<PAGE>   1




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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JANUARY 3, 1999
                                       OR
[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO
         ___________

                           Commission File No. 0-27366

                              RAINFOREST CAFE, INC.
             (Exact name of registrant as specified in its charter)

            MINNESOTA                                 41-1779527
    (State or other jurisdiction                    (I.R.S. Employer
  of incorporation or organization)                 Identification No.)

      720 SOUTH FIFTH STREET
        HOPKINS, MINNESOTA                                55343
(Address of principal executive offices)               (Zip Code)

                                 (612) 945-5400
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, 
NO PAR VALUE

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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

As of March 29, 1999, 24,548,304 shares of the Registrant's Common Stock were
outstanding. The aggregate market value of the Common Stock held by
non-affiliates of the Registrant on such date, based upon the last sale price of
the Common Stock as reported on the Nasdaq National Market on March 29, 1999,
was $122,742,000. For purposes of this computation, affiliates of the Registrant
are deemed only to be the Registrant's executive officers and directors.

                       DOCUMENTS INCORPORATED BY REFERENCE

PART II and IV - Portions of the Registrant's Annual Report to Shareholders for
the year ended January 3, 1999, are incorporated by reference into Items 5
through 8, inclusive.

PART III - Portions of the Registrant's definitive proxy statement in connection
with the annual meeting of the shareholders to be held on May 17, 1999, are
incorporated by reference into Items 10 through 13, inclusive.


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                                       1

<PAGE>   2


PART I

ITEM 1.  BUSINESS

    The following discussion contains trend information and other
forward-looking statements that involve a number of risks and uncertainties. The
actual results of Rainforest Cafe, Inc. (the "Company") could differ materially
from the Company's historical results of operations and those discussed in the
forward-looking statements. Factors that could cause actual results to differ
materially include, but are not limited to, those identified in "Certain
Factors."

    The Company owns, operates and licenses large, high volume, themed
restaurant/retail facilities (a "Unit") under the name "Rainforest Cafe -- A
Wild Place to Shop and Eat." The Company's Units are designed to provide a
visually and audibly stimulating and entertaining rain forest environment that
appeals to a broad range of customers of all ages. Each Rainforest Cafe consists
of a Restaurant and a Retail Village. The Restaurant provides an attractive
value to customers by offering a full menu of high quality food and beverage
items, generous portions and excellent service in a unique and exciting
environment. The Retail Village features apparel, toys and gifts with the
Rainforest Cafe logo and other items reflecting the rain forest theme.

THE RAINFOREST CAFE CONCEPT AND STRATEGY

    The Company seeks to differentiate itself by providing high quality, freshly
prepared food and proprietary retail merchandise in a themed environment. The
key factors of the Company's market positioning and operating strategy are as
follows:

    Distinctive Concept. The Company's rain forest theme is promoted by a
simulated unique rain forest environment throughout the Unit. Each Rainforest
Cafe features a visually and audibly exciting environment that usually includes
a variety of live tropical birds, exotic saltwater fish in large custom-designed
aquariums, animated robotic animals and sculpted banyan trees that create a
canopy of foliage. The dynamic rain forest atmosphere is further enhanced by
simulated thunder and lightning storms, tropical rain showers, waterfalls, mists
that emanate from extensive rock formations, and specially-developed aromatic
scents. This entertaining rain forest environment makes each Rainforest Cafe "A
Wild Place to Shop and Eat."

    Broad-Based Appeal. Management believes that the Company's Rainforest Cafe
concept has broader appeal than other theme-based restaurant concepts because it
attracts customers of all ages. The Company's distinctive concept, combined with
high quality food and retail merchandise, make the Rainforest Cafe appealing to
children, teenagers, adults, and senior citizens.

    High Profile Unit Locations. In order to take maximum advantage of the
Company's broad-based appeal, the Company believes that the placement of its
Units in high profile, heavy-traffic locations is critical to its success. By
being in such locations, the Company believes its Units appeal to both
destination customers as well as passers-by who are drawn to its visually and
audibly exciting environment. The Company believes that its format, as developed
at its existing Units, can be utilized in multiple high traffic locations with
favorable demographics such as shopping malls, entertainment centers and Disney
theme parks.

    High Quality Food. The Restaurant provides an attractive value to customers
by offering a moderately-priced, full menu of high quality food and beverage
items served in generous 

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portions in a distinctive environment. The Restaurant features a wide variety of
beverages, appetizers, pastas, sandwiches, salads, pizzas, burgers and
full-platter entrees, presented in a visually appealing manner. Menu items are
prepared on-site using high quality ingredients. Lunch and dinner entrees range
in price from $8.99 to $21.99 and the average guest check was approximately
$13.50 for the fiscal year ended January 3, 1999. Management believes that its
high quality food contributes to a significant level of repeat business.

    Commitment to Retail and Building Brand Awareness. In order to enter the
Restaurant, all customers must pass through the Unit's Retail Village. The
Retail Village offers over 3,000 SKUs and includes apparel, toys and gifts with
the Rainforest Cafe logo and other items suggesting the rain forest theme. The
Company has also developed eight proprietary Animal Characters, each with a
distinct personality, as an additional method of merchandising its retail
products. The Company utilizes several of its Animal Characters for clothing,
toys and gifts. By offering items featuring the Rainforest Cafe logo and Animal
Characters, the Company believes it is continuing to build "brand equity" in the
Rainforest Cafe name that will allow it to attract more customers and to enhance
its competitive retail position. The Retail Village is also intended to be
educational, with displays of live exotic tropical birds and fish and an
animated talking tree that delivers environmental messages.

    Focus on Customer Satisfaction. The Company is committed to staffing each
Unit with an experienced management team and providing its customers with
prompt, friendly and efficient service. A customer's experience is also enhanced
by the attitude and attention of Unit personnel, including "tour guides"
(greeters), "safari guides" (food servers), "navigators" (bartenders),
"pathfinders" (retail staff) and tropical bird curators. The Company recognizes
that, in order to maintain a high level of repeat customers and to attract new
business through word of mouth, it must provide superior customer service.

    Commitment to Attracting and Retaining Quality Employees. By providing
extensive training and attractive compensation, the Company fosters a strong
corporate culture and encourages a sense of personal commitment from its
employees. The Company believes its compensation structure and positive
corporate culture enable it to attract and retain quality employees. The Company
believes that Unit management is important for the profitability of each
Rainforest Cafe and accordingly, places particular emphasis on recruiting
Unit-level Directors of Operations that have significant restaurant and
management experience. The Company anticipates that, prior to opening a Unit, a
Director of Operations will have been trained at one or more Rainforest Cafes
for four to six months. All full-time corporate employees and certain members of
Unit management are eligible to participate in the Company's Stock Option Plans
and all full-time employees are eligible to participate in the Company's 1997
Employee Stock Purchase Plan.


RAINFOREST CAFE FEATURES

    To create a simulated rain forest environment, Rainforest Cafes generally
include:

        Live Exotic Birds -- Most Rainforest Cafes display live exotic birds
    such as macaws and cockatoos in the Retail Village. The Company has curators
    specifically devoted to caring for the birds and fish and for answering
    guest questions. When the exotic birds are not on display they are kept and
    maintained in a specially designed "habitat room."



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<PAGE>   4



        Aquariums -- Rainforest Cafes have large aquarium systems, including
    walk-through aquariums that contain many varieties of saltwater fish from
    locales such as Africa and South America. Aquariums range in size from 750
    to 10,000 gallons and are placed throughout each Unit to maximize visibility
    to customers.

        Tropical Rainstorms and Waterfalls -- Simulated lightning and
    thunderstorms "sweep" through each Rainforest Cafe every 20 to 30 minutes.
    Rainforest Cafes also utilize a mist system emanating from rock formations
    throughout the Unit and rain showers around the perimeter of the Restaurant
    and Mushroom Bar area. Other Rainforest Cafe features include cascading
    waterfalls, fountains and a ventilation system emitting a light floral
    aroma.

        Trees, Foliage and Animated Animals -- The ceiling level of the
    Restaurant and Retail Village of a Rainforest Cafe are intertwined with a
    "forest" of sculpted life-like banyan trees that creates a canopy of foliage
    over diners and shoppers. Each banyan tree is sculpted for a realistic
    presentation of its overgrown root system. The Restaurant and Retail Village
    contains several rock formations, abundant foliage and jungle-like scenes.
    Interspersed throughout the facility are robotic animals such as life-size
    crocodiles, elephants, gorillas, snakes, butterflies and frogs.

        Educational Commitment -- The Company makes each Rainforest Cafe an
    environmentally educational experience. The Rainforest Cafe's talking banyan
    tree "Tracy" delivers environmental messages to help educate and entertain
    children. Each Rainforest Cafe has an on-site curator who educates
    customers, including school groups, on the tropical birds and the rain
    forest. The curator also makes numerous presentations at schools and
    community organizations.

UNIT ECONOMICS

    The Company identifies its current and planned domestic Rainforest Cafes as
either "Mall" or "Icon" Units. The Mall Unit format generally ranges in size
from approximately 15,000 to 23,000 square feet and has between 300 and 450
restaurant seats. Mall Units are located primarily in high traffic shopping
malls such as Mall of America in Minneapolis Minnesota, South Coast Plaza in
Orange County, California and Tysons Corner Center I in McLean, Virginia, a
suburb of Washington D.C. The larger Icon Units are generally in excess of
20,000 square feet and have 400 to 600 restaurant seats (although some may be
slightly smaller). Icon Units are generally located in high traffic tourist
areas such as Downtown Disney Marketplace, Disney's Animal Kingdom, the MGM
Grand Hotel and Casino in Las Vegas, Nevada and downtown Chicago,.

    The Company's thirteen domestic Units that were open the entire fiscal year
ended January 3, 1999, generated average revenues of $12.7 million during 1998.
The Company's seventeen Mall Units open at the end of 1998, were developed at an
average cost of $5.9 million, net of landlord contributions. Additionally, the
Company incurred average pre-opening costs of approximately $800,000 and
purchased an average of $270,000 of inventory in connection with each opening.
Management anticipates that the majority of its future domestic Units will be
Mall Units and that average development cost, pre-opening cost and inventory
costs will be similar to these historical averages. The Company currently has
four Icon Units which were developed at an average cost of $12.3 million, net of
landlord contributions. The Company incurred an average of $1.1 million
pre-opening expenses and purchased an average of $400,000 inventory in
connection 



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with the opening of these Icon Units. The Company expects development costs for
additional Icon Units to range from $10 million to $15 million, net of landlord
contributions. In addition, the Company anticipates pre-opening costs for each
Icon Unit of $1.0 million to $1.5 million and expects to purchase approximately
$500,000 of inventory in connection with each opening.

    Management believes that the Company's demonstrated ability to generate high
sales volumes and customer traffic at its existing Units enables it to obtain
attractive sites and negotiate favorable lease terms, including landlord
contributions.

CURRENT UNIT LOCATIONS

    The following table sets forth certain information about the Company's
existing Units and international Units developed by licensees of the Company:
<TABLE>
<CAPTION>

                                                                       APPROXIMATE    RESTAURANT    
                      UNIT                          LOCATION         SQUARE FOOTAGE      SEATS       DATE OPENED
         ------------------------------     ------------------------ ---------------------------   -------------
<S>                                         <C>                           <C>             <C>      <C>
         Domestic
         Mall of America.................   Bloomington, MN               14,900           295     October 1994
         Woodfield Mall..................   Schaumburg, IL                23,000           425     October 1995
         Gurnee Mills....................   Gurnee, IL                    20,000           300     June 1996
         Downtown Disney Marketplace(1)..   Orlando, FL                   30,000           550     July 1996
         Tysons Corner Center I..........   McLean, VA                    19,500           350     October 1996
         Sawgrass Mills..................   Ft. Lauderdale, FL            20,000           350     November 1996
         South Coast Plaza...............   Costa Mesa, CA                17,000           300     June 1997
         The Source......................   Westbury,  Long Island,       22,000           375     September 1997
                                            NY
         Downtown Chicago(1).............   Chicago, IL                   23,000           375     October 1997
         Grapevine Mills.................   Dallas, TX                    20,000           350     October 1997
         Arizona Mills...................   Phoenix, AZ                   20,000           350     November 1997
         Aventura Mall...................   Miami, FL                     21,500           350     December 1997
         MGM Grand Hotel & Casino(1).....   Las Vegas, NV                 20,000           400     December 1997
         Palisades Center................   West Nyack, NY                22,500           375     March 1998
         Disney's Animal Kingdom(1)......   Orlando, FL                   34,000           550     March 1998
         Ontario Mills...................   Ontario, CA                   20,000           350     July, 1998
         Cherry Creek Mall ..............   Denver, CO                    23,000           375     August, 1998
         Menlo Park Mall.................   Edison, NJ                    18,000           350     September, 1998
         Burlington Mall.................   Burlington, MA                17,500           325     October, 1998
         Great Lakes Crossing............   Detroit, MI                   20,400           325     November, 1998
         Franklin Mills..................   Philadelphia, PA              16,000           300     November, 1998
         Oak Park Mall...................   Overland Park, KS             16,000           300     February, 1999
         Towson Town Center..............   Baltimore, MD                 17,000           325     March, 1999
         International
         London..........................   London, England               18,000           300     June 1997
         Cancun..........................   Cancun, Mexico                16,000           220     August 1997
         Mexico City.....................   Mexico City, Mexico           16,000           225     October 1997
         Eaton Center....................   Vancouver, Canada             18,000           325     June, 1998
         Manchester......................   Manchester, England           17,000           350     September, 1998
         Festival Walk...................   Hong Kong                     17,000           350     October, 1998
         Mundo E.........................   Mexico City, Mexico           14,000           250     November, 1998
         Scarborough Town Center.........   Toronto, Canada               17,500           325     January, 1999
</TABLE>
----------
(1)      Designates Icon Units.



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EXPANSION PLANS AND SITE SELECTION

    The following table sets forth certain information about the Company's
planned Units, all of which are subject to existing leases except where
otherwise indicated:
<TABLE>
<CAPTION>

                                                                        APPROXIMATE   RESTAURANT  DATE PLANNED TO BE
                      UNIT                         LOCATION           SQUARE FOOTAGE     SEATS          OPENED
         ----------------------------       -----------------         --------------  ----------  --------------------
<S>                                         <C>                            <C>             <C>    <C> 
         Domestic
         MacArthur Center............       Norfolk, VA                    15,000          300    Second Quarter 1999
         South Center Mall...........       Seattle, WA                    17,000          325    Third Quarter  1999
         Jersey Gardens..............       Newark, NJ                     16,000          325    Fourth Quarter 1999
         Katy Mills..................       Katy, TX                       16,000          325    Fourth Quarter 1999
         West Farms Mall.............       New Haven, CT                  15,000          300    First Quarter, 2000
         Fisherman's Warf (1) (2)....       San Francisco, CA              27,000          450    Second Quarter, 2000
         Opry Mills..................       Nashville, TN                  17,000          325    Second Quarter, 2000
         The Disneyland Resort (1) (2)      Anaheim, CA                    27,000          500    First Quarter, 2001
         International
         EuroDisney..................       Paris, France                  20,000          400    Second Quarter 1999
         Yorkdale....................       Toronto, Canada                17,500          325    Third Quarter, 1999
         Montreal Forum..............       Montreal, Canada                                      Fourth Quarter, 1999
</TABLE>

----------
(1) Designates Icon Units.
(2) The Company has executed letters of intent or is negotiating leases with
respect to these Units.


    The Company's domestic site selection strategy is to locate its Units in
high profile, heavy traffic locations. A variety of factors are analyzed in the
site selection process, including local market demographics, site visibility,
business seasonality, construction costs and projected Unit economics. By
operating in high profile, heavy traffic locations, the Company believes its
Units appeal to both destination customers as well as passers-by who are drawn
to its visually and audibly exciting environment. The Company believes that its
format, as developed at its existing Units, can be utilized in a number of high
traffic venues with favorable demographics such as shopping malls, entertainment
centers and Disney theme parks.

    While most of the future Rainforest Cafes will be located in shopping malls
or entertainment centers, the Downtown Disney Marketplace Unit is a stand-alone
facility located in Walt Disney World near Orlando, Florida. Customers are able
to enter the Downtown Disney Marketplace Unit without having to enter Disney's
adjacent theme parks. The Rainforest Cafe at Disney's Animal Kingdom in Walt
Disney World is also a stand-alone facility. The 34,000 square foot, 550 seat
Unit is the only full service sit-down restaurant at Disney's Animal Kingdom.
Patrons pass by the Rainforest Cafe upon entering and leaving the park.

    The Company's Disney leases provide, among other things, that the Company
will not own, operate, develop or manage a restaurant: (i) within a 75 mile
radius of Downtown Disney Marketplace or Disney's Animal Kingdom or (ii) in a
theme park located anywhere in the world that is not affiliated with Disney or
its affiliates. The Company also agreed that it would not open a Unit within 50
miles of current or future theme parks owned by Disney without giving Disney the
right of first refusal with regard to such proposed Unit. Disney waived its
radius restriction with respect to the Company's South Coast Plaza and Ontario
Mills Units. The Company is continuing discussions with Disney regarding opening
Rainforest Cafes at other locations; however, no assurance can be given that
other Disney sites will be developed. Additionally, the Company has granted MGM
Grand the right of first refusal, with certain exceptions, with respect to the
development of a Unit in any hotel/casino operation.



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<PAGE>   7


INTERNATIONAL LICENSE AND JOINT VENTURE AGREEMENTS

    The Company has entered into seven separate exclusive license arrangements
relating to the development of Rainforest Cafes in the United Kingdom and
Ireland, France, Mexico, Canada and certain countries and cities in Asia and
South America. These agreements have per Unit development fees of at least
$100,000 and royalties ranging from 3% to 10% of Unit sales. All agreements,
with the exception of the agreement relating to the United Kingdom and Ireland,
have area licensing fees which are proportionate to market size and economic
potential. For the fiscal year ended January 3, 1999, approximately 1.0% of the
Company's total revenues were derived from international licensing fees and
royalties. Through the fiscal year ended January 3, 1999, the Company's
expenditures in acquiring ownership interests in certain international
Rainforest Cafes was $5.5 million.

    United Kingdom and Ireland. In August 1996, the Company entered into a
License and Area Development Agreement with Glendola Leisure Ltd. ("Glendola"),
an affiliate of the Foundation Group, a London-based hotel and restaurant
developer and operator, pursuant to which Glendola will develop five Units over
a ten year period in the United Kingdom and Ireland. Pursuant to this agreement,
the Company will have the option to purchase, prior to the opening of the Unit,
between 20% and 50% of the equity interest in any Unit developed by Glendola.
The Company has purchased a 20% ownership interest in the London Unit for
approximately $400,000 and has purchased a 49% ownership in the Manchester Unit
for approximately $550,000.

    Mexico. In October 1996, the Company entered into a License and Area
Development Agreement with a subsidiary of Empresas de Comunicacion y
Entretenimiento ("ECE"), a Mexican-based restaurant owner and operator, pursuant
to which ECE will develop seven Units over a ten-year period in Mexico. Pursuant
to this agreement, ECE has developed three Units through fiscal 1998, one in
Cancun and in two Mexico City.

    Canada. In March 1997, the Company entered a joint venture and exclusive
license agreement with the Elephant and Castle Group ("E & C"), a Vancouver
based owner and operator of Elephant and Castle pubs and restaurants. E & C and
the Company agreed to develop five Rainforest Cafes in Canada over a four-year
period. Under the terms of this agreement, the Company is also entitled to
receive a warrant to purchase 600,000 shares of E & C stock at $8.00 per share
exercisable for a period of five years. In addition, the Company and E & C have
a 50% equity interest in the joint venture Canadian Rainforest Restaurants, Inc.
("CRRI"). The Company will have the option to purchase E & C's interest in CRRI
after seven years based on a predetermined formula of cash flow and investment.
CRRI opened its first Canadian Unit near Vancouver in June 1998 and its second
Canadian Unit in Toronto in January 1999.

    Southeast Asia. In August 1997, the Company entered into a Master License
Agreement with Rainforest Cafe Far East, Ltd. ("RFC Far East Ltd.") formerly
Movie Dream Corporation, a subsidiary of Far East Holdings International
Limited, a Singapore-based holding company. The agreement was amended as of
January 1, 1999. Under the terms of the agreement, RFC Far East Ltd. will
develop a minimum of three Units over ten years. Countries covered by this
agreement include Singapore, Thailand and the Philippines. RFC Far East Ltd. has
the right to establish sub-franchisees within the territory, subject to certain
terms and conditions, which include a right of the Company to approve all
investors and all other rights in the license agreement. Pursuant to this
agreement, the Company will have the option to purchase, prior to the opening of
any Unit, up to 20% of the equity interest in all Units developed by RFC Far
East Ltd.. This license 


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<PAGE>   8

agreement also grants RFC Far East Ltd. an option for the development rights to
India, Malaysia, and Indonesia, subject to meeting future performance criteria.

    Hong Kong. In March 1998, the Company entered into a Master Franchise
Agreement with Jungle Investment Limited ("JIL"), a Hong Kong based entity, to
develop a minimum of two units in a territory including Hong Kong, Macau,
Taiwan, and Shanghai. JIL has the right to establish sub-franchises within the
territory, subject to certain terms and conditions, such as the Company's right
to approve all shareholders of the sub-franchisee. Under the terms of this
agreement, JIL will develop a minimum of two restaurants over the next 27
months, if no restaurant is opened in Shanghai. If a restaurant is opened in
Shanghai, the minimum will be three restaurants over the next three years.
Pursuant to the agreement, the Company has a right to purchase, prior to the
opening of each Unit, up to 20% of the equity interest in any unit developed, as
well as 20% of JIL. In March, 1998, the Company purchased 20% ownership, for
approximately $1.8 million, in both JIL and the first Unit which opened in Hong
Kong in October 1998.

     France. In September 1998, the Company entered into a franchise agreement
to open a Unit at Disneyland Paris to be operated by Groupe Flo S.A.. The
agreement requires the Unit to open within one year and includes an option to
open an additional Unit in France prior to July,2002.

     Argentina, Brazil, Chile and Puerto Rico. In December 1998, the Company
entered into an Area Development Agreement with HR Sudamerica S.A. DE C.V
("Sudamerica") to develop five Units in Argentina, Brazil, Chile and Puerto Rico
prior to December 2002. Under the terms of this agreement, the Company and
Sudamerica will each own approximately 50% of the restaurants required to be
developed under the agreement.

RESTAURANT

        For the fiscal year ended January 3, 1999, approximately 77% of the
    Company's total revenues were derived from Restaurant sales. The Company
    believes that Rainforest Cafes enjoy a high level of repeat business and
    customer diversity because of the Company's commitment to providing high
    quality food and customer service in an exciting and entertaining
    environment. Features of the Restaurant are as follows:

        Menu. The Company considers its extensive menu selection to be an
    important factor in the appeal of its Restaurant and, accordingly,
    continuous attention is devoted to the development of new menu items. The
    Restaurant features casual cuisine that caters to broad customer
    preferences. The menu presently offers several types of appetizers such as
    "Rainforest Pita Quesadillas" and "Awesome Appetizer Adventure". The menu
    also offers different types of pastas, sandwiches, salads, pizzas, burgers
    and full-platter entrees, such as "Rasta Pasta" (bow tie pasta tossed in a
    garlic cream sauce with grilled chicken, broccoli and pesto), "The Sunset
    Salmon" (fresh salmon filet marinated in a soy mustard vinaigrette), and
    "Rumble in the Jungle Turkey Pita" (grilled pita bread stuffed with fresh
    roasted turkey and Caesar salad). A children's menu and complete dessert
    selection are also available. Portions are generous and significant
    attention is placed on presentation and the quality of preparation. Lunch
    and dinner entrees range in price from $8.99 to $21.99. The Restaurant's
    full-service bar, the "Mushroom Bar," features a number of customized
    alcoholic and non-alcoholic drinks, such as the "Jungle Root" (carrot
    juice), the "Margarilla" (a margarita blended with orange sherbet) and the
    "Chocolate Covered Banana Blast" (fresh banana, chocolate syrup, vanilla
    yogurt blended with rum). Alcoholic beverages are primarily served to
    complement 


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    meals and accounted for approximately 10% of total restaurant
    sales for the fiscal year ended January 3, 1999. The average check per
    person for such period was approximately $13.50. Because the Unit's menu is
    not tied to any particular type of food or beverage, the Company can
    introduce and eliminate items based on local or current consumer trends
    without altering its rain forest theme.

        Decor. Restaurant decor is divided into distinctive dining environments
    developed around the rain forest and other nature themes. Current themes
    include the Atlas and waterfall, gorillas, elephants, tropical fish and star
    gazing. Table decor complements the rain forest theme through the use of
    brilliantly-colored tables and upholstery with patterns of animals, wildlife
    and plant life. In an effort to enhance the dining experience, attempts are
    made to maximize restaurant seating near aquariums, waterfalls, sculpted
    rock formations or one of the Restaurant's several banyan trees. An integral
    part of the Restaurant is the "Mushroom Bar," the "stem" of which consists
    of the bar with a "cap" extending over the customers. Seating at the bar is
    provided by customized stools designed to resemble the legs of wild animals.

        Staffing. An important part of the Company's mission is to ensure that
    during each visit to a Rainforest Cafe, customers receive excellent service.
    To extend the adventure theme, Restaurant customers are greeted at the
    entrance by "tour guides", food servers are known as "safari guides" and the
    bartenders are known as "navigators." The "tour guides" at the front desk
    are trained to communicate, via headsets, with the floor management staff
    who greet Restaurant customers and seat them at their tables. The Company
    believes that a customer's experience is enhanced by the attitude and
    attention of its personnel. Customer service is based on a team approach so
    that each customer is continually attended to, and employees go through
    extensive ongoing training to ensure consistent service. The Company
    endeavors to hire experienced chefs and invests substantial time training
    kitchen employees to maintain consistent food preparation.

RETAIL VILLAGE

     For the fiscal year ended January 3, 1999, approximately 22% of the
Company's total revenues were derived from retail sales. In order to enter the
Restaurant, all customers must pass through the Unit's Retail Village. The
Retail Village offers over 3,000 SKUs and includes apparel and gifts with the
Rainforest Cafe logo and other items with a rain forest theme such as toys and
educational games. The Company has also developed eight proprietary Animal
Characters, each with a distinct personality, including Cha! Cha!, an
adventuresome tree frog; Ozzie, a rascally orangutan; Rio, a colorful, tropical
macaw; Tuki Makeeta, an imaginative baby elephant; Nile, a proud crocodile;
Maya, a regal feline; Bamba, a gentle gorilla; and Iggy, a philosophical iguana.
These Animal Characters are designed to appeal to a broad range of customers,
thereby increasing retail sales and repeat business. The Company utilizes
several Animal Characters for clothing and gifts. Custom designed t-shirts and
sweatshirts with colorful animals spelling out the "Rainforest Cafe" logo and
Animal Characters are signature items. By offering items featuring the
Rainforest Cafe logo and Animal Characters, the Company believes it is
continuing to develop "brand equity" in the Rainforest Cafe name that will allow
it to attract more customers and to enhance its competitive retail position.

     The Retail Village also includes a large selection of colorful rocks, plush
and animated toys and puppets, and educational and entertaining games and
puzzles. Gift items and other artifacts suggesting the rain forest theme,
including colorful animal figurines and prints, kitchen magnets, 



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<PAGE>   10

serving plates and other tableware, handmade wood products and other unique rain
forest related home accessories, are also available. The Company varies its
merchandise mix by season and location and has developed specific retail
profiles for mall Units, discount center Units, and tourist Units.

OPERATIONS, MANAGEMENT AND EMPLOYEES

    The Company's ability to manage complex operations, including high volume
Restaurants and Retail Villages, has been, and will continue to be, central to
its overall success. The Company believes that its management must include
skilled personnel at all levels, including senior corporate management, Unit
Directors of Operations and other Unit employees. The Company's senior corporate
management, including the Company's Chairman and Chief Executive Officer, Lyle
Berman, has significant restaurant and retail experience. Charly Robinson, the
Company's Senior Vice President of Operations has over 20 years of restaurant
and hospitality experience. The Company's three Regional Vice Presidents of
Operations, each of whom have extensive experience in the restaurant industry,
supervise the opening of new Units, monitor quality control and customer
service, and are responsible for the financial performance of the Units within
their respective regions. The Company believes that Unit management is important
for the profitability of each Rainforest Cafe and accordingly, places particular
emphasis on recruiting Directors of Operations that have significant restaurant
and management experience. The Company anticipates that, prior to opening a
Unit, a Director of Operations and executive chef will have been trained at one
or more Rainforest Cafes for approximately six months and three months,
respectively. All salaried Unit employees attend one week of culturalization
training.

    The Company strives to maintain quality and consistency in each of its Units
through the careful training and supervision of personnel and the establishment
of, and adherence to, high standards relating to personnel performance, food and
beverage preparation, and maintenance of facilities. All managers must complete
an eight-week training program during which they are instructed in areas such as
food quality and preparation, customer service, and employee relations. New
staff members participate in approximately three weeks of training under the
close supervision of Company management. The Company has also prepared
operations manuals relating to food and beverage quality and service standards.
Management strives to instill enthusiasm and dedication in its employees,
regularly solicits employee suggestions concerning Company operations and
endeavors to be responsive to employees' concerns. In addition, the Company has
extensive and varied programs designed to recognize and reward employees for
superior performance. The Company believes that it has been able to attract high
quality, experienced restaurant and retail management and personnel with its
competitive compensation and bonus programs.

    In general, each Unit has between 250 and 500 employees, although staffing
levels vary according to the size of the Unit. As of March 19, 1999, the Company
had approximately 6000 employees, including 137 employees at its corporate
headquarters. The Company believes that its relationship with its employees is
good.

PURCHASING

    The Company strives to obtain consistent quality items at competitive prices
from reliable sources. In order to maximize operating efficiencies and to
provide the freshest ingredients for its food products while obtaining the
lowest possible prices for the required quality, each Restaurant's management
team includes a purchasing manager or kitchen manager who 



                                       10
<PAGE>   11

determines the daily quantities of food items needed and orders such quantities
from major suppliers at prices often negotiated directly by the Company's
corporate office. Most food and supplies are shipped directly to the Units. The
Company purchases perishable food products locally. The Company does not
maintain a central food product warehouse or commissary. With respect to retail
products, the Company maintains over 3,000 SKUs, which it purchases from many
suppliers. The Company maintains a centralized warehouse for retail product
distribution. The Company has not experienced any significant delays in
receiving restaurant or retail supplies and equipment. The Company is not
dependent on any one supplier for any of its restaurant or retail goods. The
Company is committed to private label manufacturing, which it believes will
improve the Company's retail margins due to the lower cost of private label
products. The Company has formed a joint venture with a California company to
purchase wholesale clothing items, principally from foreign suppliers. Purchases
by the Company from such joint venture aggregated approximately $2.0 million for
the fiscal year ended January 3, 1999.

MANAGEMENT INFORMATION SYSTEMS/ACCOUNTING

    The Company uses integrated management information systems that are designed
to accommodate significant expansion in the number of Units. These systems
include a computerized restaurant point-of-sale system which facilitates the
movement of customer food and beverage orders between the customer areas and
kitchen operations, controls cash, handles credit card authorizations, keeps
track of revenues on a per employee basis and provides management with revenue
and inventory data. The point-of-sale system is accessed by service personnel
who are assigned individual identification keys, guest orders are printed in the
kitchen and bar areas which eliminates the need to read handwritten tickets. The
Company's retail point of sale, merchandising and distribution system allows
management to track retail inventory daily. The point-of-sale system
electronically transfers data nightly to Company headquarters. The Company also
uses a computerized time management system, which determines the time worked by
each employee, allows management to gather data and schedule work hours, and
produces payroll reports. Each Unit also uses computerized systems to control
and gather data with respect to food, beverage, retail and supplies inventories.
Each Unit has an on-site accountant who assists in the accumulation and
processing of accounting data and performs other administrative functions.

    The Company's automated Unit-level systems provide data for posting directly
to the Company's general ledger and to other accounting subsystems. The
automated general ledger system provides various management reports comparing
current and prior operating results as well as measuring performance against
predetermined operating budgets. The results are reported to and reviewed with
Company management. Such reporting includes (i) weekly reports of revenues, cost
of revenues and selected controllable Unit expenses, (ii) detailed monthly Unit
performance reports of revenues and expenses and (iii) monthly reports of Unit-
by-Unit and administrative and occupancy expense performance.

MARKETING AND PROMOTION

     The Company has created a marketing plan with an objective of positioning
the Company to reflect the following statement: Rainforest Cafe is an adventure
that stimulates the mind, emotion and senses by delivering high quality
proprietary entertainment, food and retail experiences to both children and
adults. The Company has multiple strategies for marketing newer versus mature
Rainforest Cafe Units in addition to Company-wide awareness strategies.



                                       11
<PAGE>   12

     With respect to new Units, given that sales are frequently at or near
capacity during such Unit's first year of operations, the Company places less
emphasis on promotion of new Units during their first year of operations.
Advertising of new Units is focused on recruitment of new employees and building
brand awareness through public relations and regional print media. The Company
has found that Rainforest Cafe grand openings are frequently an event that
receives much local publicity. With respect to existing Units that have been
open more than 12 months, the Company's objective and strategies are to increase
same store sales through, among other things, promoting the Unit's reservations,
offering a special weekday kid's menu and implementing a weekday lunch menu.
With both new and existing Units, the Company strives to utilize its crewmembers
to help develop repeat visits and build guest loyalty.

     In addition to strategies utilized for new and mature Units, the Company
intends to utilize the following to help build brand equity and create repeat
visits:

    -    Loyalty clubs for adults and children designed to motivate guest
         visitation for occasions ranging from birthdays and anniversaries to
         exemplary report cards.
    -    Year round promotions and events designed to help build off-peak hour
         business.
    -    Advertising, primarily print and outdoor signage, to promote both the
         Company's brand and Rainforest Cafe special event.
    -    Cross-marketing to certain businesses, organizations and individuals.
    -    Continued public relations through the Company's off-site educational
         programs.

COMPETITION

    The restaurant and specialty retail businesses are highly competitive. In
the restaurant industry, competition is based primarily upon price, service,
food quality and location. There are numerous well-established competitors,
including national, regional and local restaurant chains, possessing
substantially greater financial, marketing, personnel and other resources than
the Company. The Company also competes on a general basis with a large variety
of national and regional restaurant operations, as well as with locally owned
restaurants, diners, and other establishments that offer moderately priced food.
The Company directly competes with other theme restaurants in the highly
competitive and developing theme restaurant market. Other restaurants and
companies utilize the rain forest or related themes. Additionally, the Company
competes with a number of well-established specialty retailers possessing
substantially greater financial, marketing, personnel and other resources than
the Company. In the retail industry, competition is based primarily upon
merchandise selection, price and customer service. There can be no assurance
that the Company will be able to respond to various competitive factors
affecting the restaurant and retail industries.

    The performance of individual Units may also be affected by factors such as
traffic patterns, demographic considerations, and the type, number and location
of competing restaurants. In addition, factors such as inflation, increased
food, labor and employee benefit costs, and the availability of experienced
management and hourly employees may also adversely affect the restaurant and
retail industries in general and the Company's Units in particular. Restaurant
and retail operating costs may be further affected by increases in food
commodity prices, the minimum hourly wage, unemployment tax rates, real estate
taxes and similar matters over which the Company has no control.



                                       12
<PAGE>   13

REGULATION

    Restaurants are subject to licensing and regulation by state and local
health, sanitation, safety, fire, and other authorities and are also subject to
state and local licensing and regulation of the sale of alcoholic beverages and
food. Additionally, businesses that maintain or sell animals are subject to
additional levels of state and local health and sanitation regulations. Having
tropical birds as part of the Rainforest Cafe concept requires the Company to
adhere to stringent health codes that prohibit crossover between kitchen workers
and animal handlers, and any exchange of air from the bird areas to the rest of
the Unit. The Company overcame this problem at its existing Units that utilize
live birds by installing specially designed air exhaust hoods for the birds'
perch area. Additionally, a separate waste disposal system is provided for the
birds. Although, to date, the Company has satisfied animal-related licensing
authorities for its existing Units, no assurance can be given that the Company
will be able to maintain such approvals or obtain such approvals at other
locations. Difficulties or failure in obtaining required licenses and approvals
will result in delays in, or cancellation of, the opening of Units. Retail
establishments are also subject to licensing and regulation by safety, fire and
other authorities on the state and local level.

TRADEMARKS AND INTELLECTUAL PROPERTY

     The Company's ability to implement successfully its Rainforest Cafe concept
will depend in part on its ability to further establish "brand equity" through
the use of its trademarks, service marks, trade dress and other proprietary
intellectual property, including its name and logos, the Animal Characters and
unique features of its rain forest theme decor. It is the Company's policy to
seek to protect and to defend vigorously its rights to this intellectual
property.

     The Company's original logo incorporating "RAINFOREST CAFE" and the mark "A
WILD PLACE TO SHOP AND EAT" are federally registered service marks for the
Company's Restaurant and Retail Village. The Company also owns a federal
registration for the mark "RAINFOREST" for the Company's restaurant services.
The Company has filed and has pending several federal trademark applications for
"RAINFOREST CAFE" in various formats and for a variety of goods and services.
While the Company expects that these additional applications will result in
registrations affording the Company additional protections, there is no
assurance that all of these applications will issue as registrations.

     There is also no assurance that any of the Company's rights in any of its
intellectual property will be enforceable, even if registered, against any prior
users of similar intellectual property or competitors of the Company who seek to
utilize similar intellectual property in areas where the Company operates or
intends to conduct operations. The failure to enforce any of the Company's
intellectual property rights could have the effect of reducing the Company's
ability to capitalize on its efforts to establish brand equity. The Company is
aware of trademark applications, registrations and uses that may accord to third
parties certain rights in the words "rain forest" or in certain elements of some
of the proprietary Animal Character names and illustrations with respect to
utilization of these marks on certain clothing and retail products. The
existence of any such third party rights could result in claims of infringement
against the Company with respect to its uses of "Rainforest Cafe" or its Animal
Characters. The Company is currently involved in litigation with a party that
alleges that the Company's restaurants infringe its trade dress rights. Although
the Company believes these allegations are without merit and does not expect
this lawsuit to have a materially adverse result on the Company or its business,
in the event this matter is not successfully resolved, or in the event the
Company encounters other claims of 



                                       13
<PAGE>   14

infringement, it is possible that the Company's operations could be materially
limited or that the Company may have to pay damages.

CERTAIN FACTORS

     In addition to the factors discussed elsewhere in the Company's Annual
Report to shareholders or this Form 10-K such as competition, regulation and
trademarks, and intellectual property, the following are important factors that
could cause actual results or events to differ materially from those contained
in any forward-looking statements made by or on behalf of the Company.

SAME STORE SALES DECLINE

     The Company's history indicates that a Unit's revenues frequently decrease
during such Unit's subsequent years of operations. Sales for the seven Units
opened eighteen months or more as of January 3, 1999 declined 9% in Fiscal 1998.
Although the Company has undertaken a number of strategies to offset declining
same store sales (such as revising the Restaurant's menu and discounting certain
retail items) no assurance can be given that comparable same store sales will
not continue to decline. In addition to negatively impacting the Company's
revenues, declining same store sales has had a negative impact on the Company's
stock price and resulted in stock price volatility. Furthermore, because a new
Unit typically experiences higher revenues in the initial six to twelve months
of operations, the opening of new Units may disproportionately impact revenue
analysis.

GROWTH FACTORS/EXPANSION STRATEGY

     In addition to increasing revenues of existing Units, future growth will
depend to a substantial extent on the Company's ability to increase the number
of its Units. The Company's primary strategy is to develop new Rainforest Cafes
in shopping malls, urban entertainment centers and Disney theme parks. Because
of the relatively large size of each Rainforest Cafe and the Company's site
selection criteria, the availability of desirable locations may be limited and
the Company may be hindered in finding suitable locations for the development of
new Units. Additionally, the Company's ability to open additional Units will
depend upon a number of other factors including the ability of the Company to
negotiate leases on acceptable terms, timely approval of local regulatory
authorities, acceptance of the Rainforest Cafe concept in new markets, and the
general state of the economy. Finally, the capital resources required to develop
each new Unit are significant.

     The Company's ability to open and successfully operate additional Units
will also depend upon the hiring and training of skilled Unit management
personnel and the general ability to successfully manage growth, including
monitoring Units and controlling costs, food quality and customer service.
Accordingly, there can be no assurance that the Company will be able to open new
Units, at the planned rate of expansion, or on a timely basis, or that, if
opened, those Units can be operated profitably.

LIMITED BASE OF OPERATIONS

     The combination of the relatively small number of Unit locations and the
significant investment associated with each new Unit may cause the operating
results of the Company to fluctuate significantly and adversely affect the
profitability of the Company. Poor operating 



                                       14
<PAGE>   15

results at any one Unit or a delay in the planned opening or non-opening of a
Unit could materially affect the profitability of the entire Company.
Furthermore, the Company is expected to derive a significant portion of its
revenues from its Units located in Walt Disney World. Because of the substantial
financial requirements associated with opening new Units, the investment risk
related to any one Rainforest Cafe is much larger than that associated with most
other companies' restaurant or retail revenues.

     Some of the Company's Units, have been or will be developed at newly
constructed shopping malls that have no operating history. As the Company
continues to develop Units in newly constructed shopping malls, the Company
could experience delays in openings similar to that experienced in the
Burlington Mall Unit or the Palisades Center Unit, the anticipated opening of
which had been delayed for approximately one year due to factors beyond the
Company's control. The poor performance of these malls could also negatively
impact these Units and the financial performance of the Company. Similarly,
Disney's Animal Kingdom has limited operating history and the performance of
this Unit is dependant on visitor attendance to the theme park.

STOCK PRICE VOLATILITY

     Since the Company's initial public offering in April 1995, the market price
of the Company's Common Stock fluctuated substantially and could fluctuate
substantially in the future due to a variety of factors, including quarterly
operating results of the Company or other restaurant and retail companies,
market perception of the Company's ability to achieve successfully its planned
rapid growth, the trading volume in the Company's Common Stock, changes in
general conditions in the economy, the financial markets or the restaurant or
retail industries, or other developments affecting the Company or its
competitors. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the market
prices of securities issued by many companies for reasons unrelated to the
operating performance of these companies.

DEPENDENCE ON DISCRETIONARY CONSUMER SPENDING

     The success of the Company's operations depends to a significant extent on
a number of factors relating to discretionary consumer spending, including
economic conditions affecting disposable consumer income, the overall success of
the malls, entertainment centers and Disney theme parks in which Units are
located and the continued popularity of theme restaurants generally and the
Company's rain forest concept in particular. Theme restaurants are susceptible
to shifts in consumer preferences and may experience a decline of revenue growth
or of actual revenues as consumers tire of the related theme.

 RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS

     The Company has license agreements pursuant to which its licensees will
develop Units in the United Kingdom and Ireland, Mexico, Canada, Southeast Asia,
South America, France and Hong Kong and intends to enter into other license
agreements in the future. The Company's concept is relatively untested outside
of the United States, and no assurance can be given that any international
location will be successful. The Company's success is also dependent to a
substantial extent on its reputation, and its reputation may be affected by the
performance of certain licensee-owned Units over which the Company will have
limited control. In addition, the Company has invested equity capital in its
Units in the U.K., Canada and Hong Kong and is 



                                       15
<PAGE>   16

likely to continue to invest equity capital in certain other of its
international Units. Such investments are likely to range from approximately
$400,000 to $2.5 million per Unit. Any international operations of the Company
will also be subject to certain external business risks such as exchange rate
fluctuations, political instability and a significant weakening of a local
economy in which a foreign Unit is located. In addition, it may be more
difficult to register and protect the Company's intellectual property rights in
certain foreign countries.

LEASES

     The Company has entered into long-term leases relating to each of its
existing domestic Units and has entered into leases or letters of intent with
respect to certain of its planned domestic Units. These leases are or will be
non-cancelable by the Company (except in limited circumstances) and have or will
have annual base rents ranging from $200,000 to $1.0 million (except for Leases
related to certain Icon Units). Additional facilities developed by the Company
are likely to be subject to similar long-term leases which are non-cancelable by
the Company. If an existing or future Unit does not perform at a profitable
level, and the decision is made to close the Unit which may be deemed a default
under such Unit's lease, the Company may nonetheless be committed to perform its
obligations under the applicable lease which would include, among other things,
payment of the respective base rent for the balance of the respective lease
term. The leases related to the Downtown Disney Marketplace and Disney's Animal
Kingdom Units are cancelable by the landlord at any time upon sixty days notice
and payment of the Company's unamortized value of leasehold improvements and an
amount equal to the net operating income generated by such Unit for the previous
lease year. With regard to certain of the Company's leases, in the event the
Company fails to achieve specified gross sales by a certain date, such leases
may be terminated by the landlord. If such a termination were to occur at these
locations, the Company would lose a Unit without necessarily receiving an
adequate return on its investment.

DEPENDENCE ON KEY PERSONNEL

     The Company's future success will depend largely on the efforts and
abilities of the Company's senior corporate management. Lyle Berman, the
Company's Chairman and Chief Executive Officer, serves on four boards of public
companies. Mr. Berman devotes approximately 15% of his time to the Company.


ITEM 2.  PROPERTIES

     The Company presently intends to lease the facilities for each of its
Units. It has entered into long-term ten year leases with respect to its
existing and planned Units except for an eleven year lease for the South Coast
Plaza Unit and a fifteen year lease for its downtown Chicago location. The
Company's leases with Disney are cancelable by the landlord at any time upon 60
days notice and payment by Disney of the Company's unamortized value of
leasehold improvements at the Downtown Disney Marketplace Unit or Disney's
Animal Kingdom Unit, respectively, and an amount equal to the net operating
income generated by such Unit for the previous lease year. With regard to the
Tysons Corner Center I and Cherry Creek Mall leases, in the event the Company
fails to achieve specified gross sales by a certain date, the lease may be
terminated by the landlords. The Company's leases typically have annual base
rent, certain common area maintenance expense and percentage rents that range
from 5 to 18 percent depending upon location and volume of sales.



                                       16
<PAGE>   17

     The Company's executive offices are located in Hopkins, Minnesota, under a
lease, which terminates in October, 2003.


ITEM 3.  LEGAL PROCEEDINGS

     The Company is a defendant from time to time in routine lawsuits incidental
to its business, which individually and in the aggregate, are not expected to
have any material adverse effect on the Company. In addition, the company is
party to the following:

SHAREHOLDER CLASS ACTION LITIGATION

     The Company and certain executive officers of the Company are named as
defendants in a purported class action complaint, In Re: Rainforest Cafe, Inc.
Securities Litigation, alleging violations by the Company and such executive
officers of certain Federal securities laws. The complaint was filed on July 31,
1998 and is a consolidation of seven separate actions which were all filed in
the United States District Court for the District of Minnesota. The complaint
alleges that the defendants violated Federal securities laws by making
misrepresentations and omissions regarding the Company's performance and future
prospects during the class period while individually selling the Company's
Common Stock. The complaint purports to seek relief on behalf of a class of
plaintiffs who purchased the Company's Common Stock during the period between
October 20, 1997 and January 6, 1998. The action was dismissed without prejudice
on December 21, 1998. Plaintiffs filed an appeal of the judgement of dismissal
on January 29, 1999 and then filed a motion to voluntarily dismiss the appeal on
March 16, 1999. The Company expects the appeal will be dismissed.

SHAREHOLDER CLASS ACTION LITIGATION

     Luis San Andres, derivatively on behalf of Rainforest Cafe, Inc. vs.
Kenneth W. Brimmer, et al was filed on February 10, 1998 in the United States
District Court for the District of Minnesota. The Luis San Andres complaint
purports to seek relief on behalf of the Company against Kenneth W. Brimmer,
Mark Bartholomay, Gregory C. Carey, Mark S. Robinow, Ercu Ucan, Steven W.
Schussler and Lyle Berman and the Company as a nominal defendant. The complaint
alleges that the defendants breached their respective fiduciary duties to the
Company and were unjustly enriched as a result of certain trading activity. The
action was dismissed with prejudice on December 21, 1998.


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

     No matter was submitted to a vote of the Company's security holders during
the fourth quarter of the fiscal year ended January 3, 1999.




                                       17
<PAGE>   18



                      EXECUTIVE OFFICERS OF THE REGISTRANT

    The following sets forth certain information with respect to each person who
is a director or executive officer of the Company:

    Lyle Berman, age 57 has been Chairman of the Board and Chief Executive
Officer of the Company since its inception in February 1994. Mr. Berman has been
Chairman of the Board of Lakes Gaming since June 1998. Mr. Berman was Chief
Executive Officer of Grand Casinos, Inc. from October 1990 to March, 1998 and
had been Chairman of the Board of Grand Casinos, Inc. and its predecessor since
October 1990. Mr. Berman is also a director of G-III Apparel Group, Innovative
Gaming Corporation of America, New Horizons Kids Quest, Inc., Park Place
Entertainment Corporation and Wilsons-The Leather Experts, Inc. ("Wilsons"). Mr.
Berman was Chief Executive Officer and Chairman of Stratosphere Corporation from
July 1996 through July 1997. Stratosphere Corporation filed for reorganization
under Chapter 11 of the U.S. Bankruptcy Code in January 1997.

    Kenneth Brimmer, age 43 has been President of the Company since April 1997,
a Director of the Company since August, 1998, Treasurer since September 1995 and
involved with the Company in various capacities since its inception. Mr. Brimmer
was employed by Grand Casinos, Inc. and its predecessor from October 1990 to
January, 1998 as Special Assistant to the Chairman and Chief Executive Officer,
Lyle Berman. Mr. Brimmer is also a director of New Horizons Kids Quest, Inc. and
Oxboro Medical International, Inc.

    Steven Schussler, age 42 has been Senior Vice President-Development of the
Company since its inception and a director of the Company since January 1995.
From 1983 to February 1992, Mr. Schussler was an officer of Juke Box Saturday
Night of Minneapolis, Inc. ("JBSN"), a 1950's and 1960's theme restaurant and
nightclub.

    Ercu Ucan, age 43 has been Senior Vice President-Retail of the Company since
its inception and a director of the Company since January 1995. From September
1992 until December 1993, Mr. Ucan served as President of the Orjin Textile
Group in Istanbul, Turkey, a garment factory employing approximately 150
persons. From January 1989 until August 1992, Mr. Ucan served as Director of
Trend Merchandising and Director of Product Development for Wilsons.

    Mark Robinow, age 42 has been Senior Vice President and Chief Financial
Officer since November 1995. From August 1993 to June 1995, Mr. Robinow served
as Senior Vice President and Chief Financial Officer of Edina Realty, Inc., the
country's fourth largest residential real estate brokerage company. From
December 1986 to August 1993, Mr. Robinow served as Chief Financial Officer,
Secretary and Treasurer of Ringer Corporation, a publicly held manufacturer of
natural lawn and garden products for the consumer market. Mr. Robinow is a
certified public accountant.

    Charles Robinson, age 43 has been Senior Vice President - Operations of the
Company since August 1998. Mr. Robinson joined Rainforest Cafe in January 1996
as the Director of Operations for the Downtown Disney Marketplace unit. In
August 1997, he was named Regional Director of Operations for the eastern
division, followed by a promotion to Vice President of International Operations
in December 1997. Mr. Robinson has held executive positions in both the
restaurant and hotel industries. He holds a Bachelor of Science degree in
Restaurant, Hotel and Institutional Management from Purdue University.



                                       18
<PAGE>   19

    Mark Bartholomay, age 39 has been Senior Vice President-International
Development and Operations of the Company since February 1997. From May 1995 to
February 1997 Mr. Bartholomay served as a Vice President and research analyst of
Dain Bosworth Incorporated, an investment banking firm. From April 1993 to May
1995, Mr. Bartholomay was Senior Vice President and Regional Director of
Corporate Finance for Principal Financial Securities, Inc. From February 1992 to
April 1993, Mr. Bartholomay was Vice President and Chief Financial Officer for
Universal International, Inc. Prior to that, Mr. Bartholomay worked in
investment banking from December 1985 to February 1992.


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The inside back cover of the Company's Annual Report to Shareholders for
the fiscal year ended January 3, 1999, is incorporated herein by reference.

     The Company has never paid any cash dividends with respect to its Common
Stock and the current policy of the Board of Directors is to retain any earnings
to provide for the growth of the Company.


ITEM 6.  SELECTED FINANCIAL DATA

     The inside front cover of the Company's Annual Report to Shareholders for
the fiscal year ended January 3, 1999, is incorporated herein by reference.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     Pages 10 through 15 of the Company's Annual Report to Shareholders for the
fiscal year ended January 3, 1999, are incorporated herein by reference.


ITEM 8.  FINANCIAL STATEMENTS

     Pages 16 through 27 of the Company's Annual Report to Shareholders for the
fiscal year ended January 3, 1999, are incorporated herein by reference.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None.



                                       19
<PAGE>   20



                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information beginning immediately following the caption "Election of
Directors" to, but not including, the caption "Executive Compensation" in the
Company's Proxy Statement, to be filed with the Securities and Exchange
Commission within 120 days after the close of the Company's fiscal year ended
January 3, 1999 and forwarded to stockholders prior to the Company's 1999 Annual
Meeting of Shareholders (the "1999 Proxy Statement"), is incorporated herein by
reference.


ITEM 11.  EXECUTIVE COMPENSATION

     The information in the 1999 Proxy Statement beginning immediately following
the caption "Executive Compensation" to, but not including, the caption
"Compensation Committee Interlocks and Insider Participation," is incorporated
herein by reference.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information in the 1999 Proxy Statement beginning immediately following
the caption "Voting Securities and Principal Holders Thereof" to, but not
including, the caption "Election of Directors," is incorporated herein by
reference.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information in the 1999 Proxy Statement under the caption "Certain
Transactions" is incorporated herein by reference.


                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K

     None



                                       20
<PAGE>   21



                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                     RAINFOREST CAFE, INC.
                                        Registrant

Date:   April 2, 1999       By: /s/ Lyle Berman    
                               ---------------------------------------  
                                    Name: Lyle Berman
                                    Title: Chief Executive Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities
indicated on March 30, 1999.


<TABLE>
<CAPTION>



NAME                                                         TITLE
<S>                                                          <C> 
                                                             Chairman  of  the  Board  and  Chief  Executive  Officer
/s/ Lyle Berman                                              (principal executive officer)
------------------------------------------------------------
Lyle Berman

/s/ Kenneth W. Brimmer                                       President, Secretary, Treasurer and Director
------------------------------------------------------------
Kenneth W. Brimmer

/s/ Steven W. Schussler                                      Senior Vice President and Director
------------------------------------------------------------
Steven W. Schussler

/s/ Ercu Ucan                                                Senior Vice President and Director
------------------------------------------------------------
Ercu Ucan

/s/ David L. Rogers                                          Director
------------------------------------------------------------
David L. Rogers

/s/ Joel N. Waller                                           Director
------------------------------------------------------------
Joel N. Waller
                                                             Chief Financial  Officer  (principal  financial  officer
/s/ Mark S. Robinow                                          and principal accounting officer)
------------------------------------------------------------
Mark S. Robinow

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<CAPTION>


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(a)(3)   Exhibits

<S>               <C>
3.1               Articles of Incorporation,  as amended  (Incorporated herein by reference to Exhibit 3.1 of the Company's
                  Registration Statement on Form SB-2, File No. 33-89256C (the "SB-2"))
3.2               By-laws (Incorporated herein by reference as Exhibit 3.2 of the SB-2)
10.1              Lease Agreement by and between Mall of America, Inc. and the Company dated March 31, 1994.  (Incorporated
                  herein by reference as Exhibit 10.1 of the SB-2)
10.2              Lease Agreement by and between the Company and Walt Disney
                  World dated September 6, 1995. (Incorporated herein by
                  reference to Exhibit 10.3 of the Company's Registration
                  Statement on Form S-1, File No.
                  33-99836 (the "S-1"))
10.3              Company's 1995 Stock Option and Compensation Plan.  (Incorporated  herein by reference as Exhibit 10.3 of
                  the SB-2)
10.4              Indemnification  Agreement  dated  April  6,  1995 by and  between  the  Company  and  Steven  Schussler.
                  (Incorporated herein by reference as Exhibit 10.16 of the SB-2)
10.5              Form of Director  Stock  Option  Agreement  dated April 7, 1995.  (Incorporated  herein by  reference  as
                  Exhibit 10.1 of the SB-2)
10.6              Lease  Agreement  by and  between  the Company  and Trump Taj Mahal  Associates  dated  December 6, 1995.
                  (Incorporated herein by reference to Exhibit 10.10 of the S-1)
10.7              Company's 1996 Employee Stock Purchase Plan.  (Incorporated  herein by reference to Exhibit 10.12 of the 
                  Company's Form 10-K for the fiscal year ended December 29, 1996)
10.8              Company's  1997  Director  Stock Option Plan  (Incorporated  herein by reference to Exhibit 10.11 to the 
                  Company's Form 10-K for the fiscal year ended December 28, 1997)
10.9              Company's 1998 Non-Executive Stock Option Plan.
13.               Annual Report to Shareholders for the fiscal year ended January 3, 1999.
21.               Subsidiaries of Company.
27.               Financial Data Schedule.

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(b)  Reports on Form 8-K.

No Current Reports on Form 8-K were filed during the fiscal year ended January
3, 1999.



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