SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
                                     OF 1934

For the fiscal year ended December 28, 1996        Commission file number
                                                          0-19315


                                Bertucci's, Inc.
             (Exact name of registrant as specified in its charter)

         MASSACHUSETTS                                 04-2947209
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation of organization)

             14 AUDUBON ROAD                              01880
        WAKEFIELD, MASSACHUSETTS                        (Zip code)
(Address of principal executive offices)

       Registrant's telephone number, including area code: (617) 246-6700

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

           Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock, par value $.005 per share


      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

      The aggregate market value of the voting stock held by  non-affiliates  of
the registrants as of March 15, 1997 was $42,501,960.

      The  number of shares  outstanding  as of March 15,  1997 was  8,806,650
shares.

                       Documents Incorporated by Reference

      Part III  incorporates  information by reference from the definitive proxy
statement for the Annual Meeting of Stockholders to be held on May 13, 1997.

      Indicate by check mark if disclosure of delinquent  files pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K.
<PAGE>
                                    PART I

ITEM 1:   BUSINESS

General

      As of fiscal year end December 28, 1996,  the Company  operated a chain of
80 full-service,  Italian restaurants under the "Bertucci's Brick Oven Pizzeria"
name in the Northeastern and Mid-Atlantic  regions,  and the Chicago,  Illinois,
and  Atlanta,  Georgia,  metropolitan  areas.  The  restaurants'  menu  features
original-recipe  gourmet pizza, prepared in brick ovens, and other high-quality,
moderately-priced  Italian  food.  The average  check per  customer  for dinner,
including beverages, is approximately $9.80.

      Bertucci's seeks to distinguish  itself from its competitors in the family
and adult casual-dining market segments through offering:

         a distinctive,  yet moderately-priced menu that features fresh, natural
        ingredients  and includes  brick-oven  baked gourmet pizzas and bread, a
        wide variety of pasta items, appetizers, and desserts;

         a contemporary  European-style design,  centered around a large-display
        cooking  area  with  brick  ovens,   customized   for  each   particular
        restaurant's location, with no two restaurants looking alike; and

         a  relaxed,  family  atmosphere,  as  evidenced  by  moderate  sales of
        alcoholic beverages which,  during fiscal year 1996,  accounted for only
        9.2% of net sales.

      The Bertucci's  concept  features  lower-cost  food items and a restaurant
design with a lower  capital  investment  (averaging  $1.40  million)  than many
competitors that offer a broader menu. Accordingly,  the restaurants are able to
offer  customers  excellent  value  while  permitting  the  Company to  maintain
relatively high restaurant-unit operating margins.

      The first  Bertucci's  Brick  Oven  Pizzeria  was  opened  in  Somerville,
Massachusetts,  in 1981 by the Company's founder and president, Joseph Crugnale.
In 1985,  the Company began  expanding and as of December 28, 1996,  operated 80
restaurants, of which 31 were located in Massachusetts, two each were located in
Rhode  Island,  New  Hampshire,  and  Washington,  DC, three were located in New
Jersey,  four  each were  located  in New York and  Pennsylvania,  six each were
located in  Georgia,  Maryland,  and  Virginia,  and seven each were  located in
Connecticut and Illinois.  During the 1996 fiscal year, two locations in Florida
and one location in New Jersey were  closed.  Seven  restaurants  were opened in
1996,  and the Company  expects to open six to seven  restaurants  in 1997.  The
Company's  strategy is to pursue  controlled  expansion in contiguous areas that
can  support  multiple  locations,  with an emphasis  on future  expansion  into
existing markets.

      Average  sales per  restaurant  open for the full period were  $1,826,000,
$1,673,000, and $1,671,000 in 1994, 1995, and 1996, respectively.

Concept and Menu

      The Company's restaurants are full-service, casual-dining restaurants that
feature  gourmet  Italian food with an emphasis on  brick-oven  baked pizzas and
creative  pasta dishes.  During fiscal year 1996,  sales of pizza  accounted for
approximately 40% of net sales.  Through development of a distinctive menu and a
contemporary European-style design, the Company strives to offer a unique dining
experience with excellent value for the price. The Company's  restaurants appeal
to a diverse  target  market.  In addition  to  adult-dining,  family-dining  is
encouraged,  and a special menu is provided for  children.  All of the Company's
restaurants are open for lunch and dinner,  seven days a week. Most items on the
menu may be purchased  for take-out  service or delivery,  which,  during fiscal
year 1996, accounted for approximately 26% of net sales.

      The Company's  signature  product,  gourmet pizza,  is offered with a wide
variety of cheese, vegetable, and meat toppings, and is prepared in brick ovens.
By baking its pizzas in brick ovens at an unusually high temperature,  but for a
relatively  short  period of time,  the Company is able to produce a light crust
while  preserving the flavor and moisture of the toppings.  Management  believes
that the Company's  original recipes and brick-oven baking techniques combine to
produce a superior pizza that is difficult to duplicate.  In addition to pizzas,
the Company's menu features a variety of pasta items, appetizers, soups, salads,
calzones,  and desserts  that are prepared  fresh daily  according to Bertucci's
special recipes.  Natural, fresh ingredients are a cornerstone of the Bertucci's
concept.  In order to ensure the uniform  high-quality and freshness of its menu
offerings, the Company makes all of its own dough, sauces, mixes, and desserts.
<PAGE>
      As of December 28, 1996,  the average  check per customer at the Company's
restaurants,   including  beverages,  was  approximately  $7.35  for  lunch  and
approximately  $9.80 for dinner.  Full  bar-service  is available at most of the
Company's  restaurants,  and beer and wine are  available at all  locations.  In
keeping with its emphasis on offering  distinctive menu selections,  the Company
offers  Bertucci's  Lite beer,  a  private-label  beer brewed  according  to the
Company's  proprietary  specifications.  Limited seating is available in the bar
areas to  accommodate  those waiting to be seated.  The Company does not believe
that  changes  in public  attitude  toward  alcoholic-beverage  consumption  and
stricter governmental  regulation of establishments  serving alcoholic beverages
will have a material adverse effect on its business.

      Management  believes  that the  unique  interior  decor  of the  Company's
restaurants  contributes to the  distinctive  dining  experience  enjoyed by its
customers.   Each  of  the  Company's   restaurants   features  a  contemporary,
European-style, open-kitchen design centered around brick ovens. Ingredients are
displayed and food is prepared on polished  granite counters located in front of
the brick ovens, in plain view of diners.  Bocce-ball  courts have been included
at selected sites,  further enhancing the distinctive  decor. The interior-decor
theme is artistically adapted to each site so that no two restaurants are alike.
The floor plan of the Company's restaurants is flexible, permitting tables to be
easily rearranged to accommodate large groups or parties.
<PAGE>
Restaurant Locations and Expansion Plans

      As  of  December  28,  1996,  the  Company   operated  80  restaurants  in
Connecticut,  Georgia,  Illinois,  Maryland,  Massachusetts,  New Hampshire, New
Jersey, New York, Pennsylvania,  Rhode Island, Virginia, and Washington, DC. The
following tables provide information with respect to those restaurants that were
open, and those that were under development as of December 28, 1996.

                     Restaurants Currently Operating

                             Connecticut (7)
        ----------------------------------------------------------
              Avon                Darien           Glastonbury
           Newington              Orange          West Hartford
                                 Westport

                               Georgia (6)
        ----------------------------------------------------------
            Atlanta            Buckhead             East Cobb
         Lawrenceville          Roswell           Sandy Springs

                              Illinois (7)
        ----------------------------------------------------------
          Bloomingdale           Chicago             Glenview
         Naperville (2)         Schaumburg          Woodridge

                              Maryland (6)
        ----------------------------------------------------------
           Annapolis             Bel Air             Columbia
          Owings Mills           Timonium          White Marsh

                           Massachusetts (31)
        ----------------------------------------------------------
            Amherst              Andover          Boston (Copley Sq)
        Boston (Faneuil Hall)   Braintree            Brockton
           Brookline         Cambridge (Alewife)  Cambridge (Harvard Sq)
        Cambridge (Kendall Sq)  Chelmsford          Framingham
            Hingham             Holliston           Lexington
           Longmeadow            Marlboro            Medford
             Newton           North Andover          Norwood
            Peabody             Somerville          Swampscott
            Taunton              Waltham            Wellesley
          West Peabody         West Roxbury      West Springfield
                                  Woburn

                            New Hampshire (2)
        ----------------------------------------------------------
             Nashua                                   Salem

                             New Jersey (3)
        ----------------------------------------------------------
             Hazlet             Mt. Laurel          Woodbridge

                              New York (4)
        ----------------------------------------------------------
           Hauppauge             Melville            Syosset
                                 Westbury

                            Pennsylvania (4)
        ----------------------------------------------------------
           Huntingdon Valley   Langhorne          Philadelphia
                                 Wayne

                            Rhode Island (2)
        ----------------------------------------------------------
        East Providence                              Warwick

                              Virginia (6)
        ----------------------------------------------------------
           Alexandria          Centreville           Herndon
            Manassas           Springfield        Tysons Corner

                           Washington, DC (2)
        ----------------------------------------------------------
         Dupont Circle                       Pennsylvania Avenue, NW
<PAGE>
                          Restaurants Under Development

                                   Location

                       Waterbury, CT         Boston, MA
                       Marlboro,MA           Manchester, NH
                       Bryn Mawr, PA         Fair Lakes, VA
                       Norwood, MA (Sal and Vinnie's Sicilian Steakhouse)

      The decor and  interior-design  of the Company's  restaurants are flexible
and  can be  readily  adapted  to  accommodate  different  types  of  locations.
Restaurants have been opened both as freestanding structures and within existing
buildings, and are located in both urban and suburban areas.

      Through the course of the Company's  expansion,  management has determined
that the optimal  size for the  Company's  restaurants  is  approximately  5,700
square feet, with seating for approximately  160 customers.  The average cost of
opening a typical  restaurant has been  approximately  $1.40  million,  of which
$875,000 is attributable to leasehold improvements,  $375,000 is attributable to
furniture,  fixtures, and equipment,  and $150,000 is attributable to preopening
expenses.

      The Company intends to continue its strategy of adding restaurants through
controlled  growth into contiguous  areas that can support  multiple  locations,
with an emphasis on future expansion into selected  Connecticut,  Massachusetts,
and New  Hampshire  markets.  During fiscal year 1997,  the Company  anticipates
opening  six to  seven  restaurants.  So far in 1997,  the  Company  opened  one
restaurant, and has six restaurants under development.

      Expansion  during  fiscal year 1998 is expected to be at the level of 8 to
10   restaurants.   The  Company's   expansion  plans  are  based  primarily  on
management's  evaluation of market  potential.  The Company has not commissioned
any independent, third-party evaluation of its expansion plans.

      All of the  Bertucci's  restaurants  are operated by the Company,  and the
Company currently has no plans to develop a franchise program.

Marketing

      The Company focuses on the family and adult casual-dining market segments.
To reach these  segments,  it targets its restaurant  locations for areas with a
median to high family income.  Management believes that the Company's commitment
to customer service and price value is the most effective approach to attracting
customers.  Accordingly,  the Company  historically has focused its resources on
providing  its  customers  with  superior  service  and  value,  and has  relied
primarily  on  word-of-mouth  to attract  new and repeat  customers.  Management
believes  that its strategy of locating  multiple  restaurants  within a defined
geographic   area  will   enable   newer   restaurants   to  benefit   from  the
name-recognition  and reputation for quality developed by existing  restaurants.
The  Company  employs  print and direct mail  advertising,  and  conducts  local
restaurant  promotions.  During fiscal year 1996, the Company's expenditures for
advertising and marketing were approximately  3.2% of its revenues.  The Company
plans  to  increase  its  advertising   expenditures  in  1997  by  utilizing  a
combination  of  local  media  vehicles  such  as  television,   radio,  outdoor
billboards, and direct mail in most of its markets.

Restaurant Operations and Management

      The Company strives to maintain quality and consistency in its restaurants
through the careful training and supervision of personnel and the  establishment
of  standards  relating  to  food  and  beverage  preparation,   maintenance  of
facilities,  and conduct of  personnel.  The  Company  maintains  financial  and
accounting  controls  for each of its  restaurants  through  use of  centralized
accounting and management  information  systems.  Sales information is collected
daily from each  restaurant,  and  restaurant  managers are provided with weekly
operating  statements  for their  locations.  Cash is  controlled  through daily
deposits of sales proceeds in local  operating  accounts,  the balances of which
are wire-transferred daily to the Company's principal operating account.

      Each new  restaurant  employee  of the Company  participates  in a ten-day
training  program during which he or she works under the close  supervision of a
restaurant  manager.  Management strives to instill enthusiasm and dedication in
its employees.  Management  regularly solicits employee  suggestions  concerning
restaurant  operations,  and strives to be  responsive to employee  concerns.  A
toll-free  number is available  for use by any  employee  who has a  suggestion,
comment, or complaint,  and management meets regularly with employees at each of
the restaurants.
<PAGE>
      Restaurant managers,  many of whom are drawn from the Company's restaurant
personnel,  complete an eight-to-ten-week training program during which they are
instructed in areas including food quality and  preparation,  customer  service,
alcoholic beverage service, liquor liability avoidance,  and employee relations.
Restaurant  managers are provided with operations  manuals  relating to food and
beverage preparation, and operation of restaurants.

      Management has made a conscious  commitment to ensure customer  service of
the  highest  standards.  Employees  work  toward  the  goal  of  100%  customer
satisfaction,  and are  empowered  to address  customers'  needs with  immediate
attention  and action.  A toll-free  Customer  Comment  Line is available to all
customers, with a guaranteed response in 24 hours.

     Operations  at the  Company's  restaurants  are  managed  by twelve  region
managers,  each of whom is responsible for supervising the operations of four to
nine   restaurants.   The  region   managers   report   directly   to  the  Vice
President-Operations.  Region managers meet at least once a week with restaurant
management to review  operations and to resolve issues.  Working with region and
restaurant  managers,  the Company's executive management defines operations and
performance  objectives  for  each  restaurant.   An  incentive  plan  has  been
established in which region and restaurant  managers  participate.  Awards under
the incentive plan are tied to achievement of specified operating targets.

      The staff for a typical  Bertucci's  restaurant  consists  of one  general
manager, two managers, and approximately 40 to 60 hourly employees, most of whom
are part-time  personnel.  The Company holds regular  meetings of its restaurant
managers that cover new products,  continuing training,  and aspects of business
management.

Purchasing and Commissary Operations

      Effective  January 1994,  the Company  closed  commissary  operations  and
distributed,  to outside vendors,  production of those items previously produced
at   the    commissary.    Company    representatives    periodically    perform
quality-assurance  inspections.  Management  believes  in  maintaining  as  much
on-site  preparation of food products at the restaurants as possible in order to
ensure freshness and quality,  and to enhance the dining experience  through the
visual  display of fresh  ingredients.  The  Company  negotiates  directly  with
manufacturers,  importers,  brokers,  and  wholesale  suppliers  of primary food
ingredients and beverage products to ensure consistent  quality and freshness of
products  in its  restaurants,  and to obtain  competitive  pricing.  Management
believes  that all  essential  food and  beverage  products are  available  from
alternative, qualified suppliers.

Competition

      The  restaurant  business  is highly  competitive  and is affected by many
factors,  including general economic  conditions,  changes in consumer taste and
spending habits, and population and traffic patterns.  The Company competes with
a number of  restaurants  within its markets,  both  locally  owned and units of
regional or national  chains.  Many of the  Company's  competitors  have greater
financial resources and longer operating histories than the Company. The Company
believes  that its ability to compete  effectively  will continue to depend upon
its ability to offer  high-quality,  moderately-priced  food in a  full-service,
distinctive dining environment.

Government Regulation

      The Company's  restaurants  are subject to numerous  federal,  state,  and
local laws affecting health,  sanitation,  and safety  standards,  as well as to
state and local licensing  regulation of the sale of alcoholic  beverages.  Each
restaurant has appropriate  licenses from regulatory  authorities allowing it to
sell liquor, and/or beer and wine, and each restaurant has food service licenses
from  local  health  authorities.  The  Company's  licenses  to  sell  alcoholic
beverages  must be renewed  annually and may be suspended or revoked at any time
for cause,  including  violation  by the Company or its  employees of any law or
regulation  pertaining to alcoholic  beverage control,  such as those regulating
the  minimum age of patrons or  employees,  advertising,  wholesale  purchasing,
inventory control,  handling, and storage. The failure of a restaurant to obtain
or retain liquor or food service  licenses could  adversely  affect  operations.
However, each restaurant is operated in accordance with standardized  procedures
designed to ensure compliance with all applicable codes and regulations.

      In some  states,  the  Company is subject to  "dram-shop"  statutes  which
generally  provide  that a person who is injured  by an  intoxicated  person may
attempt to recover damages from an establishment that served alcoholic beverages
to the person who caused  injury.  While the  Company  carries  liquor-liability
coverage as part of its existing  comprehensive  general liability insurance,  a
judgment  against  the  Company  under a  dram-shop  statute  in  excess  of the
Company's  liability  coverage  could  have a  material  adverse  effect  on the
<PAGE>
Company.

      The development and construction of additional restaurants will be subject
to compliance with applicable zoning,  land use, and environmental  regulations.
The Company is also subject to federal and state employment laws concerning such
items  as  minimum   wages,   working   conditions,   overtime,   tip   credits,
discrimination and harassment, and immigration.  The Company believes that it is
in material compliance with each such law and that continued compliance will not
significantly affect its restaurant operating costs.

Service Marks

      The Company has registered the names  "Bertucci's"  and "Bertucci's  Brick
Oven  Pizzeria" as service marks,  and trademarks  with the United States Patent
and  Trademark  Office.  The  Company  is aware of names  similar to that of the
Company  used by third  parties  in certain  limited  geographical  areas.  Such
third-party  use may prevent the Company from  licensing the use of its mark for
restaurants in such areas.  Except for these areas,  the Company is not aware of
any infringing uses that could materially  affect its business.  The Company has
filed  applications  with the  United  States  Patent  and  Trademark  Office to
register  "Food  Does Not Lie" as a  service  mark,  and its  olive  design as a
trademark and service mark. The Company intends to protect its service marks and
trademarks by appropriate legal action whenever necessary.

Employees

      As of March 17, 1997, the Company employed 4,700 persons,  57 of whom were
corporate personnel, 258 of whom were region,  restaurant,  or trainee managers,
and 4,385 of whom were restaurant personnel.

      The  Company  considers  its  employee-relations  to be good.  None of the
Company's employees is covered by a collective-bargaining agreement.


ITEM 2:   PROPERTIES

     At the end of fiscal year 1996,  all of the Company's  restaurants,  except
its  locations  in  Westport,  Connecticut,   Columbia,  Maryland,  Peabody  and
Marlboro,  Massachusetts,  and Wayne,  Pennsylvania,  were established in leased
space,   none  of  which  was  leased   from  an   affiliated   party.   Initial
restaurant-lease  terms  range  from 2 years to 40 years.  The  majority  of the
leases provide for an option to renew for additional  terms ranging from 5 years
to 20 years.  All of the Company's leases provide for a specified annual rental,
and most  leases call for  additional  rents  based on sales  volumes  exceeding
specified levels.  Generally, the leases are net leases that require the Company
to pay all taxes, insurance, and maintenance costs.

      Prior to September 1993, the Company's  executive  offices were located in
5,000 square feet of leased office space in Woburn,  Massachusetts,  adjacent to
the Company's  commissary.  The Company also leased an additional  21,590 square
feet for use by its commissary  operations.  In January 1994, the Company closed
its  commissary  operations.  The lease for the Company's  office and commissary
space expired on June 30, 1994.

      In September  1993, the Company moved into its new corporate  headquarters
in Wakefield,  Massachusetts.  The Company acquired a 60,000-square-foot  office
building in December 1992, and after  renovations were completed,  approximately
20,000  square feet of office and  administrative  space were  created.  Another
40,000  square  feet of  storage  space  is  available  and can be  utilized  as
additional office space when needed.


ITEM 3:   LEGAL PROCEEDINGS

      From time to time,  lawsuits are filed against the Company in the ordinary
course of business.  The Company is not a party to any  litigation  that, in the
judgment of management  after  consultation  with  counsel,  is likely to have a
material  adverse effect on the Company or its business,  and the Company is not
aware that any such litigation is threatened.


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

      No matter was submitted to a vote of  shareholders  of the Company  during
the fourth quarter of the fiscal year ended December 28, 1996.
<PAGE>
                                   PART II

ITEM 5:  MARKET FOR THE  REGISTRANT'S  COMMON  STOCK AND  RELATED  STOCKHOLDER
         MATTERS

      The Common  Stock of the Company has been  traded on the  National  Market
System of NASDAQ  under the  symbol  BERT  since the  Company's  initial  public
offering on June 28, 1991.  Prior to that time,  there was no public  market for
the Common Stock. The following table sets forth the high and low  last-reported
sale prices for the Company's Common Stock for the period indicated, as reported
by NASDAQ.
<TABLE>
<CAPTION>

                Year       Fiscal Quarter Ended          High      Low
               -------   ------------------------      -------   -------
                <S>      <C>                           <C>         <C>

                1995     April 22, 1995                12.875      7.00
                         July 15, 1995                  8.875      6.50
                         October 7, 1995                7.875      5.875
                         December 30, 1995              7.00       4.50

                1996     April 20, 1996                 6.00       4.50
                         July 13, 1996                  7.25       4.875
                         October 5. 1996                5.375      4.25
                         December 28, 1996              6.125      4.50

                1997     April (through March 15, 1997) 6.625      5.00
</TABLE>

      As of March 15, 1997, there were approximately 4,800 beneficial owners and
715 holders of record of the Company's Common Stock.

      The Company has never paid cash dividends on its Common Stock. The Company
currently  intends to retain all earnings for use in the operation and expansion
of its business. The payment of any future dividends will be determined in light
of the  then-current  conditions,  including the Company's  earnings,  financial
condition and  requirements,  restrictions  in financing  agreements,  and other
factors.
<PAGE>
ITEM 6:   SELECTED CONSOLIDATED FINANCIAL DATA

      The data for fiscal years ended 1992 through 1996 are derived from audited
financial statements of the Company. Selected consolidated financial data should
be read in conjunction  with  Management's  Discussion and Analysis of Financial
Condition and Results of Operations,  and the Consolidated  Financial Statements
and the Notes thereto included  elsewhere in this Form 10-K.  Historical results
are not necessarily indicative of results to be expected in the future.
<TABLE>
<CAPTION>
 
                                           Fiscal Years Ended
                         ----------------------------------------------------
                         12/26/92    12/25/93   12/31/94   12/30/95  12/28/96
                         (52 wks)    (52 wks)   (53 wks)   (52 wks)  (52 wks)
                         --------    --------   --------   --------  --------

Income Statement Data:
<S>                      <C>       <C>       <C>         <C>         <C>     
NET SALES                $ 51,472  $ 74,625  $ 102,797   $ 120,260   $ 128,044
COST AND EXPENSES:
   Cost of sales           12,847    19,368     26,039      31,060      32,484
   Operating expenses      23,294    33,778     48,804      60,673      65,986
   General and             
    administrative
    expenses                3,472     4,918      6,566       8,239       7,720
   Depreciation and        
    amortization            3,095     4,840      7,327       9,083       8,781
   Taxes other than        
    income                  2,307     3,530      5,106       6,268       6,633
   Restaurant closing
    expense                     -         -          -       5,336           -
                         --------  --------- ----------  ----------  ----------
      Total costs and     
       expenses            45,015    66,434     93,842     120,659     121,604
                         --------  --------- ----------  ----------  ----------
      Operating            
       income (loss)        6,457     8,191      8,955        (399)      6,440
INTEREST EXPENSE, net          17        82        155       1,253       1,297
INTEREST INCOME               922       657         33          21          15
                         --------  --------- ----------  ----------  ----------
   Income (loss) before    
    income tax expense
     (benefit)              7,362     8,766      8,833      (1,631)      5,158
INCOME TAX EXPENSE         
 (BENEFIT)                  2,598     3,127      3,223        (745)      1,933
                         --------  --------- ----------  ----------  ----------
      Net income (loss)  $  4,764  $  5,639  $   5,610   $    (886)  $   3,225
                         ========  ========= ==========  ==========  ==========

EARNINGS (LOSS) PER
 COMMON SHARE            $   0.55  $   0.63  $    0.63   $   (0.10)  $    0.36
                         ========  ========= ==========  ==========  ==========
Balance Sheet Data:
WORKING CAPITAL           
(DEFICIT)                $ 18,232  $ (3,973) $  (5,738)  $  (5,258)  $  (2,857)
TOTAL ASSETS               61,812    70,181     93,114      98,938     102,528
LONG-TERM DEBT,
 INCLUDING CURRENT
 PORTION                        -         -     14,000      19,438      18,438
SHAREHOLDERS' EQUITY       52,490    58,804     64,846      64,092      67,538
</TABLE>
<PAGE>
ITEM 7:   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

      The following table sets forth the  percentage-relationship  to net sales,
unless  otherwise  indicated,  of certain items included in the Company's income
statement, as well as certain operating data, for the periods indicated:
<TABLE>
<CAPTION>
                                                Fiscal Years Ended
                                     -------------------------------------------
                                       December 31,  December 30,  December 28,
                                            1994         1995         1996
                                          (53 wks)    (52 wks)      (52 wks)
                                     --------------  ------------  -------------
Income Statement Data:
NET SALES                                    100.0%       100.0%       100.0%
                                     --------------  ------------  -------------
<S>                                     <C>          <C>            <C>
COST AND EXPENSES:
   Cost of sales                              25.3         25.8         25.4
   Operating expenses                         47.5         50.4         51.5
   General and administrative expenses         6.4          6.9          6.0
   Depreciation and amortization               7.1          7.6          6.9
   Taxes other than income                     5.0          5.2          5.2
   Restaurant closing expense                    -          4.4            -
                                        -----------  -----------    ------------
      Total costs and expenses                91.3        100.3         95.0
                                        -----------  -----------    ------------
      Operating income (loss)                  8.7         (0.3)         5.0
INTEREST EXPENSE, net                            -          1.0          1.0
INTEREST INCOME                                  -            -            -
                                        -----------  -----------    ------------
      Income (loss) before income tax
        expense (benefit)                      8.7         (1.3)         4.0                       
INCOME TAX EXPENSE (BENEFIT)                   3.2         (0.6)         1.5
                                        -----------  -----------    ------------
      Net income (loss)                        5.5%        (0.7)%        2.5%
                                        ===========  ============   ============

Restaurant Operating Data:
Average sales per restaurant open for
 full period                            $    1,826   $    1,673     $  1,671
Percentage change in average sales per        
 restaurant open for full period               0.3%        (8.4)%       (0.1)%
Percentage change in comparable              
 restaurant sales                              0.2%        (2.0)%        1.0%

Number of restaurants:
   Restaurants open at beginning of
    period                                      50           67           76
      Restaurants opened                        17            9            7
      Restaurants closed                         -            -           (3)
                                        ----------   ------------   ----------
   Total restaurants open at end of
    period                                      67           76           80
                                        ==========   ============   ==========
</TABLE>

Fiscal Year 1996 Versus Fiscal Year 1995

     Net sales increased $7.8 million, or 6.5%, to $128.0 million in fiscal year
1996,  from  $120.3  million  in fiscal  year  1995.  Most of the  increase  was
attributed to seven new  restaurants  that were opened in fiscal year 1996,  and
nine new restaurants that were opened in fiscal year 1995. Comparable restaurant
sales  increased  1.0% for the  fifty-two  week  period.  Menu  price  increases
averaged  about 2.2%  during the periods  under  comparison.  Average  sales per
restaurant  open for the full  period  remained  at $1.67  million  for the 1996
fiscal year.

      Cost of sales, primarily food and beverages,  increased from $31.1 million
in fiscal year 1995 to $32.5  million in fiscal year 1996,  and  decreased  as a
percentage  of  revenues  from 25.8% in fiscal year 1995 to 25.4% in fiscal year
1996.  Through more efficient  operations  and pricing,  the Company was able to
control the higher costs of flour,  cheese,  and chicken  during the 1996 fiscal
year.

      Operating  expenses  increased  from $60.7  million in fiscal year 1995 to
$66.0  million  fiscal year 1996,  and  increased as a percentage  of sales from
50.4% in fiscal year 1995 to 51.5% in fiscal  year 1996.  The  increase  was the
result of a $1.2 million increase in advertising costs during fiscal 1996. Labor
<PAGE>
costs increased slightly, but were offset by lower costs for insurance.

      General and administrative  expenses decreased from $8.2 million in fiscal
year 1995 to $7.7 million in fiscal year 1996,  and decreased as a percentage of
sales  from 6.9% in  fiscal  year 1995 to 6.0% in 1996.  This  decrease  was the
result  of  attrition  at the  corporate  level,  reduction  in  training  costs
associated with new restaurant  openings,  and a reduction of in-house marketing
costs.

      Depreciation and amortization expense was $9.1 million in fiscal year 1995
and $8.8 million in fiscal year 1996, a decrease,  as a percentage of net sales,
from 7.6% in fiscal year 1995 to 6.9% in fiscal  year 1996.  This  decrease  was
attributable to a reduction in amortization costs on new restaurant openings.

      Taxes, other than income taxes, increased from $6.3 million in fiscal year
1995 to $6.6 million in fiscal year 1996, and was 5.2% of net sales for both the
1995 and 1996 periods.

      Restaurant-closing  expenses  of $5.3  million  in  fiscal  year 1995 were
associated with the closing of three restaurants, which occurred at the close of
business on February  22,  1996.  The expense  consisted of $3.8 million for the
disposal of fixed assets,  $1.0 million for the liabilities  associated with the
termination of leases,  and $500,000 for legal and other related  closing costs.
At December 28, 1996, $45,000 of this reserve remains. The Company believes this
reserve is  adequate  to cover any  remaining  costs  associated  with the three
restaurant closings.

      Interest  expense  remained  constant at $1.3  million for both the 1995
and 1996 fiscal years.

      For fiscal year 1995,  the Company  incurred a tax benefit of $745,000 due
to the closing of the three restaurants.  The effective income tax rate for 1996
was 37.5%

Fiscal Year 1995 Versus Fiscal Year 1994

      Net sales  increased  $17.5  million,  or 17%, to $120.3 million in fiscal
year 1995,  from $102.8  million in fiscal year 1994.  All of the  increase  was
attributed  to 9  new  restaurants  opened  in  fiscal  year  1995  and  17  new
restaurants  opened in fiscal  year  1994,  while  comparable  restaurant  sales
declined  $1.8  million,  or  2.0%,  for the  comparable  52-week  period.  Menu
price-increases averaged about 1.2% during the periods under comparison. Average
sales per  restaurant  open for the full period  declined 8.4% to $1.67 million,
from $1.83 million the previous  year, due primarily to the extra week in fiscal
1994, and with the lower volumes of the new restaurants added in 1994.

      Cost of sales, primarily food and beverages,  increased from $26.0 million
in fiscal year 1994 to $31.1  million in fiscal year 1995,  and  increased  as a
percentage  of revenues  from 25.3% in fiscal 1994 to 25.8% in fiscal year 1995.
This  increase  was the result of higher food prices  (mainly  cheese,  chicken,
flour, olive oil, and produce).

      Operating  expenses  increased  from $48.8  million in fiscal year 1994 to
$60.7  million in fiscal year 1995,  and increased as a percentage of sales from
47.5% in fiscal year 1994 to 50.4% in fiscal  year 1995.  The  increase  was the
result of  advertising  costs of $1.7  million  that were not incurred in fiscal
year 1994,  along with higher utility costs and labor costs  associated with new
restaurants opened in 1994 and 1995.

      General and administrative  expenses increased from $6.6 million in fiscal
year 1994 to $8.2 million in fiscal year 1995, and increased, as a percentage of
sales,  from 6.4% in fiscal year 1994 to 6.9% in 1995.  The  increase  primarily
came  from  in-house  marketing  costs,  training  and  recruitment  costs,  and
data-processing costs.

      Depreciation  and  amortization  expenses  increased  from $7.3 million in
fiscal  year 1994 to $9.1  million  in  fiscal  year  1995,  an  increase,  as a
percentage  of net sales,  from 7.1% in fiscal  year 1994 to 7.6% in fiscal year
1995.  The  increase  was due to higher  depreciation  costs,  as a  percent  to
revenues, associated with new restaurants built in 1994 and 1995.

      Taxes, other than income taxes, increased from $5.1 million in fiscal year
1994 to $6.3  million in fiscal year 1995,  primarily  due to increases in state
unemployment tax rates and increases in real property taxes on rented property.

      Restaurant-closing  expenses  of $5.3  million  in  fiscal  year  1995 are
associated with the closing of three underperforming  restaurants  subsequent to
fiscal year 1995.  The expense  consisted  of $3.8  million for the  disposal of
fixed assets,  $1.0 million for  liabilities  associated with the termination of
leases,  and $500,000 for legal and other  related  closing  costs.  The Company
<PAGE>
anticipated  that the  disposition of assets and  termination of leases would be
fully  completed  by the end of fiscal  year  1996.  The pretax  operating  loss
attributed to these three restaurants was approximately  $550,000 for the fiscal
year 1995.

      Interest  expense  increased  from  $155,000  in fiscal  year 1994 to $1.3
million in fiscal year 1995. The increase was  attributable to the higher amount
of bank borrowings in fiscal year 1995.

      The effective income tax rate for 1994 was 36.5%. In fiscal year 1995, the
Company  incurred  a tax  benefit  of  $745,000  due to  the  closing  of  three
restaurants.

Liquidity and Sources of Capital

      To date,  the Company has financed its  expansion  from  operations,  bank
borrowings,  and the private placement and public offering of equity securities.
The Company does not have  significant  receivables  or  inventory.  The Company
receives  trade  credit  based upon  negotiated  terms for  purchasing  food and
supplies.

      The Company has a bank  line-of-credit  in effect until November 30, 1997,
under which it may borrow up to $30.0 million. On November 30, 1997, the Company
will be able to convert the balance, if any, to a term-loan maturing on November
30,  2000.  The  Company  pays a fee of 1/4  of 1% on the  unused  balance,  and
interest is calculated using LIBOR plus 1.25%. There are no compensating-balance
arrangements  or legal  restrictions  as to the  withdrawal  of these funds.  At
December 30, 1995 and December 28, 1996, the amounts outstanding under this line
of credit were $19.4 million and $18.4 million, respectively.

      During fiscal years 1994,  1995,  and 1996,  the  Company's  investment in
property and  equipment  was $27.6  million,  $14.3  million,  and $9.5 million,
respectively.  The investments  were funded with cash provided by operations and
with the proceeds of financing  activities.  During the fiscal years 1994, 1995,
and 1996, the Company generated net cash, from continuing  operations,  of $15.9
million,  $10.7 million,  and $14.1 million,  respectively.  During fiscal years
1994,  1995,  and 1996, the Company  received cash from financing  activities of
$14.4 million, $5.5 million, and $(0.8) million, respectively.

      The Company expects to open six to seven  restaurants in fiscal year 1997,
and  between 8 to 10  restaurants  in fiscal year 1998.  The Company  expects to
expend  approximately $8.5 million in fiscal year 1997, and approximately  $11.0
million to $13.0 million in fiscal year 1998, to finance planned expansion.  The
Company  believes  that  it  will  have  sufficient  working  capital  and  bank
borrowings to finance its expansion plans through the end of fiscal year 1998.

Impact of Inflation

      The impact of inflation on food, labor, and occupancy costs can affect the
Company's  operations  significantly.  Many of the Company's  employees are paid
hourly rates related to the federal minimum wage,  which was increased in fiscal
year 1996. Food costs have been essentially  stable during the period.  Building
costs,  taxes,  maintenance,  and  insurance  costs  all have an  impact  on the
Company's  occupancy  costs,  which  continued  to  increase  during the period.
Management believes that the current practice of maintaining  adequate operating
margins through a combination of menu price-increases and cost-controls, careful
evaluation of property and equipment needs, and efficient  purchasing  practices
is its most effective tool for coping with inflation.

Seasonality

      The Company's  results of operations have not been materially  affected by
seasonality.

Forward-Looking Information

      Information   in  the  Annual  Report  and  Form  10-K  contains   certain
forward-looking  statements  and  information  relating to the Company  that are
based on the beliefs of the Company's  management,  as well as assumptions  made
by, and information currently available to, the Company's management.  When used
in this  Annual  Report and Form 10-K,  words such as  "anticipate,"  "believe,"
"estimate,"  "expect," "intend," and similar expressions,  as they relate to the
Company or the Company's management,  identify forward-looking  statements. Such
statements  reflect the  current  views of the  Company  with  respect to future
events,  and are  subject  to  certain  risks,  uncertainties,  and  assumptions
relating to the operations and results of operations of the Company, competitive
factors and pricing pressures,  shifts in consumer demand, the costs of products
and services,  general economic  conditions,  and the acts of third parties,  as
well as other factors  described in the Annual  Report and Form 10-K,  and, from
time to time, in the Company's periodic earnings releases and reports filed with
<PAGE>
the  Securities  and Exchange  Commission.  Should one or more of these risks or
uncertainties  materialize,  or should  underlying  assumptions prove incorrect,
actual results or outcomes may vary materially  from those  described  herein as
anticipated, believed, estimated, expected, or intended.
<PAGE>
ITEM 8:   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                 INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

<TABLE>
<CAPTION>


                                                                 Page
<S>                                                                <C>

Report of Independent Public Accountants                           14

Consolidated Balance Sheets as of December 30, 1995, and 
   December 28, 1996                                               15

Consolidated Statements of Operations for the years ended
   December 31, 1994 December 30, 1995, and December 28, 1996      16

Consolidated Statements of Shareholders' Equity for the
   years ended December 31, 1994, December 30, 1995, 
   and December 28, 1996                                           17

Consolidated Statements of Cash Flows for the years ended
   December 31, 1994, December 30, 1995, and December 28, 1996     18

Notes to Consolidated Financial Statements                         19
</TABLE>

<PAGE>
                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Bertucci's, Inc.:

      We  have  audited  the   accompanying   consolidated   balance  sheets  of
Bertucci's,  Inc. (a Massachusetts  corporation) and subsidiaries as of December
30, 1995 and December  28,  1996,  and the related  consolidated  statements  of
operations,  shareholders' equity, and cash flows for each of the three years in
the  period  ended  December  28,  1996.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these 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, the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position of  Bertucci's,  Inc.  and
subsidiaries  as of December 30, 1995 and December 28, 1996,  and the results of
its  operations  and its cash  flows for each of the three  years in the  period
ended  December 28, 1996,  in  accordance  with  generally  accepted  accounting
principles.



                                          ARTHUR ANDERSEN LLP



Boston, Massachusetts
February 25, 1997
<PAGE>
                        BERTUCCI'S, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                     ASSETS
                                                         Fiscal Years Ended
                                                    ---------------------------
                                                     December 30,  December 28,
                                                        1995          1996
                                                     ------------  ------------
<S>                                                 <C>           <C>
CURRENT ASSETS:
   Cash and cash equivalents                        $  1,384,117  $  4,265,596
   Inventories                                           950,565     1,048,361
   Accounts receivable                                   153,486       179,280
   Note receivable                                        70,442        76,455
   Prepaid expenses                                      366,656       474,641
   Deferred preopening costs                             817,789       510,082
   Prepaid taxes                                         757,831     1,026,685
                                                    ------------  ------------
      Total current assets                             4,500,886     7,581,100
                                                    ------------  ------------

PROPERTY AND EQUIPMENT, at cost:
   Land                                                2,902,012     2,902,012
   Buildings and improvements                         10,323,766    10,359,565
   Leasehold improvements                             69,027,741    72,416,258
   Machinery and equipment                            32,438,263    35,673,484
   Construction in progress                            1,215,678       250,238
                                                    ------------  ------------
                                                     115,907,460   121,601,557
   Less--Accumulated depreciation                     26,047,667    29,704,655
                                                    ------------  ------------
      Net property and equipment                      89,859,793    91,896,902
PREPAID TAXES                                          2,405,169     1,274,686
OTHER ASSETS                                           2,171,832     1,775,741
                                                    ------------  ------------
                                                    $ 98,937,680  $102,528,429
                                                    ============  ============

      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Notes payable-current                            $     25,000  $     25,000
   Accounts payable                                    4,243,323     4,179,347
   Accrued expenses                                      513,206     1,032,565
   Accrued restaurant closing expense                  1,539,000        45,000
   Accrued payroll and employee benefits               2,419,402     3,297,703
   Accrued taxes                                       1,018,736     1,858,788
                                                    ------------  ------------
      Total current liabilities                        9,758,667    10,438,403
DEFERRED RENT                                          5,574,573     6,064,085
NOTES PAYABLE                                             75,000        50,000
LONG-TERM DEBT                                        19,437,500    18,437,500
COMMITMENTS AND CONTINGENCIES (Note 7)
SHAREHOLDERS' EQUITY:
   Preferred stock, $.01 par value -- Authorized               -             -
    -- 200,000 shares, none issued
   Common stock, $.005 par value -- Authorized 
    -- 15,000,000 shares
   Issued and outstanding -- 8,728,442 shares at
    December 30, 1995 and 8,790,429 at
    December 28, 1996                                     43,642        43,952
   Additional paid-in capital                         44,619,932    44,841,296
   Retained earnings                                  19,428,366    22,653,193
                                                    ------------  ------------
      Total shareholders' equity                      64,091,940    67,538,441
                                                    ------------  ------------
                                                    $ 98,937,680  $102,528,429
                                                    ============  ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial 
statements.

<PAGE>
                        BERTUCCI'S, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                              Fiscal Years Ended
                                   ---------------------------------------
                                     12/31/94      12/30/95      12/28/96
                                   -----------   -----------   -----------
<S>                               <C>            <C>           <C>
NET SALES                         $102,796,965   $120,259,850  $128,044,405
                                  ------------   ------------  ------------
COST AND EXPENSES:
   Cost of sales                    26,039,125     31,059,985    32,484,063
   Operating expenses               48,804,004     60,672,341    65,986,007
   General and administrative        
    expenses                         6,565,741      8,239,250     7,719,582
   Depreciation and amortization     7,326,557      9,083,381     8,781,155
   Taxes other than income           5,106,078      6,267,958     6,632,779
   Restaurant closing expense                -      5,336,000             -
                                  ------------   ------------  ------------
      Total costs and expenses      93,841,505    120,658,915   121,603,586
                                  ------------   ------------  ------------
      Operating income (loss)        8,955,460       (399,065)    6,440,819
INTEREST EXPENSE, net                  155,524      1,253,241     1,297,700
INTEREST INCOME                         32,855         21,464        14,809
                                  ------------   ------------- ------------
      Income (loss) before income           
       tax expense (benefit)         8,832,791     (1,630,842)    5,157,928
INCOME TAX EXPENSE (BENEFIT)         3,222,900       (744,893)    1,933,101
                                  ------------   ------------- ------------
      Net income (loss)           $  5,609,891   $   (885,949) $  3,224,827
                                  ============   ============= ============

WEIGHTED AVERAGE SHARES              
 OUTSTANDING                        8,936,569       8,728,442     8,853,745
                                  ============   ============= ============
EARNINGS (LOSS) PER COMMON SHARE  $     0.63     $      (0.10) $       0.36
                                  ============   ============= ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
                        BERTUCCI'S, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                          Common Stock
                       --------------------   Additional              Total
                       Number of    $0.005     Paid-In    Retained Shareholders'
                        Shares     Par Value   Capital    Earnings    Equity
                       ---------  ----------  ---------- ----------  -----------
<S>                  <C>       <C>        <C>          <C>          <C>

 BALANCE, 12/25/93   8,601,869 $  43,009  $ 44,056,534 $14,704,424  $58,803,967
  Exercise of options  101,288       506       306,276           -      306,782
  Issuance of stock      7,786        40       125,605           -      125,645
  Net income                 -         -             -   5,609,891    5,609,891
                     --------- ---------    ---------- -----------  ------------

BALANCE, 12/31/94    8,710,943    43,555    44,488,415  20,314,315   64,846,285
  Exercise of options    3,000        15        10,538           -       10,553
  Issuance of stock     14,499        72       120,979           -      121,051
  Net loss                   -         -             -    (885,949)    (885,949)
                     --------- ---------    ---------- ------------ ------------

BALANCE, 12/30/95    8,728,442    43,642    44,619,932  19,428,366   64,091,940
  Exercise of options   37,500       187        98,892           -       99,079                                   -
  Issuance of stock     24,486       123       122,472           -      122,595
  Net income                 -         -             -   3,224,827    3,224,827
                     --------- ----------   ---------- -----------  ------------

BALANCE, 12/28/96    8,790,428 $  43,952   $44,841,296 $22,653,193  $67,538,441
                     ========= ========== ============ ===========  ============

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE>
                        BERTUCCI'S, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                   Fiscal Years Ended
                                        ----------------------------------------
                                          12/31/94      12/30/95      12/28/96
                                        -----------   -----------   ------------
<S>                                  <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                 $  5,609,891   $   (885,949)  $  3,224,827 
   Adjustments to reconcile net
    income to net cash provided by
    operating activities--
      Depreciation and amortization     7,678,875      9,277,795      9,073,727
      Loss on disposal of property
        and equipment                      39,614              -              -
      Loss on restaurant closing                -      5,336,000              -
      Increase in inventories             (37,111)      (172,197)       (97,796)
      Decrease (increase) in prepaid
       expenses, accounts receivable,
       notes receivable,
       and other assets                     8,563        125,622         (2,798)
      Increase (decrease) in accounts
       payable                            328,218     (1,427,603)       (63,976)
      Increase in accrued expenses           
       and deferred rent                1,527,789      2,134,647        229,624
      Increase (decrease) in accrued,             
       deferred and prepaid taxes         752,305     (3,649,742)     1,701,681
                                      ------------  -------------  -------------
         Net cash provided in           
          operating activities         15,908,144      10,738,573     14,065,289
                                      ------------  -------------  -------------

CASH FLOWS FROM INVESTING
 ACTIVITIES:
   Additions to preopening costs       (2,383,662)    (1,332,814)      (918,553)
   Additions to property and
    equipment                         (27,633,618)   (14,308,842)    (9,461,931)
   Proceeds from sale of equipment        109,841              -              -
   Purchases of liquor licenses          (505,283)        (7,000)             -
   Purchase of trademark                 (208,105)             -              -
                                      ------------  -------------  -------------
         Net cash used in
          investing activities        (30,620,827)   (15,648,656)   (10,380,484)
                                      ------------  -------------  -------------

CASH FLOWS FROM FINANCING
 ACTIVITIES:
   Issuance of common stock               125,645        121,051        122,595
   Exercise of stock options              306,782         10,553         99,079
   Proceeds from debt                  14,000,000      5,437,500              -
   Paydown of debt                              -              -     (1,000,000)
   Decrease in notes payable              (25,000)       (25,000)        25,000)
                                      ------------  -------------  -------------
         Net cash provided by
          (used in) financing          
          activities                   14,407,427      5,544,104       (803,326)
                                      ------------  -------------  -------------

NET (DECREASE) INCREASE IN CASH
 AND CASH EQUIVALENTS                    (305,256)       634,021      2,881,479
CASH AND CASH EQUIVALENTS,
 beginning of year                      1,055,352        750,096      1,384,117
                                      ------------  -------------  -------------
CASH AND CASH EQUIVALENTS,
 end of year                          $   750,096   $  1,384,117   $  4,265,596
                                      ============  =============  =============
SUPPLEMENTAL DISCLOSURES OF CASH
 FLOW INFORMATION:
   Cash paid during the year for ---
    Interest, net of amount
     capitalized                      $    34,902   $  1,154,376   $  1,357,786
                                      ============  =============  =============
    Income taxes                      $ 3,031,074   $  2,329,311   $    340,104 
                                      ============  =============  =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
                        BERTUCCI'S, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 28, 1996


(1)   Organization and Operation

      Bertucci's,   Inc.  is  a  holding   company  for  three   wholly  owned
subsidiaries,    Bertucci's   Restaurant   Corp.   (Bertucci's),    Bertucci's
Securities  Corporation,  and  Berestco,  Inc.  (collectively,  the  Company).
Bertucci's,  Inc.  provides  managerial,  financial,  and  other  services  to
Bertucci's,  and  assists  in  its  daily  operations.  Bertucci's  Securities
Corporation  holds  all of the  Company's  short-term  investments.  Berestco,
Inc.  is a real  estate  holding  company for the  corporate  headquarters  in
Wakefield, Massachusetts.

      Bertucci's  operates 80 restaurants  that feature  original recipe gourmet
pizza prepared in brick ovens and other Italian-style foods. The restaurants are
located  in  Connecticut,   Georgia,  Illinois,  Maryland,   Massachusetts,  New
Hampshire,  New Jersey,  New York,  Pennsylvania,  Rhode Island,  Virginia,  and
Washington, DC.

(2)   Summary of Significant Accounting Policies

Principles of Consolidation
      The accompanying consolidated financial statements include the accounts of
Bertucci's, Inc. and its subsidiaries. All significant intercompany transactions
and balances have been eliminated in consolidation.

Use of Estimates
      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 Equivalents
      Cash equivalents are highly liquid securities with an original maturity of
not more than 90 days.

Inventories
      Inventories  consist of supplies  and food and are carried at the lower of
first-in, first-out cost or market value.

Fair Value of Financial Instruments
      The  Company's  financial  instruments  consist  mainly  of cash  and cash
equivalents,  accounts  receivable,  accounts  payable,  and long-term debt. The
carrying  amounts  of  the  Company's  cash  and  cash   equivalents,   accounts
receivable,  and accounts  payable  approximate fair value due to the short-term
nature of these instruments.  Long-term debt bears interest at a variable market
rate; therefore, the carrying amount approximates fair value.

Property and Equipment
      Property  and  equipment  are recorded at cost.  The Company  provides for
depreciation  using the straight-line  method for financial  reporting  purposes
over the expected  useful lives of the assets.  The useful lives are five to ten
years for machinery  and  equipment and three years for equipment  under capital
lease.  Buildings and leasehold  improvements  are amortized  over the remaining
period of the lease or 20 years, whichever is shorter.

Capitalized Interest
      Interest was  capitalized on major capital  expenditures on funds borrowed
during the period of  construction.  Total  interest  costs incurred and amounts
capitalized were as follows:
<TABLE>
<CAPTION>
                                             Fiscal Years Ended
                                ----------------------------------------
                                December 31,  December 30,  December 28,
                                   1994          1995          1996
                                ------------  ------------  ------------
      <S>                        <C>          <C>          <C>

      Total interest costs       $  425,249   $1,389,142   $1,365,545
      Interest capitalized         (269,725)    (135,901)     (67,845)
                                 -----------  -----------  -----------
           Interest expense, net $  155,524   $1,253,241   $1,297,700
                                 ===========  ===========  ===========
</TABLE>
<PAGE>
                        BERTUCCI'S, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 28, 1996


Stock-Based Compensation
      Effective  December  31,  1995,  the  Company  adopted the  provisions  of
Statement of  Financial  Accounting  Standards  (SFAS) No. 123,  Accounting  for
Stock-Based  Compensation.  The  Company  has elected to continue to account for
stock  options at intrinsic  value with  disclosure of the effects of fair value
accounting on net income and earnings per share on a pro forma basis.

Long-Lived Assets
     In 1996, the Company adopted SFAS No. 121, Accounting for the Impairment of
Long-Lived  Assets and for  Long-Lived  Assets to be Disposed of. The  Company's
long-lived  assets consist  primarily of real estate and leasehold  improvements
related to its  restaurant  operations.  SFAS No.  121  requires  management  to
consider whether  long-lived assets have been impaired by comparing gross future
cash  flows  expected  to be  generated  from  utilizing  these  assets to their
carrying  amounts.  If cash flows are not  sufficient  to recover  the  carrying
amount of the  assets,  an  impairment  has  occurred  and the assets  should be
written down to their fair market value.  Significant  estimates and assumptions
regarding  future  sales,  cost trends,  productivity,  and market  maturity are
required to be made by  management  in order to test for  impairment  under this
standard. Based on current facts, estimates and assumptions, management believes
that no assets are impaired  under this  standard.  There is no  assurance  that
management's estimates and assumptions will prove correct.

Fiscal Year
      The  Company's  fiscal  year is the 52- or  53-week  period  ended  on the
Saturday  closest  to  December  31.  References  to 1995 and 1996,  are for the
52-week periods ended December 30, 1995 and December 28, 1996, and references to
1994 are for the 53-week period ended December 31, 1994. The Company's quarterly
periods  usually consist of one 16-week period and three 12-week  periods,  with
the exception of fiscal 1994, which consists of one 16-week period,  two 12-week
periods, and one 13-week period.

Deferred Preopening Costs
      Costs  related  to the  opening  of new  restaurants,  such as  preopening
payroll and various training  expenses,  are deferred until the restaurants open
and are amortized over the subsequent 12 months.

Income Taxes
      The Company follows the liability method of accounting for income taxes as
set forth in SFAS No.  109,  Accounting  for Income  Taxes.  Under SFAS  No.109,
deferred tax assets and  liabilities  are recognized for the expected future tax
consequences  of events that have been included in the  financial  statements or
tax  returns.  The amount of  deferred  tax asset or  liability  is based on the
difference  between  the  financial  statement  and  tax  bases  of  assets  and
liabilities  using  enacted  tax  rates in  effect  for the  year in  which  the
differences are expected to reverse.

Earnings per Common Share
      The  computation  of primary  earnings  per share is based on the weighted
average number of outstanding common shares plus common stock equivalents. Fully
diluted  earnings per share were not materially  different from primary earnings
per share. The weighted average shares outstanding used in determining  earnings
per common share include common stock equivalents of 225,626, and 63,317 related
to stock options for the periods ended December 31, 1994, and December 28, 1996,
respectively.  No common stock  equivalents are included in the 1995 calculation
of earnings per common share as they would be antidilutive.

Reclassifications
     Certain  prior-year  amounts  have been  reclassified  to conform  with the
current year's presentation.

(3)   Restaurant Closing Expenses

     In 1995, the Company accrued  estimated  expenses of $5,336,000  associated
with the closing of three  restaurants,  which occurred at the close of business
on February  22,  1996.  The  estimated  expenses  consisted  of  $3,797,000  in
estimated net losses  associated  with the disposal of the fixed assets of these
three  restaurants  which  was  recorded  as  accumulated  depreciation  on  the
consolidated balance sheet,  $1,039,000 in estimated liabilities associated with
termination of leases,  and $500,000 in estimated legal and other related costs.
At December 28, 1996, $45,000 of this reserve remains. The Company believes this
reserve is  adequate  to cover any  remaining  costs  associated  with the store
closings.

<PAGE>
                       BERTUCCI'S, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 28, 1996


(4)  Stock Options and Employee Stock Purchase Plan

     On March 25,  1992,  the Board of  Directors  approved  an  Employee  Stock
Purchase Plan (the Plan) permitting eligible employees to purchase common stock,
semiannually on June 30 and December 31, through payroll  deductions of up to 8%
of each  participating  employee's  compensation,  at 85% of the average trading
price during the six-month  period,  but not less than  specified  minimums.  At
December 26, 1992, 100,000 shares were reserved for the Plan. During 1994, 1995,
and  1996  shares  issued  under  the  Plan  were  7,786,  14,499,  and  24,486,
respectively.

     Under the 1987 incentive stock option plan (the 1987 Plan), the Company may
grant stock options for the purchase of up to 775,000  shares of common stock at
an exercise price equal to the fair market value of the common stock on the date
of grant.  The 1987 Plan provides for options to be  exercisable  in four annual
installments.  All  options  must be  exercised  within  10 years of the date of
grant.

      In 1989,  the Board of Directors  of the Company  approved the issuance of
150,000 shares of time-accelerated restricted stock options to members of senior
management.  These  options are fully vested and  exercisable  through  November
1999.  Options are  exercisable at a price equal to the fair market value of the
common stock on the date of grant. At December 28, 1996, 43,000 of these options
were outstanding.

      In July 1993, the Board of Directors of the Company  established  the 1993
Stock Option Plan for Non-Employee  Directors.  Under this plan, the Company may
grant stock  options for the purchase of up to 75,000  shares of common stock at
an exercise price equal to the fair market value of the common stock on the date
of grant. At December 28, 1996,  30,000 of these options were  outstanding.  All
options must be exercised within 10 years of the date of grant.

      The following table summarizes the Company's  option  transactions for the
three years ended December 28, 1996:
<TABLE>
<CAPTION>
                                                              Exercisable
                                                        ------------------------
                                    Shares     Weighted-              Weighted-
                                    Subject     Average               Average
                                   to Options    Price    Shares       Price
                                   ----------  -------- -----------  -----------
<S>                                <C>         <C>          <C>         <C>

Outstanding at December 25, 1993    475,188    $   5.73   
     Granted                        166,500       11.77
     Exercised                     (101,288)      (2.88)
     Forfeited                      (23,000)     (15.73)
                                   ---------   ---------
Outstanding at December 31, 1994    517,400        7.79     294,150     $ 5.76
     Granted                        237,000        4.88
     Exercised                       (3,000)      (1.17)
     Forfeited                     (197,000)     (12.70)
                                   ---------   ---------
Outstanding at December 30, 1995    554,400        4.97     356,475     $ 5.48
     Granted                         24,000        5.66
     Exercised                      (37,500)      (1.33)
     Forfeited                      (23,500)      (4.88)
                                   ---------   ---------
Outstanding at December 28, 1996    517,400    $   5.27     378,200     $ 5.43
                                   =========   =========
</TABLE>
<PAGE>
                       BERTUCCI'S, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 28, 1996


      The  following  table  summarizes  information  as of December  28,  1996,
concerning outstanding and exercisable options:
<TABLE>
<CAPTION>

              Options Outstanding                      Options Exercisable
-------------------------------------------------  -----------------------------
                         Weighted-
                         Average      Weighted-
Range of                 Remaining    Average                   
Exercise    Number       Contractual  Exercise     Number       Weighted-Average
Prices      Outstanding  Life         Price        Exercisable   Exercise Price
----------- -----------  -----------  ---------    -----------  ----------------
<S>            <C>         <C>        <C>           <C>            <C>
                       
 $1.00-2.00    103,000     1.93       $  1.24       103,000        $   1.24
 $4.00-6.00    225,500     9.00       $  4.86        86,300        $   4.88                       
 $6.00-8.00    168,400     5.34       $  6.79       168,400        $   6.79
$15.00-19.00    16,000     6.57       $ 16.68        16,000        $  16.65
$19.50-22.00     4,500     6.64       $ 21.25         4,500        $  21.25
             ----------                            -----------     -------------
               517,400                              378,200        $   5.43
</TABLE>
The Company  accounts for stock option and stock purchase plans under Accounting
Principles  Board  Opinion  No. 25,  under which no  compensation  cost has been
recognized  since  options are granted  with  exercise  prices equal to the fair
market value of the common stock at the date of grant. Had compensation cost for
these plans been  determined  consistent  with SFAS No. 123, the  Company's  pro
forma net income (loss) and earnings (loss) per common share for the years ended
December 30, 1995 and December 28, 1996 would have been as follows:

<TABLE>
<CAPTION>

                                        1995           1996
                                   -------------   ------------
<S>                                 <C>            <C>

Net income (loss)
     As reported                    $  (885,949)   $ 3,224,827
     Pro forma                       (1,096,693)     2,953,734

Earnings (loss) per share
     As reported                    $     (0.10)   $      0.36
     Pro forma                            (0.13)          0.33

</TABLE>

Because the method  prescribed  by SFAS No. 123 has not been  applied to options
granted prior to January 1, 1995, the resulting pro forma  compensation  expense
may be greater as  additional  options are granted.  The  weighted-average  fair
value  of  the  options   granted  in  1995  and  1996  were  $3.78  and  $4.53,
respectively.  The fair value of each option  grant is  estimated on the date of
the grant  using the  Black-Scholes  option  pricing  model  with the  following
assumptions used for grants in 1995 and 1996:

<TABLE>
<CAPTION>
                                            1995      1996    
                                         --------- ---------
           <S>                            <C>       <C>
           Expected volatility                68%        68%
           Risk-free interest rate          6.35%      6.36%
           Expected life                  9 years   10 years
           Expected dividend yield             0%         0%
</TABLE>


(5)   Line of Credit

      The Company has a bank line of credit in effect  until  November 30, 1997,
under which it may borrow up to  $30,000,000.  On November 30, 1997, the Company
will be able to convert  the  balance,  if any,  to a term  loan,  payable in 12
quarterly  installments through November 30, 2000. The Company pays a fee of 1/4
<PAGE>
                       BERTUCCI'S, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 28, 1996


of 1% on the unused balance,  and interest is calculated using LIBOR plus 1.25%.
There are no compensating  balance  arrangements or legal restrictions as to the
withdrawal of these funds.  At December 30, 1995 and December 28, 1996,  amounts
outstanding  under  this  line  of  credit  were  $19,437,500  and  $18,437,500,
respectively.  The Company's average interest rate on outstanding  borrowings at
December 30, 1995 and December 28, 1996, were 6.87% and 6.75%, respectively. The
debt agreement contains a covenant,  among others,  that places  restrictions on
capital expenditures. In addition, equity distributions are prohibited under the
agreement.  As of December 28, 1996,  the Company was in  compliance  with these
covenants.
 
(6)   Income Taxes

      The  components  of the  provision  (benefit)  for  income  taxes  were as
follows:
<TABLE>
<CAPTION>
                                                   Fiscal Years Ended
                                       -----------------------------------------
                                       December 31,  December 30,   December 28,
                                          1994           1995           1996
                                       -----------    -----------   ------------
          <S>                           <C>            <C>           <C>
          Current:
             Federal                    $2,651,633     $1,635,906    $  507,107 
             State                         867,717        731,922       325,210
                                        ----------     ----------    ----------
                                         3,519,350      2,367,828       832,317
                                        ----------     ----------    ----------

          Deferred:
             Federal                      (223,433)    (2,346,138)      829,655
             State                         (73,017)      (766,583)      271,129
                                        -----------     ----------    ----------
                                          (296,450)    (3,112,721)    1,100,784
                                        -----------    -----------   ----------
                Total provision
                 (benefit) for income
                 taxes                  $3,222,900     $ (744,893)   $1,933,101
                                        ===========    ===========   ==========

</TABLE>

      A reconciliation  of the amount computed by applying the statutory federal
income tax rate of 34% to income before income taxes is as follows:
<TABLE>
<CAPTION>
                                                   Fiscal Years Ended
                                     -------------------------------------------
                                     December 31,    December 30,   December 28,
                                         1994            1995           1996
                                     ------------    ------------   ------------
       <S>                             <C>             <C>           <C>
       Income tax expense (benefit)
          computed at federal
          statutory rate               $3,003,149      $ (554,486)   $1,753,695
       State taxes, net of federal      
          benefit                         524,502         (22,876)      393,584
       Targeted jobs tax credit          (137,145)              -             -
       FICA tax credit                   (276,417)       (333,792)     (353,760)
       Other                              108,811         166,261       139,582
                                       -----------     -----------   -----------
          Income tax provision        
           (benefit)                   $3,222,900      $ (744,893)   $1,933,101
                                       ===========     ===========   ===========
</TABLE>
<PAGE>
                       BERTUCCI'S, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 28, 1996


      Significant  items  giving rise to deferred  tax assets and  deferred  tax
liabilities at December 30, 1995 and December 28, 1996 are as follows:
<TABLE>
<CAPTION>
                                             Fiscal Years Ended
                                        ----------------------------
                                        December 30,    December 28,
                                            1995           1996
                                        ------------    ------------
       <S>                               <C>             <C>
       Deferred Tax Assets:
         Deferred rent                   $ 2,112,629     $ 2,462,019
         Accrued workers' compensation       498,974         705,331
         Accrued vacation                    170,166         202,793
         Accrued restaurant closing costs    624,834          18,270
         Property and equipment              326,228               -
         Other                                11,076         311,307
                                         -----------     -----------
                                         $ 3,743,907     $ 3,699,720
                                         ===========     ===========

       Deferred Tax Liabilities:
         Preopening costs                $   292,482     $   206,280
         Property and equipment                    -       1,082,806
         Other                               288,425         109,263
                                         -----------     -----------
                                         $   580,907     $ 1,398,349
                                         ===========     ===========
</TABLE>

(7)   Commitments and Contingencies

Operating Leases
     The  Company  has  entered  into  numerous  operating  lease  arrangements,
primarily  for its  restaurants,  with initial terms ranging from 2 to 40 years.
Many of these leases contain renewal options ranging from 5 to 20 years.

      The minimum rental commitments under all noncancelable operating leases as
of December 28, 1996 are as follows:
<TABLE>
<CAPTION>
                                Year          Amount
                              ---------      ---------
                              <S>           <C>
                                1997        $  9,861,119
                                1998          10,133,012
                                1999           9,835,512
                                2000           9,401,712
                                2001           9,477,259
                              Thereafter      58,009,324
                                            ------------

                               Total        $106,717,938
                                            ============
</TABLE>

      Certain of the leases  require the payment of additional  amounts based on
percentages  of annual sales that exceed annual  minimum  rentals or annual base
sales.  The percentage  rental factors  generally  range from 3% to 7% of annual
sales.  Some leases contain rent  escalation  clauses  whereby the rent payments
increase over the term of the lease.  Rental expense  includes minimum base rent
amounts  payable  monthly,  percentage rent payable  annually,  and rent expense
accrued to recognize lease escalation  provisions on a straight-line  basis over
the minimum lease term.
<PAGE>
                       BERTUCCI'S, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 28, 1996


      Deferred rent liability,  including  current  portion,  was  approximately
$5,649,000   and  $6,161,000  at  December  30,  1995  and  December  28,  1996,
respectively.   Restaurant   rental   expense   included  in  the   accompanying
consolidated statements of operations consists of the following:

<TABLE>
<CAPTION>
                                           Fiscal Years Ended
                                  ----------------------------------------
                                  December 31,  December 30,  December 28,
                                     1994          1995           1996
                                  ------------  ------------  ------------
        <S>                       <C>           <C>            <C>        
        Base rent expense         $6,468,820    $ 8,704,028    $ 9,685,370
        Percentage rent expense      399,516        200,930        209,026
        Straight-line expense      1,140,036      1,032,645        489,512
                                  ----------    -----------    -----------
             Total rent expense   $8,008,372    $ 9,937,603   $ 10,383,908
                                  ==========    ===========   ============
</TABLE>

Government Regulation
      The Company is subject in certain  states to "dram-shop"  statutes,  which
generally provide a person injured by an intoxicated person the right to recover
damages from an establishment that wrongfully served alcoholic beverages to such
person.  While the  Company  carries  liquor  liability  coverage as part of its
existing  comprehensive  general  liability  insurance,  a judgment  against the
Company under a dram-shop statute in excess of the Company's  liability coverage
could have a material adverse effect on the Company.

Litigation
      From time to time,  lawsuits are filed against the Company in the ordinary
course of business.  After  consulting  with legal counsel,  management does not
believe that the result of any pending  litigation would have a material adverse
effect on the Company's financial statements or its business.

(8)   Transactions with Related Parties

      During 1992,  the Company  purchased  property  for a  restaurant  site in
Westport,  Connecticut,  for  approximately  $1.2 million from an affiliate of a
partnership whose general partner is a director of the Company. The director was
not  involved in the  purchase  negotiation  of that  particular  property,  and
management believes that the price paid represented fair market value.

      The Company has entered into an agreement  with its president  pursuant to
which, upon the death of the president,  his estate will have the right, but not
the obligation,  to cause the Company to purchase shares of the Company's common
stock held by the estate at their fair market value.  The purchase price will be
payable  out of,  and to the  extent of, the  proceeds  of a $3.0  million  life
insurance  policy on the  president's  life held by the  Company.  If the estate
chooses to sell such shares to a third party  within a specified  time after the
president's  death,  the  Company  shall  have the right of first  refusal  with
respect to the purchase of such shares.

     During 1992, the president of the Company made a personal loan amounting to
$837,175,  to the  Orange,  Connecticut  landlord,  with whom the Company has an
operating  lease.  The  repayment  terms  require the Company to make the rental
payments  directly  to the  president  through the year 2002.  The Company  paid
approximately  $150,000  per year in  1994,  1995,  and  1996,  related  to this
agreement.

     Subsequent to year end, the Company leased a building and real property for
the  first  Sal &  Vinnie's  Sicilian  Steakhouse  location  from the  Company's
president, and purchased all furniture, fixtures, and equipment currently at the
facility  for  their  appraised  value of  $650,000.  In  conjunction  with this
transaction,  the Company has loaned to its  president  approximately  $637,500,
which was repaid subsequent to year end.

(9)   Benefit Plans

     In 1990, an incentive plan was established in which general,  district, and
restaurant managers  participate.  Awards under the plan are tied to achievement
of  specific  operating  targets.  Expenses  under the plan  were  approximately
$560,000, $597,000, and $647,000 in 1994, 1995, and 1996, respectively.
<PAGE>
                        BERTUCCI'S, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 28, 1996
<TABLE>
<CAPTION>


(10)  Quarterly Financial Data (Unaudited)

                                            Quarter Ended
                      ---------------------------------------------------------
                           (in thousands of dollars, except per share data)
                      ---------------------------------------------------------  
                           16 Weeks       Twelve weeks ended         13 Weeks
                            Ended      ------------------------       Ended
          1994             April 16,      July 9,    October 1,     December 31,
                          ----------   ----------    ----------     ------------
 <S>                       <C>          <C>           <C>             <C>

 Net sales                 $ 27,796     $ 22,191      $ 24,596        $ 28,214
 Operating income             2,510        1,880         2,327           2,238
 Net income                   1,583        1,186         1,482           1,358
 Earnings per share        $   0.18     $   0.13      $   0.17        $   0.15



                           16 Weeks              Twelve weeks ended
                            Ended      -----------------------------------------
          1995             April 22,      July 15,   October 7,     December 30,
                          ----------   -----------   ----------     ------------
 Net sales                 $ 35,446     $ 28,521     $ 28,211         $ 28,082
 Operating income (loss)      1,734        1,105        1,300           (4,538)
 Net income (loss)              902          525          610           (2,923)
 Earnings (loss) per share $   0.10     $   0.06     $   0.07         $  (0.33)



                           16 Weeks              Twelve weeks ended
                            Ended      -----------------------------------------
          1996             April 20,      July 13,   October 5,     December 28,
                          ----------   -----------   ----------     ------------
 Net sales                 $ 38,259     $ 30,235     $ 29,549         $ 30,001
 Operating income             1,290        1,414        1,543            2,193
 Net income                     549          685          792            1,199
 Earnings per share        $   0.06     $   0.08     $   0.09         $   0.14

</TABLE>


<PAGE>
ITEM 9:   CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

           Not applicable

                                   PART III

ITEMS 10, 11, 12, AND 13:

           The  information  required  by Items  10,  11,  12,  and 13 is hereby
incorporated by reference from the  Registrant's  definitive proxy statement for
the Annual Meeting of Stockholders to be held on May 13, 1997.

                                   PART IV

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

            (a)  The following documents are filed as a part of this Report:

              1. Financial Statements are listed in the index to Financial
                 Statements on page 14 of this report.

              2. Exhibits

            (b)  Reports on Form 8-K

                 The Company did not file any report on Form 8-K during the last
                 quarter of the period covered by this report.

         * 3.1 - Restated Articles of Organization of the Company.
        ** 3.2 - Amendment to the Company's Restated Articles of Organization.
         * 3.3 - By-Laws of the Company.
         * 10.1- Convertible Preferred Stock Purchase Agreement dated
                 September 1, 1987.
        ** 10.2- Amended and Restated  1987 Stock Option Plan, as amended
                 and restated on June 4, 1991.
         * 10.3- Form of Incentive Stock Option Agreement under Amended and
                 Restated 1987 Stock Option Plan.
         * 10.4- Amended and Restated Time Accelerated Restricted Stock Option
                 Plan.
         * 10.5- Form of Stock Option Agreement under Amended and Restated Time
                 Accelerated Restricted Stock Option Plan.
         * 10.6- Amended and Restated Series B Convertible Redeemable Preferred
                 Stock Purchase Agreement dated March 31, 1989.
         * 10.7- Crugnale Noncompetition, Nondisclosure and Inventions Agreement
                 dated September 1, 1987.
        ** 10.8- Stock Agreement dated as of July 5, 1991,between the Company
                 and Joseph Crugnale.
         * 10.9- Commercial Lease between Cummings Properties Management, Inc
                 and Bertucci's, Inc. dated as of April 14, 1989, relating to
                 the premises located at 58, 60 and 62 Cummings Park,
                 Woburn, Massachusetts.
           22. - List of Subsidiaries
           24.2- Consent of Arthur Andersen LLP
           27. - Financial Data Schedule
           ----

         * Incorporated by reference to the exhibits to the Registration
           Statement No. 33-40677 on Form S-1 filed by the Company with the
           Securities and Exchange Commission.

        ** Incorporated by reference to the exhibits to the Registration
           Statement No. 33-46201 on Form S-1 filed by the Company with the
           Securities and Exchange Commission.

<PAGE>
                                  SIGNATURES


      Pursuant  to the  requirements  of section  13 or 15(d) 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.



Date: March 15, 1997
                     By:          /s/ JOSEPH CRUGNALE
                         -----------------------------------------------
                         Joseph Crugnale
                         President, Chief Executive Officer and Director



Date: March 15, 1997
                     By:          /s/ NORMAN S. MALLETT
                         -----------------------------------------------
                         Norman S. Mallett
                         Vice President-Finance; Treasurer
                         (Principal Financial and Accounting Officer)



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



Date: March 15, 1997
                     By:          /s/ E. BULKELEY GRISWOLD
                         -----------------------------------------------
                         E. Bulkeley Griswold, Director



Date: March 15, 1997
                     By:          /s/ ROBERT L. LESTINA, JR.
                         -----------------------------------------------
                         Robert L. Lestina, Jr., Director



Date: March 15, 1997
                     By:          /s/ ALLAN J. STEINMETZ
                         -----------------------------------------------
                         Allan J. Steinmetz, Director



Date: March 15, 1997
                     By:          /s/ JAMES WESTRA
                         -----------------------------------------------
                         James Westra, Director
<PAGE>
                                   EXHIBIT 22

                              LIST OF SUBSIDIARIES

Bertucci's  Restaurant Corp., a Massachusetts  corporation,  which does business
under the name of "Bertucci's Brick Oven Pizzeria".

Berestco, Inc., a Massachusetts corporation.
<PAGE>
                                  EXHIBIT 24.2

                              ARTHUR ANDERSEN LLP

                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
report  included  in  this  Form  10-K  into  the  Company's   previously  filed
Registration Statement File Nos. 33-43490 and 33-43439.


                                                             ARTHUR ANDERSEN LLP


Boston, Massachusetts
March 25, 1997

<PAGE>