<TABLE>
<CAPTION>
<S>                    <C>                                                 <C>
                       SECURITIES AND EXCHANGE COMMISSION                  The following items were the 
                             Washington, D.C. 20549                        subject of a Form 12b-25 and
                                                                           are included herein (Item 6,
                                   FORM 10-K/A                             Item 7 and Item 8.)
</TABLE>
    
(Mark One)
[X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended      September 30, 1996

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to____________

                          Commission file number 0-4028

                             TRANSMEDIA NETWORK INC.
                          ----------------------------
             (Exact name of Registrant as specified in its charter)

            DELAWARE                                      84-6028875
(State or other jurisdiction of                        (I.R.S Employer
incorporation or organization)                         Identification No.)

                 11900 Biscayne Boulevard, Miami, Florida 33181
          -----------------------------------------------------------
              (Address of principal executive offices) (zip code)

                                  305-892-3300
                    ---------------------------------------
                         Registrant's telephone number,
                              including area code)

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

      TITLE OF EACH CLASS                            Name of each exchange
      -------------------                            on which registered
                                                     ---------------------
            None                                             None

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

                     COMMON STOCK, PAR VALUE $.02 PER SHARE
                    ---------------------------------------
                                (Title of Class)

Indicate by (X) 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 and (2) has been subject to such filing requirements for the
past 90 days.
                                                               Yes  X     No __

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of 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.

Aggregate market value of voting stock held by non-affiliates of the Registrant
as of December 9, 1996 $44,361,461.00.

<PAGE>

Number of shares outstanding of Registrant's Common Stock, as of December 30,
1996: 10,126,926.

DOCUMENTS INCORPORATED BY REFERENCE:

                                                  Location in Form 10-K in which
        DOCUMENT                                      DOCUMENT IS INCORPORATED
        --------                                      ------------------------
Registrant's Proxy Statement                                 Part III
   relating to the 1997
Annual Meeting of Stockholders


<PAGE>

                                     PART I

ITEM 1.  BUSINESS

GENERAL

      Transmedia Network Inc., through its operating subsidiaries (collectively,
      the "Company"), owns and markets a charge card ("The Transmedia Card")
      offering savings to the Company's cardmembers on dining costs for
      restaurants both within and outside the United States from which the
      Company, its franchisees and its licensees have purchased food and
      beverage credits. The Company also offers to holders of The Transmedia
      Card savings on lodging costs at selected hotels, resorts, golf courses
      and ski lifts around the country and on purchases of merchandise from
      selected retailers. The Company's cardholders also have access to discount
      long distance telephone services through a program the Company operates
      jointly with a subsidiary of General Electric Company. The Company derives
      its income principally from retaining the difference between the amounts
      paid in advance by the Company to restaurants and amounts paid by
      cardmembers to the Company (through their credit card companies) for the
      related meals and from cardmember membership fees. The Company also enters
      into contracts with companies which own hotels, golf courses and ski lifts
      as well as merchandise retailers. In exchange for listing in the Company's
      directory, the Company receives commissions when Transmedia cardholders
      frequent these establishments. The Company also receives commissions when
      cardholders use their Transmedia/GE Capital telephone cards. The Company
      derives income from franchising and licensing The Transmedia Card and
      related proprietary rights and know-how, including rights to solicit
      restaurants, hotels, resorts and motels and acquire food, beverage and
      lodging credits, in the United States. The Company also receives revenue
      from licensing The Transmedia Card and related proprietary rights and
      know-how outside the United States.

CORPORATE STRUCTURE

      The Company commenced operations in 1984 and was reincorporated as a
      Delaware corporation in 1987. Currently, it has the following principal
      operating subsidiaries:

                  /bullet/ Transmedia Service Company Inc. which is responsible
              for soliciting and servicing all cardmembers in the United States
              and for all domestic franchising of The Transmedia Card and
              related property rights and know- how.

                  /bullet/ Transmedia Restaurant Company Inc. which is
              responsible for obtaining and servicing restaurants and obtaining
              other locations

<PAGE>

              such as hotels, golf courses and ski lifts and retailers where
              the Transmedia Card may be used.

                  /bullet/ TMNI International Incorporated which licenses the
              Transmedia Card, service marks, proprietary software and know-how
              outside the United States and has licensed rights to Europe,
              Turkey, the countries comprising the former Union of Soviet
              Socialist Republics, Australia, New Zealand and the Asia-Pacific
              region to date.

DESCRIPTION OF RIGHTS TO RECEIVE AND THE TRANSMEDIA CARD

      The Company's primary business is the acquisition of Rights to Receive
      from participating establishments which are then sold for cash to holders
      of The Transmedia Card. "Rights to Receive" are rights to receive goods
      and services, principally food and beverages, which are acquired and
      purchased from participating restaurants, for an amount equal to
      approximately fifty percent (50%) of the food and beverage credits or by
      financing the purchase of other goods or services as well as for having
      provided advertising and media placement services to the participating
      establishments. Approximately ninety percent (90%) of Rights to Receive
      are purchased for cash. The Company typically purchases that amount of
      food and beverage credits which will be consumed in a period of no more
      than six months; however, it has not always been possible for the Company
      to predict with accuracy the amount of time in which such credits will be
      consumed, especially when the Company begins operating in new areas, as
      evidenced by the 1996 turn on Rights to Receive of 1.42 times, or 257
      days.

      The Transmedia Card is only issued to applicants who are determined to be
      creditworthy by virtue of their having a current, valid MasterCard, Visa,
      Discover or American Express credit card or who are otherwise deemed
      creditworthy by Company management. The Transmedia Cardmembers have a
      choice of programs, including a "Free for Life" Transmedia Card which
      affords them 20% savings at participating establishments, an account which
      offers mileage credits with Continental Airlines, Delta Airlines and
      United Airlines of 10 miles for each dollar spent on food and beverage at
      participating establishments for a one-time fee of $9.95, and a card which
      offers a 25% savings at participating establishments, for which there is a
      $50 annual fee. Each account may have more than one user and, accordingly,
      more than one cardmember.

      In presenting The Transmedia Card, cardmembers sign for the goods or
      services rendered, as well as for the taxes and tips as they would with
      any other charge card. The Company, upon obtaining the receipt (directly
      or via electronic point of sale transmission) from the appropriate
      establishment, gives the establishment credit against Rights to Receive
      which are owned by the Company. The Company then (i) processes the receipt
      through the cardmember's MasterCard, Visa, Discover or American Express
      card

<PAGE>

      account, which remits to the Company the full amount of the bill, and (ii)
      credits to the cardmember's MasterCard, Visa, Discover or American Express
      account the appropriate discount or credits to the cardmember's airline
      account the appropriate mileage. Taxes and tips are not discounted and
      such sums are remitted to the various establishments.

DOMESTIC FRANCHISING

In 1990, the Company commenced franchising The Transmedia Card (then known as
The Restaurant Card) and related proprietary rights and know-how, including
rights to solicit restaurants and acquire Rights to Receive, in the United
States. At September 30, 1996, the Company had franchises in the following
territories: a large part of New Jersey, California, the Washington,
D.C./Baltimore, Maryland Metropolitan area, Dallas, Ft. Worth and Houston,
Texas, the States of Virginia, North Carolina, South Carolina, Washington and
Oregon and Atlanta, Georgia, eastern Tennessee, Reno, Nevada and the Nevada side
of Lake Tahoe. The Company has also granted a certain third party an option to
acquire a franchise for the State of Hawaii. The Company has determined that it
will no longer offer franchises at various locations throughout the United
States. In November 1996, the Company entered into an agreement to terminate the
franchise and to purchase certain of the assets of The Western Transmedia
Company, Inc., the Company's franchisee in the States of California, Nevada,
Oregon and Washington. After the completion of this transaction (which is
expected to occur in January 1997), the Company will operate in these States
directly.

Each franchise sold by the Company is operated under a ten year franchise
agreement that is renewable for one additional ten-year term for all locations.
Each agreement provides that the Company will assist the franchisee with
marketing, advertising, training and other administrative support; relates to a
territory that contains 625 or more full-service restaurants that accept
MasterCard, Visa, Discover or American Express credit cards; and licenses the
franchisee to use the Company's trademarks in connection with the solicitation
of new cardmembers (which is not restricted to the franchisee's territory) and
the purchase of Rights to Receive from restaurants in the territory granted to
the franchisee. The franchisee is responsible for, among other things,
soliciting cardmembers and participating establishments, purchasing Rights to
Receive from participating establishments in its territory, and maintaining
adequate insurance. In consideration for the grant of the franchise, the
franchisee (i) paid to the Company a franchise fee which varies based upon the
number of full-service restaurants located within the territory granted to the
franchisee, and (ii) pays the following continuing fees during the term of the
franchise agreement: (A) 7 1/2% of the total meal credits used within the
franchisee's territory; (B) 2 1/2% of the total meal credits sold within the
franchisee's territory into the Company's advertising and development fund; (C)
a processing fee of $.20 per sales transaction from the franchisee's territory;
and (D) a monthly service charge of $1.00 per participating establishment in the

<PAGE>

franchisee's territory. The franchisee receives a commission from the Company
equal to forty percent (40%) of the membership fees paid by all new cardmembers
solicited by the franchisee, with a minimum of $5.00 per account.

U.S. LICENSING

         In November, 1995, the Company entered into a license arrangement under
which the licensee was authorized to solicit Rights to Receive from various
types of resorts, hotels and other entities. The territory covered by the
license agreement is the continental United States, excluding the State of
Minnesota. The term of this arrangement is ten years, with a potential renewal
period of ten years. Under this arrangement, the Company compensates the
licensee through a commission.

NON-U.S. LICENSING

In 1993, the Company commenced licensing The Transmedia Card and related
proprietary rights and know-how outside the United States. The Company's
non-U.S. operations are conducted by its subsidiary, TMNI International
Incorporated. In 1993, the Company granted an exclusive, perpetual license to
Transmedia Europe, Inc. to establish the Company's business in Europe, Turkey
and the countries that formerly comprised the Union of Soviet Socialist
Republics. The license is governed by a Master License Agreement which provides
that, among other things, (i) the licensee has the right to sublicense the
rights granted under the Master License Agreement to others within the
territory, provided that each such sublicense is approved by the Company, (ii)
the Company will assist the licensee with training relating to sales,
administration, technical and operations of the business, and (iii) the licensee
is solely responsible for developing its own market, paying its own expenses for
advertising and soliciting cardmembers and participating establishments in its
territory. In consideration for the license, the licensee (i) paid the Company a
non-refundable purchase price of One Million One Hundred Twenty-Five Thousand
($1,125,000) Dollars, (ii) will pay to the Company two percent (2%) of the gross
volume with respect to the United Kingdom sublicense, (iii) will pay to the
Company twenty-five percent (25%) of initial sublicense fees (with a minimum of
$250,000) paid for each country licensed in the territory, (iv) will pay to the
Company twenty-five percent (25%) of royalties paid by sublicensees to the
licensee, and (v) granted to the Company a five percent (5%) equity interest in
the licenses. Melvin Chasen, the Chairman and Chief Executive Officer of the
Company, served as a director of the licensee until March 1, 1995. In December
1996, Transmedia Europe Inc. amended the sublicense it had granted for France
and expanded the sublicensee's territory to include Belgium and Luxemborg,
Italy, Spain and Switzerland (other than the German speaking area).
<PAGE>

In 1994, the Company granted an exclusive perpetual license to Transmedia Asia
Pacific Inc. to establish the Company's business in Australia, New Zealand and
the Asia-Pacific region (such region covering approximately 16 major countries
and areas including, among others, Japan, Hong Kong, Taiwan, Korea, the
Philippines and India). The licensee also took an option to purchase a franchise
for the State of Hawaii. The license granted by the Company is governed by a
Master License Agreement which provides, among other things, that (i) the
Company will assist the licensee with training relating to sales,
administration, technical and operations of the business, and (ii) the licensee
is solely responsible for developing its own market, paying its own expenses for
advertising and soliciting cardmembers and restaurants in its territory. In
consideration for the license, the licensee paid the Company $1,250,000, and
(ii) granted to the Company a five percent (5%) equity interest in the licensee.
The license also provides for the following payments to the Company: (i) With
respect to sublicenses granted in all territories other than Australia and New
Zealand, the licensee will pay to the Company twenty-five percent (25%) of all
initial sublicense fees (in no event less than $500,000 in the People's Republic
of China and Japan, and not less than $250,000 in all other territories), as
well as twenty-five percent (25%) of all royalties, transfer fee payments and
any other monies received; and (ii) with respect to sublicenses granted in
Australia and New Zealand, the licensee will pay to the Company two percent (2%)
of gross sales within such territories. Mr. Chasen served as a director of
Transmedia Asia Pacific Inc. until March 1, 1995.

In December 1996, the Company entered into an agreement with Transmedia Europe,
Inc. and Transmedia Asia Pacific Inc. amending both of the licenses, among other
things, to permit the companies to be reorganized under one entity and to allow
them to acquire and operate worldwide the business of Countdown plc., which
conducts a restaurant discount program in Europe and, to a lesser extent, in the
United States.

AREAS OF OPERATION

The Company's principal areas of operation, through its subsidiaries and its
domestic franchising operations, include the New York Metropolitan area
(consisting of New York City and the counties of Nassau, Suffolk, Westchester,
Rockland, Putnam and Orange in New York State, Northern New Jersey and
Connecticut); Central, Southwest and Southeast Florida; Massachusetts; the
Chicago, Illinois Metropolitan area; Rhode Island; New Hampshire; Maine;
Vermont; Philadelphia, Pennsylvania; Phoenix, Arizona; Denver, Colorado;
Milwaukee, Wisconsin; Indianapolis, Indiana; California; Delaware; Georgia; the
Washington, D.C. Metropolitan area; the Baltimore, Maryland Metropolitan area;
North and South Carolina; the Dallas,/Ft. Worth and Houston, Texas Metropolitan
areas; Atlanta, Georgia, eastern Tennessee; and Virginia.

PARTICIPATING RESTAURANTS AND CARDMEMBERS
<PAGE>

As of September 30, 1996, directories published by the Company, which are
distributed to cardmembers six times a year, listed 6,974 restaurants available
to cardmembers, and The Transmedia Card was held by an aggregate of 924,418
cardmembers, comprised of 634,761 accounts with an average of 1.46 cardmembers
per account. The following table sets forth (i) the number of restaurants listed
in directories published by the Company and (ii) the number of cardmembers, as
of the fiscal years ended September 30, 1992 though 1996:

                   1996       1995      1994      1993      1992
              ---------- ---------- --------- --------- --------
Restaurants       6,974      5,330     3,628     2,328     1,449
------------------------ ---------- --------- --------- --------
Cardmembers     924,418    593,161   395,968   197,166   112,029


As the table indicates, the number of restaurants listed in directories
published by the Company has risen nearly three hundred eighty-one percent
(381%) during the fiscal years ended September 30, 1992 through September 30,
1996, and the number of cardmembers has risen nearly seven hundred twenty-five
percent (725%) for the same period. In fiscal 1996, between fifty-five and sixty
percent (55-60%) of all cardmembers renewed their memberships, and approximately
ninety percent (90%) of all restaurants listed in the directories published by
the Company whose initial amount of Rights to Receive were expended in 1996
renewed their contracts with the Company. In addition, eighty percent (80%) of
all restaurants eligible for their second year of renewals in fiscal 1996
renewed their contracts. The Company generally experiences a sharp decline in
renewals among restaurants eligible for a third year of renewals. It has been
the Company's experience, however, that the addition of new restaurants
generally offsets the drop-off in renewing restaurants, and the Company believes
that its service areas are not close to cardmember saturation.

MARKETING

The Company markets The Transmedia Card through the use of advertising, direct
mail and through promotion with co-marketing partners such as banks and affinity
groups.

EMPLOYEES

As of December 20, 1996, the Company employed 145 persons. The Company believes
that its relationships with its employees are good.

COMPETITION

The charge card business is highly competitive and the Company competes for both
cardmembers and participating restaurants, hotels and other applicable services.
Competitors include discount programs offered by major credit card companies,
such as American Express, Visa, MasterCard and Diners Club and


<PAGE>

other companies that offer different kinds of discount marketing programs and
numerous small companies which offer services which may compete with the
services offered or to be offered by the Company. Certain of the Company's
competitors may have substantially greater financial resources and expend
considerably larger sums than does the Company for new product development and
marketing. Further, the Company must compete with many larger and better
established companies for the hiring and retaining of qualified marketing
personnel. The Company believes that the unique features of its program -- that
The Transmedia Card can be used by cardmembers at participating establishments
with very few restrictions, that The Transmedia Card provides substantial
savings without the need for a cardmember to present discount coupons when
paying for a meal, and that participating establishments are provided with cash
in advance of customer charges -- contribute to the Company's competitiveness
and allow the Company to offer better value and service to its cardmembers.

ITEM 2.  PROPERTIES

The Company's present executive office consists of 8,303 square feet, located in
Miami, Florida, which the Company occupies pursuant to a lease expiring on
February 28, 1997 and which provides for an annual base rental of $148,860. The
Company's Miami office also houses the Company's cardmember service center. The
Company has entered into a new lease, which commences on March 1, 1997, for
13,096 square feet, thus adding an additional 4,793 square feet of contiguous
space to its current office. The lease will expire on February 28, 2002 and
provides for an annual base rent of $270,825. The Company leases offices in New
York City for 5,710 square feet of office space pursuant to a lease entered into
in May 1996. The lease, which expires on June 30, 2001, provides for minimum
annual rentals of $199,850. In addition, the Company has a four and one-half
year office lease in Philadelphia, Pennsylvania for approximately 1,641 square
feet, which commenced April 1, 1994. The lease provides for a base annual rental
of approximately $24,500 in the first year, which will increase by approximately
$800 each year thereafter. In Boston, Massachusetts, the Company has a
sixty-four month lease for approximately 1,500 square feet, which commenced May
1, 1995. The lease provides for base annual rentals of $29,400. The Company has
an option for one three-year renewal. In Chicago, the Company has a thirty-nine
month lease for approximately 1,183 square feet, which commenced October 1,
1995. The lease provides for an initial annual lease rental of $26,730
increasing by approximately $600 each year thereafter. In Detroit, the Company
leases an executive office for a twelve-month period which began on May 1, 1995
at an annual fee of $6,840. In Tampa, the Company leases an executive office for
a thirteen-month period which began on June 1, 1995. The total rental for the
thirteen month period is $9,795. In Phoenix, the Company leases an executive
office for a thirteen-month period which began on March 6, 1996 for a total rent
of $9,620 for the thirteen months. In Denver, the Company leases on a
month-to-month basis, an executive office for $450 per month.
<PAGE>

In connection with the termination of the franchise granted to The Western
Transmedia Company Inc. and the acquisition of certain of its assets, the
Company will be assuming ongoing leases for two office properties in San
Francisco, California and Los Angeles, California. In San Francisco, California,
the Company would be assuming a lease for approximately 3,000 square feet, at an
annual rent of $54,686.04 from August 1, 1996 to July 31, 1997, $57,642.00 from
August 1, 1997 to July 31, 1998 and $60,597.96 from August 1, 1998 to August 31,
1999. The lease expires on August 31, 1999. In Los Angeles, California, the
Company would be assuming a lease for approximately 2,000 square feet at a
monthly base rent of approximately $4,200. The lease expires on January 31,
1997, however, the Company intends to exercise an option to extend the lease for
two years at a rental equal to market value.

ITEM 3.  LEGAL PROCEEDINGS

As of September 30, 1996, there were no material legal proceedings pending
involving the Company.

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

During the quarter ended September 30, 1996, no matters were submitted to a vote
of the security holders.

EXECUTIVE OFFICERS OF THE REGISTRANT

NAME                     POSITION                           AGE
----                     --------                           ---
Melvin Chasen            Director, Chairman of the           68
                         Board, President and Chief
                         Executive Officer
James M. Callaghan       Director and Vice President;        57
                         President of Transmedia
                         Restaurant
                         Company Inc.
Barry S. Kaplan          Director and Vice President;
                         President of Transmedia
                         Service Company Inc.                38
David L. Weinberg        Vice President and Chief            51
                         Financial Officer;
                         President of TMNI
                         International Inc.
Paul A. Ficalora         Executive Vice President            45
                         of Transmedia Restaurant
                         Company Inc.
Gregory Borges           Treasurer                           60
Kathryn Ferara           Secretary                           40


<PAGE>

Mr. Chasen has been a director and the Chairman of the Board, President and
Chief Executive Officer of the Company since 1983. From 1984 through 1987, he
was a director, Chairman of the Board, President and Chief Executive Officer of
Transmedia Network Inc., a Colorado corporation, which was the predecessor of
the Company.

Mr. Callaghan, a director of the Company since 1991, was elected Vice President
of the Company and President of Transmedia Restaurant Company Inc., a
subsidiary, in 1994. He joined the Company in 1989 and served as its Executive
Vice President, Vice President, Sales and Marketing and Treasurer.

Mr. Kaplan was elected a Vice President of the Company and President of
Transmedia Service Company Inc., a subsidiary, in September 1995 and was elected
a Director of the Company in March 1996. From 1986 until joining the Company, he
served in various positions including Executive Vice President, Chief Operating
Officer of Liberty Travel, Inc., a chain of full-service travel agencies.

Mr. Weinberg was elected Vice President and Chief Financial Officer of the
Company in 1992 and in 1994 was also elected President of TMNI International
Incorporated, a subsidiary. He joined the Company as Vice President Finance in
1991. From 1987 to 1991, Mr. Weinberg served as Vice President Finance and
Administration, Chief Financial Officer, Treasurer and Secretary of Columbia
Laboratories, Inc., a health care products company.

Mr. Ficalora was elected Executive Vice President of the Restaurant Company in
1994, having served as Vice President, Operations of the Company from 1992 until
1994, and Director of Franchise Sales from 1991 to 1992.

Mr. Borges was elected Treasurer of the Company in 1992. He joined the Company
in 1985 as Controller.

Mrs. Ferara was elected Secretary of the Company in 1992. She joined the Company
in 1989 as Office Manager and Assistant Secretary.


<PAGE>
PART II

ITEM 5.  MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

         The Company's Common Stock is traded on the New York Stock Exchange
under the symbol "TMN". Prior to June 28, 1995, the Company's Common Stock was
included in the Nasdaq National Market . The following table sets forth the high
and low sale prices for the common stock for each fiscal quarter ended from
December 31, 1994 (adjusted for the three-for-two stock split effected on April
22, 1994 and applied retroactively where appropriate) as reported on the New
York Stock Exchange or the Nasdaq National Market, as well as the dividends paid
during each such fiscal quarter.

         The payment of dividends, if any, in the future, will depend upon,
among other things, the Company's earnings and financial requirements, as well
as general business conditions.

QUARTER ENDED            LOW            HIGH         DIVIDENDS PAID
-------------            ---            ----         --------------
December 31, 1994      $8.313         $13.750              $.02
March 31, 1995          8.500          13.250                --
June 30, 1995           8.000          13.250               .02
September 30, 1995      8.375          11.375                --
December 31, 1995       8.750          11.000               .02
March 31, 1996          7.125           9.750                --
June 30, 1996           7.125           9.000               .02
September 30, 1996      5.500           8.625                --

         The aggregate number of holders of record of the Company's Common Stock
on December 20, 1996 was approximately 2,400.

         The payment of dividends, if any, in the future, will depend upon,
among other things, the Company's earnings and financial requirements, as well
as general and business conditions.
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA
   
<TABLE>
<CAPTION>
INCOME STATEMENT DATA:

                                                                 YEAR ENDED SEPTEMBER 30,
                                                                 ------------------------
                                               1996              1995             1994              1993             1992
                                               ----              ----             ----              ----             ----
<S>                                     <C>             <C>               <C>              <C>               <C>
Net sales                               $68,600,122     $  58,792,454     $ 45,605,606     $  33,512,234     $ 23,777,303
Membership and renewal
  fee income                              6,833,013         4,207,368        2,769,618         1,686,423        1,142,345
Continuing franchise and
  royalty fee income                      2,469,316         2,633,031        1,503,028           360,076          167,084
Commission income                           682,121           605,441          405,054                --               --

Total revenues                           78,584,572        66,238,294       50,283,356        35,558,733       25,086,732

Operating income                          4,756,552         6,344,850        5,216,578         3,425,433        2,609,244

Net income                                2,546,072         4,196,213        4,176,171         2,734,225        1,744,894

Net income per share
  Primary                                      0.25              0.42             0.42              0.29             0.20
  Fully diluted                                0.25              0.42             0.42              0.28             0.20

BALANCE SHEET DATA:

Total assets                            $53,910,673       $37,361,341      $28,477,060     $  17,903,666     $ 13,459,098

Total long-term debt                             --         2,000,000               --                --               --

Stockholders' equity                     25,752,898        24,191,249       18,924,979        12,618,829        9,438,386

Cash dividends per
  common share                                  .04               .04              .04               .02               --
</TABLE>
    
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESTATEMENT

The Company has changed its application of Statement of Position 93-7 "Reporting
on Advertising Costs". The Company had been deferring certain costs of acquiring
cardmembers and then amortizing these costs over the average life of a
cardmember, or 24 months. The Company has now decided to defer the costs
associated with obtaining fee paying cardmembers, but only to the extent that
initial fees are generated, and to then amortize these costs over 12 months, the
period of initial membership. Since the


<PAGE>
   
Company established a no-fee membership program in 1996 and had waived most
initial fees in 1994 and 1995, this change resulted in a write-down of
previously capitalized and deferred costs and an increase in cardmember
acquisition expenses.
    
STATEMENT PRESENTATION
   
The Company has included all non-capitalizable advertising expenses related to
membership acquisition as a separate line item on its income statement. Also
included on this separate line item is the amortization of capitalizable
advertising costs. Previously, the amortization had been netted against
membership and renewal fee income and all non-capitalizable advertising expenses
had been included in selling, general and administrative expenses. All periods
presented reflect this presentation.
    

NEW ACCOUNTING PRONOUNCEMENTS

i.        Accounting for Stock-Based Compensation
   
          On October 23, 1995, the FASB issued Statement No. 123, "Accounting
for Stock-Based Compensation (FAS "123"). This Statement applies to all
transactions in which an entity acquires goods or services by issuing equity
instruments or by incurring liabilities where the payment amounts are based on
the entity's common stock price. The Statement covers transactions with
employees and nonemployees and is applicable to both public and nonpublic
entities. Entities are allowed (1) to to continue to use the Accounting
Principles Board Opinion No. 25 (APB 25"), or (2) to adopt the FAS 123 fair
value based method. Once the method is adopted, an entity cannot change and the
method selected applies to all of an entity's compensation plans and
transactions. For entities not adopting the FAS 123 fair value based method, the
disclosure requirements of FAS 123, including the pro forma information, are
effective for financial statements for fiscal years beginning after December 15,
1995. The pro forma disclosure are to include all awards granted in fiscal years
that begin after December 15, 1994. However, the disclosures, including the pro
forma net income and earnings per share disclosures, for the fiscal year
beginning after December 15, 1994 will not be included in that year's financial
statements, but will be included in the following year-end financial statements
if the first fiscal year is presented for comparative purposes. Management has
determined that it will follow the accounting method for APB 25 for employees
and that the effect of FAS 123 for non-employees is not significant. FAS 123
will be adopted by the Company as of October 1, 1996.
    
ii.       Accounting for Transfers of Servicing of Financial Assets and
Extinguishments of Liabilities

          In June 1996, the FASB issued Statement of financial Accounting
Standards No. 125 ("FAS 125"), "Accounting for Transfers of Servicing of
Financial Assets and Extinguishments of Liabilities." FAS 125 provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities based on a financial-components
approach that focuses on control. FAS 125 is effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring after

<PAGE>

December 31, 1996 and is to be prospectively applied. The Company believes that
the adoption of FAS 125 will have no impact on its financial statements.

RESULTS OF OPERATIONS (1996 VERSUS 1995)

Net sales for the fiscal year ended September 30, 1996 increased 16.7% to
$68,600,122 as compared to $58,792,454 for the year ended September 30, 1995.
The sales increase was due to an increased number of cardmembers and restaurants
available to cardmembers. Approximately ninety percent (90%) of all restaurants
listed in the directories published by the Company renew their contracts with
the Company after the initial amount of rights to receive meal credits purchased
by the Company is expended. In the second year of renewal, the Company renews
approximately 80% of those restaurants continuing in business. After the second
year, renewal rates drop sharply because the restaurants with the Company's help
have become successful and no longer need the Company, the Company chooses not
to renew the restaurant or the restaurant has gone out of business. However,
offsetting this drop is the fact that new restaurants start-up as old ones go
out of business, providing the Company with new restaurant prospects. The
Company believes that in no area where the Company operates is it close to
restaurant or cardmember saturation. At September 30, 1996, the average Rights
to Receive balance per Company restaurant participating was $9,220 versus $8,592
at September 30, 1995. Membership and renewal fee income increased to
$6,833,013, of which $1,164,883 was initial fee income in 1996 from $4,207,368,
of which $835,151 was initial fee income in 1995 as the result of an increased
number of cardmembers, as well as renewals.

In 1996, 7% of joining cardmembers paid a fee. The others joined under no-fee
programs. In 1995, the initial fee was waived 93% of the time. The renewal rates
in both 1996 and 1995 approximated 55% to 60%. Fee income is recognized over a
twelve-month period beginning in the month the fee is received. Continuing
franchise fee and royalty income decreased to $2,469,316 from $2,633,031. This
decrease resulted from the purchase by the Company of its Chicago franchisee on
July 1, 1995. As a result in the growth in the overall elements of revenue,
gross profits increased by $6,688,213 to $33,438,014 in 1996.
   
In 1996, selling, general and administrative ("SG&A") expenses increased by
$5,262,636, as compared to 1995, representing a 27.8% increase. In 1996, SG&A
expenses of a variable nature amounted to $11,170,000 (46.1% of total SG&A
expenses) versus $9,498,000 (50.1% of total SG&A expenses) in 1995. Main
components of SG&A expenses included sales salaries and commissions ($2,362,000
in 1996 versus $1,866,000 in 1995), bank processing fees ($3,433,000 in 1996
versus $2,834,000 in 1995), Rights to Receive loss expense ($2,075,000 in 1996
versus $2,332,000 in 1995) and salaries expense ($4,230,000 in 1996 versus
$3,604,000 in 1995). The Company also incurred
    
<PAGE>

$801,000 of expenses in 1996 associated with the start-up of new territories
operated by the Company compared with $268,000 in 1995.

In 1996, cardmember acquisition expenses were $4,456,435 versus $1,442,560 in
1995. Included in cardmember acquisition expenses was the amortization of
deferred advertising costs amounting to $1,164,865 in 1996 and $751,802 in 1995.
Costs capitalized in 1996 and 1995 were $969,129 and $1,012,740, respectively.
(See Footnote 1(e) to Consolidated Financial Statements.)

Operating income in 1996 was $4,756,552, a 25.0% decrease from $6,344,850 in
1995.

Other income, net of expense in 1996 was a net expense amounting to $650,000
versus net income of $534,000 in 1995, a difference of $1,184,000. Reasons for
the reduction included $736,000 more interest expense and financing costs in
1996 than 1995, $578,000 less initial franchise fee and license income in 1996
than 1995, $165,000 less in interest and other income in 1996 than 1995, and no
merger and acquisition expenses in 1996 versus $295,000 in 1995, which was
related to the Company's acquisition of its Chicago franchisee.

Earnings before taxes amounted to $4,106,572 in 1996 compared with $6,879,013 in
1995. The effective tax rate in 1996 was 38.0% versus 39.0% in 1995.

Net income was $2,546,072 or $.25 per share, versus $4,196,213 or $.42 per share
in 1995.

RESULTS OF OPERATIONS (1995 VERSUS 1994)

Net sales for the fiscal year ended September 30, 1995 increased 28.9% to
$58,792,454, as compared to $45,605,656 for the year ended September 30, 1994.
The sales increase was primarily due to an increased number of cardmembers and
restaurants available to cardmembers. Approximately ninety percent (90%) of all
restaurants listed in the directories published by the Company renew their
contracts with the Company after the initial amount of Rights to Receive meal
credits purchased by the Company is expended. In the second year of renewal, the
Company renews approximately 80% of those restaurants continuing in business.
After the second year, renewal rates drop sharply because the restaurants with
the Company's help have become successful and no longer need the Company, the
Company chooses not to renew the restaurant or the restaurant has gone out of
business. However, offsetting this drop is the fact that new restaurants
start-up as old ones go out of business, providing the Company with new
restaurant prospects. The Company believes that in no area where the Company
operates is it close to restaurant or cardmember saturation. At September 30,
1995, the average Rights to Receive balance per Company restaurant participating
was $8,592 versus $8,719 at September 30, 1994. Membership and renewal fee
income increased to $4,207,368, of which $835,151 was initial fee income in 1995
from $2,769,618, of which $788,345 was initial fee income in 1994 as the result
of an increased number of cardmembers, as well as


<PAGE>

renewals. In 1995 and 1994, the initial fee was waived 93% and 90% of the time,
respectively. In April 1994 the Company ceased waiving renewal fees. In 1994
prior to April, the Company waived renewal fees 35% of the time. The renewal
rate in 1995 and 1994 approximated 55% to 60%. Fee income is recognized into
income over a twelve-month period beginning in the month the fee is received.
Continuing franchise fee and royalty income increased to $2,633,031 in 1995 from
$1,503,028 in 1994 as a result of the growth in the Company's franchisees and
the start-up of the licensees in the United Kingdom and Australia. Commission
income received by the company increased to $605,441 in 1995 from $405,054 in
1994. As a result of the growth in the overall elements of revenue, gross
profits increased by $6,938,391 to $26,749,801 in 1995.
   
In 1995, selling, general and administrative ("SG&A") expenses increased by
$4,910,504, as compared to 1994, representing a 34.9% increase. In 1995, SG&A
expenses of a variable nature amounted to $9,498,000 (50.1% of total SG&A
expenses) versus $6,540,000 (46.5% of total SG&A expenses) in 1994. Main
components of SG&A expenses included sales salaries and commissions ($1,866,000
in 1995 versus $1,147,000 in 1994), bank processing fees ($2,834,000 in 1995
versus $2,045,000 in 1994), Rights to Receive loss expense ($2,332,000 in 1995
versus $1,743,000 in 1994) and salaries expense ($3,604,000 in 1995 versus
$2,603,000 in 1994). The Company also incurred $268,000 of expenses in 1995
associated with the start-up of new territories operated by the Company.
    
In 1995 cardmember acquisition expenses were $1,442,560 versus $542,945 in 1994.
Included in cardmember acquisition expenses was the amortization of deferred
advertising costs amounting to $751,802 in 1995 and $303,590 in 1994. Costs
capitalized in 1995 and 1994 were $1,012,740 and $581,770, respectively. (See
Footnote 1(e) to Consolidated Financial Statements.)

Operating income in 1995 was $6,344,850, a 21.6% increase over the $5,216,578 in
1994.

Other income, net of expense in 1995 amounted to $534,163 compared to $1,757,093
in 1994. The reduction of $1,222,930 results from an $863,789 decrease in
initial franchise and license fee income, net of expenses in 1995. The Company
in 1994 had entered into a major license for Australia, New Zealand and the
right to sublicense Asia. In 1995, the Company incurred merger and acquisitions
costs amounting to $294,600 in connection with the acquisition of its Chicago
franchisee.

Earnings before taxes amounted to $6,879,013 in 1995 compared with 6,973,671 in
1994. The effective tax rate in 1995 was 39.0% compared with 40.1% in 1994.

Net income in 1995 was $4,196,213 or $.42 per share, versus $4,176,171 or $.42
per share in 1994.

LIQUIDITY AND CAPITAL RESOURCES


<PAGE>

The Company's working capital decreased to $21,952,478 at September 30, 1996
from $23,263,096 at September 30, 1995. The Company's rights-to-receive
increased by $11,378,557; however, this was offset by the increase in the use of
the Companys line of credit which increased by $13,000,000 to $15,000,000 at
September 30, 1996, all of which was classified as a current liability.

On June 30, 1995 the Company obtained a loan facility with NationsBank of
Florida ("NationsBank") under which it could borrow, at the bank's prime rate of
interest, up to Six Million Dollars ($6,000,000) until May 15, 1996, and
thereafter, up to Seven Million Five Hundred Thousand Dollars ($7,500,000). On
January 26, 1996, the loan facility was amended and increased to Twenty Million
Dollars ($20,000,000) and the expiration date was changed to January 26, 1999;
however, because of the Company's asset securitization described below, the line
of credit terminated on December 24, 1996.

On December 24, 1996, the Company sold approximately $33 million of its Rights
to Receive as part of a revolving securitization. The rights to receive were
sold without recourse to a special purpose corporation ("SPC") which issued $33
million of fixed-rate securities in a private placement to various third-party
investors. In exchange for the Rights to Receive, the Company received
approximately $32 million after costs of the transaction and will retain a
residual interest in the future excess cash flows which will be generated as the
Rights to Receive are exchanged for meals by the Company's cardholders. A
portion of this residual interest will be represented by a subordinated note
issued by the SPC to the Company.

Assuming the December 24, 1996 securitization had been completed on 
September 30, 1996 and that part of the proceeds was were used to pay off the 
Company's outstanding line-of-credit balance, the following pro-forma condensed 
balance sheet is presented:

                                                   SEPTEMBER 30, 1996
                                                   ------------------
                                             ORIGINAL            PRO-FORMA
                                             --------            ---------
Cash                                        $ 3,603,409         $20,603,409
Rights-to-Receive                            37,525,957           4,525,957
Other current assets                          4,545,339           4,545,339
                                            -----------         -----------
          Total current assets               45,674,705          29,674,705
Non-current assets                            8,235,968           9,235,968
                                            -----------         -----------
          Total assets                      $53,910,673         $38,910,673
                                            ===========         ===========

Line of credit                               15,000,000               --
Current liabilitites                          8,722,227           8,722,227
                                            -----------         -----------
Total current liabilities                    15,722,227           8,722,227

<PAGE>

Non-current liabilities                       4,435,548           4,435,548
                                            -----------         -----------
          Total liabilities                  28,157,776          13,157,775
Stockholders' equity                         25,752,898          25,752,898
          Total liabilities and             -----------         -----------
          stockholders' equity              $53,910,673         $38,910,673
                                            ===========         ===========
   
The Company expects to recognize income of approximately $11 million as the
Rights to Receive are utilized over a six to nine month period. This revenue
stream is approximately the same as that which would have been experienced by
the Company had it retained the Rights to Receive on its balance sheet instead
of selling them. The Company will also receive a fee for servicing the Rights to
Receive which will offset the cost of servicing presently recorded in general
and administrative expense.
    
Because the private placement certificates will have a term of five years before
their principal is amortized, the Company will replenish the pool of rights to
receive in the SPC as they are utilized. This on-going replenishment by the
Company will generate additional revenue as the new rights to receive are
utilized by cardholders.

On November 15, 1996, the Company entered into a purchase agreement with The
Western Transmedia Company, Inc. ("Western"), a franchisee of the Company. Under
the terms of the agreement, the Company will reacquire the right to operate its
business in California, Oregon, Washington and a portion of Nevada. In addition,
the Company will acquire Western's Rights to Receive, and its furniture,
fixtures and equipment. The purchase price will approximate $7,750,00, of which
$4,750,000, represents the cost of the franchise. Closing of the proposed
transaction is anticipated to take place in January 1997.

Capital expenditures by the Company over the past three fiscal years
(approximately $7,062,105) have been due almost exclusively to the Company's
development and acquisition of computer hardware and software necessary for the
operation of the Cardmember Service Center. The Company estimates that it will
spend approximately $2,600,000 on capital expenditures, consisting primarily of
computer software in fiscal year 1997.

The Company believes that cash on hand at September 30, 1996, together with cash
generation by operations plus cash received from the December 1996
securitization after paying off the Company's line of credit will satisfy the
Company's total need for cash during the 1997 fiscal year.

The Company's inventory of Rights to Receive increased by $11,378,557 to a total
of $37,525,957 at September 30, 1996. As noted above, the Company sold


<PAGE>

approximately $33,000,000 of its Rights to Receive in a securitization
transaction in December 1996.

In many instances the Rights to Receive purchased by the Company are secured by
the furniture, fixtures and kitchen equipment of the related restaurants as
filed pursuant to the Uniform Commercial Code. The Company also attempts to
obtain personal guarantees from the restaurant owners.
   
<TABLE>
<CAPTION>
                          Analysis of Rights to Receive

                                                      1996                  1995                  1994
                                                      ----                  ----                  ----
<S>                                              <C>                   <C>                   <C>
Rights to Receive, beginning of year             $26,147,400           $17,472,712           $ 9,968,102
Purchase of Rights to Receive                     59,179,978            50,295,531            39,419,189
Write-offs of Rights to Receive                   (2,654,863)           (2,132,350)           (1,442,633)
                                                 -----------           -----------           -----------
                                                  82,672,515            65,635,893            47,944,658
Cost of sales                                     45,146,558            39,488,493            30,471,946
                                                 -----------           -----------           -----------
Rights to Receive, end of year                   $37,525,957           $26,147,400           $17,472,712
                                                 ===========           ===========           ===========
</TABLE>
    
Management of the Company believes that continued increase in the number of
restaurants which honor the Transmedia Card (and, therefore, increases in the
inventory of Rights to Receive purchased) is essential to attract additional
cardmembers, satisfy existing cardmembers and continue the Company's revenues
growth. Further, management believes that the purchase of Rights to Receive can
be funded generally from cash on hand, from operations and from funds made
available from future securitizations.

Cash flow used in operating activities was $7,941,637 in fiscal year ended
September 30, 1996, compared with cash used in operating activities of $843,422
and $1,526,902 in 1995 and 1994, respectively. Cash is primarily used in
purchasing Rights to Receive meal credits. Management of the Company anticipates
that the expenditure for the purchases of Rights to Receive will continue to
increase as the Company expands the number of participating full service
restaurants available to its cardmembers.

Cash used in investing activities was $3,354,072 in the fiscal year ended
September 30, 1996, compared with $2,020,055 used in 1995 and $1,860,978 used in
1994. Cash flow deficits from investing activities were due primarily to the
development and acquisition of computer hardware and software necessary for the
operation of the Company's Cardmember Service Center. Management believes that
cash to be used in investing activities in the fiscal year ended September 30,
1997 will approximate $2,600,000.

Cash flow provided by financing activities was $12,628,796 for the fiscal year
ended September 30, 1996, compared with cash flows provided by financing


<PAGE>

activities of $2,654,900 in 1995 and $861,734 in 1994. In 1996, the principal
source of cash flow was from borrowings under the Company's bank line of credit.
In 1995, the principal source of cash flow were from borrowings under the
Company's bank line of credit and from the exercise of options for common stock.
In 1994, the principal source of cash flow from financing activities was from
the exercise of options for common stock and the conversion of warrants.


<PAGE>
ITEM 8. FINANCIAL STATEMENTS
   
                         INDEX TO FINANCIAL STATEMENTS
                         -----------------------------

Independent Auditors' Report                                F - 1

Financial Statements:
 Consolidated Balance Sheets,
  September 30, 1996 and 1995                               F - 2

Consolidated Statements of Income                           F - 3
 for each of the years in the three-year
 period ended September 30, 1996

Consolidated Statements of Stockholders'                    F - 4
 Equity for each of the years in the three-year
 period ended September 30, 1996

Consolidated Statements of Cash Flows                       F - 5,6
 for each of the years in the three-year
 period ended September 30, 1996

Notes to Consolidated Financial Statements                  F - 7
    
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and
    Stockholders
Transmedia Network Inc.:

We have audited the accompanying consolidated balance sheets of Transmedia
Network Inc. and subsidiaries as of September 30, 1996 and 1995, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the years in the three-year period ended September 30, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Transmedia Network Inc. and subsidiaries at September 30, 1996 and 1995, and the
results of their operations and their cash flows for each of the years in the
three-year period ended September 30, 1996 in conformity with generally accepted
accounting principles.

As discussed in note 1(c) to the consolidated financial statements, the Company
changed its method of accounting for investments at September 30, 1995 to adopt
the provisions of the Financial Accounting Standards Board's SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities."

December 6, 1996, except as to notes 13
   and 16, which are dated as of
   December 24, 1996
Miami, Florida

                                      F-1

<PAGE>
<TABLE>
<CAPTION>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           September 30, 1996 and 1995

                                  ASSETS                                                  1996             1995
                                  ------                                                  ----             ----

<S>                                                                               <C>                      <C>
Current assets:
     Cash and cash equivalents (note 1)                                           $         3,603,409       2,270,322
     Accounts receivable, less allowance for doubtful accounts 
        of $15,000 in 1996 and 1995 (note 5)                                                2,616,586       1,771,821
     Rights to receive (note 5)                                                            37,525,957      26,147,400
     Prepaid expenses and other current assets                                              1,035,083         708,253
     Unamortized advertising costs (note 16)                                                  343,385         539,118
     Income taxes receivable                                                                  307,377            -
     Deferred income taxes (note 8)                                                           242,908         441,285
                                                                                           ----------      ----------
                   Total current assets                                                    45,674,705      31,878,199

Securities available for sale, at fair value (note 3)                                       1,264,793       1,878,012
Property and equipment, net (note 2)                                                        5,663,693       3,471,700
Other assets                                                                                1,307,482         133,430
                                                                                           ----------      ----------

                   Total assets                                                   $        53,910,673      37,361,341
                                                                                           ==========      ==========
                   LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Line of credit (note 13)                                                     $        15,000,000            -
     Accounts payable - Rights to receive                                                   4,784,352       4,933,070
     Accounts payable - reimbursable tax and tips                                             485,245         428,000
     Accounts payable - other                                                               2,679,290       1,663,754
     Income taxes payable                                                                        -             22,600
     Accrued expenses                                                                         773,340       1,028,561
                                                                                           ----------      ----------
                   Total current liabilities                                               23,722,227       8,075,985

Line of credit (note 13)                                                                         -          2,000,000
Deferred membership and renewal fee income (note 1)                                         4,102,786       2,866,916
Deferred income taxes (note 8)                                                                332,763         227,191
                                                                                           ----------      ----------
                   Total liabilities                                                       28,157,776      13,170,092
                                                                                           ----------      ----------
Stockholders' equity (notes 6 and 7):
     Preferred stock, $.10 par value per share                                                   -               -
     Common stock, $.02 par value per share                                                   202,539         202,375
     Additional paid-in capital                                                            10,546,612      10,513,055

     Unrealized gain on securities available for sale (net of
        deferred income taxes of $603,583 in 1996 and
        $1,021,679 in 1995)                                                                   984,792       1,598,011
     Retained earnings                                                                     14,018,955      11,877,808
                                                                                           ----------      ----------
                   Total stockholders' equity                                              25,752,898      24,191,249

Commitments (notes 6, 11 and 12)
                                                                                           ----------      ----------
                   Total liabilities and stockholders' equity                     $        53,910,673      37,361,341
                                                                                           ==========      ==========


</TABLE>
See accompanying notes to consolidated financial statements.

                                                         F-2
<PAGE>
<TABLE>
<CAPTION>

                                               TRANSMEDIA NETWORK INC.
                                                   AND SUBSIDIARIES

                                          CONSOLIDATED STATEMENTS OF INCOME

                       For each of the years in the three-year period ended September 30, 1996

                                                                          1996            1995             1994
                                                                          ----            ----             ----
<S>                                                                <C>                    <C>              <C>
Revenues:
     Net sales                                                     $      68,600,122       58,792,454      45,605,656
     Membership and renewal fee income                                     6,833,013        4,207,368       2,769,618
     Continuing franchise fee and royalty income                           2,469,316        2,633,031       1,503,028
     Commission income                                                       682,121          605,441         405,054
                                                                          ----------       ----------      ----------
                                                                          78,584,572       66,238,294      50,283,356

Cost of sales                                                             45,146,558       39,488,493      30,471,946
                                                                          ----------       ----------      ----------
                   Gross profit                                           33,438,014       26,749,801      19,811,410

Selling, general and administrative expenses                              24,225,027       18,962,391      14,051,887
Cardmember acquisition expenses                                            4,456,435        1,442,560         542,945
                                                                          ----------       ----------      ----------
 
                   Operating income                                        4,756,552        6,344,850       5,216,578
                                                                          ----------       ----------      ----------

Other income (expense):
     Initial franchise fee and license fee income, 
        net of expense                                                        30,100          608,211       1,472,000
     Merger and acquisition expenses                                            -            (294,600)           -
     Interest and other income                                               171,772          336,742         290,197
     Interest expense and financing costs                                   (851,852)        (116,190)         (5,104)
                                                                          ----------       ----------      ----------
                                                                            (649,980)         534,163       1,757,093
                                                                          ----------       ----------      ----------
Income before income taxes                                                 4,106,572        6,879,013       6,973,671
                   Income taxes (note 6)                                   1,560,500        2,682,800       2,797,500
                                                                          ----------       ----------      ----------
                   Net income                                      $       2,546,072        4,196,213       4,176,171
                                                                          ==========       ==========      ==========
Net income per common and common equivalent
   share:
        Primary                                                    $      .25              .42             .42
                                                                          ===              ===             ===

        Fully diluted                                              $      .25              .42             .42
                                                                          ===              ===             ===
Weighted average number of
 common and common equivalent shares outstanding:
        Primary                                                           10,299,229       10,112,326       9,980,302
                                                                          ==========       ==========      ==========
        Fully diluted                                                     10,299,229       10,112,326      10,024,175
                                                                          ==========       ==========      ==========

</TABLE>
See accompanying notes to consolidated financial statements.

                                       F-3
<PAGE>
<TABLE>
<CAPTION>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

     For each of the years in the three-year period ended September 30, 1996

                                                           COMMON STOCK                 
                                                   ------------------------     ADDITIONAL    UNREALIZE
                                                        NUMBER                    PAID-IN       GAINS       RETAINED
                                                      OF SHARES     AMOUNT        CAPITAL    (LOSSES), NET  EARNINGS        TOTAL
                                                      ---------     ------        -------    -------------  --------        -----
<S>                                                    <C>        <C>           <C>          <C>           <C>           <C>       
Balance, September 30, 1993                            6,184,716  $ 123,694     8,245,386         -        4,249,749    12,618,829
     Net income                                             -          -             -            -        4,176,171     4,176,171
     Three-for-two stock split                         3,177,607     63,552          -            -          (63,552)         -
     Exercise of stock options                           189,758      3,795       181,404         -             -          185,199
     Income tax benefit related to stock
      option plan                                           -          -          663,104         -             -          663,104
     Conversion of warrants to stock                      66,397      1,329       388,299         -             -          389,628
     Dividend                                               -          -             -            -         (383,025)     (383,025)
     Unrealized gains, net                                  -          -             -       1,275,073          -        1,275,073
                                                      ----------  ---------    ----------   ----------    ----------    ----------
Balance, September 30, 1994                            9,618,478    192,370     9,478,193    1,275,073     7,979,343    18,924,979
     Net income                                             -          -             -            -        4,196,213     4,196,213
     Exercise of stock options                           221,905      4,438       341,820         -             -          346,258
     Income tax benefit related to stock
      option plan                                           -          -          688,610         -             -          688,610
     Dividend                                               -          -             -            -         (397,861)     (397,861)
     Acquisition of franchise                            278,387      5,567         4,432         -          100,113       110,112
     Unrealized gains, net                                  -          -             -         322,938          -          322,938
                                                      ----------  ---------    ----------   ----------    ----------    ----------
Balance, September 30, 1995                           10,118,770    202,375    10,513,055    1,598,011    11,877,808    24,191,249
     Net income                                             -          -             -            -        2,546,072     2,546,072
     Exercise of stock options                             8,156        164        33,557         -             -           33,721
     Dividend                                               -          -             -            -         (404,925)     (404,925)
     Unrealized loss, net                                   -          -             -        (613,219)         -         (613,219)
                                                      ----------  ---------    ----------   ----------    ----------    ----------
Balance, September 30, 1996                           10,126,926  $ 202,539    10,546,612      984,792    14,018,955    25,752,898
                                                      ==========  =========    ==========   ==========    ==========    ==========

</TABLE>
See accompanying notes to consolidated financial statements.

                                       F-4                           (Continued)
                                      
<PAGE>
<TABLE>
<CAPTION>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

     For each of the years in the three-year period ended September 30, 1996

                                                                           1996            1995            1994
                                                                           ----            ----            ----
<S>                                                                  <C>                   <C>              <C>
Cash flows from operating activities:
     Net income                                                      $      2,546,072       4,196,213       4,176,171
     Adjustments to reconcile net income to net cash
        used in operating activities:
           Depreciation and amortization                                    1,163,367         693,960         360,621
           Deferred income taxes                                              303,948        (115,054)         45,826
           Loss on disposal of property and equipment                           8,712           4,090          71,717
           Changes in assets and liabilities:
               Accounts receivable                                           (844,765)        526,684        (732,418)
               Rights to receive                                          (11,378,557)     (8,674,688)     (7,504,610)
               Income taxes receivable                                       (307,377)           -               -
               Prepaid expenses and other current assets                     (326,830)       (137,289)       (408,475)
               Unamortized advertising costs                                  195,733        (260,938)       (278,180)
               Other assets                                                (1,184,052)        177,553        (203,876)
               Accounts payable - Rights to receive                          (148,718)      1,290,739       1,907,463
               Accounts payable - other                                     1,072,781         242,812         592,414
               Income taxes payable                                           (22,600)       (318,739)       (202,293)
               Accrued expenses                                              (255,221)        184,082          43,583
               Deferred membership and renewal fee
                 income                                                     1,235,870       1,347,153         605,155
                                                                          -----------      ----------      ----------

                     Total adjustments                                    (10,487,709)     (5,039,635)     (5,703,073)
                                                                          -----------      ----------      ----------
                     Net cash used in operating activities                 (7,941,637)       (843,422)     (1,526,902)
                                                                          -----------      ----------      ----------
Cash flow from investing activities:
     Additions to property and equipment                                   (3,354,572)     (2,020,055)     (1,687,478)
     Purchase of securities available for sale                                   -               -           (180,000)
     Proceeds from sale of property and equipment                                 500            -              6,500
                                                                          -----------      ----------      ----------

                     Net cash used in investing activities                 (3,354,072)     (2,020,055)     (1,860,978)
                                                                          -----------      ----------      ----------
Cash flows from financing activities:
     Net borrowings on note payable to bank under
        revolving line of credit                                           13,000,000       2,000,000            -
     Conversion of warrants and options for common
        stock, net of tax benefits                                             33,721       1,034,868       1,237,931
     Dividends paid                                                          (404,925)       (379,968)       (376,197)
                                                                          -----------      ----------      ----------
                     Net cash provided by financing activities
                                                                           12,628,796       2,654,900         861,734
                                                                          -----------      ----------      ----------
</TABLE>
                                                                    
                                      F-5                           (Continued)
                                      
<PAGE>
<TABLE>
<CAPTION>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED


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

<S>                                                                <C>                       <C>           <C>        
                     Net (decrease) increase in cash               $        1,333,087        (208,577)     (2,526,146)
Cash and cash equivalents, beginning of year                                2,270,322       2,478,899       5,005,045
                                                                           ----------       ---------       ---------
Cash and cash equivalents, end of year                             $        3,603,409       2,270,322       2,478,899
                                                                           ==========       =========       =========

Supplemental disclosures of cash flow information:
     Cash paid during the year for:
        Interest                                                   $          580,379          95,135           - 
                                                                           ==========       =========       =========
        Income taxes                                               $        1,382,330       2,138,000       2,293,855
                                                                           ==========       =========       =========
</TABLE>
Supplemental schedule of noncash investing and financing activities:
     Noncash investing and financing activities:
        During the years ended September 30, 1996 and 1995, the Company adjusted
           its available for sale investment portfolio to fair value; resulting
           in a net (decrease) increase to stockholders' equity of ($613,219)
           and $322,938, net of deferred income taxes.
        On March 20, 1996 and September 16, 1996, the Company declared a cash
           dividend of $.02 per share of common stock outstanding, payable on
           April 19, 1996 and October 24, 1996, respectively, to stockholders'
           of record at close of business on April 5, 1996 and October 10, 1996,
           respectively. At September 30, 1996, the dividend payable of $213,801
           is recorded as accrued expenses.
        On March 23, 1995 and September 18, 1995, the Company declared a cash
           dividend of $.02 per share of common stock outstanding, payable on
           April 21, 1995 and October 19, 1995, respectively, to stockholders'
           of record at close of business on April 7, 1995 and October 5, 1995,
           respectively. At September 30, 1995, the dividend payable of $210,263
           is recorded in accrued expenses.

See accompanying notes to consolidated financial statements.
   
                                   F-6
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        September 30, 1996, 1995 and 1994

(1)      DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (A)    DESCRIPTION OF BUSINESS

                Transmedia Network Inc. and subsidiaries' (the "Company") main
                business activity is to acquire rights to receive goods and
                services from restaurants and other establishments ("Rights to
                receive"), which are then sold to the Company's cardholders for
                cash. These Rights to receive are primarily purchased by the
                Company for cash.

                The Company's primary area of operations includes the Central
                and Southeast Florida area, the New York and Chicago
                metropolitan areas, Boston and Philadelphia, as well as its
                surrounding areas, including Delaware, also Detroit,
                Indianapolis, Milwaukee, Denver and Phoenix. Franchised areas
                include most of New Jersey, Washington, D.C., Maryland,
                Virginia, Texas, Oregon, North and South Carolina; Atlanta,
                Georgia, and parts of Tennessee, and California, including parts
                of Nevada and the state of Washington. Licensing arrangements
                exist for the United Kingdom, Canada, and Europe, as well as the
                Asia-Pacific region.

                Transmedia Network Inc.'s corporate structure consists of three
                wholly owned subsidiaries: Transmedia Restaurant Company Inc.,
                is in charge of all restaurant-oriented functions of the
                Company; TMNI International Incorporated is responsible for all
                foreign licensing; and Transmedia Service Company Inc. which is
                responsible for all card member-related facets of the business,
                including the card member service center, and domestic
                franchising. All intercompany accounts and transactions have
                been eliminated in consolidation.

         (B)    RIGHTS TO RECEIVE

                Rights to receive ("Rights") are composed primarily of food and
                beverage credits from restaurants. Rights are stated at the
                gross amount of the commitment to the establishment
                (approximately 50 percent of the retail value of Rights
                obtained). Accounts payable-Rights represent the unfunded
                portion of the total commitments. Cost is determined by the
                first-in, first-out method. The Company reviews the
                realizability of the Rights on a periodic basis, provides for
                write offs of rights to receive and writes off Rights from
                restaurants that have ceased operations or whose credits are not
                utilized by cardholders. These write offs are offset by
                recoveries from restaurants. 

         (C)    SECURITIES AVAILABLE FOR SALE

                The Company adopted the provisions of Statement of Financial
                Accounting Standards No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS
                IN DEBT AND EQUITY Securities, ("SFAS 115") effective September
                30, 1994. Under SFAS 115, the Company is required to classify
                any debt and marketable equity securities in one of three
                categories: trading, Securities available for sale are recorded
                at fair value. Realized gains and losses from

                                                                     (Continued)
                                      F-7
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                the sale of securities available for sale are computed using the
                specific identification method. Unrealized gains and losses, net
                of the related tax effects, on securities are recorded as a
                separate component of stockholders' equity until realized.

         (D)    PROPERTY AND EQUIPMENT

                Property and equipment are stated at cost. Depreciation on
                property and equipment is calculated using the straight-line
                method over the estimated useful lives of the assets.
                Amortization of leasehold improvements is calculated over the
                shorter of the lease term or estimated useful life of the asset.

         (E)    DEFERRED MEMBERSHIP AND RENEWAL FEE INCOME AND UNAMORTIZED 
                ADVERTISING COSTS

                Statement of Position No. 93-7 ("SOP 93-7"), REPORTING ON
                ADVERTISING COSTS, was issued by the Accounting Standards
                Executive Committee ("AcSEC") in December 1993, effective for
                years beginning after June 15, 1994, with earlier adoption
                encouraged. This statement provides guidance for reporting
                direct-response advertising costs, with future economic
                benefits, as assets when the costs are incurred and amortizing
                the costs to expense in the current and subsequent periods.

                Under SOP 93-7, certain advertising costs are capitalized. The
                advertising costs are amortized, straight-line, over 12 months,
                which is the cardholder membership period. The advertising costs
                capitalized as assets by the Company represent initial
                fee-paying member acquisition costs resulting from
                direct-response campaign costs which are recorded as incurred.
                Campaign costs include incremental direct costs of
                direct-response advertising, such as printing of brochures,
                campaign applications and mailings; as well as, payroll and
                payroll-related costs paid to employees directly related to the
                campaigns and to outside sources. Such costs are deferred only
                to the extent of membership fees generated by the campaign.

                Deferred membership and renewal fee income is billed in advance
                and amortized, straight-line, over the period of membership.
                Deferred membership and renewal fee income, is classified as a
                noncurrent liability since working capital will not be required
                as the deferred income is recognized over future periods.

                Cardmember acquisition expenses represent the cost of acquiring
                cardmembers and consist primarily of direct-response advertising
                costs.

         (F)    FRANCHISE AND LICENSE FEE INCOME

                Continuing franchise fee revenues are based on the franchisees'
                sales and are recognized when earned.

                                      F-8                            (Continued)
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                Initial franchise fees and license fees are recognized when
                material services or conditions relating to the sale have been
                substantially performed. Initial franchise fees and license fees
                consist of the following:
<TABLE>
<CAPTION>
                                                                                        SEPTEMBER 30,
                                                                        -----------------------------------------------
                                                                            1996            1995            1994
                                                                            ----            ----            ----
<S>                                                                       <C>              <C>               <C>      
               Initial franchise and license fees                         $  75,000        725,000           1,680,000
               Initial franchise and license expenses                        44,900       (116,789)           (208,000)
                                                                          ---------       --------          ----------
                                                                          $  30,100        608,211           1,472,000
                                                                          =========       ========          ==========
</TABLE>
         (G)    NET SALES

                Net sales represent the retail value usage of the rights to
                receive sold, less the 20-30 percent discount offered to the
                Company's cardholders.

         (H)    INCOME TAXES

                The Company recognizes deferred tax liabilities and assets for
                the expected future tax consequences of events that have been
                included in the financial statements or tax returns. Under this
                method, deferred tax liabilities and assets are determined based
                on the difference between the financial statement and tax basis
                of assets and liabilities using enacted tax rates in effect for
                the year in which the differences are expected to reverse. The
                effect on deferred tax assets and liabilities of a change in tax
                rates is recognized in income in the period that includes the
                enactment date.

         (I)    INCOME PER COMMON AND COMMON EQUIVALENT SHARE

                Primary income per common and common equivalent share is
                computed by dividing net income by the weighted average number
                of common stock outstanding and common stock equivalents. Fully
                diluted income per share computation reflects the effect of
                common shares contingently issuable upon the exercise warrants
                in periods in which such exercise would cause dilution. Fully
                diluted income per share also reflects additional dilution
                related to stock options due to the use of the market price at
                the end of the period, when higher than the average price for
                the period.

         (J)    CASH AND CASH EQUIVALENTS

                Cash and cash equivalents are instruments with original
                maturities of three months or less.

         (K)    RECLASSIFICATION

                Certain prior year amounts have been reclassified to conform
                with the 1996 presentation.

                                      F-9                            (Continued)
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         (L)    COMMISSION INCOME

                Commission income represents income for advertising services
                provided by the Company to restaurants or other establishments,
                other than services derived from the purchase of rights to
                receive in advance.

         (M)    NEW ACCOUNTING PRONOUNCEMENTS

                (I)    ACCOUNTING FOR STOCK-BASED COMPENSATION

                       On October 23, 1995, the FASB issued Statement No. 123,
                       "Accounting for Stock-Based Compensation" ("FAS 123").
                       This Statement applies to all transactions in which an
                       entity acquires goods or services by issuing equity
                       instruments or by incurring liabilities where the payment
                       amounts are based on the entity's common stock price. The
                       Statement covers transactions with employees and
                       nonemployees and is applicable to both public and
                       nonpublic entities. Entities are allowed (1) to continue
                       to use the Accounting Principles Board Opinion No. 25
                       method ("APB 25"), or (2) to adopt the FAS 123 fair value
                       based method. Once the method is adopted, an entity
                       cannot change and the method selected applies to all of
                       an entity's compensation plans and transactions. For
                       entities not adopting the FAS 123 fair value based
                       method, FAS 123 requires pro forma net income and
                       earnings per share information as if the fair value based
                       method has been adopted. For entities not adopting the
                       fair value based method, the disclosure requirements of
                       FAS 123, including the pro forma information, are
                       effective for financial statements for fiscal years
                       beginning after December 15, 1995. The pro forma
                       disclosure are to include all awards granted in fiscal
                       years that begin after December 15, 1994. However, the
                       disclosures, including the pro forma net income and
                       earnings per share disclosures, for the fiscal year
                       beginning after December 15, 1994 will not be included in
                       that year's financial statements but will be included in
                       the following year-end financial statements if the first
                       fiscal year is presented for comparative purposes.
                       Management has determined that it will follow the
                       accounting method for APB 25 for employees and that the
                       effect of FAS 123 for non-employees is not significant.
                       FAS 123 will be adopted by the Company as of October 1,
                       1996.

               (II)    ACCOUNTING FOR TRANSFERS OF SERVICING OF FINANCIAL ASSETS
                       AND EXTINGUISHMENTS OF LIABILITIES

                       In June 1996, the FASB issued Statement of Financial
                       Accounting Standards No. 125 ("FAS 125"), "Accounting for
                       Transfers of Servicing of Financial Assets and
                       Extinguishments of Liabilities." FAS 125 provides
                       accounting and reporting standards for transfers and
                       servicing of financial assets and extinguishments of
                       liabilities based on a financial-components approach that
                       focuses on control. FAS 125 is effective for transfers
                       and servicing of financial assets and extinguishments of
                       liabilities occurring after December 31, 1996 and is to
                       be prospectively applied. The Company believes that the
                       adoption of FAS 125 will have no impact on its financial
                       statements.

                                      F-10                           (Continued)
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(2)      PROPERTY AND EQUIPMENT

         Property and equipment consist of the following:

                                                                    ESTIMATED
                                         SEPTEMBER 30,            USEFUL LIVES
                                     --------------------------   ------------
                                       1996            1995
                                       ----            ----

      Furniture and fixtures         $   354,502        169,875       5 years
      Office equipment                 7,386,056      4,334,136       5 years
      Leasehold improvements              53,791         61,272    Life of lease
                                     -----------     ----------
                                       7,794,349      4,565,283
      Less accumulated depreciation   (2,130,656)    (1,093,583)
                                     -----------     ----------

                                     $ 5,663,693      3,471,700
                                     ===========     ==========

         Depreciation and amortization expense for the years ended September 30,
         1996 and 1995 was $1,163,367 and $693,960, respectively.

(3)      SECURITIES AVAILABLE FOR SALE

         Securities available for sale are recorded at fair value and consist of
         shares of common stock of various companies with an aggregate cost of
         $280,000 and $280,000 as of September 30, 1996 and 1995. Gross
         unrealized gains were $1,749,625 and $2,685,941 as of September 30,
         1996 and 1995, respectively. Gross unrealized losses were $161,250 and
         $66,250 as of September 30, 1996 and 1995, respectively. There were no
         realized gains or losses for the years ended September 30, 1996 and
         1995.

(4)      FAIR VALUES OF FINANCIAL INSTRUMENTS

         Statement of Financial Accounting Standards No. 107, "Disclosures About
         Fair Value of Financial Instruments," defines the fair value of a
         financial instrument as the amount at which the instrument could be
         exchanged in a current transaction between willing parties, other than
         in a forced or liquidation sale. For the financial instruments shown
         below. The following presents the carrying amount and fair value of the
         Company's financial instruments at September 30, 1996:

                                                   CARRYING          FAIR
                                                    AMOUNT           VALUE
                                                    ------            -----

           Rights to receive                   $  37,525,957        37,525,957
                                                  ==========        ==========

           Securities available for sale       $   1,868,375         1,868,375
                                                  ==========        ==========

           Line of credit                      $  15,000,000        15,000,000
                                                  ==========        ==========

                                      F-11                          (Continued)
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         The fair value of the rights to receive is based upon the sale
         described in note 17(a). The fair value of the securities available for
         sale is based upon quoted market prices for these or similar
         instruments. Amounts outstanding under the line of credit are
         considered to be at fair value because the rate of increase fluctuates
         as market conditions charge.

(5)      ALLOWANCE ACCOUNTS

         The following tables describe the activity in the allowance accounts
         for accounts receivable and rights to receive:
<TABLE>
<CAPTION>

                                                              BALANCE,        CHARGED                       BALANCE,
                                                              BEGINNING         TO                           END OF
                                                               OF YEAR        EXPENSES      WRITE-OFFS        YEAR
                                                               -------        --------      ----------        ----
<S>                                                            <C>            <C>              <C>           <C>
       Accounts receivable:
            Year ended September 30, 1966:
               Allowance for doubtful accounts                 $    15,000       424,807         (424,807)     15,000
                                                                  ========    ==========       ==========    ========

            Year ended September 30, 1995:
               Allowance for doubtful accounts                 $    25,000       332,528         (342,528)     15,000
                                                                  ========    ==========       ==========    ========

            Year ended September 30, 1994:
               Allowance for doubtful accounts                 $    20,000       111,527         (106,527)     25,000
                                                                  ========    ==========       ==========    ========

       Rights to receive:
            Year ended September 30, 1996:
               Allowance for doubtful accounts                  $  900,000     2,074,863       (2,654,863)    320,000
                                                                   =======     =========       ==========     =======

            Year ended September 30, 1995:
               Allowance for doubtful accounts                  $  700,000     2,332,350       (2,132,350)    900,000
                                                                   =======     =========       ==========     =======

            Year ended September 30, 1994:
               Allowance for doubtful accounts                  $  400,000     1,742,633       (1,442,633)    700,000
                                                                   =======     =========        =========     =======
</TABLE>
         Write-offs for rights to receive are offset by recoveries from
         restaurants.

(6)      STOCK OPTION PLANS

         Under the Company's 1987 Stock Option and Rights Plan (the "1987
         Plan"), the Company may grant stock options and related stock
         appreciation rights to persons who are now or who during the term of
         the 1987 Plan become key employees (including those who are also
         directors) and independent sales agents. Stock options granted under
         the 1987 Plan may either be incentive stock options or nonqualified
         stock options for federal income tax purposes. The 1987 Plan, as
         amended in 1992, provides that the Stock Option Committee of

                                      F-12                           (Continued)
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         the Board of Directors may grant stock options or stock appreciation
         rights with respect to a maximum of 1,012,500 shares of common stock at
         a price not less than the fair market value at the date of grant for
         qualified and nonqualified stock options. The exercise price under an
         incentive stock option granted to a person owning stock representing
         more than 10 percent of the common stock must equal at least 110
         percent of the fair market value at the date of grant. Options are
         exercisable beginning not less than one year after date of grant. All
         options expire either five or ten years from the date of grant and each
         becomes exercisable in installments of 25 percent of the underlying
         shares for each year the option is outstanding, commencing on the first
         anniversary of the date of grant.

         In March 1996, the 1996 Long-Term Incentive Plan (the "1996 Plan") was
         approved for adoption by the Company's stockholders. Under the 1996
         Plan, the Company may grant awards, which may include stock options,
         stock appreciation rights, restricted stock, deferred stock, stock
         granted as a bonus or in lieu of other awards, dividend equivalents and
         other stock based awards to directors, officers and other key employees
         and consultants of the Company. A maximum of 505,966 shares of the
         Company's common stock is included in the 1996 Plan. Stock options
         granted under the 1996 Plan may be either incentive stock options or
         nonqualified stock options for federal income tax purposes. The
         exercise price under an incentive stock option to a person owning stock
         representing more than 10 percent of the common stock must equal at
         least 110 percent of the fair market value at the date of grant.
         Options are excercisable not less than one year after the date of
         grant.

         The following table summarizes the stock options granted and exercised
         during 1996 and 1995:

                                                                1996      1995
                                                                ----      ----

        Total stock options granted - common stock             85,000    165,500
                                                              =======   ========
        Total stock options exercised - common stock            8,156    221,905
                                                              =======   ========
        Average exercise price                                $  4.13   $   1.56
                                                              =======   ========
        Nonqualified stock options exercised - common stock       -      208,686
                                                              =======   ========
           Current windfall tax benefit                       $   -      688,610
                                                              =======   ========
        Total warrants converted to common stock                  -         -

           Average exercise price                             $   -     $   4.56
                                                              =======   ========

                                      F-13                           (Continued)
<PAGE>


         At September 30, 1996 and 1995, options under the Plans to purchase
         586,373 and 509,529 shares of common stock are outstanding as follows:
<TABLE>
<CAPTION>
                                                       SEPTEMBER 30, 1996
                                               -------------------------------------
                      ISSUANCE                    NUMBER OF            EXERCISE                 EXPIRATION
                        DATE                        SHARES               PRICE                     DATE
                        ----                        ------               -----                     ----

<S>                   <C>                            <C>           <C>                      <C> 
                March 1992                           26,157        $     3.8889             March 1997
                May 1992                            102,093              4.8333             May 1997
                September 1993                       77,623              7.4445             September 2003
                February 1994                        37,500             12.2500             February 2004
                March 1994                           97,500             15.0000             March 2004
                March 1995                          135,500             12.2500             March 2005
                August 1995                          25,000              9.2500             August 2005
                December 1995                        50,000             10.0000             December 2000
                March 1996                           25,000              7.8750             March 2001
                June 1996                            10,000              8.0000             June 2001
                                                   --------
                                                    586,373
                                                   ========

                                                       SEPTEMBER 30, 1995
                                               -------------------------------------
                      ISSUANCE                    NUMBER OF            EXERCISE                 EXPIRATION
                        DATE                        SHARES               PRICE                     DATE
                        ----                        ------               -----                     ----

                March 1992                           33,750        $     3.8889             March 1997
                May 1992                            102,093              4.8333             May 1997
                September 1993                       78,186              7.4445             September 2003
                February 1994                        37,500             12.2500             February 2004
                March 1994                           97,500             15.0000             March 2004
                March 1995                          135,500             12.2500             March 2005
                August 1995                          25,000              9.2500             August 2005
                                                   --------
                                                    509,529
                                                   ========
</TABLE>

         In addition to the options under the Plan, at September 30, 1996 and
         1995, the Company has issued the following nonqualified options to
         purchase an additional 421,250 and 421,250 shares of common stock
         outstanding as follows:
<TABLE>
<CAPTION>
                                                       SEPTEMBER 30, 1996
                                               -------------------------------------
                      ISSUANCE                    NUMBER OF            EXERCISE                 EXPIRATION
                        DATE                        SHARES               PRICE                     DATE
                        ----                        ------               -----                     ----
<S>                   <C>                           <C>                 <C>                       <C> 
                March 1992                          168,750             3.8889              March 1997
                May 1992                            135,000             4.8333              May 1997
                September 1993                      112,500             7.4445              September 1998
                May 1995                              5,000             11.375              May 2000
                                                  ---------
                                                    421,250
                                                  =========
                                      F-14                           (Continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                       SEPTEMBER 30, 1995
                                               -------------------------------------
                      ISSUANCE                    NUMBER OF            EXERCISE                 EXPIRATION
                        DATE                        SHARES               PRICE                     DATE
                        ----                        ------               -----                     ----
                <S>                                 <C>            <C>                      <C> 
                March 1992                          168,750        $    3.8889              March 1997
                May 1992                            135,000             4.8333              May 1997
                September 1993                      112,500             7.4445              September 1998
                May 1995                              5,000             11.375              May 2000
                                                  ---------
                                                    421,250
                                                  =========
</TABLE>
         During 1996 and 1995, expired or canceled stock options totaled -0- and
         17,500, respectively.

(7)      STOCKHOLDERS' EQUITY

         The Company has 1 million authorized shares of preferred stock, $.10
         par value per share; none of which has been issued.

         Effective March 22, 1994, the Company effected a three-for-two stock
         split recorded in the form of a 50 percent stock dividend on its common
         stock. All references to the number of common shares and per common
         share amounts have been restated to reflect the split.

         During March 1994, the Company amended its Certificate of Incorporation
         to increase the number of shares of authorized common stock from 10
         million to 20 million.

(8)      INCOME TAXES

         The tax effects of the temporary differences that give rise to
         significant portions of the deferred tax assets and liabilities at
         September 30, 1996 and 1995 are as follows:

                                                             1996        1995
                                                             ----        ----
         Deferred tax assets:
              Travel programs                               $ 98,730       -
              Amortization of leasehold improvements           5,956       -
              Rights to receive                              132,032    351,000
              Accrued expenses                                  -        84,435
              Accounts receivable                              6,190      5,850
                                                            --------    -------
                    Total gross deferred tax assets          242,908    441,285
              Less valuation allowance                          -          -
                                                            --------    -------
                    Net deferred tax assets                  242,908    441,285
                                                            --------    -------
         Deferred tax liabilities:
              Deferred advertising costs                     141,681    210,786
              Property and equipment                         191,082     21,405
                                                            --------    -------
                    Total gross deferred tax liabilities     332,763    227,191
                                                            --------    -------
         Net deferred tax (liability) asset                 $(89,855)   214,094
                                                            ========    =======

                                      F-15                          (Continued)

<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         There was no valuation allowance for deferred tax assets as of
         September 30, 1996 and 1995. The increase/(decrease) in deferred taxes
         related to securities available for sale was (418,097) and $135,611
         during 1996 and 1995, respectively.

         Income tax expense (benefit) for the years ended September 30, 1996 and
         1995 is as follows:

                                              CURRENT     DEFERRED      TOTAL
                                              -------     --------      -----
               1996:
                     U.S. federal           $  921,553    336,313     1,257,866
                     State and local           334,999    (32,365)      302,634
                                            ----------   --------     ---------
                                            $1,256,552    303,948     1,560,500
                                            ==========   ========     =========
                1995:
                     U.S. federal           $2,179,357    (75,488)    2,103,869
                     State and local           618,497    (39,566)      578,931
                                            ----------   --------     ---------
                                            $2,797,854   (115,054)    2,682,800
                                            ==========   ========     =========

                1994:
                     U.S. federal           $2,018,072    195,618     2,213,690
                     State and local           733,602   (149,792)      583,810
                                            ----------   --------     ---------
                                            $2,751,674     45,826     2,797,500
                                            ==========   ========     =========

         Reconciliation of the statutory federal income tax rate and the
         Company's effective rate for the years ended September 30, 1996, 1995
         and 1994, is as follows:
<TABLE>
<CAPTION>

                                               1996                         1995                        1994
                                     ---------------------------  --------------------------  ---------------------------
                                                  % OF PRETAX                  % OF PRETAX                  % OF PRETAX
                                        AMOUNT      EARNINGS         AMOUNT     EARNINGS          AMOUNT     EARNINGS
                                        ------      --------         ------     --------          ------     --------
<S>                               <C>                 <C>        <C>               <C>      <C>                 <C>  
        Federal tax rate          $    1,396,276      34.0%      $  2,338,864      34.0%    $    2,371,048      34.0%
        State and local taxes,
             net of federal
             income tax benefit          302,634       7.4            578,931       8.4            583,810       8.4
        Other                           (138,410)     (3.4)          (234,995)     (3.4)          (157,358)     (2.3)
                                      ----------      ----         ----------     -----          ---------     -----

                                  $    1,560,500      38.0%      $  2,682,800      39.0%    $    2,797,500      40.1%
                                       =========      ====          =========      ====          =========      ====
</TABLE>
(9)      FRANCHISE AGREEMENTS

         The Company, as franchiser, has entered into various 10-year
         franchising agreements with franchisees. In accordance with these
         agreements, the Company has agreed to provide marketing, advertising,
         training and other administrative support. All material services or
         conditions relating to the franchise sales have been substantially
         performed or satisfied by the Company as of September 30, 1996. In
         addition, the Company has agreed to grant a territory with at least 625
         full-service restaurants that accept certain major credit cards; and
         will continue to develop trademarks for itself and the system of
         franchisees. The Company also has agreed to pay a commission to the
         franchisees in an amount equal to 40 percent of the initial membership
         cardholders' fees for all new cardholders solicited by the franchisees.

                                      F-16                          (Continued)
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         The franchisees are responsible for soliciting restaurants and
         cardholders, paying consideration to the restaurants to obtain Rights
         to receive meal and beverage credits, and maintaining adequate
         insurance. During 1994, the Company funded two of its franchisees
         through the issuance of notes receivable totaling $220,000 (included in
         other assets). Such notes are secured by Rights to receive purchased by
         such franchisees in their respective geographic territories. As of
         September 1996, no amounts were outstanding for these notes.

         In consideration for granting the franchises, the franchisees paid the
         Company initial franchise fees and an initial fee to the Company's
         advertising and development fund. Continuing fees to be paid by the
         franchisees are as follows:

               /bullet/ 7.5 percent of the total meal credits used within the
                        franchisee's territory.

               /bullet/ 2.5 percent of the total meal credits used within the
                        franchisee's territory to be deposited into the
                        advertising and development fund.

               /bullet/ A processing fee of $0.20 per sale transaction slip
                        forwarded to the Company from the franchisee's
                        territory.

               /bullet/ A weekly service charge of $0.23 per participating
                        restaurant in the franchisee's territory.

         As of September 30, 1996 and 1995, the Company maintained $1,897 and
         $1,068, respectively, in its advertising and development fund, which is
         included as cash in the accompanying consolidated financial statements.
         These funds may be used in the Company's sole discretion to meet any
         and all costs of maintaining, administering, directing and preparing
         advertising for purposes of enhancing the franchise system, the
         Restaurant Card and for soliciting and marketing to restaurants and
         Restaurant Card holders.

         The Company received 60,000 shares of publicly traded common stock in
         connection with the sale of its fourth and fifth franchise territories
         during 1995, which represented 2.3 percent of the franchisee's 1995
         common stock. There were no franchise territories sold during 1996. The
         shares are included in Securities available for sale. In addition, the
         chairman and a director of the Company own 0.3 percent and 6.5 percent
         of the franchisee's common stock, respectively.

(10)     LICENSE AGREEMENTS

         In March 1994, the Company entered into an agreement for an exclusive
         perpetual license of its software and trademark in the Asia-Pacific
         region. In accordance with the agreement, the Company agreed to assist
         the licensee with training relating to sales, administration,
         technology and operations of the business. All material services or
         conditions relating to the license sale had been substantially
         performed or satisfied by the Company as of September 30, 1994. The
         licensee may grant sublicenses in the territory and is responsible for
         the operations of the business in the Asia-Pacific region, including
         procuring member restaurants and providing related services and
         activities throughout the territory.

                                      F-17                           (Continued)
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         In consideration for granting the exclusive license, the licensee paid
         the Company in fiscal 1994 a license fee totaling $1,250,000 for the
         master license agreement and has granted to the Company a 5 percent
         equity interest in the new entity which will operate in Australia and
         New Zealand. The shares comprising the equity interest are included in
         securities available for sale. Continuing fees to be paid by the
         licensee are as follows:

               /bullet/ 25 percent of any amounts that the licensee receives
                        from any sublicensee within the territory, other than
                        Australia and New Zealand. Such amounts shall include,
                        but not be limited to, royalty payments, transfer fee
                        payments and up-front sublicense fee payments. The
                        portion of the up-front sublicense fee paid to the
                        Company shall not be less than $250,000, unless
                        otherwise agreed to by the Company, and in no event less
                        than $500,000, for each of the People's Republic of
                        China and Japan.

               /bullet/ Royalty of 2 percent of gross sales of the Australia and
                        New Zealand sublicensee, and 25 percent of any other
                        amounts that the licensee receives from the sublicensee.

         The Company has an agreement for an exclusive perpetual license of its
         software and trademarks in the continent of Europe. In accordance with
         this agreement, the Company agreed to assist the licensee with training
         relating to sales, administration, technology, and operations of the
         business. All material services or conditions relating to the license
         sale have been substantially performed or satisfied by the Company. The
         licensee may grant sublicenses in the territory and is responsible for
         the operations of the business in Europe, including procuring member
         restaurants and providing related services and activities throughout
         the territory.

         In consideration for granting the exclusive license, the licensee paid
         the Company in August 1993 a license fee of $1,125,000 for the master
         license agreement and has granted to the Company a 5 percent equity
         interest in the new entity which will operate in the United Kingdom.
         Continuing fees to be paid by the licensee are as follows:

               /bullet/ 25 percent of any amounts that licensee receives from
                        any sublicensee within the territory, other than the
                        United Kingdom. Such amounts shall include, but not be
                        limited to, royalty payments, transfer fee payments and
                        up-front sublicense fee payments. The portion of the
                        up-front sublicense fee paid to the Company shall not be
                        less than $250,000, unless otherwise agreed to by the
                        Company.

               /bullet/ Royalty of 2 percent of gross sales of the United
                        Kingdom sublicensee, and 25 percent of any other amounts
                        that the licensee receives from the sublicensee.

         During 1995, the Company received $250,000 from the European licensee
         when it exercised its right to sub-license within the territory.

(11)     LEASES

         The Company leases certain equipment and office space under long-term
         lease agreements.

                                      F-18                           (Continued)
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Future minimum lease payments under noncancelable operating leases as
         of September 30, 1996 are as follows:

                       YEAR ENDING
                      SEPTEMBER 30,
                      -------------

                           1997                       $       341,872
                           1998                               269,783
                           1999                               230,585
                           2000                               210,707
                           2001                               137,800
                                                           ----------

               Total minimum lease payments           $     1,190,747
                                                            =========

         Rent expense charged to operations was $386,915, $292,907, and $263,821
         for the years ended September 30, 1996, 1995 and 1994, respectively.

(12)     COMMITMENTS

         On July 14, 1995, the Company entered into an unconditional guaranty
         agreement with a financial institution, to extend credit in the amount
         of $450,000 to a franchisee, which is still outstanding at 
         September 30, 1996.

         On October 1, 1994, the Company amended its employment agreement with
         its president through September 30, 1997. The agreement provides for
         salary at an annual rate of $275,000 through September 30, 1995;
         $300,000 through September 30, 1996; and $350,000 through September 30,
         1997, plus 5 percent of the Company's pretax income not to exceed
         $600,000 for the fiscal years ended September 30, 1995 and 1996 and
         $700,000 for the fiscal year ended September 30, 1997. In addition, in
         the event of a sale of the Company, the president has the right to
         resign from his positions with Transmedia within one year and receive
         $1 million upon such resignation.

         On November 24, 1993 the Company also entered into a consulting
         agreement with its president to commence on September 30, 1997 through
         January 1, 2005. The agreement provides compensation at an annual
         amount equal to 50 percent of the sum of the highest base salary and
         bonus received by the president in any year under the employment
         agreement, discussed above, not to exceed in any one year during the
         term of the consulting agreement, 10 percent of the Company's prior
         year's pre-tax income, but in any event not less than $100,000.

         On October 1, 1994, the Company also amended an employment agreement
         with an executive vice president through September 30, 1997. The
         agreement provides for salary at an annual rate of $180,000 through
         September 30, 1995; $250,000 through September 30, 1996; and $300,000
         through September 30, 1997, plus 3 percent of the increase in the
         Company's pretax income over the prior fiscal year for fiscal years
         1995, 1996 and 1997. In addition, this executive received a $150,000
         signing bonus, forfeitable pro rata over the term of the agreement. In
         the event of a sale of the Company, this executive has the right to
         resign from his positions with Transmedia within one year and receive
         $750,000 upon such resignation.

                                      F-19                           (Continued)

<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         On October 31, 1994, the Company approved a severance plan for selected
         officers and key employees of the Company. This plan offers one year of
         salary for each year of service with the Company, up to a maximum of
         three years, if, within the two-year period following a change in
         control of the Company, the individual is terminated or voluntarily
         resigns from the Company.

         On December 5, 1995, the Company entered into an employment agreement
         with a vice president through September 30, 1997. This agreement
         provides for salary at an annual rate of $225,000 through September 30,
         1996 and $250,000 through September 30, 1997, and is eligible for a
         performance bonus in each year up to one-third of the annual salary. In
         addition, a $500,000 split dollar life insurance policy, options to
         purchase 50,000 shares of the Company's common stock, and a $500,000
         severance payment in the event of termination following a change in
         control.

(13)     LINE OF CREDIT

         The Company maintains a line of credit with a bank to finance the
         purchase of Rights to receive. On January 26, 1996 the Company
         increased the line of credit to $20 million. The facility matures on
         January 26, 1999. As of September 30, 1996 and 1995, $15 million and $2
         million were outstanding under this credit facility, respectively. The
         credit facility has an interest rate of prime and is unsecured. There
         were no conditions under which the line of credit may be withdrawn. As
         a result of the sale of the rights to receive described in note 16(a),
         the line of credit was terminated on December 24, 1996.

(14)     BUSINESS AND CREDIT CONCENTRATIONS

         Most of the Company's customers are located in the New York City and
         Southeast Florida areas. No single customer accounted for more than 5
         percent of the Company's sales in any fiscal year presented.

         No single restaurant's Rights to receive balance was greater than 5
         percent of the total Rights to receive balance at September 30, 1996 or
         1995.

(15)     BUSINESS COMBINATIONS

         On July 1, 1995, the Chicago franchisee (the "franchisee"), was merged
         into the Company, and 278,387 shares of the Company's common stock were
         issued in exchange for all the outstanding common stock of the
         franchisee. The merger was accounted for as a pooling of interests and
         the accompanying financial statements reflect this transaction.

(16)     SUBSEQUENT EVENTS

         (A)    SALE OF RIGHTS TO RECEIVE

                On December 24, 1996, the Company sold $33 million of its rights
                to receive as part of a revolving securitization. The rights to
                receive were sold without recourse to a special purpose
                corporation ("SPC") which issued $33 million of fixed-rate
                securities in a private placement to various third-party
                investors. In exchange for the rights to receive,

                                      F-20                           (Continued)
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                the Company received $32 million after costs of the transaction
                and retained a residual interest in the future excess cash flows
                which will be generated as the rights to receive are exchanged
                for meals by the Company's cardholders. A portion of this
                residual interest was represented by a subordinated note issued
                by the SPC to the Company.

                The Company expects to recognize income of approximately $11
                million as the rights to receive are utilized over a six to nine
                month period. This revenue stream is approximately the same as
                that which would have been experienced by the Company had it
                retained the rights to receive on its balance sheet instead of
                selling them. The Company will also receive a fee for servicing
                the rights to receive which will offset the cost of servicing
                presently recorded in general and administrative expense.

                Because the private placement certificates have a term of five
                years before their principal is amortized, the Company will
                replenish the pool of rights to receive in the SPC as they are
                utilized. This on-going replenishment by the Company will
                generate additional revenue as the new rights to receive are
                utilized by cardholders.

                Throughout the securitization period, the Company anticipates
                that its revenue stream will be comparable to the revenue stream
                which would have been recognized if the securitization did not
                take place. Moreover, the rate paid to the certificate holders
                is lower than historical costs of financing available to the
                Company.

         (B)    RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS

                After discussions with the Securities and Exchange Commission
                staff, the Company has changed its accounting policy for certain
                costs of acquiring cardmembers. To the extent that membership
                and renewal fees were expected to be received, the Company had
                been deferring certain costs of acquiring cardmembers and
                amortizing them over the average life of a cardmember,
                twenty-four months. The Company has changed its policy to defer
                costs associated with acquiring fee paying cardmembers to the
                extent that initial membership fees are generated and to defer
                those costs over twelve months, the period of initial
                membership. This accounting has been applied retroactively.
                Accordingly, the Company has restated its previously issued 1994
                and 1995 financial statements to appropriately reflect this new
                policy. The impact of the restatement was as follows:
<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED                        YEAR ENDED
                                           ------------------------------------------- --------------------------------
                                             JUNE 30,    MARCH 31,     DECEMBER 31,     SEPTEMBER 30,  SEPTEMBER 30,
                                               1996        1996            1995             1995            1994
                                               ----        ----            ----
<S>                                      <C>              <C>              <C>               <C>            <C>
         Net income:
              Previously reported       $    1,112,005    1,106,157        906,933           4,627,726      4,406,622
              As restated                      839,878      461,925        780,587           4,196,213      4,176,171

         Earnings per share:
              Previously reported                .11          .11             .09              .46            .44
              As restated                        .08          .05             .08              .42            .42
</TABLE>
                Deferred advertising costs at September 30, 1995, were reduced
                to $539,118 from the $1,688,682 previously reported.

                                      F-21                           (Continued)
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         (C)    PURCHASE OF FRANCHISE

                On November 15, 1996, The Company entered into a purchase
                agreement with The Western Transmedia Company, Inc. ("Western"),
                a franchisee of the Company. Under the terms of the agreement,
                the Company will reacquire the right to operate its business in
                California, Oregon, Washington and a portion of Nevada. In
                addition, the Company will acquire Western's rights to receive,
                and its furniture, fixtures and equipment. The purchase price
                will approximate $7,750,000, of which $4,750,000 represents the
                cost of the franchise. Closing of the proposed transaction is
                expected to take place in January 1997.


                                      F-22

<PAGE>

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

*        None.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information called for by Item 10 is set forth under the heading
         "Executive Officers of the Registrant" in Part I hereof and in
         "Election of Directors" in the Company's 1997 Proxy Statement, which is
         incorporated herein by this reference.

ITEM 11.  EXECUTIVE COMPENSATION

         Information called for by Item 11 is set forth under the heading
         "Executive Compensation" in the Company's 1997 Proxy Statement, which
         is incorporated herein by this reference.


<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information called for in Item 12 is set forth under the heading
         "Security Ownership of Certain Beneficial Owners and Management" in the
         Company's 1997 Proxy Statement, which is incorporated herein by this
         reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information called for in Item 13 is set forth under the heading
         "Certain Relationships and Related Transactions" in the Company's 1997
         Proxy Statement, which is incorporated herein by this reference.

PART IV

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

         The following documents are being filed as part of this Report:

         (a)(1)   Financial Statements:
                    Transmedia Network Inc.

                  See "Index to Financial Statements" contained in Part II,
                    Item 8.

         (a)(2)   Financial Statement Schedules

         No schedules have been included because they are not applicable or the
         required information is shown in the Financial Statements or the Notes
         thereto.

         (a)(3)   Exhibits

DESIGNATION                         DESCRIPTION
-----------                         -----------

2.1      Assignment and Assumption of Franchise Agreements dated September 30,
         1994 between Transmedia Network Inc. and the Service Company.(1)

2.2      Capital Contribution dated September 30, 1994 by Transmedia Network
         Inc. to the Service Company.(1)

2.3      Trademark Contribution dated September 30, 1994 from Transmedia Network
         to the Service Company.(1)

2.4      Capital Contribution dated September 30, 1994 from Transmedia Network
         Inc. to the Restaurant Company.(1)
<PAGE>

2.5      Administrative Services Agreement dated as of September 30, 1994
         between Transmedia Service Company Inc. and Transmedia Restaurant
         Company Inc.(1)

2.6      Franchise Agreement dated September 30, 1994 between Transmedia Service
         Company Inc. and Transmedia Restaurant Company Inc.(1)

3.1      Certificate of Incorporation of the Company, as amended.(2)

3.2      Certificate of Amendment to the Certificate of Incorporation of the
         Company.(9)

3.3      Certificate of Amendment to the Certificate of Incorporation of the
         Company, as filed with the Delaware Secretary of State on March 22,
         1994.(1)

3.4      By-Laws of the Company.(3)

10.2     1987 Stock Option and Rights Plan, as amended.(1)(10)

10.3     Form of Stock Option Agreement (as modified) between the Company and
         certain Directors and Schedule of Options granted and outstanding (as
         of September 30, 1995) to such Directors pursuant to the respective
         Stock Option Agreements with such Directors.(10) (11)

10.4     Amended and Restated Employment Agreement dated as of November 15, 1996
         between the Company and Melvin Chasen.(12)

10.5     Amended and Restated Consulting Agreement dated as of November 15, 1996
         between the Company and Melvin Chasen.(12)

10.6     Employment Agreement effective April 1, 1992 between the Company and
         James Callaghan.(9) (10)

10.7     Amendment dated October 1, 1994, to Employment Agreement between the
         Company and James Callaghan.(1)(10)

10.8     Employment Agreement dated as of October 1, 1995 between the
         Company and Barry Kaplan. (10)(12)

10.9     Master License Agreement dated December 14, 1992 between the Company
         and Conestoga Partners, Inc.(8)

10.10    First Amendment to Master License Agreement dated April 12, 1993,
         between the Company and Conestoga Partners, Inc.(9)
<PAGE>

10.11    Second Amendment to Master License Agreement -- Assignment and
         Assumption Agreement dated August 11, 1993 among the Company, TMNI
         International Incorporated and Transmedia Europe, Inc.(9)

10.12    Master License Agreement Amendment No. 3 dated November 22, 1993
         between TMNI International Incorporated and Transmedia Europe, Inc.(9)

10.13    Master License Agreement dated March 21, 1994 between TMNI
         International Incorporated and Conestoga Partners II, Inc. licensing
         rights in the Asia Pacific region.(1)

10.14    Agreement, dated as of December 6, 1996, among the Company, TMNI
         International Incorporated, Transmedia Europe Inc. and Transmedia Asia
         Pacific Inc.(12)

10.15    Agreement, dated as of November 15, 1996 between the Company and The
         Western Transmedia Company Inc.(12)

21.1     Subsidiaries of Transmedia Network Inc.(1)

23.1     Consent of Independent Auditors.(13)

99.1     Prospectus of the Company dated July 10, 1992 filed pursuant to the
         Securities Act of 1933.(5)

99.2     Prospectus of the Company dated August 12, 1992 filed pursuant to the
         Securities Act of 1933.(6)

99.3     Form of Subscription Agreement.(7)

99.4     Agency Agreement dated April 9, 1992 between the Company and Janney
         Montgomery Scott Inc.(8)

99.5     Warrant Purchase Agreement dated June 15, 1992 between the Company and
         Janney Montgomery Scott.(8)



         (1)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1994 and
                  incorporated by reference.

         (2)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1988, and
                  incorporated by reference thereto.
<PAGE>

         (3)      Filed as an exhibit to the Post Effective Amendment to the
                  Registration Statement on Form S-1 (Registration No. 33-5036),
                  and incorporated by reference thereto.

         (4)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1990, and
                  incorporated by reference thereto.

         (5)      Filed as an exhibit to the Company's Registration Statement on
                  Form S-8 (Registration No. 33-494460), and incorporated by
                  reference thereto.

         (6)      Filed as an exhibit to the Company's Registration Statement on
                  Form S-3 (Registration No. 33-49374), and incorporated by
                  reference thereto.

         (7)      Filed as an exhibit to the Company's Form 8-K Current Report
                  dated June 15, 1992, and incorporated by reference thereto.

         (8)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1992, and
                  incorporated by reference thereto.

         (9)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1993, and
                  incorporated by reference thereto.

         (10)     Management contract or compensatory plan or arrangement
                  required to be filed as an exhibit to this Annual Report on
                  Form 10-K pursuant to Item 14(c) hereof.

         (11)     Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1995 and
                  incorporated by reference.
   
         (12)     Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1996 and 
                  incorporated by reference.
   
         (13)     Filed as an exhibit hereto.
    
         (b)      The Company did not file any Form 8-K Current Reports during
                  the fiscal year ended September 30, 1995.

         (c)      Exhibits:

                  See paragraph (a) (3) above for items filed as exhibits to
                  this Annual Report on Form 10-K as required by Item 601 of
                  Regulation S-K.
<PAGE>

         (d)      Financial Statement Schedules:

                  See paragraphs (a)(1) and (a)(2) above for financial statement
                  schedules and supplemental financial statements filed as part
                  of this Annual Report on Form 10-K.

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.
   
                                       Dated January 3, 1997

                                       TRANSMEDIA NETWORK INC.

                                    By: /S/DAVID L. WEINBERG
                                        ------------------------
                                        David L. Weinberg, Vice President

    
<PAGE>
<TABLE>
<CAPTION>

                                  EXHIBIT INDEX
                                  -------------
                                                                                      SEQUENTIALLY
EXHIBIT NO.                         DESCRIPTION OF DOCUMENT                             NUMBERED
PAGE                                -----------------------                           ------------
----

<S>      <C>                                                                              <C>
2.1      Assignment and Assumption of Franchise Agreements dated
         September 30, 1994 between Transmedia Network Inc. and the
         Service Company.(1)                                                              P

2.2      Capital Contribution dated September 30, 1994 by Transmedia
         Network Inc. to the Service Company.(1)                                          P

2.3      Trademark Contribution dated September 30, 1994 from
         Transmedia Network to the Service Company.(1)                                    P

2.4      Capital Contribution dated September 30, 1994 from
         Transmedia Network Inc. to the Restaurant Company.(1)                            P

2.5      Administrative Services Agreement dated as of September 30,
         1994 between Transmedia Service Company Inc. and Transmedia
         Restaurant Company Inc.(1)                                                       P

2.6      Franchise Agreement dated September 30, 1994 between
         Transmedia Service Company Inc. and Transmedia Restaurant
         Company Inc.(1)                                                                  P

3.1      Certificate of Incorporation of the Company, as amended.(2)                      P

3.2      Certificate of Amendment to the Certificate of
         Incorporation of the Company.(9)                                                 P

3.3      Certificate of Amendment to the Certificate of Incorporation
         of the Company, as filed with the Delaware Secretary of State
         on March 22, 1994.(1)                                                            P

3.4      By-Laws of the Company.(3)                                                       P

10.2     1987 Stock Option and Rights Plan, as amended.(1)(10)                            P

10.3     Form of Stock Option Agreement (as modified) between the Company and
         certain Directors and Schedule of Options
<PAGE>

         granted and outstanding (as of September 30, 1995) to such Directors
         pursuant to the respective Stock Option Agreements with such
         Directors.(10)(11)

10.4     Amended and Restated Employment Agreement dated as of
         November 15, 1996 between the Company and Melvin Chasen.(12)                     P

10.5     Amended and Restated Consulting Agreement dated as of November 15,
         1996 between the Company and Melvin Chasen.(12)                                  P

10.6     Employment Agreement effective October 1, 1995 between the
         Company and James Callaghan.(9) (10)                                             P

10.7     Amendment dated October 1, 1994, to Employment Agreement
         between the Company and James Callaghan.                                         P

10.8     Employment Agreement dated as of October 1, 1995 between
         the Company and Barry Kaplan.(10)(12)                                            P

10.9     Master License Agreement dated December 14, 1992 between the
         Company and Conestoga Partners, Inc.(8)                                          P

10.10    First Amendment to Master License Agreement dated April 12, 1993,
         between the Company and Conestoga Partners, Inc.(9)                              P

10.11    Second Amendment to Master License Agreement -- Assignment
         and Assumption Agreement dated August 11, 1993 among the
         Company, TMNI International Incorporated and Transmedia
         Europe, Inc.(9)                                                                  P

10.12    Master License Agreement Amendment No. 3 dated
         November 22, 1993 between TMNI International Incorporated and
         Transmedia Europe, Inc.(9)                                                       P

10.13    Master License Agreement dated March 21, 1994 between TMNI
         International Incorporated and Conestoga Partners II, Inc. licensing
         rights in the Asia Pacific region.(1)                                            P

10.14    Agreement, dated as of December 6, 1996, among the Company,
         TMNI International Incorporated, Transmedia Europe Inc. and
         Transmedia Asia Pacific Inc.(12)                                                 P

10.15    Agreement, dated as of  November 15, 1996 between the Company
         and The Western Transmedia Company Inc.(12)                                      P
<PAGE>

21.1     Subsidiaries of Transmedia Network Inc.(1)                                       P

23.1     Consent of Independent Auditors.(13)

99.1     Prospectus of the Company dated July 10, 1992 filed pursuant
         to the Securities Act of 1933.(5)                                                P

99.2     Prospectus of the Company dated August 12, 1992 filed
         pursuant to the Securities Act of 1933.(6)                                       P

99.3     Form of Subscription Agreement.(7)                                               P

99.4     Agency Agreement dated April 9, 1992 between the Company
         and Janney Montgomery Scott Inc.(8)                                              P

99.5     Warrant Purchase Agreement dated June 15, 1992 between the
         Company and Janney Montgomery Scott.(8)                                          P
</TABLE>

         (1)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1994 and
                  incorporated by reference.

         (2)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1988, and
                  incorporated by reference thereto.

         (3)      Filed as an exhibit to the Post Effective Amendment to the
                  Registration Statement on Form S-1 (Registration No. 33-5036),
                  and incorporated by reference thereto.

         (4)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1990, and
                  incorporated by reference thereto.

         (5)      Filed as an exhibit to the Company's Registration Statement on
                  Form S-8 (Registration No. 33-494460), and incorporated by
                  reference thereto.

         (6)      Filed as an exhibit to the Company's Registration Statement on
                  Form S-3 (Registration No. 33-49374), and incorporated by
                  reference thereto.
<PAGE>

         (7)      Filed as an exhibit to the Company's Form 8-K Current Report
                  dated June 15, 1992, and incorporated by reference thereto.

         (8)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1992, and
                  incorporated by reference thereto.

         (9)      Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1993, and
                  incorporated by reference thereto.

         (10)     Management contract or compensatory plan or arrangement
                  required to be filed as an exhibit to this Annual Report on
                  Form 10-K pursuant to Item 14(c) hereof.

         (11)     Filed as an exhibit to the Company's Annual Report on Form
                  10-K for the fiscal year ended September 30, 1995 and
                  incorporated by reference.
   
         (12)     Filed as an exhibit to the Company's Annual Report on Form 
                  10-K for the fiscal year ended September 30, 1996 and      
                  incorporated by reference.                                 
                  
         (13)     Filed as an exhibit hereto.