stock options 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.



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

September 18, 2005



|                                         |  |                                       |  |        |  |        |  |        |  |        |  |        |  |                
|---------------------------------------- |  | ------------------------------------- |  | ------ |  | ------ |  | ------ |  | ------ |  | ------ |  | ---------------
|                                         |  | Payments due by period (in thousands)
|                                         |  | Total                                 |  | year 1 |  | year 2 |  | year 3 |  | year 4 |  | year 5 |  | morethan 5years
|Long-Term Debt                           |  | 37,697                                |  | 8,058  |  | 9,083  |  | 9,539  |  | 5,108  |  | 2,994  |  | 2,915          
|Rent due under Capital Lease Obligations |  | 4,303                                 |  | 846    |  | 617    |  | 2,478  |  | 119    |  | 87     |  | 156            
|1 Rent due under Operating Leases        |  | 24,936                                |  | 1,734  |  | 1,725  |  | 1,722  |  | 1,669  |  | 1,459  |  | 16,627         
|2 Unconditional Purchase Obligations     |  | 8,223                                 |  | 8,223  |  |        |  |        |  |        |  |        |  |                
|3 Other Long-Term Obligations            |  | 2,151                                 |  | 214    |  | 217    |  | 220    |  | 223    |  | 226    |  | 1,051          
|Total Contractual Cash Obligations       |  | 77,310                                |  | 19,075 |  | 11,642 |  | 13,959 |  | 7,119  |  | 4,766  |  | 20,749         



|1 | Not included in the table is a contingent liability 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. 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 capital projects plus certain food and beverage items.
|- | --------------------------------------------------------------------------------------------



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



The working capital deficit was $23,608,000 as of September 18, 2005. The deficit was $21,180,000 as of May 29, 2005. The working capital deficit is expected to
continue increasing over the next few years at a modest, manageable pace as construction debt is prudently increased to supplement the use of internally generated cash to finance expansion plans. In September 2005, the maximum amount that may be
borrowed under the terms of the Companys Construction Draw Facility was increased by $15,000,000, which increased to $19,000,000 the amount available to be drawn upon before the Facility expires on September 1, 2008, unless extended.
Additionally, a $5,000,000 working capital revolving line of credit (currently unused) is readily available through September 1, 2008, if needed.



Operating Activities



Operating cash flows were $8,199,000 in the First Quarter of Fiscal 2006, or $3,726,000 higher than the First quarter of Fiscal 2005. The increase is attributable to
normal changes in assets and liabilities such as prepaid expenses, inventories and accounts payable, all of which can and do often widely fluctuate. Management believes a



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more reliable gauge to measure cash flows from the operation of the business is to use the simple method of net earnings plus depreciation. This method
yields $6,393,000 in cash flows from operating activities for the First Quarter of Fiscal 2006 versus $6,445,000 in the First Quarter of Fiscal 2005.



Investing Activities



Capital spending is the principal component of the Companys investing activities. Capital spending was $8,073,000 during the First Quarter of Fiscal 2006, a
decrease of $926,000 from the First Quarter of Fiscal 2005. The capital spending includes $5,272,000 for Golden Corral restaurants, consisting of new restaurant construction, site acquisitions and remodeling costs. Also included in the capital costs
was $2,801,000 spent on Big Boy restaurants, consisting of new restaurant construction, remodeling existing restaurants including kitchen and dining room expansions, routine equipment replacements and other capital outlays.



Financing Activities



Borrowing against credit lines amounted to $3,000,000 during the First Quarter of Fiscal
2006. An additional $2,000,000 was borrowed shortly after the end of the quarter. Scheduled and other payments of long-term debt and capital lease obligations amounted to $2,600,000 during the First Quarter of Fiscal 2006. Regular quarterly cash
dividends paid to shareholders totaled $556,000. Dividends declared but not paid as of September 18, 2005 totaled $557,000. The Company expects to continue its 45 year practice of paying regular quarterly cash dividends.



During the First Quarter of Fiscal 2006, employees acquired approximately 5,400 shares of the
Companys common stock pursuant to the exercise of stock options, yielding proceeds to the Company of approximately $95,000. As of September 18, 2005, 364,156 shares granted remain outstanding under the 1993 Stock Option Plan, including
328,153 fully vested shares at a weighted average price per share of $17.95, and 6,204 remained available to be granted. As of September 18, 2005, 78,500 shares have been granted under the 2003 Stock Option and Incentive Plan, none of which had
vested, and 721,500 shares remain available to be granted.



Other Information



The Company reached
a new agreement with Golden Corral Franchising Systems, Inc. in July 2004. The new agreement added 22 Golden Corral restaurants to the development schedule, bringing to 63, the total number of restaurants planned to be in operation by
December 31, 2011. The development agreement, which had called for five new restaurants to open each calendar year through 2010 with the final four scheduled for 2011, was modified in June 2005 to permit the opening of only three restaurants in
calendar year 2006. The Company asked for the modification in order to use cash flows and credit facilities in a debt neutral manner. The modification did not change the Companys intention to complete the build out schedule by
December 31, 2011.



As of September 18, 2005, 32 Golden Corral
restaurants were in operation with two restaurants under construction, which are scheduled to open in October and November 2005. Costs remaining to complete construction of these two restaurants were estimated at $2,199,000 as of September 18,
2005. Construction of the three restaurants planned to open in calendar year 2006 is currently scheduled to respectively begin in March, May and July. Five older Golden Corrals are scheduled to be remodeled in Fiscal 2006 at a cost of
approximately $150,000 per restaurant.



Construction of a brand new Big Boy
restaurant began in October 2005 that should be ready to open in February 2006. Construction of two Big Boy restaurants that will replace existing operations on better sites will begin respectively in November 2005 and May 2006. 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. A typical kitchen redesign costs approximately $125,000.



Including land and land improvements, the cash required to build and equip each new restaurant ranges from $2,600,000 to $3,500,000 for a Golden Corral, and from
$2,200,000 to $2,900,000 for a Big Boy. 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.



It is the Companys policy 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. Six of the 32 Golden Corral restaurants now in operation were built on leased land. The two Golden Corral restaurants currently under
construction are being built on leased land. In addition, two of the three Big Boy restaurants that will start



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construction between October 2005 and May 2006 will be on leased land. All of these leases are being accounted for as operating leases pursuant to Statement
of Financial Accounting Standards No. 13 (SFAS 13), Accounting for Leases as amended. As of September 18, 2005, the Company occupied a total of 30 restaurants pursuant to leases, ten of which are capital leases under the
provisions of SFAS 13.



RISK FACTORS



Food safety is the most significant risk to any company that operates in
the restaurant industry. It has become 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.



Other examples of risks and uncertainties facing the Company include, but are not limited to, the following:



| |  |  | intense competition for customers;
| | - |  | ----------------------------------



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



| |  |  | changing consumer preferences, particularly based on concerns with nutritional content of the Companys food or restaurant food in general;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the effects of higher gasoline prices on discretionary spending by consumers in restaurants.
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | changing demographics in neighborhoods in which the Company operates restaurants;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | changes in business strategy and development plans;
| | - |  | ---------------------------------------------------



| |  |  | the rising cost of quality sites on which to build restaurants;
| | - |  | ---------------------------------------------------------------



| |  |  | poor selection of restaurant sites on which to build;
| | - |  | -----------------------------------------------------



| |  |  | changes in the supply and cost of food;
| | - |  | ---------------------------------------



| |  |  | the effects of other inflationary pressures, especially higher costs for health care benefits and higher energy prices;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | rolling power outages, especially during the summer months;
| | - |  | -----------------------------------------------------------



| |  |  | shortages of qualified labor;
| | - |  | -----------------------------



| |  |  | seasonal weather conditions, particularly during the winter months of the third quarter;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | natural disasters;
| | - |  | ------------------



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



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



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



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



Risks and uncertainties also include:



| |  |  | rising variable interest rates;
| | - |  | -------------------------------



| |  |  | limitations on borrowing capacity;
| | - |  | ----------------------------------



| |  |  | legal claims;
| | - |  | -------------



| |  |  | changes in accounting standards;
| | - |  | --------------------------------



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



| |  |  | disruptions to the business during transitions to new computer software;
| | - |  | ------------------------------------------------------------------------



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



| |  |  | unauthorized access to information systems;
| | - |  | -------------------------------------------



| |  |  | changes in governmental regulations regarding the environment;
| | - |  | --------------------------------------------------------------



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



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



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



| |  |  | legislation or court rulings that result in changes to tax codes.
| | - |  | -----------------------------------------------------------------



The Company continually takes reasonable preventive measures to reduce the risks and uncertainties that it faces. However, the nature of some risks and uncertainties
offers 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 the 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.



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 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. The plan
assets are targeted to be invested 70 percent in equity securities, as these investments have historically provided the greatest long-term returns. The Company has used an 8.5 percent expected long-term rate of return on plan assets for many years,
and will likely continue with that rate for the foreseeable future. Management believes that 8.5 percent is a fair rate over the long term, despite poor market performance in the early years of the current decade which has adversely impacted net
periodic pension cost in recent years, after many years of steady, low costs.



Long-Lived Assets



Long-lived assets
include property and equipment, goodwill and other intangible assets. Property and equipment typically approximate 85 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.



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In addition, carrying values of property and equipment are tested for impairment each quarter using historical cash flow
losses on a restaurant-by-restaurant basis. Carrying values are also reviewed 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.



|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
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 ultimately results in lower food and supply
costs. The Commissary operation does not supply Golden Corral restaurants.



Food supplies are generally plentiful and may be obtained from any number of suppliers. Quality, timeliness of deliveries and price are the principal determinants of source. Commodity pricing affects the cost of many of the Companys
food products. Commodity pricing can be extremely volatile, affected by many factors outside the Companys control, including import and export restrictions, supply versus demand, production 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. The Company does not use financial instruments as a hedge against changes in commodity pricing.



Except for items such as fresh produce and dairy products that are purchased from any number of local suppliers, the Company currently purchases substantially all
food, beverage and other menu items for use in its Golden Corral restaurants from the same approved vendor that Golden Corral Franchising Systems, Inc. (Franchisor) uses for its operations. Deliveries are made two to three 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 September 18, 2005. 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.



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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 September 18, 2005 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 was 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.



On July 30, 2002, Fortney filed a Demand for Arbitration against the Company with the American Arbitration Association. Fortney seeks recovery of its
outstanding contract balance, in the sum of $293,638, plus interest, fees, and costs. Fortney contends that it is owed this money by the Company under the terms of the General Construction Contract. The Company has denied that it owes
these monies to Fortney, and has filed a counterclaim against Fortney alleging defective construction. The Companys claim against Fortney is for excess cost of construction, loss profits, interest and costs, in an amount exceeding $1,000,000.



On August 29, 2002, the Company filed a lawsuit in the Stark County, Ohio
Court of Common Pleas against its former architect, LMH&T, alleging 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 (CBC). In July 2003, the Company resolved all claims, counterclaims,
and cross-claims, against and involving the trial court defendants. The trial court defendants, including 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 (design team) is separate and apart from the dispute between Fortney and the Company that is before the American Arbitration Association. The arbitration is on going.



A group of current and former employees of one of the Companys Golden Corral
restaurants filed a collective action against the Company in December 2003 alleging multiple violations of the Fair Labor Standards Act. The parties are currently negotiating a settlement agreement that will dismiss the case in U. S. District Court
and submit the matter to arbitration. The proposed settlement will include provisions for opt-in notices to be sent to all current and former employees of the restaurant who are eligible to participate in the arbitration. While it is not possible to
ascertain the ultimate legal and financial liability of the Company with respect to this matter, the Company has set aside a reserve that it believes is a reasonable estimate for the probable resolution of the matter. The establishment of the
reserve during the quarter ended September 18, 2005 did not have a material adverse impact on the Companys earnings or financial position.



The Company is subject to various other claims and suits that arise in the ordinary course of business. The Company does not believe that any ultimate liability for such
claims will have a material impact on its earnings, cash flows or financial position.



|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------



Not applicable



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------



Not applicable



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|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------



a) The Annual Meeting of Shareholders was held on October 3, 2005.



b) Directors elected on October 3, 2005 to serve until the 2007 annual meeting of shareholders:



|                 |  |                   |  |                    
|---------------- |  | ----------------- |  | -------------------
|Blanche F. Maier |  | Craig F. Maier    |  | Jerome P. Montopoli
|Dale P. Brown    |  | Daniel W. Geeding |  |                    



Director elected on October 3, 2005 to serve until the 2006 annual meeting of shareholders:



|               |  |  |  | 
|-------------- |  |  |  | 
|Karen F. Maier |  |  |  | 



Directors whose terms continued after the meeting (serving until the 2006 annual meeting of shareholders):



|                     |  |  |  | 
|-------------------- |  |  |  | 
|Lorrence T. Kellar   |  |  |  | 
|William J. Reik, Jr. |  |  |  | 



c) The following
matters were voted upon:



1) Election of
Directors to serve until the 2007 annual meeting of shareholders:



|                    |  |           |  |                  
|------------------- |  | --------- |  | -----------------
|Name                |  | For       |  | WithheldAuthority
|Blanche F. Maier    |  | 4,573,014 |  | 117,527          
|Dale P. Brown       |  | 4,646,463 |  | 44,078           
|Craig F. Maier      |  | 4,572,066 |  | 118,475          
|Daniel W. Geeding   |  | 4,594,974 |  | 95,567           
|Jerome P. Montopoli |  | 4,643,177 |  | 47,364           



Election of Director
to serve until the 2006 annual meeting of shareholders:



|               |  |           |  |                  
|-------------- |  | --------- |  | -----------------
|Name           |  | For       |  | WithheldAuthority
|Karen F. Maier |  | 4,571,104 |  | 119,437          



2)
Proposal to ratify the appointment of Grant Thornton LLP as the Companys Independent Registered Public Accounting Firm for the fiscal year commencing May 30, 2005 was approved.



|          |  |         |  |        
|--------- |  | ------- |  | -------
|For       |  | Against |  | Abstain
|4,588,976 |  | 96,235  |  | 5,330  



d) Not applicable



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|ITEM 5. | OTHER INFORMATION
|------- | -----------------



On September 27, 2005, the Company amended and restated its loan agreements with US Bank, NA. The primary purpose of the amendments was to increase the maximum
amount that may be borrowed under the Golden Corral Construction Facility from $61,500,000 to $76,500,000. As $57,500,000 had already been drawn on the Golden Corral facility, the amount available to be drawn was effectively increased
from $4,000,000 to $19,000,000. The time frame for borrowing under all the loan agreements was extended from September 1, 2006 to September 1, 2008.



The modifications also released four of six mortgages that US Bank had held as collateral on a Bullet Loan and a financial covenant relating to minimum interest
coverage was eliminated in favor of a covenant that limits outstanding debt to $50,000,000 at any time. Other provisions in the agreements were left substantially unchanged. Those provisions are summarized in the historical financial statements of
the Company on Forms 10-K and 10-Q, and in this Form 10-Q for the quarter ended September 18, 2005. Copies of the amended agreements are filed as Exhibit 10 (d) 1) and 10 (d) 2) in this Form 10-Q.



|ITEM 6. | EXHIBITS
|------- | --------



|   |     |  |                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3  | (a) |  | 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  | (b) |  | Code of Regulations, filed as Exhibit (3) (a) to the Registrants Form 10-Q Quarterly Report for December 15, 1996, is incorporated herein by reference.                                                                                                                                                                                                                                             
|   |    
|3  | (c) |  | Amendments to the Code of Regulations adopted October 1, 1984, filed as Exhibit (3) (b) to the Registrants Form 10-Q Quarterly Report for December 15, 1996, is
incorporated herein by reference.                                                                                                                                                                                                   
|   |    
|3  | (d) |  | Amendments to the Code of Regulations adopted October 24, 1996, filed as Exhibit (3) (c) to the Registrants Form 10-Q Quarterly Report for December 15, 1996, 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) |  | 1) First Amended and Restated Loan Agreement (Golden Corral Construction Facility) and Exhibit 10(c) 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, is incorporated herein by reference.



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|   |     |  |                                                                                                                                                                                                                                                                                                              
|-- | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |    
|10 | (d) |  | 1) Amendment No. 1 to First Amended and Restated Loan Agreement (Golden Corral Construction Facility and Exhibit 10 (d) 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, are filed herewith.
|   |    
|10 | (e) |  | 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 | (f) |  | Employment Agreement between the Registrant and Jack C. Maier effective May 29, 2000, filed as Exhibit (10) (d) to the Registrants Form 10-Q Quarterly Report for
September 17, 2000, is incorporated herein by reference. *                                                                                
|   |    
|10 | (g) |  | Employment Agreement between the Registrant and Craig F. Maier effective June 2, 2003, filed as Exhibit 10 (h) to the Registrants Form 10-K Annual Report for 2003, is
incorporated herein by reference. *                                                                                                  
|   |    
|10 | (h) |  | 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 | (i) |  | 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 | (j) |  | Third Amendment to the Frischs Executive Savings Plan effective June 7, 2005, is filed herewith. *                                                                                                                                                                                                          
|   |    
|10 | (k) |  | Fourth Amendment to the Frischs Executive Savings Plan effective August 30, 2005, is filed herewith. *                                                                                                                                                                                                      
|   |    
|10 | (l) |  | 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 | (m) |  | Amendment No. 1 to Frischs Executive Retirement Plan 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 | (n) |  | 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 | (o) |  | 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 From 8-K dated October 1, 2004, are incorporated herein by reference. *                  
|   |    
|10 | (p) |  | 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 | (q) |  | Employee Stock Option Plan, filed as Exhibit B to the Registrants Proxy Statement dated September 9, 1998, is incorporated herein by reference. *                                                                                                                                                           
|   |    
|10 | (r) |  | 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. *                                                                                                          



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|   |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10 | (s) |  | 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, Paul F. McFarland, W. Gary King, Karen F. Maier, Ken C. Hull, Michael E. Conner, Todd M. Rion and certain other highly compensated employees (Grantors). *
|   |    
|10 | (t) |  | 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 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.                            



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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 |  | October 21, 2005 |  |                            |  | BY |  | /s/    DONALD H. WALKER                                                                            
|     |  |                  |  |                            |  |    |  | Donald H. Walker Vice President  Finance, Treasurer and Principal Financial and Accounting
Officer



40