UNITED STATES

                       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 December 25, 1996

                                       OR

    [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 For the transition period from ________ to
                                   ___________

                        Commission file number: 000-28590

                              Fine Host Corporation
             (Exact name of Registrant as specified in its charter)

          Delaware                                              06-1156070
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

    3 Greenwich Office Park
      Greenwich, CT                                                 06831
(Address of principal executive offices)                         (Zip code)

(Registrant's telephone number including area code)            (203) 629-4320


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

Securities registered pursuant to Section 12(g) of the Act:

                                            None

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 ____



<PAGE>



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 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. [ X ]

At March 21, 1997,  the  aggregate  market  value of shares of the  Registrant's
Common  Stock,  $.01 par value (based upon the closing price of $25.00 per share
of  such  stock  on  NASDAQ)  held  by  non-affiliates  of  the  Registrant  was
approximately $194,008,775. Solely, for the purposes of this calculation, shares
held by  directors  and  officers of the  Registrant  have been  excluded.  Such
exclusion should not be deemed a determination or an admission by the Registrant
that such individuals are, in fact, affiliates of the Registrant

The number of shares  outstanding of each of the Registrant's  classes of common
stock, as of the latest practicable date are as follows:

Title                                                        Outstanding

Common Stock, $.01 Par Value                                  8,955,766



                       DOCUMENTS INCORPORATED BY REFERENCE

Incorporated Document                                   Location in Form 10-K

Registrant's definitive proxy
statement for its 1997 annual meeting                           Part III
of stockholders


<PAGE>



                              FINE HOST CORPORATION
                         TABLE OF CONTENTS TO FORM 10-K

Item Number                                                            Page


PART I

   ITEM 1  - BUSINESS.................................................. 1
   ITEM 2  - PROPERTIES................................................ 9
   ITEM 3  - LEGAL PROCEEDINGS......................................... 9
   ITEM 4  - SUBMISSION OF MATTERS TO A VOTE OF
                     SECURITY HOLDERS.................................. 9

PART II

  ITEM 5  - MARKET FOR THE COMPANY'S EQUITY AND RELATE
                    STOCKHOLDER MATTERS................................10
  ITEM 6  - SELECTED FINANCIAL DATA....................................11
  ITEM 7  - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATION.................12
  ITEM 8  - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................18
  ITEM 9  - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                         ACCOUNTING AND FINANCIAL DISCLOSURE...........18

PART III

  ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY............19
  ITEM 11 - EXECUTIVE COMPENSATION.....................................19
  ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                    AND MANAGEMENT.....................................19
  ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............19
  ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
                    ON FORM 8-K........................................20


                                       1

                                     <PAGE>



                                     PART I

ITEM 1 - BUSINESS

General

         Fine  Host  Corporation  (the  "Company")  is a leading  contract  food
service management company, providing food and beverage concession, catering and
other  ancillary  services  at more than 400  facilities  located  in 38 states,
primarily  through  multi-year  contracts.  The Company  targets  four  distinct
markets  within the contract food service  industry:  the recreation and leisure
market (arenas,  stadiums,  amphitheaters,  civic centers and other recreational
facilities);  the convention  center  market;  the education  market  (colleges,
universities  and elementary  and secondary  schools);  and the business  dining
market (corporate  cafeterias,  office complexes and manufacturing  plants). The
Company is the exclusive provider of food and beverage services at substantially
all of the facilities it serves. The Company is a Delaware  corporation,  formed
in November 1985 and its principal  executive offices are located at 3 Greenwich
Office  Park,  Greenwich,  Connecticut  06831.  Its  telephone  number  is (203)
629-4320.

Recent Developments

         The Company completed four acquisitions in the 1996 fiscal year and two
acquisitions  in the first quarter of the 1997 fiscal year.  These  acquisitions
significantly  increased the  Company's  presence in the education and corporate
dining markets in the  southwestern,  southern,  northeastern  and  mid-Atlantic
regions of the United  States.  Five of these  acquisitions,  Sun West Services,
Inc.  ("Sun  West"),  Ideal  Management  Services,   Inc.  ("Ideal"),   Republic
Management Corp. of Massachusetts ("Republic"), Service Dynamics Corp. ("Service
Dynamics") and Serv-Rite Corporation ("Serv-Rite"), have increased the Company's
presence in the school  nutrition  (grades K - 12) market, a market estimated by
the U.S.  government  to be  approximately  $10  billion  in 1995.  The  Company
believes that all of these companies have effective  management teams and strong
operating results at their  facilities,  yet can benefit from the Company's size
and operating infrastructure.

         On June 19, 1996, the Company  completed its initial  public  offering,
including the exercise of the over allotment option granted to the underwriters,
resulting  in net  proceeds  of  approximately  $32.6  million  after  deducting
underwriting  discounts and certain  expenses.  On February 7, 1997, the Company
completed a second public offering, including the exercise of the over allotment
option granted to the  underwriters,  resulting in net proceeds of approximately
$59.1 million after deducting  underwriting  discounts and certain expenses. See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations -- Liquidity and Capital Resources."

Services and Operations

         The Company  provides a wide array of food services,  ranging from food
and  beverage  concessions,  such as hot dogs,  sandwiches,  soda and  beer,  to
sophisticated  catering and fine dining in a formal  setting.  At its convention
center locations, the Company routinely serves banquets attended by thousands of
persons.

         The  Company  is the  exclusive  provider  of  food  and  beverages  at
substantially  all of the  facilities it serves and is  responsible  for hiring,
training and supervising food service personnel

                                        2

<PAGE>



and  ordering,  receiving,  preparing and serving all items of food and beverage
sold. At facilities serviced by the Company, the Company's client is responsible
for  attracting  patrons on an  event-specific  basis at recreation  and leisure
facilities  and  convention  centers and on a continuing  basis at education and
corporate dining facilities. As a result, the Company does not incur the expense
of marketing to the broader public,  and is able to focus on operations,  client
satisfaction, account retention and new account development.

         The Company has developed and implemented various operating  strategies
and systems to quickly and  efficiently  provide  food and  beverages to a large
number of people in a short period of time and in a cost-effective manner.

Clients

         The Company provides  contract food services  principally to recreation
and leisure facilities,  convention centers,  education facilities and corporate
dining  accounts.  As of December 25, 1996, the Company  provided  contract food
service  management  at more than 400  facilities  under 341 written  contracts,
including 30 recreation and leisure, 24 convention center, 111 education and 148
corporate  dining  contracts,  as well as 28  contracts  serving  other types of
facilities.

         Recreation and Leisure Facilities. The Company offers food and beverage
concession  and  catering  services to arenas,  stadiums,  amphitheaters,  civic
centers and other recreational  facilities.  These facilities typically select a
food service  provider on the basis of its ability to generate  increased volume
from concession sales while maintaining high quality and attendee  satisfaction.
The Company believes that, as a result of the growing popularity of minor league
sports,  significant  opportunities  exist at stadiums and arenas at which minor
league  baseball  and hockey teams play.  As of December  25, 1996,  the Company
provided  services to facilities  hosting eight minor league  baseball teams and
seven minor league hockey teams.  The Company  further  believes that more major
college  athletic  programs will seek to outsource food and beverage  concession
operations at on-campus  stadiums and arenas.  Recreation and leisure facilities
served by the Company  presently  include Pro Player  Stadium in Miami,  Florida
(home of the Miami  Dolphins and Florida  Marlins),  Sun Devil Stadium in Tempe,
Arizona  (home of the  Arizona  Cardinals)  and the Great  Woods  Center for the
Performing  Arts  in  Mansfield,   Massachusetts.   The  Company  also  provides
concession  services to  recreation  and  leisure  facilities  at  colleges  and
universities including Arizona State University,  Boise State University and the
University of Minnesota.

         Convention Centers. Food service offered in convention centers consists
primarily of large scale  catering and banquet  functions held in the facility's
ballroom and banquet halls,  catering and concession  services to functions held
in meeting rooms,  and concession  services offered to convention and trade show
attendees.  The Company  believes  that its ability to renew  convention  center
contracts is particularly  significant  because public authorities  choosing the
food  service  provider  put great  emphasis on the level of quality and service
offered.  These  aspects are viewed as critical  factors in the  decision-making
process  of  convention   organizers  and  meeting  planners  when  making  site
selections. The Company believes it is well positioned to gain incremental sales
at existing  convention  centers which are expanding  their banquet and ballroom
capacities,  and to obtain additional contracts at newly constructed  convention
centers.  Major  convention  center clients include the  Albuquerque  Convention
Center in  Albuquerque,  New  Mexico;  the Austin  Convention  Center in Austin,
Texas; the Lawrence  Convention Center in Pittsburgh,  Pennsylvania;  the Orange
County  Convention Center in Orlando,  Florida;  the Oregon Convention Center in
Portland, Oregon; and the Wisconsin Center in Milwaukee, Wisconsin.

                                        3

<PAGE>



         Education.  The  Company  provides  food and  beverage  concession  and
catering services to student  cafeterias,  food courts,  snack bars and clubs at
colleges,  universities  and elementary and secondary  schools.  College student
dining habits have changed  dramatically in recent years,  with students tending
to eat smaller  meals  throughout  the day and evening,  often paying with debit
cards in lieu of cash or traditional  board plans. In response to these changes,
the Company now offers  increased  quality and choices  among food and  beverage
items at educational facilities, including recognized brand name foods served in
education  facilities by the Company's  employees.  The Company has  contractual
arrangements  with Subway  Corporation,  Pizza Hut,  Inc. and Taco Bell Corp. to
offer their  products at various dining  locations at educational  institutions.
The Company  presently  provides  dining  services  to students at colleges  and
universities  including  Morris  Brown  College in  Atlanta,  Georgia;  Mt. Hood
Community  College in  Gresham,  Oregon;  Wayne  State  University  in  Detroit,
Michigan; and Xavier University in New Orleans, Louisiana.

         Business  Dining.  The Company  provides food and beverage  services to
business dining rooms and cafeterias, office complexes and manufacturing plants.
Business dining facilities are increasingly  offering upscale,  quality food and
beverage items and are often subsidized by employers seeking to shorten employee
meal breaks and increase  productivity.  The Company seeks to capitalize on this
trend by  providing  high quality  food and  beverage  service at its  corporate
client dining locations. The Company serves a diversified mix of large corporate
clients,  focusing on more upscale office dining.  Clients include facilities of
Chrysler  Corporation,  General  Motors  Corporation,  Ore-Ida  Foods,  Inc. and
Whirlpool Corporation.

Contracts

         The Company  generally  enters  into one of three  types of  contracts:
profit  and  loss  contracts,   profit  sharing  contracts  and  management  fee
contracts.

         Profit and Loss Contracts  ("P&Ls").  Under P&Ls, the Company  receives
all the  revenues and bears all the expenses of the  operation.  These  expenses
include rent paid to the client,  typically  calculated as a fixed percentage of
various  categories  of sales.  While the Company  often  benefits  from greater
upside potential with a P&L contract, it is responsible for all costs of running
the food  service  operation  and  consequently  bears  greater risk than with a
management fee or profit sharing contract.  As of December 25, 1996, the Company
had 240 P&L contracts.

         Profit Sharing Contracts.  Under profit sharing contracts,  the Company
receives a  percentage  of profits  earned at the  facility  plus a fixed fee or
percentage of sales as an administrative  fee. Under this type of contract,  the
Company does not bear responsibility for losses incurred, if any.
As of December 25, 1996, the Company had 18 profit sharing contracts.

         Management  Fee  Contracts.   Revenues  derived  under  management  fee
contracts  are based upon a fixed fee.  The  Company is  reimbursed  for all its
on-site  expenses  incurred  in  providing  food  and  beverage  services  under
management  fee  contracts.  A number of the Company's  management fee contracts
provide for an  additional  incentive  fee based on a percentage of sales over a
base  threshold  level.  The  benefit  of this type of  contract  is that  risks
associated  with food and beverage  operations at the facility are generally not
borne by the Company. As of December 25, 1996, the Company had 83 management fee
contracts.




                                        4

<PAGE>



         The Company often provides a capital commitment in its bid to win a new
facility  contract.  This  commitment  most  frequently  takes  the  form  of an
investment in food service equipment and leasehold facilities, which upgrade the
facility  itself  and can  increase  the  returns  to both the  Company  and the
facility owner by generating  increased sales.  Occasionally,  the Company makes
loans or advances to the client,  the  proceeds of which are  generally  used to
improve an  existing  facility or to  complete a new  facility.  These loans are
sometimes collateralized by other assets in the facility. When the Company makes
an  investment,  loan or advance to a facility  under either a management fee or
profit sharing  contract,  the amount of the  commitment,  together,  in certain
cases, with interest,  is repaid to the Company out of the revenues generated by
the food service operation in accordance with an amortization schedule set forth
in the contract.  P&L contracts do not require the repayment of invested capital
to the Company during the contract term. All of the Company's  contracts require
the client to reimburse the Company for any unamortized  invested capital in the
event of the expiration or  termination of the contract for any reason,  and the
Company keeps title to the subject  assets until such payment is made.  Invested
capital is usually  amortized over a period of time equal to or greater than the
term  of the  contract.  The  Company  believes  that  its  willingness  to make
selective investments can provide it with a competitive advantage in bidding for
new contracts.  There can be no assurance,  however,  that any such  investments
will enhance returns and not result in losses for the Company.

         The length of contracts varies depending on the type of facility,  type
of contract and  financial  investment.  Contracts  for  recreation  and leisure
facilities  typically include the largest capital  investment by the Company and
generally have a term of three to ten years.  Contracts for  convention  centers
generally have a term of three to five years. Education contracts generally have
a term of one to five years. Corporate dining accounts,  which generally require
the smallest  capital  investment by the Company,  typically have a shorter term
than those in the recreation and leisure, convention center and education areas,
and  generally  contain a  provision  allowing  either  party to  terminate  for
convenience  after a short notice period,  typically ranging from 30 to 90 days.
The Company's  remaining contracts generally have a fixed term and in any fiscal
year a number of these contracts either expire or come up for renewal.

         Certain  municipalities  and  governmental  authorities  require that a
certain percentage of food service contract bids be from  minority-owned  and/or
women-owned  businesses  ("MBEs"  and  "WBEs,"  respectively).  The  Company has
entered  into  joint  ventures  with four  MBEs/WBEs  to operate  facilities  in
Orlando, Florida; Portland, Oregon; Fort Worth, Texas; and Milwaukee, Wisconsin.
It is likely  that the  Company  will be  required  to partner  with  additional
MBEs/WBEs  in the future as a  precondition  to winning  certain  municipal  and
governmental authority facility food service contracts.

Sales and Marketing

         The  Company   selectively  bids  for  both  privately  owned  facility
contracts and contracts awarded by governmental and quasi-governmental agencies.
The privately negotiated  transactions are usually competitive in nature, with a
privately owned facility owner or operator soliciting proposals from the Company
and  several of its  competitors.  These bids  often  require a Company  team to
formulate a rapid response and make a proposal encompassing, among other things,
a capital  investment  and other  financial  terms.  In certain cases, a private
facility owner may choose to negotiate with the Company exclusively for a period
of  time.   Governmental   contracts   are   usually   awarded   pursuant  to  a
request-for-proposal  process.  Bidding  in  publicly  controlled  venues  often
requires  more than a year of effort by a Company  team,  focusing  on  building
meaningful  relationships  in the local  community in which the venue is located
and raising the profile of the

                                        5

<PAGE>



Company name with the decision makers within that community. During this bidding
period,  the Company  expends  substantial  time,  effort and funds  preparing a
contract  proposal  and  negotiating  the  contract.  The  Company's  sales  and
marketing  team  consists of three  senior  sales  executives  and ten sales and
marketing  professionals.  The entire  team is  involved  at  various  stages in
formulating sales proposals and operating plans and negotiating new contracts.

         Members  of the  Company's  sales and  marketing  team  maintain a high
degree of visibility in various  industry trade  associations.  Virtually all of
the  Company's  clients  and  potential   clients  in  facilities   operated  by
governmental  and  quasi-governmental  authorities  are  members of these  trade
groups.  The Company regularly  exhibits at industry trade shows held for and by
groups comprised of recreation and leisure facility  owners,  convention  center
managers  and  representatives  of colleges,  universities  and  elementary  and
secondary  schools.  The Company also advertises on a regular basis in magazines
and periodicals that focus on the public facilities industry.

Competition

         The  Company  encounters  significant  competition  in each area of the
contract  food  service  market in which it  operates.  Food  service  companies
compete for clients on the basis of quality  and service  standards,  innovative
approaches to food service  facilities  design,  maximization of sales and price
(including the making of loans,  advances and  investments in client  facilities
and  equipment).  Competition  may result in price  reductions,  decreased gross
margins and loss of market share.  Certain of the Company's  competitors compete
with the Company on both a national  and  international  basis and have  greater
financial  and other  resources  than the  Company.  In  addition,  existing  or
potential  clients may elect to "self operate"  their food service,  eliminating
the  opportunity  for the  Company to compete for the  account.  There can be no
assurance that the Company will be able to compete successfully in the future or
that  competition  will not have a  material  adverse  effect  on the  Company's
business, financial condition or results of operations.

Employees

         As of December  25,  1996,  the Company  had 1,665  full-time  salaried
employees, including 1,501 in operations, 136 in administration and 28 in sales.
During December 1996,  approximately  7,900 employees were part-time or hired on
an   event-by-event   basis.   The  number  of  part-time   employees  can  vary
significantly  from time to time.  The Company  believes that its future success
will depend in large part upon the  continued  service of its senior  management
personnel and upon the Company's continuing ability to attract and retain highly
qualified  managerial  personnel.  Competition for highly qualified personnel is
intense and there can be no  assurance  that the Company  will be able to retain
its key  managerial  personnel  or that it will be able to  attract  and  retain
additional  managerial  personnel  in  the  future.  Approximately  9.0%  of the
Company's  total  employees  (including  full  and  part-time)  are  covered  by
collective  bargaining  agreements.  The  Company has not  experienced  any work
stoppage and considers its relations with its employees to be satisfactory.  The
Company  has hired and  expects to  continue  to need to hire a large  number of
qualified, temporary workers at particular events.


Government Regulation

         The Company's business is subject to various  governmental  regulations
incidental to its operations,  such as environmental,  employment and health and
safety  regulations.  Since it serves  alcoholic  beverages  at many  convention
centers and recreation and leisure facilities, the Company

                                        6

<PAGE>

also holds liquor licenses  incidental to its contract food service business and
is subject to the liquor license  requirements of the states in which it holds a
liquor  license.  As of December 25, 1996, the Company and its  affiliates  held
liquor licenses in 20 states. While the application  procedures and requirements
for a liquor  license  vary by state,  the  Company has  received  an  alcoholic
beverage  license with respect to each of the  approximately  32 applications it
has  submitted,  and has never had an  alcoholic  beverage  license  revoked  or
suspended.

         Typically,  liquor licenses must be renewed annually and may be revoked
or  suspended  for cause at any time.  Alcoholic  beverage  control  regulations
relate to numerous aspects of the Company's operations, including minimum age of
patrons and employees,  hours of operation,  advertising,  wholesale purchasing,
inventory  control  and  handling,  and  storage  and  dispensing  of  alcoholic
beverages.  The Company has not  encountered any material  problems  relating to
alcoholic  beverage  licenses to date. The failure to receive or retain a liquor
license in a particular location could adversely affect the Company's ability to
obtain such a license elsewhere.

         The Company is subject to  "dram-shop"  statutes in the states in which
facilities are located.  These statutes generally provide a person injured by an
intoxicated  person the right to recover  damages  from an  establishment  which
wrongfully served alcoholic beverages to the intoxicated individual. The Company
carries liquor liability coverage as part of its existing  comprehensive general
liability  insurance which it believes is adequate.  While the Company maintains
such  insurance,  there can be no assurance that such insurance will be adequate
to cover any  potential  liability or that such  insurance  will  continue to be
available on commercially acceptable terms.

         The cost of the Company's compliance with governmental  regulations has
not been material. However, there can be no assurance that additional federal or
state legislation, or changes in regulatory implementation,  would not limit the
activities  of the Company in the future or  significantly  increase the cost of
regulatory compliance.

                 Executive Officers and Directors of the Company

         The executive officers and directors of the Company are as follows:

Name                           Age             Position

Richard E. Kerley (1).......... 55  President, Chief Executive Officer and
                                    Director
Randy B. Spector............... 45  Executive Vice President, Chief 
                                    Administrative Officer and Director
Randall K. Ziegler............. 54  Group President - Convention, Leisure, and
                                    International and Director
Robert F. Barney............... 57  Group President - Education and
                                    Business Dining
Nelson A. Barber............... 41  Senior Vice President and Chief Financial
                                    Officer
Ellen Keats.................... 40  Vice President and General Counsel
Cynthia J. Robbins............. 41  Vice President and Controller
William R. Berkley (1)(2)...... 51  Chairman of the Board of Directors
Ronald E. Blaylock(3).......... 37  Director
Andrew M. Bursky(2)............ 40  Director
Catherine B. James............. 44  Director
Jack H. Nusbaum(3)............. 56  Director
Joshua A. Polan(1)(2)(3)....... 48  Director

(1) Member of Executive Committee.
(2) Member of Compensation Committee
(3) Member of Audit Committee.


                                        7

<PAGE>




         Richard E. Kerley has been the President and Chief Executive Officer of
the Company since 1991. He previously  served as Chief Financial  Officer of the
Company from 1990 to 1991. He has been a director of the Company since 1994. Mr.
Kerley  has 21  years of  experience  in the food  services  industry.  Prior to
joining  the  Company in 1990,  Mr.  Kerley  held a series of senior  management
positions at Ogden Corporation, a contract food service provider, including head
of business development, logistic support and accounting.

         Randy B. Spector has been Chief Administrative Officer and Director of 
the Company since March 1997. He continues to serve as Executive Vice President
of the  Company, a position he has held since  1993.  From  1990 to 1993,  Mr. 
Spector was  Senior  Vice President-Law  and  Corporate  Affairs of the Company.
From 1987 to 1990,Mr. Spector  served as Vice  President  and General  Counsel
of the Company.  Before joining the Company in 1987,  Mr. Spector spent five 
years as Vice President and General Counsel of Dellwood Foods, Inc.,a processor
and distributor of milk and dairy products in the New York City metropolitan 
area.

         Randall K. Ziegler has been Group President - Convention, Leisure and
International of the Company since March 1997.  He previously served as 
Executive  Vice  President - Recreation & Leisure from 1995 to 1997.  Prior to  
that time he served as  President of the Company's  Food  Services  Division
from 1990 to 1995.  From 1985 to 1990,  Mr. Ziegler served as Vice  President-
Sales  of the Company.  Mr. Ziegler has been a director of the Company  since 
1994.  Prior to joining the Company in 1985,  he held a number of senior 
management positions at Service America  Corporation,  a contract food service 
provider, including head of new business development.

         Robert F.  Barney  has been Group President - Education and Business
Dining since March 1997.  He joined the Company as Vice  President- Education  
and Business Dining in 1995 and  became  Executive  Vice  President - Education
and Business  Dining in 1996.  Prior to joining the  Company,  Mr.  Barney  
founded Northwest  Food  Services,  Inc. in 1976,  and served as its President
and Chief Executive Officer until its sale to the Company in 1995.

         Nelson A.  Barber has been Senior Vice  President  and Chief  Financial
Officer of the Company  since 1995.  He  previously  served as  Treasurer of the
Company from 1993 to 1995.  From 1989 to 1993,  Mr.  Barber was Chief  Financial
Officer and Treasurer of GEV Corporation (now known as Pioneer Companies,  Inc.)
and from 1987 to 1989 he was Director of Corporate and International  Accounting
at Combustion Engineering Inc., a diversified industrial services company.

         Ellen Keats has been Vice President and General  Counsel of the Company
since December 1996. She previously  served as Corporate  Counsel of the Company
from 1994 to 1996.  Prior to joining the Company,  from 1993 to 1994,  Ms. Keats
was  General  Counsel  of EIS  International,  Inc.,  a  telecommunications  and
software company in Stamford,  Connecticut.  Prior to such time, Ms. Keats was a
partner with the Greenwich,  Connecticut  law firm of Gilbride,  Tusa,  Last and
Spellane.

     Cynthia  J.  Robbins  has been the Vice  President  and  Controller  of the
Company  since  December  1996.   From  1995  to  1996,  Ms.  Robbins  was  Vice
President-Finance   of  ACI  America  Holdings  Inc.   ("ACI"),   a  diversified
manufacturing  company.  From  1992 to 1995,  Ms.  Robbins  was  Controller  and
Treasurer of ACI. From 1989 to 1992, Ms. Robbins was Vice President, Director of
Accounting for Citicorp POS Information Services, Inc., an information gathering
company.





                                        8

<PAGE>



         William R. Berkley has been  Chairman of the Board of the Company since
1994 and a director of the Company since 1985. He also serves as Chairman of the
Board of several  companies  which he controls or founded.  These  include  W.R.
Berkley  Corporation,   a  property  and  casualty  insurance  holding  company,
Interlaken  Capital,  Inc.  ("Interlaken  Capital"),  a private  investment  and
consulting firm, and Pioneer Companies,  Inc. ("PCI"), a publicly traded company
engaged in the  manufacture  and  marketing  of chlorine  and  caustic  soda and
related products. Mr. Berkley is also a director of Strategic Distribution, Inc.
("Strategic   Distribution"),   a  publicly   traded   industrial   service  and
distribution  business. Mr. Berkley is Vice-Chairman of the Board of Trustees of
the University of Connecticut, a director of Georgetown University, a trustee of
New York  University  and a member  of the  Board of  Overseers  of the New York
University Stern School of Business.

         Ronald E. Blaylock became a director of the Company upon the closing of
the Initial Public  Offering in June 1996.  Mr.  Blaylock has been President and
Chief Executive Officer of Blaylock & Partners, L.P. an investment banking firm,
since he founded  the firm in  September  1993.  Prior to  September  1993,  Mr.
Blaylock was a founding partner and Executive Vice President of Utendahl Capital
Partners,  a  minority-owned  broker  dealer,  where he  specialized  in taxable
fixed-income securities, from 1991 to 1993. Prior to such time, Mr. Blaylock was
a First Vice President at Paine Webber Incorporated from 1988 to 1991 and a Vice
President  at Citibank  Capital  Markets  from 1982 to 1988.  Mr.  Blaylock is a
director of Georgetown  University,  where he was a member of an NCAA Final Four
basketball team, and also serves as a director of Harbourton  Mortgage Corp. and
Covenant House.

     Andrew  M.  Bursky  has been a  director  of the  Company  since  1986.  He
previously  served as Secretary  and Treasurer of the Company from 1985 to 1990.
Mr. Bursky has been a Managing  Director of  Interlaken  Capital since May 1980.
Mr.  Bursky is a director of PCI and has been Chairman of the Board of Strategic
Distribution since July 1988.

     Catherine B. James has been a director of the Company  since 1994.  She
has served as Chief Financial Officer of Strategic  Distribution  since February
1996, as Executive Vice President of Strategic  Distribution  since January 1989
and as Secretary and Treasurer of Strategic  Distribution  since  December 1989.
She has served as a member of the Board of Directors  of Strategic  Distribution
since 1990.  She was Chief  Financial  Officer of  Strategic  Distribution  from
January 1989 until  September  1993.  Ms. James has been a Managing  Director of
Interlaken  Capital since January 1990. From 1982 through 1988, she was employed
by Morgan  Stanley & Co.  Incorporated,  serving as a Managing  Director  in the
corporate finance area during the last two years of her tenure.

     Jack H.  Nusbaum  became a director of the Company  upon the closing of the
Initial  Public  Offering in June 1996.  Mr.  Nusbaum is the Chairman of the New
York law firm of Willkie Farr & Gallagher,  where he has been a partner for more
than twenty-five years. He is also a director of PCI, W.R. Berkley  Corporation,
Strategic Distribution,  Prime Hospitality Corp. and The Topps Company, Inc. Mr.
Nusbaum is also a trustee of Prep for Prep,  the Joseph  Collins  Foundation and
the Robert Steel Foundation.

         Joshua A. Polan has been a director  of the  Company  since  1994.  Mr.
Polan has served as an executive officer of Interlaken  Capital since June 1988,
currently serving as a Managing Director. He has served as a member of the Board
of  Directors  of Strategic  Distribution  since 1988.  For more than five years
prior to June 1988,  Mr.  Polan was a partner in the  accounting  firm of Touche
Ross & Co.





                                        9

<PAGE>


ITEM 2 - PROPERTIES

         The Company leases its corporate headquarters in Greenwich, Connecticut
pursuant to a lease expiring in June 2004. The Company also maintains accounting
processing centers in Toledo,  Ohio and Tempe,  Arizona.  The Company leases the
space for each of these  facilities.  The Company  believes that the  properties
which are  currently  under lease are adequate to serve the  Company's  business
operations  for the  foreseeable  future.  The Company  believes that if it were
unable to renew the lease on any of these facilities,  other suitable facilities
would be available to meet the Company's needs.


ITEM 3 - LEGAL PROCEEDINGS

         In January 1996,  the Company was served with a complaint  naming it as
one of five  defendants in a lawsuit  brought by multiple  plaintiffs in the New
York State  Supreme  Court  alleging  damages  arising out of the  Woodstock  II
Festival  held in August  1994 in  Saugerties,  New York.  The  promoter  of the
festival is also a defendant.  According to the complaint,  the plaintiffs  were
hired by the Company (which had a concession  agreement with the promoter of the
festival) as  subcontractors  of food,  beverage  and/or  merchandise.  In their
complaint, which seeks approximately $5.9 million, the plaintiffs allege damages
arising  primarily  from the failure to provide  adequate  security  and prevent
festival  attendees  from bringing  food and  beverages in to the festival.  The
Company has made claim for  indemnification  under applicable  provisions of the
concession agreement, which has been rejected by the promoter. On April 4, 1996,
the other  defendants  named in the suit  answered  the  complaint  and asserted
cross-claims  for  contribution   and   indemnification   against  the  Company.
Thereafter,  the Company  cross-claimed  for  contribution  and  indemnification
against a co-defendant.

         The  Company  has also sued a former  client in the  Jefferson  Circuit
Court of the  Commonwealth  of Kentucky  for certain  amounts owed by the former
client  under the food  service  contract  between the  parties,  and the former
client has filed a counterclaim  against the Company seeking unspecified damages
for the Company's alleged tortuous  interference with a prospective  contractual
relationship with another food service provider.

         The Company is involved in certain other legal  proceedings  incidental
to the normal  conduct of its  business.  The Company  does not believe that any
liabilities  relating to any of the legal proceedings to which it is a party are
likely to be,  individually  or in the aggregate,  material to its  consolidated
financial position or results of operations.


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

         Not applicable.

                                       10

<PAGE>



PART II

ITEM 5     -  MARKET FOR THE COMPANY'S EQUITY AND RELATED STOCKHOLDER MATTERS
------        ---------------------------------------------------------------

Market Information

         The Common  Stock has been quoted on the Nasdaq  National  Market under
the symbol "FINE" since the initial public offering on June 19, 1996.

         The  following  table  sets  forth the high and low sale  prices of the
Common Stock on the Nasdaq National Market for the periods indicated.


                                                         High         Low
Fiscal Year Ended December 25, 1996:
   Second Quarter (beginning June 19, 1996).......      $12.25      $10.75
   Third Quarter..................................       16.25       10.50
   Fourth Quarter.................................       19.25       14.00


Number of Stockholders

         As of March 21, 1997, there were  approximately 39 holders of record of
the Company's Common Stock.

Dividend Policy

         The  Company  has never paid cash  dividends  on its  Common  Stock and
presently  does not intend to declare any cash  dividends on the Common Stock in
the  foreseeable  future.  It is the current  policy of the  Company's  Board of
Directors  to retain  earnings to finance the  operations  and  expansion of the
Company's business. In addition, the Company's restated bank agreement restricts
the  Company's  ability  to pay  dividends  to its  stockholders  so long as any
borrowings  remain  outstanding  under such agreement and it is anticipated that
future financing agreements will have similar restrictions.


                                       11

<PAGE>



ITEM 6 - SELECTED FINANCIAL DATA

                       Summary Consolidated Financial Data
                  (dollars in thousands except per share data)
                                                  Fiscal Years (1)


                                1996      1995      1994       1993      1992
                                ----      ----      ----       ----      ----

Statement of Income Data:
Net sales...................  $127,925   $95,462   $82,119   $61,212   $39,429
Gross profit................    14,222     9,886     8,286     5,396     4,031
Income from operations......     8,834     6,260     4,880     2,747       949
Net income..................    $3,804    $2,196    $1,866    $1,084      $340
Net income per share
 assuming full dilution (2)    $  0.50     $0.39     $0.49     $0.24     $0.17
Average number of shares of
   Common Stock
   outstanding assuming full
   dilution.................     5,005     3,330     3,287     3,087     2,048
Selected Operating Data:
EBITDA (3)..................   $14,078   $10,416    $7,563    $4,631    $2,154
Net cash provided by
   operating activities.....        34     2,971     2,570     3,765     1,676
Net cash used in investing
   activities...............   (25,875)   (8,124)   (9,046)   (7,669)   (2,295)
Net cash provided by
   financing activities.....    29,619     4,255     7,632     2,737       463
Total contracts (at end of
   period) (4)..............       341        95        81        42        28
Balance Sheet Data (at end
of period):
Working capital
(deficit)                   $    4,578  $ (4,499)  $(4,056)  $   (33)   $  843
Total assets                   117,443    60,581    53,153    29,174    19,938
Total debt                      39,621    28,931    25,518    13,358    10,759
Stockholders' equity            46,772    11,382     8,586     6,970     2,726

(1) The Company's  fiscal year ends on the last Wednesday of December.  The 1992
fiscal year was a 53-week period.

(2) Net income (loss) per share assuming full dilution is calculated  based upon
net income less accretion to the redemption  value of warrants  issued in fiscal
1993.  Accretion to  redemption  value of warrants was $1,300 ($0.26 per share),
$900  ($0.27 per  share),  $250 ($0.08 per share) and $230 ($0.07 per share) for
fiscal 1996, 1995, 1994 and 1993, respectively.

(3)  Represents  earnings  before  interest  expense,  income  tax  expense  and
depreciation  and  amortization  ("EBITDA").  EBITDA  is  not a  measurement  in
accordance with generally accepted accounting principles ("GAAP") and should not
be  considered  an  alternative  to,  or  more  meaningful  than,   income  from
operations,  net  income or cash flows as defined by GAAP or as a measure of the
Company's  profitability  or  liquidity.  The Company has  included  information
concerning  EBITDA herein because  management  believes  EBITDA  provides useful
information  regarding  the cash flow of the  Company and its ability to service
debt.

(4)  Represents  total  contracts  other than  contracts for one-time or special
events.


                                                      12

<PAGE>



ITEM 7     -      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATION
Overview

     The Company  was formed in 1985 and has grown to become a leading  provider
of food and beverage  concession,  catering and ancillary  services to more than
400 facilities in 38 states.  The Company  targets four distinct  markets within
the  contract  food  service   industry:   the  recreation  and  leisure  market
("Recreation  and Leisure"),  serving  arenas,  stadiums,  amphitheaters,  civic
centers  and  other  recreational  facilities;   the  convention  center  market
("Convention   Centers");   the   educational  and  school   nutrition   markets
("Education"), which the Company entered in 1994, serving colleges, universities
and since 1996, elementary and secondary schools; and the business dining market
("Business  Dining"),  which the  Company  entered  in 1994,  serving  corporate
cafeterias, office complexes and manufacturing plants.

     A significant portion of the Company's growth to date has been derived from
acquisitions.  From April 1993 through December 1996, the Company acquired seven
companies.  In April 1993, the Company acquired  Fanfare,  Inc., which primarily
serves  recreation  and  leisure  facilities.  In  September  1994,  the Company
acquired  Creative Food Management,  Inc., which serves the Education,  Business
Dining and Recreation and Leisure  markets.  In July 1995, the Company  acquired
Northwest  Food Service,  Inc.  which serves the  Education and Business  Dining
markets.  The Company  acquired Sun West in March 1996,  Ideal in July 1996, PCS
Holding Corporation  (formerly known as HCS Management  Corporation)  ("PCS") in
November 1996 and Republic in December 1996 for an aggregate  purchase  price of
approximately  $23.4 million.  In the beginning of the first quarter of the 1997
fiscal year, the Company acquired two additional companies. On December 30, 1996
the Company acquired Service Dynamics for a purchase price of approximately $3.0
million. On January 23, 1997 the Company acquired Serv-Rite for a purchase price
of  approximately  $7.5  million.  The Company is in the process of  eliminating
certain  redundant  operations  through  closings of offices and  termination of
excess personnel from certain of the companies acquired in 1996 and 1997.

     The matters  discussed in this Report  contain  forward-looking  statements
which involve risks relating to future events and uncertainties  associated with
the food service  industry.  The  Company's  actual events or results may differ
materially from the results discussed in the forward looking  statements.  These
risks  are  detailed  from  time to  time  in the  Company's  filings  with  the
Securities and Exchange Commission.

Results of Operations

     The  following  table  sets  forth,  for  the  periods  indicated,  certain
financial data as a percentage of the Company's net sales:

                                                    Fiscal Years
                                         1996          1995            1994
                                         -----        -----           -----

Net Sales................................100.0%       100.0%          100.0%
Cost of Sales............................ 88.9         89.6            89.9
                                         -----        -----           -----
Gross Profit............................. 11.1         10.4            10.1
General and administrative expenses......   4.2         3.8             4.1
                                         ------      ------          ------
Income from operations...................   6.9         6.6             6.0
Interest expense, net....................   1.8         2.6             2.0
                                         ------      ------          ------
Income before tax provision .............   5.1         4.0             4.0
Tax provision............................   2.1         1.7             1.7
                                         ------      ------          ------
Net income before warrant accretion......   3.0%        2.3%            2.3%
                                         ======      ======          ======


                                       13

<PAGE>




     The  following  table sets forth net sales  attributable  to the  Company's
principal  operating  markets,  expressed  in dollars  (in  thousands)  and as a
percentage of total net sales:

                                             Fiscal Years

                                   1996               1995            1994
                            ---------------      -------------   -------------

Recreation and Leisure.....  $40,897   32.0%   $42,657   44.7% $45,773   55.7%
Convention Centers.........   42,585   33.3     34,746   36.4   30,443   37.1
Education..................   26,109   20.4      8,902    9.3   2,715     3.3
Business Dining............   18,334   14.3      9,157    9.6   3,188     3.9
                            --------   ----     ------  -----   ------   -----
   Total................... $127,925  100.0%   $95,462  100.0%  $82,119 100.0%
                            ========  =====    =======  =====   ======= ======

Fiscal 1996 Compared to Fiscal 1995

     Net Sales.  The  Company's  net sales  increased  34% to $127.9  million in
fiscal 1996 from $95.5  million in fiscal  1995.  Net sales  increased in fiscal
1996 in all market areas except  Recreation and Leisure.  Recreation and Leisure
net sales decreased 4% in fiscal 1996 as compared to fiscal 1995,  primarily due
to a decrease in attendance at the Florida  Marlins major league  baseball games
and the decision by a private tenant of one of the Company's  clients to build a
new facility  and self operate its food  service.  This  decrease was  partially
offset by new contracts signed with the Concord Pavilion in Concord,  California
and the Coral Sky  Amphitheater  in West Palm  Beach,  Florida.  Net sales  from
Convention  Centers  increased  23% in fiscal  1996 as  compared  to fiscal 1995
primarily as a result of increased sales from existing contracts,  including the
Orange County  Convention  Center in Orlando,  Florida,  the Monroe Civic Center
Complex in Monroe, Louisiana, the D.L. Lawrence Convention Center in Pittsburgh,
Pennsylvania and the Albuquerque Convention Center in New Mexico. Net sales from
Education  and Business  Dining more than  doubled  primarily as a result of the
acquisitions of Sun West in March 1996, Ideal in July 1996, PCS in November 1996
and Republic in December  1996, as well as the impact of new  contracts  such as
Boise  State  University  in Boise,  Idaho and St.  Edward's  College in Austin,
Texas.

     Gross Profit.  Gross profit as a percentage of net sales increased to 11.1%
in fiscal  1996 from 10.4% in fiscal  1995.  This  increase is  attributable  to
purchasing  efficiencies  gained  from  an  expanded  base of  business  and the
contribution of new contacts and acquisitions.

     General and Administrative  Expenses.  General and administrative  expenses
increased  to $5.4  million  (or 4.2% of net  sales)  in  fiscal  1996 from $3.6
million (or 3.8% of net sales) in fiscal 1995.  This  increase was  attributable
primarily to the Company's continued  investment in training programs,  regional
management  and  additional  sales  personnel  to support its current and future
growth plans.

     Operating  Income.  Operating  income  increased  41%, from $6.3 million in
fiscal 1995 to $8.8 million in fiscal 1996,  primarily for the reasons mentioned
above.

     Interest Expense.  Interest expense decreased  approximately  $149,000, due
primarily to a reduction in debt levels  resulting from the repayment of certain
obligations  under the Company's  credit facility with the net proceeds from the
initial public offering, as well as the repayment of subordinated debt.





                                       14

<PAGE>



Fiscal 1995 Compared to Fiscal 1994

     Net Sales.  The Company's net sales  increased  16.2% from $82.1 million in
fiscal 1994 to $95.5 million in fiscal 1995. Net sales  increased in fiscal 1995
in all markets areas, except Recreation and Leisure.  Recreation and Leisure net
sales  decreased 6.8% in fiscal 1995 as compared to fiscal 1994,  primarily from
the continued effects of the Major League Baseball lock-out as well as a decline
in attendance at Florida Marlins games,  partially  offset by the effects of new
contracts signed in 1994 and 1995. The Company's  contract at Pro Player Stadium
in Miami,  Florida,  the home of the Miami  Dolphins  and the  Florida  Marlins,
accounted  for $13.0  million  of net sales in fiscal  1995,  compared  to $16.0
million in fiscal 1994. Net sales from  Convention  Centers  increased  14.1% in
fiscal 1995 as compared to fiscal 1994 primarily as a result of increased  sales
from existing  contracts  and the impact of new contracts  signed in 1994 and in
1995. Net sales from Education and Business  Dining  increased in fiscal 1995 as
compared to fiscal  1994,  primarily  as a result of the full year impact of the
acquisition of Creative and the impact of the acquisition of Northwest.

     Gross Profit.  Gross profit as a percentage of net sales increased to 10.4%
in fiscal 1995 from 10.1% in fiscal 1994 primarily  attributable  to the benefit
of continued  economies of scale from national  purchasing  programs,  effective
labor cost controls and an increase in management fee contracts.

     General and Administrative  Expenses.  General and administrative  expenses
increased  from $3.4  million  (or 4.1% of net  sales)  in  fiscal  1994 to $3.6
million  (or  3.8% of net  sales)  in  fiscal  1995.  The  dollar  increase  was
attributable  primarily to the increase in clerical support for new accounts and
acquisitions.  The percentage  decrease  resulted from a proportionally  greater
increase in net sales relative to general and administrative expenses.

     Operating  Income.  Operating income increased 28.3%,  from $4.9 million in
fiscal 1994 to $6.3 million in fiscal 1995,  primarily for the reasons mentioned
above.

     Interest Expense.  Interest expense increased  approximately  $850,000, due
primarily to increased  debt levels to finance  investments  in new accounts and
acquisitions  as well as an  increase  in the  prime  rate and the  reset of the
interest rate on its variable rate subordinated notes from 9.8% to 12.79%.

Quarterly Results of Operations

     The  Company's  net sales and  operating  results vary  significantly  from
quarter to quarter as a result of seasonal patterns, the unpredictability in the
number, timing and type of new contracts, the timing of contract expirations and
special  one-time  events  at  facilities  served  by the  Company.  Results  of
operations  for any  particular  quarter  may not be  indicative  of  results of
operations for future  periods.  There can be no assurance that future  seasonal
and  quarterly  fluctuations  will not have a  material  adverse  effect  on the
Company's business, financial condition and results of operations.

     The  following  table sets forth  unaudited  selected  consolidated  income
statement  data for the periods  indicated,  as well as such data expressed as a
percentage of net sales for the same periods.  This information has been derived
from  unaudited  consolidated  financial  statements  and,  in  the  opinion  of
management,  includes  all  adjustments  (consisting  only of  normal  recurring
adjustments) necessary for a fair presentation of such information.




                                       15

<PAGE>
<TABLE>


<CAPTION>



                                                               Fiscal Quarters Ended
                                                  1996                                       1995
                                 -------------------------------------       ----------------------------------
                                 First     Second    Third     Fourth        First      Second   Third   Fourth
                                                                   (in thousands)
<S>                             <C>        <C>        <C>       <C>         <C>         <C>      <C>      <C>
Net sales..................    $24,160    $25,803    $37,272   $40,690     $23,429     $20,090  $26,340  $25,603
Cost of sales..............     21,630     23,390     32,766    35,918      21,295      18,422   23,002   22,857
                                ------    -------     ------    ------      ------      ------   ------   ------
Gross profit...............      2,530      2,413      4,506     4,772       2,134       1,668    3,338    2,746
General and administrative
   expenses................      1,336      1,241      1,467     1,344       1,090         923      870      743
                                ------     ------     ------    ------       -----      ------   ------   ------
Income from operations.....      1,194      1,172      3,039     3,428       1,044         745    2,468    2,003
Interest expense, net......        767        755        496       312         696         633      642      508
                                ------     ------     ------    ------       -----      ------   ------   ------
Income before tax
   provision...............        427        417      2,543     3,116         348         112    1,826    1,495
Tax provision..............        168        167      1,144     1,221         140          38      781      626
                                ------     ------     ------    ------       -----      ------   ------   ------
Net income before warrant
accretion..................      $ 259     $  250     $1,399    $1,895      $  208       $  74  $ 1,045   $  869
                                 =====     ======     ======    ======      ======       =====   ======   ======

                                           (as a percentage of net sales)
Net sales..................      100.0%     100.0%    100.0%     100.0%      100.0%      100.0%   100.0%  100.0%
Cost of sales..............       89.5       90.6      87.9       88.3        90.9        91.7     87.3    89.3
                                 -----      ------    ------     ------      ------      ------   ------  ------
Gross profit...............       10.5        9.4      12.1       11.7         9.1         8.3     12.7    10.7
General and administrative
    expenses...............        5.5        4.9       3.9        3.3         4.6         4.6      3.3     2.9
                                 -----      ------    ------     ------      ------      ------   ------   -----
Income from operations.....        5.0        4.5       8.2        8.4         4.5         3.7      9.4     7.8
Interest expense, net......        3.2        2.9       1.3         .8         3.0         3.2      2.5     2.0
                                 -----      ------    ------     ------      ------      ------   ------   -----
Income before tax provision.       1.8        1.6       6.9        7.6         1.5         0.5      6.9     5.8
Tax provision...............        .7         .6       3.1        3.0         0.6         0.2      3.0     2.4
                                 -----      ------    ------     ------      ------      ------   ------   -----
Net income before warrant
accretion...................       1.1%       1.0%      3.8%       4.6%        0.9%        0.3%     3.9%    3.4%
                                 ======     ======    ======     ======      ======      ======   ======   =====
</TABLE>

Liquidity and Capital Resources

     The Company  has funded its  capital  requirements  from a  combination  of
operating  cash  flow and debt  and  equity  financing.  Net  cash  provided  by
operating  activities  was $346,  $3.0  million and $2.6 million in fiscal 1996,
1995 and 1994,  respectively.  The  increase in net cash  provided by  operating
activities in fiscal 1996 was  attributable  primarily to the improvement in the
Company's net income.

     EBITDA was $14.1  million,  $10.4  million and $7.6 million in fiscal 1996,
1995 and 1994, respectively. EBITDA represents earnings before interest expense,
income tax expense  and  depreciation  and  amortization.  EBITDA is not a  
measurement  in accordance  with GAAP and should not be  considered an  
alternative  to, or more meaningful than, income from operations,  net income 
or cash flows as defined by GAAP or as a measure of the Company's profitability
or liquidity.  The Company has included  information  concerning EBITDA herein
because management  believes EBITDA  provides useful  information regarding the
cash flow of the Company and its ability to service debt.  EBITDA  information 
should be read in conjunction with the  Consolidated  Statements of Cash Flows
of the Company included in the consolidated financial statements of the Company.


                                       16

<PAGE>




     Cash flows used in investing activities was $25.9 million, $8.1 million and
$9.0 million in fiscal 1996, 1995 and 1994,  respectively.  In fiscal 1996, 1995
and 1994, $8.5 million,  $3.3 million and $6.3 million,  respectively,  was used
for  additions to fixtures and  equipment.  In 1994,  the Company made  advances
aggregating  $2.3 million to two clients in  accordance  with their food service
contracts.

     A significant portion of the Company's growth to date has been derived from
acquisitions.  From April 1993 through  December  1996, the Company has acquired
seven  companies.  In April 1993,  the Company  acquired  Fanfare,  Inc.,  which
primarily  serves  recreation  and leisure  facilities.  In September  1994, the
Company  acquired  Creative Food  Management,  Inc., which serves the Education,
Corporate Dining and Recreation and Leisure  markets.  In July 1995, the Company
acquired  Northwest  Food Service,  Inc. which serves the Education and Business
Dining markets. The Company acquired Sun West in March 1996, Ideal in July 1996,
PCS in November  1996 and Republic in December  1996 for an  aggregate  purchase
price of approximately  $23.4 million.  In the beginning of the first quarter of
the 1997 fiscal year, the Company acquired two additional companies. On December
31,  1996  the  Company  acquired  Service  Dynamics  for a  purchase  price  of
approximately  $3.0 million.  On January 22, 1997 the Company acquired Serv-Rite
for a purchase price of approximately  $7.5 million.  The Company is eliminating
certain  redundant  operations  through  closings of offices and  termination of
excess personnel relating to these acquisitions.  The Company's acquisitions are
generally  financed  through  cash from working  capital and from the  Company's
credit facility and occasionally through the issuance of subordinated promissory
notes to the sellers.

   On June 19, 1996,  the Company  completed  its Initial  Public  Offering (the
"IPO"), resulting in net proceeds of approximately $32.6 million after deducting
underwriting  discounts and certain expenses.  The IPO net proceeds were used to
repay obligations under the Company's credit facility in effect prior to the IPO
and  subordinated  notes,  as well as to repurchase  certain  warrants;  and the
remainder  was used for general  corporate  purposes.  On February 7, 1997,  the
Company completed a second offering (the "Follow-On Offering"), resulting in net
proceeds  to  the  Company  of  approximately   $59.1  million  after  deducting
underwriting  discounts  and certain  expenses.  The  proceeds of the  Follow-On
Offering  were used to repay  obligations  under  the  Restated  Bank  Agreement
(described below) and for general working capital purposes.

      In connection  with the Company's IPO, the Company's  credit  facility was
amended and  restated on June 19, 1996 ( the  "Restated  Bank  Agreement").  The
Restated Bank Agreement provides for (i) a working capital revolving credit line
for general  obligations and letters of credit,  in the maximum aggregate amount
of $20.0  million  (the  "Working  Capital  Line")  and (ii) a line of credit to
provide for future  expansion  by the  Company,  in the maximum  amount of $55.0
million (the  "Guidance  Line").  The Working  Capital Line  provides  funds for
liquidity,  seasonal borrowing needs and other general corporate  purposes.  The
Guidance  Line  is  available  to  fund  the  Company's   acquisitions  and  for
investments  made in  connection  with  obtaining  new  contracts.  The  maximum
aggregate  allowable  borrowings  under the  Restated  Bank  Agreement  is $75.0
million. The Restated Bank Agreement terminates on April 30, 1999.

      The Company is often  required to provide a capital  commitment in its bid
to win a new facility contract.  This commitment most often takes the form of an
investment in food service  equipment and leasehold  facilities,  which upgrades
the  facility  itself  and can  increase  the  returns to both Fine Host and the
facility owner by generating  increased sales.  Occasionally,  the Company makes
loans or advances to the client,  the  proceeds of which are  generally  used to
improve an  existing  facility or to  complete a new  facility.  These loans are
sometimes collateralized by other assets in the facility. When the Company makes
an  investment,  loan or advance to a facility  under either a profit sharing or
management  fee contract,  the amount of the  commitment,  together,  in certain
cases, with interest,  is repaid to the Company out of the revenues generated by
the food service operation in accordance with an amortization schedule set forth
in the contract.  The Company's capital  expenditures and other costs associated
with obtaining and retaining contracts totaled

                                       17

<PAGE>



$6.3 million, $6.8 million and $8.8 million in fiscal 1996, 1995 and 1994.

      At December 25, 1996, the Company's  current  assets  exceeded its current
liabilities, resulting in a working capital surplus of $4.6 million. The surplus
is the  result of the fact that the  markets  in which the  recent  acquisitions
operate  (Education and Business Dining) generally invest in shorter term assets
(accounts  receivable)  as  compared  to the  Company's  Recreation  and Leisure
business which generally invest in longer term assets (fixtures and equipment).

        The Company believes that the proceeds of the Follow-On Offering,  funds
expected  to be  generated  from  operations  and  amounts  available  under the
Restated Bank  Agreement  will be  sufficient  to satisfy the Company's  capital
requirements for at least the next twelve months.

Inflation

     The Company  believes that  inflation has not had a material  effect on its
results of operations.

Seasonality

             The Company's  business is seasonal in nature.  Many Recreation and
Leisure facilities experience slack periods in March, April and May due to fewer
sporting  events  in these  months.  Convention  Centers  generally  host  fewer
conventions from May through September and Education  facilities are slow during
July and August.  Among other things,  the Company adjusts its labor  scheduling
and staffing to compensate for these fluctuations.






                                       18

<PAGE>




ITEM 8 -         FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  See index to the financial statements included in Item 14.


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

                          None.





                                       18

<PAGE>



                                    PART III


ITEM 10 -         DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
-------           -----------------------------------------------

         See  Part  I,  Item  1.  "Executive  Officers  of the  Company."  Other
information  required by this item is incorporated by reference to the Company's
definitive proxy statement to be filed not later than April 18, 1997 pursuant to
Regulation 14A of the General Rules and Regulations ("Regulation 14A") under the
Securities Exchange Act of 1934, as amended.

ITEM 11 -          EXECUTIVE COMPENSATION
-------            ----------------------

         The  information  required by this item is incorporated by reference to
the Company's  definitive  proxy  statement to be filed not later than April 18,
1997 pursuant to Regulation 14A.

ITEM 12 -          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
-------            ---------------------------------------------------
                   MANAGEMENT
                   ----------

         The  information  required by this item is incorporated by reference to
the Company's  definitive  proxy  statement to be filed not later than April 18,
1997 pursuant to Regulation 14A.

ITEM 13 -          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------            ----------------------------------------------

         The  information  required by this item is incorporated by reference to
the Company's  definitive  proxy  statement to be filed not later than April 18,
1997 pursuant to Regulation 14A.




                                       19

<PAGE>




                                     PART IV


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

(a)(1)  Financial Statements

                          INDEX TO FINANCIAL STATEMENTS

                                                                          Page

Independent Auditors' Report...............................................F-2
Consolidated Balance Sheets as of December 25,1996
     and December 27, 1995.................................................F-3
Consolidated Statements of Income for the fiscal years ended
     December 25, 1996, December 27, 1995 and December 28, 1994............F-4
Consolidated Statements of Stockholders' Equity for the fiscal years
     ended December 25, 1996, December 27, 1995 and December 28, 1994......F-5
Consolidated Statements of Cash Flows for the fiscal years ended
     December 25, 1996, December 27, 1995 and December 28, 1994............F-6
Notes to Consolidated Financial Statements.................................F-7




                                       F-1

<PAGE>



                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of
  FINE HOST CORPORATION

     We have audited the accompanying  consolidated  balance sheets of Fine Host
Corporation  and  subsidiaries  (the  "Company")  as of  December  25,  1996 and
December 27, 1995,  and the  consolidated  statements  of income,  stockholders'
equity and cash flows for each of the three years in the period  ended  December
25, 1996. These consolidated  financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

    We conducted  our audits in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  such consolidated  financial statements present fairly, in
all material  respects,  the  financial  position of Fine Host  Corporation  and
subsidiaries  as of December  25, 1996 and  December 27, 1995 and the results of
their  operations and their cash flows for each of the three years in the period
ended  December  25,  1996 in  conformity  with  generally  accepted  accounting
principles.



Deloitte & Touche LLP
New York, New York
February 28, 1997




                                       F-2

<PAGE>



                     FINE HOST CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)


                                            December 25, 1996  December 27, 1995
                                             ----------------- -----------------
                              ASSETS
Current assets:
 Cash and cash equivalents....................   $   4,724            $   634
 Accounts receivable..........................      14,580              7,548
 Inventories..................................       3,260              2,099
 Prepaid expenses and other current assets....       3,749              2,413
                                                ----------             ------
    Total current assets......................      26,313             12,694
Contract rights, net..........................      22,869             12,866
Fixtures and equipment, net...................      24,057             15,829
Excess of cost over fair value of net assets
   acquired, net..............................      34,362             13,406
Other assets..................................       9,842              5,786
                                                 ---------           --------
   Total assets...............................    $117,443            $60,581
                                                  ========            =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable and accrued expenses........     $18,690            $12,467
 Current portion of long-term debt............     -----                2,981
 Current portion of subordinated debt.........       3,045              1,745
                                                 ---------           --------
     Total current liabilities  ..............      21,735             17,193
Deferred income taxes.........................      12,360              6,421
Long-term debt................................      31,562             15,326
Subordinated debt.............................       5,014              8,879
                                                 ---------            -------
    Total liabilities.........................      70,671             47,819

Commitments and contingencies

Stock warrants................................           -              1,380

Stockholders' equity:
   Convertible Preferred Stock, $.01 par value,
   250,000 shares authorized, 0 and 134,171
   issued and outstanding at December 25, 1996
   ans December 27, 1995, respectively........           -                  1
   Common Stock, $.01 par value, 25,000,000
   shares authorized, 6,212,016 and 2,048,200
   issued and outstanding at December 25, 1996
   and December 27, 1995, respectively.........         62                 20
 Additional paid-in-capital....................     41,778              8,933
 Retained earnings.............................      5,121              2,617
 Receivables from stockholders for purchase of
      Common Stock.............................       (189)              (189)
                                                   --------           -------
      Total stockholders' equity...............     46,772             11,382
                                                   --------           -------
       Total liabilities and stockholders'equity. $117,443            $60,581
                                                   ========           =======


                See accompanying notes to consolidated financial
                                  statements.


                                       F-3

<PAGE>



                                       FINE HOST CORPORATION AND SUBSIDIARIES
                                         CONSOLIDATED STATEMENTS OF INCOME
                                       (in thousands, except per share data)

                                                        Fiscal Years Ended
                                         December 25, December 27,  December 28,
                                             1996         1995          1994
                                         ------------  -----------  ------------

Net sales.................................. $127,925  $    95,462    $   82,119
Cost of sales..............................  113,703       85,576        73,833
                                             -------      -------        ------
Gross profit...............................   14,222        9,886         8,286
General and administrative expenses........    5,388        3,626         3,406
                                             -------       ------        ------
Income from operations.....................    8,834        6,260         4,880
Interest expense, net......................    2,330        2,479         1,629
                                             -------       ------        ------
Income before tax provision ..............     6,504        3,781         3,251
Tax provision..............................    2,700        1,585         1,385
                                             -------       ------        ------
Net income.................................    3,804        2,196         1,866
Accretion to redemption value of warrants..   (1,300)        (900)         (250)
                                             -------       ------        ------
Net income available to Common Stockholders   $2,504       $1,296        $1,616
                                             =======       ======        ======

Earnings per share of Common Stock.........   $  .51     $    .39        $  .50
                                             =======     ========        ======
Average number of shares of Common Stock
  outstanding..............................    4,929        3,307         3,230
                                             =======       ======        ======

Earnings per share assuming full dilution..  $   .50       $  .39       $   .49
                                              ======      =======        ======
Average number of shares of Common Stock
  outstanding assuming full dilution.......    5,005        3,330         3,287
                                              ======      =======        ======






                See accompanying notes to consolidated financial
                                  statements



                                       F-4

<PAGE>

<TABLE>
<CAPTION>


                     FINE HOST CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        (in thousands, except share data)


                                                                                                        Receivables
                                                                                                           from
                                                                                                        Stockholders
                                                                                                            for
                                            Convertible                       Additional    Retained    Purchase of      Total
                                        Preferred Stock      Common  Stock      Paid in     Earnings       Common     Stockholders'
                                        Shares   Amount   Shares     Amount     Capital     (Deficit)       Stock        Equity
                                        -------------------------------------------------------------------------------------------
<S>                                     <C>       <C>    <C>          <C>     <C>            <C>           <C>          <C>


Balance, December 29, 1993......        102,592 $    1   2,048,200   $  20    $ 7,433      $  (295)    $  (189)       $ 6,970
 Net income....................                                                              1,866                      1,866
 Stock warrant accretion........                                                              (250)                      (250)
                                        -------------------------------------------------------------------------------------------
Balance, December 28, 1994.....         102,592      1   2,048,200      20      7,433        1,321        (189)         8,586
   Net income..................                                                              2,196                      2,196
   Stock warrant accretion.....                                                               (900)                      (900)
   Shares issued...............          31,579                                 1,500                                   1,500
                                        -------------------------------------------------------------------------------------------
Balance, December 27, 1995....          134,171      1   2,048,200      20      8,933        2,617        (189)        11,382
Net income                                                                                   3,804                      3,804
Stock warrant accretion                                                                     (1,300)                    (1,300)
Shares issued in connection
  with Sun West acquisition                                 25,900       1        369                                     370
Shares issued in connection
  with initial public offering                           3,064,718      30     31,967                                  31,997
Conversion of Preferred Stock          (134,171)    (1)    939,197       9         (8)                                      -
 Warrants exercised                                        123,585       1        608                                     609
Warrants redeemed                                                                (200)                                   (200)
Other                                                       10,416       1        109                                     110

                                       --------------------------------------------------------------------------------------------
Balance, December 25, 1996....               -    $  -   6,212,016     $62    $41,778       $5,121      $ (189)       $46,772
                                       =======    ====   =========     ===    =======       ======      =======       =======




                     See accompanying notes to consolidated
                             financial statements.

</TABLE>









                                                                  F-5

<PAGE>

<TABLE>
<CAPTION>


                     FINE HOST CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)


                                                                                                               Fiscal Years Ended

                                                December 25,   December 27,   December 28,
                                                  1996            1995           1994
                                                -----------------------------------------
<S>                                                <C>             <C>           <C>

Cash flows from operating activities:
Net income....................................  $  3,804        $  2,196        $ 1,866
Adjustments to reconcile net income to net
   cash provided by operating activities:
  Depreciation and amortization...............     4,692           3,804          2,379
  Deferred income tax provision...............     2,620           1,536          1,359
  Changes in operating assets and liabilities:
     Accounts receivable........................  (3,100)           (372)        (2,238)
     Inventories..................................(  366)            306           (367)
     Prepaid expenses and other current assets    (1,175)           (473)        (1,001)
     Accounts payable and accrued expenses...     (6,065)         (2,627)         2,100
Increase in other assets........................     (64)         (1,399)        (1,528)
                                                  -------         -------        -------
    Net cash provided by operating activities.       346           2,971          2,570
                                                  -------         -------        -------

Cash flows from investing activities:
Increase in contract rights....................   (6,277)         (3,446)          (234)
Purchases of fixtures and equipment...........    (8,516)         (3,329)        (6,303)
Sales of fixtures and equipment...............        64               -              -
Acquisition of business, net of cash acquired.   (11,640)         (3,478)          (777)
Collection of notes receivable................       494           2,129            548
Issuance of notes receivable..................         -               -         (2,280)
                                                 -------          -------        ------
  Net cash used in investing activities.......   (25,875)         (8,124)        (9,046)
                                                 -------          -------        ------

Cash flows from financing activities:
Issuance of common stock......................    32,016               -              -
Issuance of convertible preferred stock.......         -           1,500              -
Borrowings under long-term debt agreement.....    27,844           8,580         10,739
Payment of long-term debt.....................   (22,254)         (2,300)        (1,529)
Payment of subordinated debt..................   ( 8,396)         (3,525)        (1,578)
Redemption of warrants........................      (200)              -              -
Proceeds from exercise of warrants............       609               -              -
                                                 -------          -------        -------
  Net cash provided by financing activities...    29,619           4,255          7,632
                                                 -------          -------        -------
(Decrease) increase in cash...................     4,090            (898)         1,156
Cash, beginning of year.......................       634           1,532            376
                                                 -------         --------        -------
Cash, end of year............................... $ 4,724         $   634        $ 1,532
                                                 =======         ========        =======

</TABLE>

                     See accompanying notes to consolidated
                             financial statements.



                                       F-6

                                     <PAGE>



                     FINE HOST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (dollars in thousands, except per share data)

1.  Description of Business

     Fine  Host  Corporation  and its  subsidiaries  ( the  "Company")  provides
contract food service  management to four distinct  markets  within the contract
food service  industry:  the recreation and leisure  market  (arenas,  stadiums,
amphitheaters,  civic centers and other recreational facilities); the convention
center market;  the education market (colleges,  universities and elementary and
secondary schools); and the business dining market (corporate cafeterias, office
complexes and manufacturing plants).

2.  Summary of Significant Accounting Policies

     Basis of Presentation - The consolidated  financial  statements include the
accounts of the  Company  and its  wholly-owned  subsidiaries.  All  significant
intercompany transactions and accounts have been eliminated.

    The  preparation  of  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements,  and the  reported  amounts  of  revenues  and  expenses  during the
reporting period. Actual results could differ from those estimates.

     Cash and Cash Equivalents - Cash and cash  equivalents  include cash, money
market funds,  commercial paper and certain U.S.  Government  securities with an
original  maturity of three  months or less and are  deposited  with a number of
institutions  with high  credit  ratings.  The  Company  does not  believe it is
exposed to any significant credit risk related to cash and cash equivalents.

     Inventories - Inventories are stated at the lower of cost,  determined on a
first-in, first-out (FIFO) basis, or market.

     Contract Rights - Certain  directly  attributable  costs,  primarily direct
payments to clients to acquire  contracts  and the cost of licenses and permits,
incurred by the Company in  obtaining  contracts  with  clients are  recorded as
contract  rights and are amortized  over the contract life of each such contract
without consideration of future renewals.  The costs of licenses and permits are
amortized  over the  shorter  of the  related  contract  life or the term of the
license or permit.  The unamortized  value of such capitalized costs was $10,940
at December 25, 1996,  consisting  of costs  related to 53  contracts.  Contract
rights  are  being  amortized  over a range of 3 to 20  years,  with an  average
amortization period of 8 years as of December 25, 1996. The cost of licenses and
permits are being amortized over a range of 3 to 10 years. The value of contract
rights acquired  through  acquisitions has been determined  through  independent
valuation  based on  projected  cash  flows  discounted  at a rate  that  market
participants  would use to determine fair value and is being  amortized over the
projected  lives as determined  through the valuation  process,  with an average
amortization  period of 10 years as of December 25, 1996. The unamortized  value
of contract rights  acquired  through  acquisitions  was $11,929 at December 25,
1996, consisting of rights relating to 259 contracts.  Accumulated  amortization
was $6,180 and $3,949 at December 25, 1996 and December 27, 1995,  respectively.
The  carrying  value  of the  asset  would be  reduced  if it is  probable  that
management's best estimate of future cash flows from related operations over the
remaining  amortization  period, on an undiscounted basis, will be less than the
carrying amount of the asset, plus allocated  goodwill if acquired in a business
combination.  Any such  impairment loss would be measured as the amount by which
the carrying value of the asset exceeds the fair value determined as the present
value of estimated  expected  future cash flow  discounted at a rate that market
participants would use to determine fair value.


                                       F-7

                                     <PAGE>



                     FINE HOST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (dollars in thousands, except per share data)

     Fixtures  and  Equipment -  Acquisitions  of  fixtures  and  equipment  are
recorded at cost and are  depreciated  using the  straight  line method over the
shorter of  estimated  useful  lives of the  assets or the term of the  customer
concession  and catering  contract.  Fixtures  and  equipment  are  periodically
reviewed to determine recoverability by comparing the carrying value to expected
future cash flows.

     Excess of Cost Over Fair Value of Net Assets  Acquired - The excess of cost
over fair value of net assets  acquired is  amortized  using the  straight  line
method  over  periods  generally  ranging  from  20  to  30  years.  Accumulated
amortization  was $1,758 and $848 at December  25, 1996 and  December  27, 1995,
respectively.

     The carrying value of the net asset would be reduced if it is probable that
management's best estimate of future cash flows from related  operations,  on an
undiscounted  basis, will be less than the carrying amount of the asset over the
remaining amortization period. Any such impairment loss would be measured as the
amount  by  which  the  carrying  value of the  asset  exceeds  the  fair  value
determined as the present value of estimated expected future cash flow.

     Revenue  Recognition  and Cost of  Sales - Sales  from  food  and  beverage
concession  and catering  contract food services are  recognized as the services
are provided.

     The Company  generally  enters into one of three types of contracts for its
food services:  profit and loss contracts ("P&Ls"), profit sharing contracts and
management fee contracts.  Under P&L contracts,  all food and beverage sales are
recorded in net sales.  P&Ls require the Company to bear all the expenses of the
operation,  including  rent paid to the client  (usually  calculated  as a fixed
percentage of various categories of sales).  Under the profit sharing contracts,
the Company  receives a percentage of profits  earned at the facility  after the
payment of all expenses of the operation plus a fixed fee or percentage of sales
as  an  administrative  fee.  Under  this  type  of  contract,   the  fixed  and
administrative  fees and all food and beverage sales generated at a location are
recorded in net sales.  Management  fee contracts  provide for a fixed fee. Fine
Host is also  reimbursed for all of its on-site  expenses  incurred in providing
food and  beverage  services  under  management  fee  contracts.  Certain of the
Company's management fee contracts provide for an additional incentive fee based
on a  percentage  of  sales  over a base  threshold  level.  In  the  case  of a
management fee contract,  the Company  records only the fixed and incentive fee,
if any, as net sales.

     Cost of sales is composed of the following:

                                             Fiscal Years Ended

                                       1996           1995            1994
                                     -------        ------          ------

   Wages and benefits................$38,555      $ 27,024       $  20,079
   Food and beverages................ 38,007        24,670          18,463
   Rent paid to clients.............. 24,425        22,035          25,345
   Other operating expenses..........  8,368         8,259           7,567
   Depreciation and amortization.....  4,348         3,588           2,379
                                     -------      --------        --------
                                    $113,703      $ 85,576        $ 73,833
                                    ========      ========        ========

   P&L and profit  sharing  contracts  include all  on-site  costs for the above
items.  Management  fee  contracts  include  only the  amortization  of invested
capital.

                                       F-8

<PAGE>



                     FINE HOST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (dollars in thousands, except per share data)


   Income Taxes - Deferred tax assets or liabilities  (shown net) are recognized
for the  estimated  future tax effects  attributable  to temporary  differences,
principally  depreciation,  amortization  of contract  rights and operating loss
carryforwards. A temporary difference is the difference between the tax basis of
an asset or liability and its reported amount in the financial statements.

   Stock Option Plan - Stock options are recorded in accordance  with Accounting
Principles  Board  Opinion  ("APB")  No. 25, with pro forma  disclosures  of net
income and earnings per share as if Statement of Financial  Accounting Standards
("SFAS") No. 123 had been applied.

   Earnings Per Share - Earnings per share of Common Stock is computed  based on
the weighted average number of common and common equivalent  shares  outstanding
during each year. The Series A Convertible  Preferred  Stock has been considered
to be the  equivalent of Common Stock from the time of its issuance in 1993. The
number of shares  issuable on  conversion  of  Preferred  Stock was added to the
number of shares of Common Stock.  The number of shares of Common Stock was also
increased  by the number of shares  issuable  on the  exercise  of  options  and
warrants when the fair value of the Common Stock  exceeded the exercise price of
the options and warrants.  Prior to the initial public offering (the "IPO"), the
fair value was estimated through analysis of transactions in the Company's stock
involving  third parties.  This increase in the number of shares of Common Stock
was  reduced by the number of shares of Common  Stock  which are assumed to have
been  purchased  with the  proceeds  from the  exercise of the  warrants.  These
purchases were assumed to have been made at the average fair value of the Common
Stock during the year. Earnings per share assuming full dilution gives effect to
the assumed exercise of all dilutive stock options and the assumed conversion of
dilutive convertible securities (warrants) as of the beginning of the respective
year except when their effect is antidilutive; outstanding shares were increased
as  described  above for the  option and  warrant  conversions  except  that the
purchases  of Common  Stock are assumed to have been made at the  year-end  fair
value if it was higher than the average fair value. In calculating  earnings per
share,  net income has been reduced for the accretion to the redemption value of
warrants by $1,300,  $900, and $250 in fiscal 1996, 1995 and 1994,  respectively
(see Note 10).

     Fiscal  Year - The  Company's  fiscal  year ends on the last  Wednesday  in
December.

     Reclassification - Prior year balances have been restated to conform to the
current presentation.


3. Acquisitions

    On December  8, 1996,  the  Company  acquired  100% of the stock of Republic
Management  Corp.  ("Republic").  Republic  provides  contract  food service and
vending to various  corporations  and  elementary  and  secondary  schools.  The
purchase price was  approximately  $8,600  consisting of cash to the sellers,  a
subordinated note payable to one shareholder plus assumed debt of Republic.





                                       F-9

                                     <PAGE>



                     FINE HOST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (dollars in thousands, except per share data)

      In November  1996,  the Company  acquired 100% of the stock of PCS Holding
Corporation (formerly known as HCS Management Corporation) ("PCS"). PCS, through
its  operating  subsidiaries,  provides  non-patient  contract  food  and  other
services to hospitals and  corporations.  The purchase  price was  approximately
$6,000 consisting of cash to the seller plus assumed debt of HCS.

    In July 1996, the Company  acquired 100% of the  outstanding  stock of Ideal
Management Services,  Inc. ("Ideal").  Ideal provides contract food and beverage
services to  elementary  and secondary  schools in New York State.  The purchase
price was approximately  $3,200,  consisting of cash,  convertible  subordinated
notes with interest at 7 1/4%,  and a seven year covenant not to compete  valued
at $400. At the option of the note holders, the outstanding principal balance of
the notes is  convertible  into Common  Stock at a  conversion  price of $15 per
share.

    In March 1996,  the Company  acquired 100% of the  outstanding  stock of Sun
West Services,  Inc. ("Sun West").  Sun West provides contract food and beverage
services  primarily  to  elementary  and  secondary  schools as well as to other
institutional clients. The purchase price was approximately $5,200 consisting of
cash, five-year subordinated notes to the sellers with interest at 7% and 25,900
shares of Common Stock.

    In July  1995,  the  Company  acquired  100%  of the  outstanding  stock  of
Northwest Food Service, Inc. ("Northwest"). Northwest provides contract food and
beverage services,  primarily in the education and corporate dining markets. The
purchase price was approximately  $2,500 consisting of subordinated notes to the
seller and cash.

   The  aforementioned  acquisitions  have been accounted for under the purchase
method of accounting and, accordingly,  the accompanying  consolidated financial
statements  reflect  the fair  values of the  assets  acquired  and  liabilities
assumed or incurred as of the effective date of the acquisitions. The results of
operations  of  the  acquired   companies  are  included  in  the   accompanying
consolidated financial statements since their respective dates of acquisition.

    The following table  summarizes pro forma  information as follows:  (i) with
respect to the income statement data for fiscal year 1995 as if the acquisitions
of Republic,  PCS,  Ideal,  Sun West, and Northwest had been completed as of the
beginning of such period; and (ii) with respect to the income statement data for
fiscal year 1996 as if the acquisition of Republic,  PCS, Ideal and Sun West had
been  completed  as  of  the  beginning  of  such  period.  No  adjustments  for
acquisition synergies (i.e. overhead reductions) have been reflected.

                                                          Fiscal Years Ended
                                                       December 25, December 27,
                                                            1996        1995
                                                       ------------------------
   Summary statement of income data:
   Net sales............................................  $161,204   $ 151,031
   Income from operations...............................     8,057       5,782
   Net Income before warrant accretion..................     2,407         758
   Net Income per share before warrant accretion
     assuming full dilution.............................  $    .48   $     .23
                                                          ========   =========

   The above pro forma information is provided for informational  purposes only.
It is based on  historical  information  and does not  necessarily  reflect  the
actual  results that would have  occurred nor is it  necessarily  indicative  of
future results of operations of the combined enterprise.

                                      F-10

<PAGE>



                     FINE HOST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (dollars in thousands, except per share data)



4. Inventories

     The components of inventories are as follows:

                                       December 25,          December 27,
                                           1996                  1995
                                       ------------          ------------

   Food and liquor..........            $ 2,814             $   1,333
   Beverage.....................             41                   447
   Other...........................         405                   319
                                        -------             ---------

             Total.................     $ 3,260             $   2,099
                                        =======             =========


5. Fixtures and Equipment

     Fixtures and equipment consists of the following:

                                          December 25,           December 27,
                                             1996                    1995
                                          ------------           ------------

  Furniture and fixtures.................   $ 19,677              $   15,091
  Office equipment.......................      3,550                   1,811
  Leasehold improvements.................      1,405                   1,114
  Smallwares.............................      3,846                   2,306
  Other..................................      2,135                   1,218
                                            --------              ----------
                                              30,613                  21,540
  Less: accumulated depreciation.........      6,556                   5,711
                                            --------              ----------

  Fixtures and equipment, net............    $24,057               $  15,829
                                            ========               =========


     The Company  invests in fixtures and equipment at various  locations.  Upon
termination  of a  concession  agreement,  the client is  generally  required to
purchase  the  assets  from the  Company  for an amount  equal to their net book
value.

     All fixtures and equipment are depreciated  over their useful lives ranging
from 3 to 20 years, except smallwares which are depreciated over periods ranging
from 3 to 5 years.






                                      F-11

                                     <PAGE>



                     FINE HOST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (dollars in thousands, except per share data)




6. Accounts Payable and Accrued Expenses

     Accounts payable and accrued expenses consists of the following:

                                      December 25,         December 27,
                                          1996                 1995
                                   ---------------         ------------

 Accounts payable.................    $ 8,404                $ 5,197
 Accrued wages and benefits.......      2,640                  1,607
 Accrued rent to clients..........      3,187                  2,576
 Accrued other....................      4,459                  3,087
                                     --------                -------
       Total......................    $18,690               $ 12,467
                                     ========               ========



7. Long-Term Debt

     Long-term debt consists of the following:

                                            December 25,          December 27,
                                                1996                   1995
                                            ------------          -----------


 Working Capital Line..................       $15,818             $  6,000
 Guidance Line.........................        15,744                3,207
 Term Loan.............................             -                9,100
                                              -------              -------
                                              $31,562              $18,307
 Less: current portion.................             -                2,981
                                              -------              -------
         Total............................... $31,562              $15,326
                                              =======              =======















                                      F-12

                                     <PAGE>



                     FINE HOST CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except per share data)


    The  Company's  bank  agreement was amended and restated on June 19, 1996 in
connection  with the IPO (the "Restated Bank  Agreement") and provides for (i) a
working capital  revolving  credit line (the "Working Capital Line") for general
obligations  and  letters of credit of the  Company,  in the  maximum  amount of
$20,000 and (ii) a line of credit to provide for future expansion by the Company
(the "Guidance  Line") in the maximum amount of $55,000.  The maximum  borrowing
available to the Company  under the Restated  Bank  Agreement  was $75,000 as of
December 25, 1996. The Restated Bank Agreement terminates on April 30, 1999.

    The   Company's   obligations   under  the  Restated   Bank   Agreement  are
collateralized  by a pledge  of  shares  of the  common  stock  or other  equity
interests  of the  Company's  subsidiaries,  as well as by certain  fixtures and
equipment,  notes  receivable  and other  assets,  and the  receipt,  if any, of
certain  funds paid to the Company  with  respect to the  termination  of client
contracts prior to their expiration.

    The  Restated  Bank   Agreement   contains   various   financial  and  other
restrictions,  including,  but not limited  to,  restrictions  on  indebtedness,
capital expenditures and commitments. Additional obligations require maintenance
of certain financial ratios, including the ratio of total debt to operating cash
flow,  operating cash flow to cash interest  expense,  and minimum net worth and
operating cash flow. The Restated Bank Agreement also contains  prohibitions  on
the payment of dividends.

    The net proceeds from the IPO, including  the exercise of the over allotment
option  granted  to  the   underwriters   (see  Note  9),  were  used  to  repay
substantially  all of the long term debt  then  outstanding  at the close of the
transactions.

     On December 25,  1996,  the prime rate was 8.25%.  Interest  payable on the
Working  Capital Line is prime or LIBOR plus 2.0% and the  Guidance  Line is the
prime plus .5% or the 180 day LIBOR rate plus 2.0%.

     Long-term debt at December 25, 1996 is payable as follows:

      Year Ending                                       Amount

      December 31, 1997........................      $       -
      December 30, 1998........................              -
      December 29, 1999........................         15,818
      December 27, 2000........................          3,149
      December 26, 2001........................          3,149
      Thereafter...............................          9,446
                                                       -------
      Total....................................        $31,562
                                                       =======

    The net proceeds from the second offering on February 7, 1997, including the
exercise of the warrants and option granted to the  underwriters  (see Note 17),
were used to repay all of the long  term  debt  outstanding  at the close of the
transaction.

     Interest  paid on  long-term  debt was  $2,128,  $1,645 and $639 for fiscal
1996, 1995 and 1994, respectively.






                                      F-13

<PAGE>




                     FINE HOST CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except per share data)

8. Subordinated Debt

    In December  1996, as part of the  acquisition of Republic (see Note 3), the
Company issued to a stockholder of Republic a subordinated  promissory note with
a face  value of  $1,000 at 8.75%  interest  per  annum,  payable  in  quarterly
installments.  The note was  discounted  to present value using a market rate of
11% and had a balance of $958 at December 25, 1996, of which $623 was classified
as long term.

    In July 1996, as part of the  acquisition of Ideal (see Note 3), the Company
issued to the  stockholders  of Ideal two  convertible  subordinated  promissory
notes each with a face value of $710 at 7 1/4%  interest  per annum,  payable in
quarterly  installments.  At the  option of the note  holders,  the  outstanding
principal  balance of the notes is convertible into Common Stock at a conversion
price of $15 per share.  The notes were  discounted  to  present  value  using a
market rate of 13% and had a combined balance at December 25, 1996 of $1,144, of
which $870 was classified as long-term.

     In March  1996,  as part of the  acquisition  of Sun West (see Note 3), the
Company issued to the stockholders of Sun West the following: (1) a subordinated
promissory note with a face value of $1,350 at 7% interest per annum, payable in
four annual  installments  beginning in 1998; and (2) a subordinated  promissory
note with a face value of $638 at 7% interest per annum, payable in three annual
installments beginning in 1997. The notes were discounted to present value using
a market rate of 10%. The  respective  balances at December 25, 1996 were $1,221
and $602, of which $1,221 and $330 were classified as long term.

      In July 1995, as part of the purchase price of Northwest (see Note 3), the
Company  issued a $1,350 note to the seller at 7% interest  per annum.  The note
was  discounted  to present value using a market rate of 12.5% and had a balance
at December 25, 1996 of $1,207 of which $1,135 was classified as long-term.

    In April 1993, the Company entered into a subordinated  loan  agreement,  as
amended (the "Subordinated Loan Agreement"),  pursuant to which the Company sold
$8,500 of its variable  rate  subordinated  notes (the  "Notes"),  together with
detachable  warrants to  purchase a maximum of 867,230  shares of a new class of
Non-Voting Common Stock. The proceeds of the issuance of the Notes
were used to repay existing indebtedness. A portion of the net proceeds from the
IPO (see Note 9) were used to repay these Notes.

    The estimated fair value  approximated  the carrying  amount of subordinated
debt at December  25, 1996 and  December  27,  1995.  Considerable  judgment was
required in interpreting  market data to develop the estimates of fair value. In
addition,   the  use  of  different   market   assumptions   and/or   estimation
methodologies  may  have had a  material  effect  on the  estimated  fair  value
amounts.  Accordingly,  the  estimated  fair  value of  subordinated  debt as of
December  25, 1996 and December 27, 1995 is not  necessarily  indicative  of the
amounts that the Company could realize in a current market exchange.

     Subordinated debt at December 25, 1996 is payable as follows:

   Year Ending                                               Amount
  December 31, 1997................................         $ 3,259
  December 30, 1998................................           2,165
  December 29, 1999................................           1,870
  December 27, 2000................................             885
  December 26, 2001................................             625
  Thereafter.......................................               -
                                                            -------
                                                              8,804
  Less: discount on subordinated note..............             745
                                                            -------
  Total............................................        $  8,059
                                                           ========

    Interest paid on  subordinated  debt was $392,  $1,427 and $1,253 for fiscal
1996, 1995 and 1994, respectively.

                                      F-14

                                     <PAGE>





                     FINE HOST CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except per share data)


9. Stockholders' Equity

     Common  Stock - Holders of Common  Stock are entitled to one vote per share
in all matters to be voted on by the  stockholders  of the  Company.  Subject to
preferences  that may be applicable to any Preferred  Stock  outstanding  at the
time, holders of Common Stock are entitled to receive ratably such dividends, if
any, as may be declared from time to time by the Board of Directors out of funds
legally available therefor.

    On June 19, 1996,  the effective date of the IPO, as authorized by the Board
of Directors,  the Company sold 3,064,718 shares at a price of $12.00 per share,
generating net proceeds (including the net proceeds received by the Company upon
the exercise of certain  warrants and options) of  approximately  $32.6 million,
after  deducting  the  underwriting  discount and offering  expenses paid by the
Company.  The net proceeds  were used to repay  obligations  under the Company's
credit facility in effect prior to the IPO and subordinated notes, as well as to
repurchase  certain  warrants;  and the remainder was used for general corporate
purposes.

     On February 7, 1997,  the Company made a second  offering  resulting in net
proceeds of approximately $59.1 million after deducting  underwriting  discounts
and certain expenses (see Note 17).

     Preferred  Stock - Holders of the Series A Convertible  Preferred Stock are
entitled  to  receive,  when  and as  declared,  out of the net  profits  of the
Company,  dividends  in an amount  per share  equal to the  aggregate  per share
amount of all cash  dividends  declared on the Common  Stock  multiplied  by the
number  of shares of Common  Stock  into  which a share of Series A  Convertible
Preferred  Stock is convertible on the date on which such dividend is to be paid
in full. All dividends declared upon Series A Convertible  Preferred Stock shall
be declared pro rata per share.  In the event of any  voluntary  or  involuntary
liquidation, dissolution or winding up of the Company, the holders of the shares
of Series A Convertible  Preferred Stock then  outstanding  shall be entitled to
share ratably with holders of the shares of Common Stock in any  distribution of
the  assets  and  funds  of the  Company.  Each  share of  Series A  Convertible
Preferred  Stock is  convertible  into seven shares of Common Stock,  subject to
certain  adjustments.  In conjunction  with the IPO all of the then  outstanding
Convertible Preferred Stock was converted into 939,197 shares of common stock.

    1996 Non-Employee Director Stock Plan - The 1996 Non-Employee Director Stock
Plan (the  "Directors  Plan")  authorizes  the grant of an  aggregate  of 50,000
shares of Common Stock.  Common Stock is granted  pursuant to the Directors Plan
only to members of the Board of  Directors  who are not officers or employees of
the company  ("Non-Employee").  Upon  consummation of the IPO, each Non-Employee
Director was  granted  1,250  shares  pursuant  to  the  terms  of  the  
Directors  Plan. Thereafter,  for the remainder of the term of the Directors 
Plan and provided he or she remains a director of the Company,  on the date of 
each of the  Company's annual meeting of Stockholders, each Non-Employee 
Director will be automatically granted, without further action by the Board of 
Directors, a number of shares of Common  Stock equal to $15,000  divided by the
Fair Market  Value (as defined in the Director's Plan) of one share of Common 
Stock on the date of grant.

     Three  officers of the Company  purchased  in 1987 and 1991 an aggregate of
154,000  shares of Common Stock for cash and notes at prices  ranging from $0.32
to $1.40 per share. The subject notes have an aggregate  outstanding  balance of
$189 and are due on June 30,  1999.  Upon  closing of the IPO,  pursuant  to the
terms of the  employee  notes to the  Company,  the  interest  on the  notes was
forgiven, and interest thereafter ceased to accrue.


                                      F-15

                                     <PAGE>





                     FINE HOST CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except per share data)


10. Stock Options and Warrants

     Stock  Options - The 1994 Stock Option Plan provides for granting of either
incentive  stock options or non qualified  options to purchase  shares of Common
Stock.  The plan provides that (i) the option price of an incentive stock option
may not be less than the fair  market  value of the Common  Stock on the date of
grant and (ii) the option  price of an option  which is not an  incentive  stock
option shall not be less than 85% of the fair value. Generally,  options granted
become  exercisable  after one year in 20%  increments  per year and  expire ten
years  from the date of grant.  The  Company  has  reserved  566,084  shares for
distribution under the Plan. In addition, included in the table below are 27,944
options issued in connection with the Fanfare acquisition in 1993.

     A summary of the status of the  Company's  stock option plan as of December
25, 1996,  December 27, 1995 and December 28, 1994 and changes  during the years
ending on those dates is presented below:
<TABLE>
<CAPTION>

                                   1996                          1995                               1994
                            -----------------------------------------------------------------------------------------------
                                     Weighted-Average                Weighted-Average                     Weighted-Average
                            Shares   Exercise Price       Shares      Exercise Price          Shares       Exercise Price
<S>                        <C>             <C>           <C>                <C>              <C>                 <C>

Outstanding at
  beginning of year        143,444        $ 6.19         132,944           $ 6.11             27,944            $ 4.93
Granted                    380,750         12.82          10,500             7.14            105,000              6.43
Exercised                    2,916          6.43               -                -                  -                 -
Canceled                    30,084         10.92               -                -                  -                 -
                          ---------       ------         -------            -----            -------            ------
Outstanding at end         491,194         11.03         143,444             6.19            132,944              6.11
                          ========        ======         =======            =====            =======            ======
   of year
Options exercisable at
   year-end                 88,204          6.20          50,090             6.13              6,148              4.93
                          ========                       =======            =====            =======
Options available for
 grant at end of year      102,834                       453,500                             464,000
                          ========                       =======                             =======





</TABLE>





                                      F-16

<PAGE>





                     FINE HOST CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except per share data)


      The following table summarizes information about stock options outstanding
at December 25, 1996:
<TABLE>
<CAPTION>

                                         Options Outstanding                                    Options Exercisable
                               Number        Weighted-Average                                   Number
              Range of       Outstanding        Remaining         Weighted-Average         Exercisable       Weighted-Average
         Exercise Prices     At 12/25/96     Contractual Life         Exercise Price        at 12/25/96        Exercise Price
         ---------------    ------------    ------------------    ---------------------     -----------      ------------------
      <S>                      <C>                   <C>                  <C>                <C>                   <C>

      $  4.93 -  $ 7.14       134,694                 7                 $ 6.17               88,204                $6.20
      $  7.15 -  $12.00       250,500                 9                 $12.00                    -                    -
      $ 12.01 -  $15.63       106,000                10                 $14.93                    -                    -
                               -------               --                 ------               ------                -----
                              491,194                 9                 $11.03               88,204                $6.20
                              =======                ==                 ======               ======                =====
</TABLE>


      If the  fair  value  based  accounting  method  was  used to  account  for
stock-based compensation costs, pro forma net income for the fiscal years ended
December 25, 1996 and  December  27, 1995 would have been $2,429,  and $1,291 or
$.49 and $.39 pro forma fully diluted earnings per share, respectively. The fair
value  of each  option  grant  is  estimated  on the  date of  grant  using  the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions used for grants in 1996, and 1995  respectively:  no dividend yield;
expected volatility of 15% and risk-free interest rates of 5%.

Holders of Subordinated Notes -

      In   conjunction   with  the  Ideal   acquisition   (Note  3)  convertible
subordinated  notes  were  issued.  At  the  option  of  the  note  holders  the
outstanding  principle  balance is convertible into common stock at a conversion
price of $15 per share.
The outstanding principle balance at December 25, 1996 was $1,282,500.

      Pursuant to the issuance and sale of the Notes (see Note 8), the purchaser
received  warrants to purchase  733,467 and 133,763 shares of Non-Voting  Common
Stock at exercise  prices $4.93 a share (the "$4.93  Warrants") and $.01 a share
(the "$.01 Warrants), respectively. The warrants were valued at $230.

      The $4.93 and the $.01  Warrants were  exercisable  from the date of issue
through the periods ended April 29, 2001 and April 29, 2003, respectively.  Both
the number of shares and exercise price were subject to adjustment under various
antidilution provisions.

      Upon  achieving  specified  levels of  earnings in each of fiscal 1993 and
1994,  the Company had the right to earn back, in respect of each such year, the
portion of the $4.93 Warrants issued to the purchaser of the Notes  representing
the right to acquire 1% of the fully diluted Common Stock.  The Company achieved
the required earnings levels specified for those fiscal years.  Accordingly,  in
each of May  1994  and June  1995,  respectively,  the  Company  canceled  $4.93
Warrants to acquire the equivalent of 1% of the fully diluted  Common Stock,  or
approximately  43,365  shares  (in each  year).  As a result of the  refinancing
completed  prior to the IPO, the Company  redeemed an  additional  amount of the
$4.93 Warrants equal to 2% of the fully diluted Common Stock, or 86,730 shares.


                                      F-17

<PAGE>



      Upon achieving  specified levels of earnings in each of fiscal 1993, 1994,
1995 and  1996,  the  Company  has the  right to earn back the total of the $.01
Warrant  issued  (133,763)  to the Note holder.  Since the Company  achieved the
required  earnings level  specified for fiscal 1993, 1994 and 1995, the Company,
in each of fiscal  1994,  1995 and 1996 earned back and  canceled  33,439 of the
$.01 Warrants held by the purchaser of the Notes, respectively.

      During a specified  repurchase period, the Company was obligated (the "Put
Repurchase"),  subject to certain conditions,  to repurchase all or a designated
portion of the issuable  warrant shares within 120 days after  notification of a
put option exercise. The Put Repurchase period began on the earlier of (i) April
29, 1997,  (ii) the  prepayment of 50% of the original  principal  amount of the
Notes  issued  under  the  Subordinated  Loan  Agreement,  or (iii) a Change  of
Control, as defined, of the Company. The Put Repurchase price was based upon the
greater of the  Appraised  Value (as  defined in the warrant  agreement)  of the
Common  Stock,  and the result  obtained by dividing a multiple of the Company's
adjusted earnings,  as defined,  by the number of fully diluted shares of Common
Stock. The Put Repurchase was accreted to its highest  redemption price based on
the IPO offering price.  Upon the closing of the IPO, holders of Warrants to 
acquire an aggregate of 296,726.5  additional shares of Common Stock (280,003.5
at $4.93 per share and 16,723 at $.01 per share) were obligated to sell these 
Warrants to the Company at a price equal to $2,180.

      In March 1996,  the holder of the Notes sold the Notes to a  non-affiliate
of the Company.  The purchaser also acquired 280,003.5 of the $4.93 Warrants and
16,723 of the $.01 Warrants. In connection with this transaction,  the purchaser
granted the Company an option to purchase all of the warrants for prices ranging
from $500 to $1500 in the event the Notes were  fully  redeemed  before  various
dates  from June 30,  1996 to  December  31,  1996.  In the  event  the  Company
increased  its bank  borrowings  in excess of  $32,500,  the option  price would
increase by $200 for each additional $2,500 of borrowings,  subject to a maximum
increase in the option  price of $600.  Upon the closing of the IPO, the Company
repurchased these warrants for an aggregate repurchase price of $700.

Holders of Series A Convertible Preferred Stock -

      In connection  with the sale in fiscal 1993 by the Company of the Series A
Convertible  Preferred Stock to an investor and one of its directors  (described
in Note 9), each purchaser received $4.93 warrants and $.01 warrants to purchase
Common  Stock.  The  investor  received  118,307 of the $4.93  Warrants  and the
director received 21,294 of the $4.93 Warrants. The investor received 453,432 of
the $.01 Warrants.  and the director received 81,613 of the $.01 Warrants.  Both
the number of shares and exercise price are subject to adjustment  under various
antidilution provisions.

      The $4.93 Warrants  issued by the Company to the investor and the director
(139,601  in total) are subject to  cancellation  to the extent that the Company
earns back $4.93  Warrants  issued to the  purchaser  of its Notes (see  above).
Since the Company has achieved the earnings level  specified for fiscal 1993 and
1994  required  under the Notes,  8,253 of these  $4.93  Warrants,  the  maximum
allowed  during the 1993  reduction  period,  were canceled in June 1994, and an
additional  7,763,  the maximum allowed during the 1994 reduction  period,  were
canceled  in June 1995.  In  conjunction  with the IPO,  these  holders of $4.93
Warrants  exercised the remaining 123,585 $4.93 Warrants and sold such shares in
the IPO.

      Upon achieving specified levels of earnings in fiscal 1993, 1994, 1995 and
1996,  the  Company  has the right to earn  back the total of the $.01  Warrants
(535,045 in the  aggregate)  issued to the  holders of the Series A  Convertible
Preferred  Stock.  Since  the  Company, achieved  the  required  earnings  level
specified for each of fiscal 1993,  1994 and 1995, the Company in 1994, 1995 and
1996,  respectively,  canceled 133,763 of these warrants,  representing  113,358
warrants for the investor and 20,405 for the director.  The Company has achieved
the specified earnings in fiscal 1996 as required under the $.01 Warrants.  As a
result,  in fiscal 1997,  the Company will redeem and cancel the remaining  $.01
Warrants held by the investor and the director (133,756 in total).



                                      F-18

<PAGE>




 11. Commitments and Contingencies

     The Company  operates  principally  at its  clients'  premises  pursuant to
written contracts ("Client Contracts"). The length of Client Contracts generally
ranges  from one to ten years with  options  to renew for  periods of one to ten
years.  Certain of these Client  Contracts  provide for base rent and contingent
rent.  Aggregate rent expense under these  agreements for fiscal 1996,  1995 and
1994 was $24,425, $22,035 and $25,345 respectively.

     Future minimum  commitments as of December 25, 1996 for all  noncancellable
operating leases and client contracts are as follows:

           Year                                                   Amount
           ----                                                   ------
         1997....................................                $ 3,013
         1998....................................                  1,890
         1999....................................                    867
         2000....................................                    672
         2001....................................                    301
         Thereafter..............................                    150
                                                                  ------
             Total...............................                $ 6,893
                                                                 =======

     Pursuant to its contracts with various clients, the Company is committed to
spend approximately $3,765 for equipment and capital improvements as of December
25,  1996.  At December 25, 1996,  the Company was  contingently  liable for the
following:  (1) a standby Letter of Credit for $1,000,  the principal  amount of
which is reduced annually pursuant to its terms and (2) performance bonds in the
aggregate amount of $4,483.

     The Company has entered into purchasing  agreements  with various  national
and  regional  suppliers  pursuant to which the Company  agreed to purchase  its
requirements of products (as defined in the agreements).  If the Company exceeds
the agreed-upon purchasing levels, additional rebates and promotional allowances
may be  payable  by the  suppliers.  If the  Company  fails to meet  agreed-upon
purchasing levels during the term of the agreements,  the suppliers may elect to
extend the term of the agreements by one year, or a longer period, if necessary,
to reach agreed-upon purchasing levels.



                                      F-19

                                     <PAGE>




                     FINE HOST CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except per share data)


12. Income Taxes

     The income tax provision consists of the following:

                                                 Fiscal Years Ended

                                  December 25,    December 27,     December 28,
                                      1996             1995            1994
                                  ---------------------------------------------

 Current:
   Federal......................   $    -           $    -          $      -
   State and local..............       80               49                26
                                   -------          ------          --------
       Total current............       80               49                26
                                   -------          ------          --------

Deferred:
   Federal......................    2,086            1,471             1,123
   State and local..............      534               65               236
                                   -------          ------          --------
       Total deferred...........    2,620            1,536             1,359
                                   -------          ------          --------
         Total..................   $2,700          $ 1,585           $ 1,385
                                   =======         =======           =======


   The tax  effects  of  temporary  differences  that give  rise to  significant
portions of the deferred tax assets and liabilities are presented below:

                                                 December 25,    December 27,
                                                     1996            1995
                                                 ------------    -----------


  Deferred tax assets:
     Net operating loss carryforwards......        $1,125          $ 1,100
                                                    ------         -------
          Total deferred tax assets........         1,125            1,100

  Deferred tax liabilities:
     Tax in excess of book depreciation....         2,150            1,500
     Excess tax deduction attributable to
         contract rights...................        10,178            5,394
     Other.................................         1,157              627
                                                   ------          -------
         Total deferred tax liabilities....        13,485            7,521
                                                   ------          -------
             Total.........................       $12,360          $ 6,421
                                                   ======          ========









                                      F-20

                                     <PAGE>




                     FINE HOST CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except per share data)

    The Company's  effective income tax rate differed from the Federal statutory
rate as follows:

                                              Fiscal Years Ended

                                        December 29, December 27,   December 28,
                                            1996         1995            1994
                                         --------------------------------------

Federal statutory rate.............         34.0%       34.0%           34.0%
Excess of cost over fair value
  of net assets acquired...........          4.7         4.2             4.8
State & local taxes net of Federal
  tax benefits.....................          4.2         4.2             4.2
Other, net.........................        ( 1.3)       (0.5)           (0.4)
                                           -------     ------           -----
Effective income tax rate..........         41.6%       41.9%           42.6%
                                           =======     ======           =====

     At December 25, 1996, the Company had, for Federal income tax reporting, an
estimated net operating  loss  carryforward  of  approximately  $2,869 that will
begin to expire in 2008.

     Income  taxes  paid in fiscal  1996,  1995 and 1994 were $80,  $49 and $26,
respectively.

13. Litigation

     In January 1996,  the Company was served with a complaint  naming it as one
of five defendants in a lawsuit brought by multiple  plaintiffs alleging damages
arising out of the Woodstock II Festival held in August 1994 in Saugerties,  New
York. The promoter of the Festival is also a defendant. Plaintiffs were hired by
the Company  (which had a concession  agreement  with the promoters of Woodstock
II) as subcontractors of food, beverage and/or merchandise.  In their complaint,
which seeks  approximately  $5,900,  plaintiffs allege damages arising primarily
from the failure to (i) provide  adequate  security;  and (ii) prevent  Festival
attendees  from bringing  food and  beverages in to the Festival.  The Company's
concession  agreement with the promoter made the promoter solely responsible for
providing  security and preventing food and beverage from being brought onto the
premises,  and the Company has made claim for  indemnification  under applicable
provisions of the concession agreement, which has been rejected by the promoter.
On April 4, 1996, the other  defendants named in the suit answered the complaint
and asserted  cross-claims  for  contribution  and  indemnification  against the
Company.   Thereafter,   the  Company   cross-claimed   for   contribution   and
indemnification  against a co-defendant.  The Company believes that its ultimate
liability, if any, will not be material.

     The Company has also sued a former client in the Jefferson Circuit Court of
the Commonwealth of Kentucky for certain amounts owed by the former client under
the food service contract between the parties, and the former client has filed a
counterclaim  against the Company seeking  unspecified damages for the Company's
alleged tortuous interference with a prospective  contractual  relationship with
another food service provider. The Company believes that its ultimate liability,
if any, will not be material.

      The Company is involved in certain other legal  proceedings  incidental to
the normal  conduct of its  business.  The  Company  does not  believe  that any
liabilities  relating to any of the legal proceedings to which it is a party are
likely to be,  individually  or in the aggregate,  material to its  consolidated
financial position or results of operations.


                                      F-21

                                     <PAGE>




                     FINE HOST CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except per share data)


14. Related Party Transaction

     For each of  fiscal  1996,  1995 and 1994,  the  Company  incurred  $150 in
advisory  fees with a company  whose sole owner is the  Chairman of the Board of
the Company. On March 20, 1997, the Company terminated the advisory agreement.


15. Major Client

     During fiscal 1996,  one client  represented  10.0% of net sales and during
fiscal 1995 and 1994 another  client  represented  13.7% and 19.5% of net sales,
respectively.


16. Quarterly Results (Unaudited)

     The  following  summary  shows the  quarterly  results of operations of the
Company for fiscal 1996 and 1995.

                                                     Fiscal Quarters

                                            First   Second    Third     Fourth
 1996:
 Net sales.............................   $24,160  $25,803    $37,272   $40,690
 Gross profit..........................     2,530    2,413      4,506     4,772
 Net income before warrant accretion          259      250      1,399     1,895
 Net income per share(a)............      $  0.08  $  0.07    $  0.22   $  0.30
 Net income per share assuming full
       dilution(a).....................   $  0.07  $  0.07    $  0.22   $  0.30
 1995:
 Net sales.............................   $23,429  $20,090    $26,340   $25,603
 Gross profit..........................     2,134    1,668      3,338     2,746
 Net income before warrant accretion...   $   208  $    74    $ 1,045   $   869
 Net income per share(a)...............   $  0.05  $  0.01    $  0.26   $  0.07
 Net income per share assuming full
       dilution(a).....................   $  0.04  $  0.01    $  0.26   $  0.07

 (a) Each period calculated separately.

17. Subsequent Events

       On February 7, 1997, the Company made a second offering, as authorized by
the Board of Directors, selling 2,689,000 shares at a price of $23.50 per share,
generating net proceeds (including the net proceeds received by the Company upon
the exercise of certain options) of approximately $59.1 million, after deducting
the  underwriting  discount and offering  expenses paid by the Company.  The net
proceeds were used to repay  obligations  under the Company's credit facility in
effect

                                      F-22

                                     <PAGE>





                     FINE HOST CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except per share data)


prior to the  public  offering  and the  remainder  was  invested  in short term
investments in accordance with the Company's  investment  policy.  Assuming this
transaction had occurred at the beginning of fiscal year 1996,  supplemental pro
forma  1996  net  income  per  share  assuming  full  dilution  is $.54  and was
calculated  based upon (i) net income  adjusted  for the  reduction  in interest
expense  resulting  from the  application of the net proceeds of the Offering to
reduce  indebtedness  of the Company  and (ii) the  average  number of shares of
Common Stock outstanding assuming full dilution, as adjusted to reflect the sale
by the Company of a number of shares in the Offering.

       On January 23, 1997, the Company  acquired 100% of the stock of Versatile
Holding  Corporation,  which  owns  100% of the stock of  Serv-Rite  Corporation
("Serv-Rite"),  a contract food services  management  company that provides food
services  to  the  education  and  business  dining  markets  in  New  York  and
Pennsylvania.  The purchase price was approximately  $7,500,  consisting of cash
and assumed debt of Serv-Rite.

       On December 30, 1996,  the Company  acquired 100% of the stock of Service
Dynamics Corp.  ("Service  Dynamics").  Service Dynamics  provides contract food
service  to  various   corporations   and  schools.   The  purchase   price  was
approximately $3,000 consisting of cash paid to the seller.

(a)(2)   Financial Statement Schedules

            None.


(a)(3)   Exhibits

Exhibit No.                    Description

*2        Stock Purchase Agreement, dated as of March 25, 1996, by and among
          the Company, William C. Smitherman, Jo An McBride Smitherman, James E
          McBride and Edward G.Enos.
*3.1      Restated Certificate of Incorporation
*3.2      Restated By-Laws
*4        Specimen of Registrant's Common Stock certificate
*10.1     Subscription Agreement, dated as of April 29, 1993, by among the
          Company, GRD Corporation, The Berkley Family Limited Partnership and
          William R. Berkley.
*10.2     Registration Rights Agreement, dated as of April 29, 1993, by and
          among the Company, Continental Bank N.A., GRD Corporation and William
          R. Berkley.
*10.3     Warrant,  dated  April  29,  1993,  issued to GRD
          Corporation,  to purchase up to 453,432 shares of
          Common  Stock,  par value  $0.01 per share,  at a
          price of $0.01 per share.
*10.4     Warrant, dated April 29, 1993, issued to William R. Berkley, to
          purchase up to 81,613 shares of Common Stock, par value $0.01 per
          share, at a price of $0.01 per share.
*10.5     Warrant,  dates as of April 29,  1993,  issued to
          Bank  of  America  Illinois,  formerly  known  as
          Continental  Bank N.A., to purchase up ro 117,712
          shares  of  Non-Voting  Common  Stock,  par value
          $0.01 per share, at a price of $0.01 per share.

*10.6     (a) Second  Amended and Restated Loan  Agreement,
          dated as of April 24, 1995, among the Company, as
          borrower, its Subsidiaries and USTrust, The Daiwa
          Bank Limited,  NBD Bank and State Street Bank and
          Trust Company.
*10.6 (b) First Amendment to Second Amended and Restated Loan Agreement,
          dated as of August 1, 1995.
*10.6 (c) Second Amendment to Second Amended and Restated Loan Agreement,
          dated as of August 24, 1995.
*10.6 (d) Third Amendment to Second Amended and Restated Loan Agreement, dated
          as of January 16, 1996.
*10.6 (e) Fourth Amendment to Second Amended and Restated Loan Agreement, dated
          as of March 22, 1996.
*10.6 (f) Fifth Amendment to Second Amended and Restated Loan Agreement, dated
          as of June 5, 1996.
*10.7     Subscription  Agreement,  dated as of  April  24,
          1995,  by and among the  Company  and  Interlaken
          Investment Partners, L.P.
*10.8     Registration Rights Agreement,  dated as of April
          24,  1995,  between the  Company  and  Interlaken
          Investment Partners, L.P.
*10.9     Advisory  Services  Agreement,  dated as of March
          25,  1996,  between the  Company  and  Interlaken
          Capital, Inc.
*10.10    Form of 1994 Stock Option Plan, as amended
*10.11    Form of 1996 Non-Employee Director Stock Option Plan
*10.12    Employment Agreement, dated as of June 30, 1995, by and among the
          Company, Northwest Food Service, Inc. and Robert F. Barney.

*10.13    Lease,  dated as of January 31, 1994, as amended,
          between the Company and Fawn  Associates  Limited
          Partnership,  in  regard  to 3  Greenwich  Office
          Park, Greenwich, Connecticut.
*10.14    Commercial Lease  Agreement,  dated as of January
          1, 1991, as amended, between Robert F. Barney and
          Northwest  Food  Service,   Inc.,  in  regard  to
          certain parcel of real property located in Boise,
          Idaho.
*10.15    Business Property Lease, dated as of October 27, 1995, between
          Telegraph Ind. Plaza Ltd. and Creative Food Management, Inc., in
          regard to 6061 Telegraph Road, Toledo, Ohio.
*10.16    Lease,  dated  March 22,  1996,  between  19 West
          Alameda,  LLC and Sun  West  Services,  Inc.,  in
          regard  to  Suite  101,  19 West  Alameda  Drive,
          Tempe, Arizona.
*10.17    Form of Promissory Note from Richard E. Kerley to the Company.
*10.18    Form of Promissory Note from Randy B. Spector to the Company.
*10.19    Form of Promissory Note from Douglas M. Stabler to Interlaken Capital
          Partners Limited Partnerhsip.
*10.20    Form of Promissory Note from Randall K. Ziegler to the Company and
          Interlaken Capital Partners Limited Partnership.
*10.21    Form of Registration Rights Agreement by and among the Company and
          Messrs. Kerley, Spector, Ziegler and Stabler.
*10.22    Form of Third Amended and Restated Loan Agreement.
 10.23    First Amendment to Employment Agreement, dated as of July 1, 1996, by
          and among the Company, Northwest Food Service, Inc. and
          Robert F. Barney
  11      Computations of Per Share Earnings
  21      Subsidiaries
  23      Consent of Deloitte & Touche LLP
  27      Financial Data Schedule



<PAGE>




     *Incorporated  by reference to the Registrant's  Registration  Statement on
Form S-1 (File No. 333-2906),  as amended,  originally filed with the Commission
on March 29,  1996.

Certain  instruments  defining  the  rights of  holders  of long-term  debt of
the  Company  have not been  filed in  accordance  with  Item 601(b)(4)(iii)
of Regulation S-K under the  Securities  Act. The company hereby agrees to
furnish a copy of such instruments to the Commission upon request. (b)
Reports on Form 8-K None









<PAGE>





                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934,
  the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized in New York, New York on March 17, 1997.
                             FINE HOST CORPORATION

                             By: /s/Richard E. Kerley
                                   Name: Richard E. Kerley
                                   Title: President and Chief Executive Officer

           Pursuant to the requirements of the Securities  Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
in the capacities and on the dates indicated.

    Signature                            Title                     Date

/s/ Richard E. Kerley    President and Chief Executive Officer   March 17, 1997
                         and Director (Principal Executive
                           Officer)

/s/Nelson A. Barber      Senior Vice President and Chief         March 17, 1997
                         Financial Officer (Principal Financial
                         and Accounting Officer)

/s/Randy B. Spector      Executive Vice President, Chief         March 17, 1997
                         Administative Officer and Director                     


/s/Randall K. Ziegler    Group President - Convention, Leisure,  March 17, 1997
                         International and Director

/s/William R. Berkley    Chairman of the Board of Directors      March 17, 1997


/s/Ronald E. Blaylock    Director                                March 17, 1997


/s/Andrew M. Bursky      Director                                March 17, 1997


/s/Catherine B. James    Director                                March 17, 1997


s/sJack H. Nusbaum       Director                                March 17, 1997


/s/Joshua A. Polan       Director                                March 17, 1997


<PAGE>





                                                    EXHIBIT INDEX

Exhibit No.                    Description

*2        Stock Purchase Agreement, dated as of March 25, 1996, by and among
          the Company, William C. Smitherman, Jo An McBride Smitherman, James E
          McBride and Edward G.Enos.
*3.1      Restated Certificate of Incorporation
*3.2      Restated By-Laws
*4        Specimen of Registrant's Common Stock certificate
*10.1     Subscription Agreement, dated as of April 29, 1993, by among the
          Company, GRD Corporation, The Berkley Family Limited Partnership and
          William R. Berkley.
*10.2     Registration Rights Agreement, dated as of April 29, 1993, by and
          among the Company, Continental Bank N.A., GRD Corporation and William
          R. Berkley.
*10.3     Warrant,  dated  April  29,  1993,  issued to GRD
          Corporation,  to purchase up to 453,432 shares of
          Common  Stock,  par value  $0.01 per share,  at a
          price of $0.01 per share.
*10.4     Warrant, dated April 29, 1993, issued to William R. Berkley, to
          purchase up to 81,613 shares of Common Stock, par value $0.01 per
          share, at a price of $0.01 per share.
*10.5     Warrant,  dates as of April 29,  1993,  issued to
          Bank  of  America  Illinois,  formerly  known  as
          Continental  Bank N.A., to purchase up ro 117,712
          shares  of  Non-Voting  Common  Stock,  par value
          $0.01 per share, at a price of $0.01 per share.

*10.6     (a) Second  Amended and Restated Loan  Agreement,
          dated as of April 24, 1995, among the Company, as
          borrower, its Subsidiaries and USTrust, The Daiwa
          Bank Limited,  NBD Bank and State Street Bank and
          Trust Company.
*10.6 (b) First Amendment to Second Amended and Restated Loan Agreement,
          dated as of August 1, 1995.
*10.6 (c) Second Amendment to Second Amended and Restated Loan Agreement,
          dated as of August 24, 1995.
*10.6 (d) Third Amendment to Second Amended and Restated Loan Agreement, dated
          as of January 16, 1996.
*10.6 (e) Fourth Amendment to Second Amended and Restated Loan Agreement, dated
          as of March 22, 1996.
*10.6 (f) Fifth Amendment to Second Amended and Restated Loan Agreement, dated
          as of June 5, 1996.
*10.7     Subscription  Agreement,  dated as of  April  24,
          1995,  by and among the  Company  and  Interlaken
          Investment Partners, L.P.
*10.8     Registration Rights Agreement,  dated as of April
          24,  1995,  between the  Company  and  Interlaken
          Investment Partners, L.P.
*10.9     Advisory  Services  Agreement,  dated as of March
          25,  1996,  between the  Company  and  Interlaken
          Capital, Inc.
*10.10    Form of 1994 Stock Option Plan, as amended
*10.11    Form of 1996 Non-Employee Director Stock Option Plan
*10.12    Employment Agreement, dated as of June 30, 1995, by and among the
          Company, Northwest Food Service, Inc. and Robert F. Barney.

*10.13    Lease,  dated as of January 31, 1994, as amended,
          between the Company and Fawn  Associates  Limited
          Partnership,  in  regard  to 3  Greenwich  Office
          Park, Greenwich, Connecticut.
*10.14    Commercial Lease  Agreement,  dated as of January
          1, 1991, as amended, between Robert F. Barney and
          Northwest  Food  Service,   Inc.,  in  regard  to
          certain parcel of real property located in Boise,
          Idaho.
*10.15    Business Property Lease, dated as of October 27, 1995, between
          Telegraph Ind. Plaza Ltd. and Creative Food Management, Inc., in
          regard to 6061 Telegraph Road, Toledo, Ohio.
*10.16    Lease,  dated  March 22,  1996,  between  19 West
          Alameda,  LLC and Sun  West  Services,  Inc.,  in
          regard  to  Suite  101,  19 West  Alameda  Drive,
          Tempe, Arizona.
*10.17    Form of Promissory Note from Richard E. Kerley to the Company.
*10.18    Form of Promissory Note from Randy B. Spector to the Company.
*10.19    Form of Promissory Note from Douglas M. Stabler to Interlaken Capital
          Partners Limited Partnerhsip.
*10.20    Form of Promissory Note from Randall K. Ziegler to the Company and
          Interlaken Capital Partners Limited Partnership.
*10.21    Form of Registration Rights Agreement by and among the Company and
          Messrs. Kerley, Spector, Ziegler and Stabler.
*10.22    Form of Third Amended and Restated Loan Agreement.
 10.23    First Amendment to Employment Agreement, dated as of July 1, 1996, by
          and among the Company, Northwest Food Service, Inc. and
          Robert F. Barney
  11      Computations of Per Share Earnings
  21      Subsidiaries
  23      Consent of Deloitte & Touche LLP
  27      Financial Data Schedule



     *Incorporated  by reference to the Registrant's  Registration  Statement on
Form S-1 (File No. 333-2906),  as amended,  originally filed with the Commission
on March 29,  1996.


<PAGE>