<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                            ______________________

                                   FORM 10-Q
(Mark One)

/ X /     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
          ACT OF 1934

          For quarterly period ended March 31, 2001

                                       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 0-25886

                         GARDEN FRESH RESTAURANT CORP.
                         -----------------------------

            (Exact name of registrant as specified in its charter)

                 Delaware                                         33-0028786
                 --------                                         ----------
(State or other jurisdiction of incorporation                 (I.R.S. Employee
or organization                                              Identification No.)

               17180 Bernardo Center Drive, San Diego, CA 92128
               ------------------------------------------------
              (Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code:  (858) 675-1600
                                                     --------------
________________________________________________________________________________

              (Former name, former address and former fiscal year,
                         if changed since last report)

     Indicate by a 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 _____
                                         -----

The number of shares of Common Stock, $.01 par value, outstanding as of April
26, 2001 was 5,661,787. There are no other classes of common stock.

                                       1
<PAGE>

                         GARDEN FRESH RESTAURANT CORP.
                                   FORM 10-Q

                                     INDEX

<TABLE>
<CAPTION>
                                                                                          PAGE
<S>                                                                                       <C>
PART I:   FINANCIAL INFORMATION

          Item 1:   Unaudited Financial Statements

                    Balance Sheets at September 30, 2000 and
                    March 31, 2001                                                         3

                    Statements of Operations for the three and six months ended
                    March 31, 2000 and March 31, 2001                                      4

                    Statements of Cash Flows for the six months ended
                    March 31, 2000 and March 31, 2001                                      5

                    Notes to Unaudited Financial Statements                                6

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

           Item 3:  Quantitative and Qualitative Disclosures About Market Risk            15


PART II:  OTHER INFORMATION

          Item 1:   Legal Proceedings                                                     16
          Item 2:   Changes in Securities                                                 16
          Item 3:   Defaults Upon Senior Securities                                       16
          Item 4:   Submission of Matters to a Vote of Security Holders                   16
          Item 5:   Other Information                                                     16
          Item 6:   Exhibits and Reports on Form 8-K                                      16
</TABLE>

                                       2
<PAGE>

GARDEN FRESH RESTAURANT CORP.
BALANCE SHEETS
(Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                     September 30, 2000        March 31, 2001
                                                                                     ------------------      ------------------
                                                                                                                 (Unaudited)
<S>                                                                                  <C>                     <C>
Assets

Current assets:
    Cash and cash equivalents                                                        $             2,058     $            2,058
    Inventories                                                                                    6,383                  7,284
    Other current assets                                                                           1,273                  2,765
                                                                                     -------------------     ------------------

       Total current assets                                                                        9,714                 12,107

Property and equipment, net                                                                      135,535                140,641
Intangible and other assets                                                                        1,939                  2,148
                                                                                     -------------------      -----------------

       Total assets                                                                  $           147,188      $         154,896
                                                                                     ===================      =================

Liabilities and Shareholders' Equity:

Current liabilities:
     Accounts payable                                                                $             9,701      $           7,473
     Revolving line of credit                                                                     12,000                  8,000
     Current portion of long-term debt                                                             8,942                  9,449
     Current deferred income taxes                                                                   218                    382
     Accrued liabilities                                                                           7,928                 11,150
                                                                                     -------------------      -----------------

       Total current liabilities                                                                  38,789                 36,454

Deferred income taxes                                                                              3,745                  4,202
Long-term debt, net of current portion                                                            30,612                 37,620
Other liabilities                                                                                  2,371                  2,882

Shareholders' equity:
     Common stock, $.01 par value per share; 12,000,000
       shares authorized at September 30, 2000 and March 31, 2001,
       respectively; 5,655,645 and 5,665,719 issued and
       outstanding at September 30, 2000 and March 31, 2001, respectively                             57                     57
     Paid-in capital                                                                              59,518                 59,606
     Retained earnings                                                                            12,096                 14,075
                                                                                     -------------------      -----------------
       Total shareholders' equity                                                                 71,671                 73,738
                                                                                     -------------------      -----------------
Total liabilities and shareholders' equity                                           $           147,188      $         154,896
                                                                                     ===================      =================
</TABLE>

See notes to unaudited financial statements.

                                       3
<PAGE>

GARDEN FRESH RESTAURANT CORP.
STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

<TABLE>
<CAPTION>
(Unaudited)                                               Three Months Ended                      Six months ended
                                                  ----------------------------------      ----------------------------------
                                                              March 31,                                March 31,
                                                       2000                2001                2000               2001
                                                  --------------      --------------      --------------      --------------
<S>                                               <C>                 <C>                 <C>                 <C>
NET SALES                                         $       40,783      $       51,322      $       76,485      $       94,681
                                                  --------------      --------------      --------------      --------------

Costs and expenses:
   Costs of sales                                         10,190              12,482              19,267              23,441
   Restaurant operating expenses:
       Labor                                              12,763              16,660              24,366              30,999
       Occupancy and other expenses                        8,575              11,747              16,512              22,303
   General and administrative expenses                     2,690               3,308               5,017               6,542
   Restaurant opening costs                                  513                 541               1,045               1,127
   Depreciation and amortization expenses                  2,291               3,041               4,447               5,929
                                                  --------------      --------------      --------------      --------------
Total costs and expenses                                  37,022              47,779              70,654              90,341
                                                  --------------      --------------      --------------      --------------

Operating income                                           3,761               3,543               5,831               4,340

Other income (expenses):
   Interest income                                            38                  43                  67                 110
   Interest expense                                         (808)             (1,193)             (1,532)             (2,344)
   Other income (expenses), net                              105                 (60)                 50               1,169
                                                  --------------      --------------      --------------      --------------
Income before provision for income taxes and
  cumulative effect of accounting change                   3,096               2,333               4,416               3,275
Provision for income taxes                                (1,229)               (925)             (1,748)             (1,296)
                                                  --------------      --------------      --------------      --------------

 Income before cumulative effect of accounting
  change                                                   1,867               1,408               2,668               1,979

Cumulative effect of change in accounting for
startup costs, net of income tax benefit of $800               -                   -              (1,233)                  -
                                                  --------------      --------------      --------------      --------------

Net income                                        $        1,867      $        1,408      $        1,435      $        1,979
                                                  ==============      ==============      ==============      ==============
Basic net income per share:
  Income before cumulative effect of accounting
   change                                         $         0.33      $         0.25      $         0.47      $         0.35
  Cumulative effect of change in accounting
   for startup costs                                           -                   -               (0.22)                  -
                                                  --------------      --------------      --------------      --------------
    Net income                                    $         0.33      $         0.25      $         0.25      $         0.35
                                                  ==============      ==============      ==============      ==============

Shares used in computing basic net income  per
 share                                                     5,641               5,665               5,639               5,665
                                                  ==============      ==============      ==============      ==============

Diluted net income per share:
  Income before cumulative effect of accounting
   change                                         $         0.32      $         0.25      $         0.46      $         0.35
  Cumulative effect of change in accounting
   for startup costs                                           -                   -               (0.21)                  -
                                                  --------------      --------------      --------------      --------------
    Net income                                    $         0.32      $         0.25      $         0.25      $         0.35
                                                  ==============      ==============      ==============      ==============
Shares used in computing diluted net income per
 share                                                     5,796               5,670               5,833               5,677
                                                  ==============      ==============      ==============      ==============
</TABLE>

See notes to unaudited financial statements.

                                       4
<PAGE>

GARDEN FRESH RESTAURANT CORP.
STATEMENTS OF CASH FLOWS
(Dollars in thousands)

<TABLE>
<CAPTION>
(Unaudited)                                                                                          Six months ended
                                                                                          ---------------------------------------
                                                                                          March 31, 2000           March 31, 2001
                                                                                          --------------           --------------
<S>                                                                                       <C>                      <C>
OPERATING ACTIVITIES:
   Net income                                                                             $        1,435           $        1,979
   Adjustments to reconcile net income to net cash
     provided by operating activities:
     Cumulative effect of accounting change, net of tax benefit                                    1,233                        -
     Depreciation and amortization                                                                 4,447                    5,929
     Loss on disposal of property and equipment                                                      105                      132
     Provision for deferred income taxes                                                             782                      621
     Tax benefits from exercise of common stock options                                                5                        -
     Amortization of deferred gain on sale-leaseback of properties                                     -                      (14)
   Changes in operating assets and liabilities:
       Increase in inventories                                                                    (1,287)                    (901)
       Increase in other current assets                                                             (926)                  (1,492)
       Increase (decrease) in accounts payable                                                     2,046                   (1,217)
       Increase in accrued liabilities                                                             2,080                    3,247
       Increase (decrease) in other liabilities                                                      263                       32
                                                                                          --------------           --------------

Net cash provided by operating activities                                                         10,183                    8,316
                                                                                          --------------           --------------

INVESTING ACTIVITIES:
Acquisition of property and equipment:
       New restaurant development                                                                (14,418)                 (14,796)
       Existing restaurant additions                                                              (2,070)                  (1,762)
       Decrease in accounts payable                                                                    -                   (2,451)
       Increase in intangible and other assets                                                      (524)                    (232)
Proceeds from sale-leaseback transactions                                                              -                    7,322
                                                                                          --------------           --------------

Net cash used in investing activities                                                            (17,012)                 (11,919)
                                                                                          --------------           --------------

FINANCING ACTIVITIES:
Borrowings (repayments) under line of credit                                                       1,009                   (4,000)
Proceeds from long-term debt                                                                       9,528                   13,039
Repayment of long-term debt                                                                       (3,580)                  (5,524)
Net proceeds from issuance of common stock                                                           157                       88
                                                                                          --------------           --------------

Net cash provided by financing activities                                                          7,114                    3,603
                                                                                          --------------           --------------

Net increase in cash and cash equivalents                                                            285                        -

Cash and cash equivalents at beginning of period                                                     911                    2,058
                                                                                          --------------           --------------

Cash and cash equivalents at end of period                                                $        1,196           $        2,058
                                                                                          ==============           ==============

Supplemental disclosure of noncash transactions:
   Property and equipment asset purchases in accounts payable                             $        3,576           $        1,440
</TABLE>

See notes to unaudited financial statements.

                                       5
<PAGE>

GARDEN FRESH RESTAURANT CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS

1.   UNAUDITED FINANCIAL STATEMENTS
     ------------------------------

          The accompanying financial statements have been prepared by Garden
     Fresh Restaurant Corp. (the "Company") without audit and reflect all
     adjustments, consisting of normal recurring adjustments, which are, in the
     opinion of management, necessary for a fair statement of financial position
     and the results of operations for the interim periods. The statements have
     been prepared in accordance with the regulations of the Securities and
     Exchange Commission and do not necessarily include certain information and
     footnote disclosures necessary to present the statements in accordance with
     accounting principles generally accepted in the United States of America.
     For further information, refer to the financial statements and notes
     thereto for the fiscal year ended September 30, 2000 included in the
     Company's Form 10-K.

2.   NET INCOME PER SHARE
     --------------------

          Basic net income per share is computed based on the weighted average
     number of common shares outstanding during the period. Diluted net income
     per share is computed on the weighted average number of common shares and
     dilutive potential common shares, which includes options under the
     Company's stock option plans computed using the treasury stock method and
     common shares expected to be issued under the Company's Employee Stock
     Purchase Plan.

          Potential issuances of common stock of 155,000 and 5,000 shares for
     the three month periods ended March 31, 2000 and 2001, respectively, and
     194,000 and 12,000 shares for the six month periods ended March 31, 2000
     and 2001, respectively, were used to calculate diluted earnings per share.
     There were no reconciling items in calculating the numerator for basic and
     diluted earnings per share for either of the periods presented. Shares
     related to stock options of 384,000 and 1,079,000 for the three month
     periods ended March 31, 2000 and 2001, respectively, and 183,000 and
     823,000 shares for the six month periods ended March 31, 2000 and 2001,
     respectively, were excluded from the calculation of diluted net income per
     share, as the effect of their inclusion would be anti-dilutive.

3.   SETTLEMENT OF INSURANCE CLAIM
     -----------------------------

          The Company recorded other income of $1,284,000 during the six months
     ended March 31, 2001 related to the settlement of an insurance claim for
     the loss of assets in a fire at the Company's Point Loma restaurant in
     December 1999.

4.   DEBT COVENANT COMPLIANCE
     ------------------------

          The Company was out of compliance with a certain covenant relating to
     its revolving line of credit as of March 31, 2001. The Company has obtained
     a waiver of this violation from the bank.

5.   PREPARATION OF FINANCIAL STATEMENTS
     -----------------------------------

          The preparation of financial statements, in conformity with accounting
     principles generally accepted in the United States of America, 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 these estimates.

                                       6
<PAGE>

GARDEN FRESH RESTAURANT CORP.
STATEMENT OF OPERATING DATA

       ITEM 2: MANGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

INTRODUCTION

     The statements contained in this Form 10-Q that are not purely historical
are forward looking statements, including statements regarding the Company's
expectations, hopes, beliefs, intentions or strategies regarding the future.
Statements which use the words "expects," "will," "may," "anticipates,"
"believes," "intends," "attempts," and "seeks" are forward looking statements.
These forward looking statements, including statements regarding the Company's
(i) plans to open new restaurants, (ii) plans to increase operational efficiency
and improve labor utilization, (iii) budgeted capital expenditures for new
restaurant openings and improvements at existing sites, (iv) timing for
implementation of its new accounting software program, (v) need to obtain
additional financing, (vi) future restaurant sales, and (vii) strategic
marketing programs and effects of such programs are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward looking statements. It is important to
note that the Company's actual results could differ materially from those in
such forward looking statements. Among the factors that could cause actual
results to differ materially are the factors set forth under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Business Risks." In particular, the Company's expansion efforts and
plans to open new restaurants could be affected by the Company's ability to
locate suitable restaurant sites, construct new restaurants in a timely manner
and obtain additional funds, while the Company's plans to increase operational
efficiency could be affected by difficulties in assimilating new accounting
software as well as escalating utilities costs and fuel, and labor cost for the
distribution center.

QUARTERLY RESULTS

     The following table sets forth the percentage of net sales certain items
included in the Company's statement of operations for the periods indicated.
(Unaudited)

<TABLE>
<CAPTION>
                                                               Three Months Ended                       Six Months Ended
                                                       March 31, 2000      March 31, 2001      March 31, 2000      March 31, 2001
                                                       --------------      --------------      --------------      --------------
<S>                                                    <C>                 <C>                 <C>                 <C>
NET SALES                                                       100.0%              100.0%              100.0%              100.0%
                                                       --------------      --------------      --------------      --------------
COSTS AND EXPENSES:
   Costs of sales                                                25.0%               24.3%               25.2%               24.8%
   Restaurant operating expenses:
     Labor                                                       31.3%               32.5%               31.9%               32.7%
     Occupancy and other expenses                                21.0%               22.9%               21.6%               23.5%
  General and administrative expenses                             6.6%                6.4%                6.6%                6.9%
  Restaurant opening costs                                        1.3%                1.1%                1.3%                1.2%
  Depreciation and amortization expenses                          5.6%                5.9%                5.8%                6.3%
                                                       --------------      --------------      --------------      --------------
Total costs and expenses                                         90.8%               93.1%               92.4%               95.4%
                                                       --------------      --------------      --------------      --------------

Operating income                                                  9.2%                6.9%                7.6%                4.6%
  Interest income                                                 0.1%                  -                 0.1%                0.1%
  Interest expense                                               (2.0%)              (2.3%)              (2.0%)              (2.5%)
  Other income (expenses), net                                    0.3%               (0.1%)               0.1%                1.2%
                                                       --------------      --------------      --------------      --------------

Income before provision for income taxes and
  cumulative effect of accounting change                          7.6%                4.5%                5.8%                3.4%
Provision for income taxes                                       (3.0%)              (1.8%)              (2.3%)              (1.4%)
                                                       --------------      --------------      --------------      --------------

Income before cumulative effect
  of accounting change                                            4.6%                2.7%                3.5%                2.0%
Cumulative effect of accounting for startup costs,
  net of income tax benefit                                         -                   -                (1.6%)                 -
                                                       --------------      --------------      --------------      --------------
Net income                                                        4.6%                2.7%                1.9%                2.0%
                                                       ==============      ==============      ==============      ==============
</TABLE>

                                       7
<PAGE>

RESULTS OF OPERATIONS

Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000

     Net Sales.  Net sales for the three months ended March 31, 2001 increased
25.7% to $51.3 million from $40.8 million for the comparable 2000 period.  This
increase was primarily due to the opening of seventeen restaurants since the
comparable 2000 period and the increase in comparable restaurant sales of 4.9%.
The increase in same store sales is due to higher prices which were partially
offset by decreased guest counts of 0.6% versus the comparable 2000 period.  See
"Business Risks - Certain Operating Results and Considerations".

     Costs of Sales.  Costs of sales for the three months ended March 31, 2001
increased 22.5% to $12.5 million from $10.2 million for the comparable 2000
period.  This increase was due to the addition of seventeen restaurants opened
since the comparable 2000 period.  As a percentage of net sales, costs of sales
decreased to 24.3% from 25.0% as a result of an increase in average meal price
across most markets effective July 2000. See "Business Risks - Certain Operating
Results and Considerations".

     Labor Expense.  Labor expense for the three months ended March 31, 2001
increased 30.5% to $16.7 million from $12.8 million for the comparable 2000
period.  This increase was due primarily to an increase in the minimum wage in
California and the addition of seventeen restaurants opened since the comparable
2000 period, which require higher labor usage during the first ninety days of
operations.  As a percentage of net sales, the labor expense increased 1.2% to
32.5% from 31.3% in the comparable 2000 period due primarily to an increase in
the employee hourly wage rates. See "Business Risks - Minimum Wage."

     Occupancy and Other Expenses.  Occupancy and other expenses for the three
months ended March 31, 2001 increased 36.0% to $11.7 million from $8.6 million
for the comparable 2000 period. Occupancy and other expenses as a percentage of
net sales increased 1.9% to 22.9% from 21.0% for the comparable 2000 period.
This was due primarily to planned marketing expenses, higher utility costs in
California and higher natural gas costs in our other markets, increases in base
rent associated with sale-lease backs, and repair and maintenance costs for
aging restaurants. See "Business Risks - Planned Operating Expenditures and
Business Risks - Results of Energy Crisis."

     General and Administrative Expenses. General and administrative expenses
for the three months ended March 31, 2001 increased 22.2% to $3.3 million from
$2.7 million for the comparable 2000 period. These increases were primarily due
to personnel costs, including planned increases to field supervision and human
resources, to support both the additional seventeen restaurants opened since the
comparable 2000 period and the future new regions. As a percentage of net sales,
general and administrative expenses decreased 0.2% to 6.4% from 6.6% for the
comparable 2000 period.

     Restaurant Opening Costs. Restaurant opening costs for the three months
ended March 31, 2001 approximated the 2000 period at $0.5 million. Restaurant
opening costs as a percentage of net sales decreased 0.2% to 1.1% from 1.3% for
the comparable 2000 period.

     Depreciation and Amortization Expenses.    Depreciation and amortization
expenses for the three months ended March 31, 2001 increased 30.4% to $3.0
million from $2.3 million for the comparable 2000 period. Depreciation and
amortization expense as a percentage of net sales increased 0.3% to 5.9% from
5.6% for the comparable 2000 period.  These increases were due to additional
depreciation for the seventeen restaurants opened since the comparable 2000
period.

     Interest Income.  Interest income for the three months ended March 31, 2001
and 2000 was $43,000 and $38,000, respectively.

     Interest Expense. Interest expense for the three months ended March 31,
2001 increased 50.0% to $1.2 million from $0.8 million for the comparable 2000
period due to additional borrowing activity resulting from higher capital
expenditures for existing stores, seasonal funding requirements, and higher
capital costs for new sites.

     Other Income (Expense), net. Other income (expense), net for the three
months ended March 31, 2001 and 2000 was ($60,000) and $105,000, respectively.

                                       8
<PAGE>

Six Months Ended March 31, 2001 Compared to Six Months Ended March 31, 2000

     Net Sales. Net sales for the six months ended March 31, 2001 increased
23.8% to $94.7 million from $76.5 million for the comparable 2000 period. This
increase was primarily due to the opening of seventeen salad buffet restaurants
since the comparable 2000 period and the increase in comparable restaurant sales
of 4.3%. The same store sales increase is due to higher prices which were
partially offset by decreased guest counts of 1.0% versus the comparable 2000
period. See "Business Risks - Certain Operating Results and Considerations".

     Costs of Sales. Costs of sales for the six months ended March 31, 2001
increased 21.2% to $23.4 million from $19.3 million for the comparable 2000
period. This increase was due to the addition of seventeen salad buffet
restaurants since the comparable 2000 period. As a percentage of net sales,
costs of sales decreased to 24.8% from 25.2% since the comparable 2000 period as
a result of an increase in average meal price across most markets effective July
2000. See "Business Risks - Certain Operating Results and Considerations".

     Labor Expense.  Labor expense for the six months ended March 31, 2001
increased 27.0% to $31.0 million from $24.4 million for the comparable 2000
period.  This increase was due primarily to an increase in the minimum wage in
California and the addition of seventeen restaurants opened since the comparable
2000 period, which require higher labor usage during the first ninety days of
operations.  As a percentage of net sales, the labor expense increased 0.8% to
32.7% from 31.9% in the comparable 2000 period due primarily to an increase in
the employee hourly wage rates. See "Business Risks - Minimum Wage."

     Occupancy and Other Expenses. Occupancy and other expenses for the six
months ended March 31, 2000 increased 35.2% to $22.3 million from $16.5 million
for the comparable 2000 period. Occupancy and other expenses as a percentage of
net sales increased 1.9% to 23.5% from 21.6% for the comparable 2000 period.
This was due primarily to planned marketing expenses, higher utility costs in
California and higher natural gas costs in our other markets, increases in base
rent associated with sale-lease backs, and repair and maintenance costs for
aging restaurants. See "Business Risks - Planned Operating Expenditures and
Business Risks - Results of Energy Crisis."

     General and Administrative Expenses. General and administrative expenses
for the six months ended March 31, 2001 increased 30.0% to $6.5 million from
$5.0 million for the comparable 2000 period. As a percentage of net sales,
general and administrative expenses increased 0.3% to 6.9% from 6.6% for the
comparable 2000 period. These increases were primarily due to personnel costs,
including planned increases to field supervision and human resources, to support
both the additional seventeen restaurants opened since the comparable 2000
period and the future new regions.

     Restaurant Opening Costs. Restaurant opening costs for the six months ended
March 31, 2001 increased to $1.1 million from $1.0 million for the comparable
2000 period.  Restaurant opening costs as a percentage of net sales decreased
0.1% to 1.2% from 1.3% for the comparable 2000 period.

     Depreciation and Amortization Expenses.    Depreciation and amortization
expenses for the six months ended March 31, 2001 increased to $5.9 million from
$4.4 million for the same period in fiscal 2000.  Depreciation and amortization
expense as a percentage of net sales increased 0.5% to 6.3% from 5.8% for the
comparable period in 2000.  These increases were due to additional depreciation
for the seventeen salad buffet restaurants opened since the comparable 2000
period.

     Interest Income.  Interest income for the six months ended March 31, 2001
increased 64.2% to $110,000 from $67,000. The increase in interest income was
due to increased investments of cash on hand during the 2001 period.

     Interest Expense.  Interest expense for the six months ended March 31, 2001
increased 53.3% to $2.3 million from $1.5 million for the comparable 2000
period.  For the six months ended March 31, 2001 interest expense as a percent
of net sales increased 0.5% to 2.5% from 2.0% for the same period in fiscal 2000
due to additional borrowing activity resulting from higher capital expenditures
for existing stores, seasonal funding requirements, and higher capital costs for
new sites.

     Other Income (Expense), net. Other income (expense), net for the six months
ended March 31, 2001 was $1.2 million compared to $0.1 million for the
comparable 2000 period. This increase resulted primarily from the insurance
settlement related to the loss of assets in a fire at a restaurant in San Diego,
California.

                                       9
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company finances its cash requirements principally from cash flow from
operating activities, bank debt, mortgage and capital lease financing, sale-
lease back of owned properties and sale of Company stock.  The Company does not
have significant receivables or inventory, and receives trade credit based upon
negotiated terms when purchasing food and supplies.  For the six months ended
March 31, 2001, the Company generated $8.3 million from operating activities,
repaid $4.0 million under its bank line of credit, and obtained $13.0 million
from equipment and mortgage financing  (with repayments of $5.5 million). The
Company's principal capital requirement has been for funding the development of
restaurants.  Historically the Company has primarily leased the land and
buildings for its restaurant operations.  The Company does purchase land or land
and buildings when favorable conditions are available.  The Company currently
owns the land or land and buildings for 26 restaurants, including the land for
certain sites the Company expects to open during the balance of fiscal 2001.
During the first six months of fiscal 2001 the Company opened one owned
restaurant site, opened three leased restaurant sites, opened one leased kitchen
facility, re-opened one leased restaurant site and completed sale-lease backs
for three restaurant sites.  Capital expenditures totaled $11.9 million (net of
$7.3 million in proceeds from sale-lease backs) during the first six months of
fiscal 2001 and $17.0 million for the comparable period in fiscal 2000.  As of
March 31, 2001, the Company operated 88 salad buffet restaurants, and 1 Ladles
restaurant.

     The cash investment required for the four restaurants and one kitchen
facility opened and one restaurant re-opened during the six month period ended
March 31, 2001 was $14.2 million including land and buildings, and excluding
restaurant opening costs. The restaurant opening costs incurred during the six
month period ended March 31, 2001 for the four restaurants opened and the one
re-opened was $1,127,000. For restaurant sites planned to open in fiscal 2001
and 2002 the Company has signed five leases, and purchased three sites. In
addition, the Company has signed 1 lease for a fiscal 2001 site for a small
restaurant concept. The cash investment to open a new restaurant typically
includes the purchase or installation of furniture, fixtures, equipment and
leasehold improvements, and in the case of an owned site, the purchase of land
and a building. In addition to remaining budgeted capital expenditures for
fiscal 2001 of $15.7 million for new restaurant openings, the Company has a
remaining budgeted $3.2 million in expenditures for fiscal 2001 for capital
improvements at existing sites. See "Business Risks - Expansion Risks."

     In addition to funds generated from operations, sale-lease back of owned
properties and public stock offerings, the Company will need to obtain external
financing to complete its expansion plans for fiscal year 2001 and beyond.
There can be no assurance that such funds will be available when needed.
Additionally, should the Company's results of operations decrease or should
costs or capital expenditures rise, the Company may not have the ability to open
new restaurants at its desired pace or at all, because capital may not be
available.  See "Business Risks - Capital Requirements."

     As of March 31, 2001 the Company had $8.0 million in debt outstanding under
its revolving line of credit.  The Company was out of compliance with a certain
covenant relating to the revolving line of credit as of March 31, 2001.  The
Company has obtained a waiver of this violation from the bank.

IMPACT OF INFLATION

     The primary inflationary factors affecting the Company's operations include
food and beverage and labor costs.   Minimum wage increases have affected
earnings during the current fiscal year.  Substantial increases in costs and
expenses, particularly food, supplies, labor, utilities, and operating expenses,
could have a significant impact on the Company's operating results to the extent
that such increases cannot be passed along to guests through price increases.

BUSINESS RISKS

     The Company's business is subject to a number of risks.  A comprehensive
summary of such risks can be found in the Company's Form 10-K.  In addition to
other information in this Form 10-Q, shareholders and prospective investors
should consider carefully the following factors in evaluating the Company and
its business.

                                       10
<PAGE>

Certain Operating Results and Considerations

     In fiscal 1999 and 2000, the Company experienced an increase of 3.7% and
3.1%, respectively, in comparable restaurant sales. In the first six months of
fiscal 2000 and 2001, the Company's comparable restaurant sales increased 2.4%
and 4.3% respectively. The Company's restaurants have not historically
experienced significant increases in guest volume following their initial
opening period (15 months) due to the fact that most sites open immediately at
average or greater than average guest volume. As a result, the Company does not
believe that recent comparable restaurant sales are indicative of future trends
in comparable restaurant sales. The Company believes that it may from time to
time in the future experience declines in comparable restaurant sales, and that
any future increases in comparable restaurant sales would be modest.

     In July 2000, the Company increased prices in most of its markets.  To
date, this increase has resulted in fewer guests.  While additional price
increases may be considered in the future, the Company does not believe it has
significant latitude to achieve comparable restaurant sales growth through price
increases.

Expansion Risks

     The Company opened ten salad buffet restaurants in fiscal 1999, seventeen
in fiscal 2000, and has opened six restaurants to date in fiscal 2001, four in
existing regions (Southern California, Northern California, and Missouri) and
two located in suburbs of Chicago, Illinois. A location in San Diego, California
was reopened subsequent to being rebuilt after the December 31, 1999 fire. The
Company currently intends to open three additional restaurants in fiscal 2001.
The Company opened its first "Ladles, A Soup and Salad Takery," a take-out
restaurant concept targeted for on-the-go families and busy professionals
located in San Diego, California. During fiscal 2000 the Company opened and
closed its second "Ladles, A Soup and Salad Takery," restaurant located in San
Diego, California. The Company's ability to achieve its expansion plans will
depend on a variety of factors, many of which may be beyond the Company's
control, including the Company's ability to locate suitable restaurant sites,
negotiate acceptable lease or purchase terms, obtain required governmental
approvals, construct new restaurants in a timely manner, attract, train and
retain qualified and experienced personnel and management, operate its
restaurants profitably and obtain additional capital, as well as general
economic conditions and the degree of competition in the particular region of
expansion. The Company has experienced, and expects to continue to experience,
delays in restaurant openings from time to time. Since its inception the Company
has closed three non-performing salad buffet restaurants. Given the number of
restaurants in current operation and the Company's projected expansion rate
there can be no assurances that the Company will not close restaurants in the
future. Any closure could result in a significant write off of assets, which
could adversely affect the Company's business, financial condition and results
of operations.

     The Company incurs substantial costs in opening a new restaurant and, in
the Company's experience, new restaurants experience fluctuating operational
levels for some time after opening.  Owned restaurants generally require
significantly more up-front capital than leased restaurants, as a result of
which an increase in the percentage of owned restaurant openings as compared to
historical practice would increase the overall capital required to meet the
Company's growth plans.  There can be no assurance that the Company will
successfully expand or that the Company's existing or new restaurants will be
profitable.  The Company has encountered intense competition for restaurant
sites, and in many cases has had difficulty buying or leasing desirable sites on
terms that are acceptable to the Company.  In many cases, the Company's
competitors are willing and able to pay more than the Company for sites.  The
Company expects these difficulties in obtaining desirable sites to continue for
the foreseeable future.

Restaurant Industry and Competition

     The restaurant industry is highly competitive. Key competitive factors in
the industry include the quality and value of the food products offered, quality
of service, price, dining experience, restaurant location and the ambiance of
the facilities. The Company's primary competitors include mid-priced, full-
service casual dining restaurants, as well as traditional self-service buffet
and other soup and salad restaurants and healthful and nutrition-oriented
restaurants. The Company competes with national and regional chains, as well as
individually owned restaurants. The number of buffet and casual restaurants with
operations generally similar to the Company's has grown substantially in the
last several years and the Company believes competition among buffet-style and
casual restaurants has increased and will continue to increase as the Company's
competitors expand operations in various geographic areas. Such increased
competition could increase the Company's operating costs or adversely affect its
revenues. The Company believes it competes favorably in the industry,

                                       11
<PAGE>

although many of the Company's competitors have been in existence longer than
the Company, have more established market presence and have substantially
greater financial, marketing and other resources than the Company, which may
give them certain competitive advantages. In addition, the restaurant industry
has few non-economic barriers to entry. Therefore, there can be no assurance
that third parties will not be able to successfully imitate and implement the
Company's concept. The Company has encountered intense competition for
restaurant sites, and in many cases has had difficulty buying or leasing
desirable sites on terms that are acceptable to the Company. In many cases, the
Company's competitors are willing and able to pay more than the Company for
sites. The Company expects these difficulties in obtaining desirable sites to
continue for the foreseeable future.

Capital Requirements

     In addition to funds generated from operations, sale-lease back of owned
properties and public stock offerings, the Company will need to obtain external
financing to complete its expansion plans for fiscal year 2001 and beyond.
There can be no assurance that such funds will be available when needed.
Additionally, should the Company's results of operations decrease or should
costs or capital expenditures rise, the Company may not have the ability to open
new restaurants at its desired pace or at all, because capital may not be
available.

Cost Sensitivity

     The Company's profitability is highly sensitive to increases in food, labor
and other operating costs.  The Company's dependence on frequent deliveries of
fresh produce and groceries subjects it to the risk that shortages or
interruptions in supply caused by adverse weather or other conditions could
materially adversely affect the availability, quality and cost of ingredients.
In addition, unfavorable trends or developments concerning factors such as
inflation, food, labor, and employee benefit costs (including increases in
hourly wage and minimum unemployment tax rates - See "Business Risks - Minimum
Wage"), rent increases resulting from the rent escalation provisions in the
Company's leases, and the availability of experienced management and hourly
employees may also adversely affect the Company.  The Company believes recent
relatively favorable inflation rates and part-time labor supplies in its
principal market area have contributed to relatively stable food and labor costs
in recent years.  However there can be no assurance that these conditions will
continue or that the Company will have the ability to control costs in the
future.  See "Business Risks - Reliance on Key Suppliers and Distributors".

Minimum Wage

     The Company has experienced increases in the hourly wage rate due to
increases in the federal minimum wage and in the California minimum wage and due
to the tight part-time labor market resulting from historically low unemployment
levels. These increases have resulted in a decrease in the Company's
profitability. The Company expects to continue to be impacted by increasing wage
costs in California where the minimum wage rate increased by $0.50 per hour on
January 2, 2001. While there can be no assurance that the Company will be able
to manage and absorb these increases in the future, the Company is exploring
strategic ideas on how to better manage labor utilization in order to minimize
the impact.

Planned Operating Expenditures

     The Company has incurred planned marketing expenditures during the first
six months of fiscal 2001 in order to implement strategic marketing programs
designed to benefit the Company in subsequent quarters. Expenditures related to
these programs include advertising production costs, media expenses, and
research. There can be no assurance these programs will be successful and will
benefit the Company by increasing guest counts and revenues in the future.

     Since May 2000 the Company has converted five locations to leased from
owned as part of a plan to reduce debt.  Such conversions result in an increase
in store rent expense for the converted location.  Should the Company continue
to convert owned locations to leased locations, store rent expense will continue
to increase as a result.

Effects of Energy Crisis

     The Company continues to experience increased energy costs related to the
California energy crisis and to higher natural gas prices in its other markets.
In addition to higher utility costs, the California energy crisis has resulted
in

                                       12
<PAGE>

electricity shortages that have caused power providers to implement rolling
blackouts throughout the state.  Disruptions in the power supply could occur in
areas where Company restaurants are located, causing those restaurants to
experience temporary interruptions in operations.  Such interruptions in
operations may result in lost revenue and affect store profitability.  The
increased utility and natural gas costs were not part of the Company's original
plan and will continue to affect the Company's profitability.  In addition,
there can be no assurance that the interruptions in power supplies resulting
from the energy shortages in California will not also impact the Company's
operating results and ability to control costs in the future.

Importance of Key Employees

     The Company is heavily dependent upon the services of its officers and key
management personnel involved in restaurant operations, purchasing, expansion
and administration.  In particular, the Company is dependent upon the management
and leadership of its four executive officers, Michael P. Mack, David W. Qualls,
R. Gregory Keller and Kenneth J. Keane.  The loss of any of these four
individuals could have a material adverse effect on the Company's business,
financial condition and results of operations.  The success of the Company and
its individual restaurants depends upon the Company's ability to attract and
retain highly motivated, well-qualified restaurant operations and other
management personnel.  The Company faces significant competition in the
recruitment of qualified employees.

Computer Information System

     The core component of the Company's cost management program is the
Company's computer information system. The Company has developed a proprietary
computer accounting and management information system that is fully integrated
throughout the Company, including in each restaurant. The Company believes that,
as compared to off-the-shelf software applications, this system provides
significantly greater access to restaurant operating data and a much shorter
management reaction time. The system is used as a critical planning tool by
corporate and restaurant managers in four primary areas: production, labor, food
cost and financial and accounting controls. The system generates forecasts of
estimated guest volumes and other predictive data, which assist restaurant
managers in developing automated production reports that detail the daily
quantity and timing of batch production of various menu offerings and food
preparation requirements. The computerized system also acts as a scheduling tool
for the general managers, producing automated daily labor reports outlining the
restaurant's staffing needs based on changing trends and guest volume forecasts.
Corporate management, through daily information updates, has complete access to
restaurant data and can react quickly to changing trends. The Company can
quickly analyze the cost of its menu and make corporate-wide menu adjustments to
minimize the impact of shifting food prices and food waste. Weekly computer-
generated profit and loss statements and monthly accounting department-generated
profit and loss statements are reviewed at the corporate, regional and
restaurant management levels.

     Because of the Company's growth and additional needs in the areas of
distribution, construction and regional management reporting, the component of
the system that provides the Company's formal accounting reports is in the
process of being replaced with a commercial software package. The selection has
been made. The implementation has begun in the Company's second quarter of
fiscal 2001 and is anticipated to be completed during the fourth quarter of
fiscal 2001.


Seasonality and Quarterly Fluctuations

     The Company's business experiences seasonal fluctuations, as a
disproportionate amount of the Company's net income is generally realized in the
second, third and fourth fiscal quarters due to higher average sales and lower
average costs.  Quarterly results have been and are expected to continue to
fluctuate as a result of a number of factors, including the timing of new
restaurant openings.  As a result of these factors, net sales and net income on
a quarterly basis may fluctuate and are not necessarily indicative of the
results that may be achieved for a full fiscal year.

Geographic Concentration:  Restaurant Base

     Thirty-five of the Company's ninety existing salad buffet restaurants are
located in California, and eighteen are located in Florida.  Accordingly, the
Company is susceptible to fluctuations in its business caused by adverse
economic or other conditions in these regions, including natural disasters or
other acts of God.  In addition, in California, higher utility costs will
continue to affect the Company's profitability in this region.  As a result of
the Company's continued concentration in California and Florida, adverse
economic or other conditions in either state could have a material adverse
effect on the Company's business.  The Company's significant investment in, and
long-term commitment to, each of its

                                       13
<PAGE>

restaurant sites limits its ability to respond quickly or effectively to changes
in local competitive conditions or other changes that could affect the Company's
operations. In addition, the Company has a small number of restaurants relative
to some of its competitors. Consequently, a decline in the profitability of an
existing restaurant or the introduction of an unsuccessful concept could have a
more significant effect on the Company's results of operations than would be the
case in a company with a larger number of restaurants.

Reliance on Key Suppliers and Distributors

     Beginning April 2000 the company began utilization of its delivery and
distribution center for the West Coast restaurants.  In addition, the Company
utilizes sole source suppliers for certain produce and grocery items.  In order
to minimize price fluctuations, the Company enters into fixed price supply
contracts that generally have terms of two months to one year and generally do
not have minimum purchase requirements.  However, in the event that the
distribution center or the Company's suppliers are unable to make the required
deliveries due to shortages or interruptions caused by adverse weather or other
conditions, or are relieved of their contract obligations due to an invocation
of an act of God provision, the Company would need to renegotiate these
contracts or purchase such products elsewhere.  In addition to the West Coast
distribution center, the Company has several local produce distributors that are
governed by one program and one main grocery distributor.  All produce and
groceries purchased by the Company are channeled from the growers and other
suppliers to the Company's restaurants and central kitchens through these
distributors.  In the event that any of these distributors were to cease
distribution on behalf of the Company, the Company would be required to make
alternate arrangements for produce and grocery distribution.  There can be no
assurance that the Company's distribution expense would not be greater under
such alternate arrangements.  See "Business Risks - Cost Sensitivity".

Volatility of Stock Price

     The market price of the Company's common stock has fluctuated since the
initial public offering of its common stock in May 1995.  Quarterly operating
results of the Company and other restaurant companies, daily transactional
volume, changes in general conditions in the economy, the financial markets or
the restaurant industry, natural disasters or other developments affecting the
Company or its competitors could cause the market price of the common stock to
fluctuate substantially.  In addition, in recent years the stock market has
experienced extreme price and volume fluctuations.  This volatility has had a
significant effect on the market price of securities issued by many companies
for reasons unrelated to the operating performance of these companies.

                                       14
<PAGE>

       ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


     Market risks relating to the Company's operations result primarily from
changes in short-term interest rates as the Company's line of credit is tied to
the prime rate, or LIBOR rounded to the nearest whole 1/8 of 1% plus 2%.  As of
March 31, 2001, the Company had $8.0 million in debt outstanding under these
credit facilities, a decrease of $4.0 million since September 30, 2000.  Based
on a hypothetical 50 basis point adverse change in prime rates, net interest
expense would increase by approximately $40,000 on an annual basis, and likewise
would decrease earnings and cash flows.  The Company cannot predict market
fluctuations in interest rates and their impact on debt, nor can there be any
assurance that long-term fixed rate debt will be available at favorable rates,
if at all.  Consequently, future results may differ materially from the
estimated results due to adverse changes in interest rates or debt availability.

     The Company did not have any foreign currency or other market risk or any
derivative financial instruments at March 31, 2001.

                                       15
<PAGE>

                          PART II - OTHER INFORMATION

Item 1. Legal Proceedings                                   Not Applicable

Item 2. Changes in Securities                               Not Applicable

Item 3. Defaults Upon Senior Securities                     Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders

        On March 7, 2001, the Company held its Annual Meeting of Stockholders.
At this meeting, Robert A. Gunst and Michael M. Minchin, Jr. were elected to the
Board of Directors as Class C Directors receiving votes in favor of 4,974,851
and 4,973,933, respectively. Votes against Mr. Gunst and Mr. Minchin were 65,114
and 66,032, respectively, with no abstentions. One Class A director (Michael P.
Mack) and two Class B directors (Edgar F. Berner and John M. Robbins) have terms
continuing until the Annual Meetings of Stockholders in 2003 and 2002,
respectively.  Also at the 2001 meeting, KPMG LLP was ratified as the Company's
independent auditors. 5,002,972 votes were cast for the ratification of KPMG
LLP, 4,929 votes were cast against, with 32,064 abstentions.

Item 5. Other Information                                   Not Applicable

Item 6. Exhibits and Reports on Form 8-K

        (a)    Exhibits:

               The Exhibits required by Item 6(a) of the report are listed in
               the Exhibit Index on page 17 herewith.

        (b)    Reports on Form 8-K:

               A report on Form 8-K was filed by the Company in February 23,
               2001 relating to the February 15, 2001 declaration of a dividends
               in connection with the Rights Agreement described therein.

                                       16
<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.

DATED:
                                   GARDEN FRESH RESTAURANT CORP.
May 15, 2001                            (Registrant)


                                   /s/ Michael P. Mack
                                   ---------------------------------------------
                                   Michael P. Mack
                                   Chief Executive Officer/President
                                   (Principal Executive Officer)


                                   /s/ David W. Qualls
                                   ---------------------------------------------
                                   David W. Qualls
                                   Chief Financial Officer
                                   (Principal Accounting and Financial
                                   Officer)

                                       17
<PAGE>

                                 EXHIBIT INDEX

EXHIBIT NO.    DESCRIPTION
-----------    -----------

3.1  *         Restated Certificate of Incorporation of Garden Fresh Restaurant
               Corp.

3.2  **        Bylaws of Garden Fresh Restaurant Corp., as amended.

10.1 **        Form of Indemnity Agreement for executive officers and directors.

10.2 **        The Company's Restaurant Management Stock Option Plan, as
               amended.

10.3 **        The Company's Key Employee Stock Option Plan, as amended.

10.4 **        The Company's 1995 Outside Director Stock Option Plan.

10.5 **        The Company's 1995 Key Employee Stock Option Plan, as amended.

10.6 ***       Form of Executive Employment Agreement

10.7 ***       Wells Fargo Bank Revolving Line of Credit Note

10.8 ****      The Company's 1998 Stock Option Plan

10.9 ****      The Company's Variable Deferred Compensation Plan for Executives

10.9A ****     Amendment to the Company's Variable Deferred Compensation Plan
               for Executives

10.13**        Park Terrace Office Park lease between the Company and Park
               Terrace Partners dated November 1, 1991

10.14*****     Indemnification Agreement between the Company and David Qualls,
               Greg Keller, and Michael Mack dated April 28, 1998.

________________________

*      Incorporated by reference from Exhibit 4.1 filed with the Company's
       Registration Statement on Form S-8 (No. 33-93568) filed June 16, 1995.

**     Incorporated by reference from the Exhibits with corresponding numbers
       filed with the Company's Registration Statement on Form S-1 (No. 33-
       90404), as amended by Amendment No. 1 to Form S-1 filed on April 19,
       1995, Amendment No. 2 for Form S-1 filed May 8, 1995, Amendment No. 3 to
       Form S-1 filed May 15, 1995, Exhibit 10.2 is incorporated by reference
       from Exhibits 10.2 and 10.2A, Exhibit 10.3 is incorporated by reference
       from Exhibits 10.3 and 10.3A and Exhibit 10.5 is incorporated by
       reference from Exhibit 10.5 and 10.5A.

***    Incorporated by reference from the Exhibits with corresponding numbers
       filed with the Company's Form 10-Q filed with the SEC on February 13,
       1998.

****   Incorporated by reference from the Exhibits with corresponding numbers
       filed with the Company's Form 10-Q filed with the SEC on April 28, 1998,
       as amended by Amendment No. 1 to Form 10-Q filed on April 28, 1998,
       Amendment No. 2 for Form 10-K filed on August 13, 1999, and Amendment No.
       3 for Form 10-Q filed on December 29, 1999.

*****  Incorporated by reference from the Exhibits with corresponding numbers
       filed with the Company's Form S-1 (No. 33-51267) filed with the SEC on
       April 29, 1998.

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