UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 29, 2000

                         Commission File Number 1-13226


                         PHOENIX RESTAURANT GROUP, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


                GEORGIA                                          58-1861457
    -------------------------------                          -------------------
    (State or Other Jurisdiction of                           (I.R.S. Employer
     Incorporation or Organization)                          Identification No.)


        7373 N. SCOTTSDALE ROAD
    SUITE D-120, SCOTTSDALE AZ 85253                                85253
----------------------------------------                         ----------
(Address of Principal Executive Offices)                         (Zip Code)


                                 (480) 483-7055
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

The number of outstanding shares of the issuer's class of common stock as of the
latest practicable date, is as follows:  13,081,821 shares of Common Stock, $.10
par value, as of April 10, 2000.
<PAGE>
                         PHOENIX RESTAURANT GROUP, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 29, 2000


                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I.  FINANCIAL INFORMATION

ITEM 1   Unaudited Financial Statements

         Condensed Consolidated Balance Sheets -
           December 29, 1999 and March 29, 2000.............................   3

         Condensed Consolidated  Statements of Operations -
           13-Week Periods ended March 31, 1999
           and March 29, 2000...............................................   4

         Condensed Consolidated  Statements of Cash Flows -
           13-Week Periods ended March 31, 1999
           and March 29, 2000...............................................   5

         Notes to Condensed Consolidated Financial Statements...............   6

ITEM 2   Management's Discussion and Analysis of Financial
         Condition and Results of Operations................................   8

ITEM 3   Quantitative and Qualitative Disclosures about Market Risk.........  12

PART II. OTHER INFORMATION..................................................  13

         SIGNATURES.........................................................  14

                                        2
<PAGE>
PART I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

                 PHOENIX RESTAURANT GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)


                                                        December 29,  March 29,
                                     ASSETS                1999         2000
                                                         ---------    ---------
                                                                     (Unaudited)
CURRENT ASSETS:
  Cash and cash equivalents                              $   1,491    $   2,861
  Receivables                                                2,244        2,899
  Inventories                                                1,087        1,048
  Deferred income taxes                                     11,700       11,700
  Other current assets                                       4,761        1,236
  Net assets held for sale                                  42,128       42,364
                                                         ---------    ---------
      Total current assets                                  63,411       62,108
PROPERTY AND EQUIPMENT - Net                                20,619       20,282
INTANGIBLE ASSETS - Net                                     11,117       11,041
OTHER ASSETS                                                 3,220        3,320
                                                         ---------    ---------

TOTAL                                                    $  98,367    $  96,751
                                                         =========    =========

                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Accounts payable                                       $  17,778    $  19,491
  Accrued compensation                                       5,237        5,790
  Accrued taxes                                              4,733        3,865
  Other current liabilities                                 14,082       13,613
  Current debt obligations                                  25,651       25,651
                                                         ---------    ---------
      Total current liabilities                             67,481       68,410
LONG-TERM DEBT - Less current portion                       54,908       53,055
OTHER LONG-TERM LIABILITIES                                  5,214        5,184
                                                         ---------    ---------

      TOTAL LIABILITIES                                    127,603      126,649
                                                         ---------    ---------

COMMITMENTS AND CONTINGENCIES (note 3)

SHAREHOLDERS' DEFICIT
  Preferred stock, $.01 par value; authorized,
    5,000,000 shares; issued and outstanding none
  Common stock $.10 par value; authorized,
    40,000,000 shares; 13,081,821 shares issued
    and outstanding                                          1,349        1,349
  Additional paid-in capital                                35,869       35,869
  Treasury stock                                                --       (1,139)
  Accumulated deficit                                      (66,454)     (65,977)
                                                         ---------    ---------

      TOTAL SHAREHOLDERS' DEFICIT                          (29,236)     (29,898)
                                                         ---------    ---------

TOTAL                                                    $  98,367    $  96,751
                                                         =========    =========

See accompanying notes to condensed consolidated financial statements

                                        3
<PAGE>
                         PHOENIX RESTAURANT GROUP, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                         13 Week Periods Ended
                                                        -----------------------
                                                        March 31,      March 29,
                                                          1999           2000
                                                        --------       --------
                                                              (Unaudited)

RESTAURANT SALES                                        $ 60,941       $ 56,471
                                                        --------       --------
RESTAURANT OPERATING EXPENSES:
  Food and beverage costs                                 16,463         15,221
  Payroll and payroll related costs                       20,819         19,372
  Depreciation and amortization                            1,685            676
  Other restaurant operating expenses                     16,871         14,880
                                                        --------       --------
     Total operating expenses                             55,838         50,149
                                                        --------       --------

RESTAURANT OPERATING INCOME                                5,103          6,322

ADMINISTRATIVE EXPENSES                                    2,831          2,974
                                                        --------       --------

OPERATING INCOME                                           2,272          3,348

INTEREST EXPENSE - Net                                     2,606          2,871
                                                        --------       --------

INCOME (LOSS) BEFORE INCOME TAXES                           (334)           477

INCOME TAX (BENEFIT)                                        (135)            --
                                                        --------       --------

NET INCOME (LOSS)                                       $   (199)      $    477
                                                        ========       ========
Basic and diluted income (loss) per share
  Applicable to common shareholders                     $   (.02)      $    .04
                                                        ========       ========
Basic and diluted weighted average shares
  Outstanding:
     Basic                                                13,485         13,081
                                                        ========       ========
     Diluted                                              13,485         13,081
                                                        ========       ========

See accompanying notes to condensed consolidated financial statements.

                                        4
<PAGE>
                         PHOENIX RESTAURANT GROUP, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


                                                          13 Week Periods Ended
                                                            ------------------
                                                           March 31,  March 29,
                                                             1999       2000
                                                            -------    -------
                                                               (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss)                                          $  (199)   $   477
 Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities:
     Depreciation and amortization                            1,685        676
     Amortization of deferred financing costs                    91        187
     Deferred income taxes                                     (135)
     Deferred rent                                               61        115
     Other - net                                               (215)        (3)
     Changes in operating assets and liabilities
       net of dispositions:
       Receivables                                               29       (655)
       Inventories                                              (49)        39
       Other current assets                                     166        119
       Accounts payable and accrued liabilities              (1,093)      1551
                                                            -------    -------
         Net cash provided by operating activities              341      2,506
                                                            -------    -------
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of property and equipment                          (1,459)      (430)
 Purchase of intangibles                                        (36)        --
                                                            -------    -------
         Net cash provided by (used in) investing
          activities                                         (1,495)      (430)
                                                            -------    -------
CASH FLOWS FROM FINANCING ACTIVITIES
 Note receivable collections                                    138         85
 Borrowings                                                     857       (791)
 Principal reductions on long-term obligations                 (908)        --
                                                            -------    -------
         Net cash used in financing activities                   87       (706)
                                                            -------    -------
NET CHANGE IN CASH AND CASH EQUIVALENTS                      (1,067)     1,370
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD              2,330      1,491
                                                            -------    -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                  $ 1,263      2,861
                                                            =======    =======
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:

 Cash paid during the period for:
    Interest                                                $ 2,255    $ 1,948
    Income taxes                                            $     2    $     7

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
  AND FINANCING ACTIVITIES:
  Collapse of related party notes:
    Subordinated debenture                                             $ 1,456
                                                                       =======
    Note receivable                                                    $ 2,600
                                                                       =======
    Treasury Stock                                                     $ 1,139
                                                                       =======

See accompanying notes to condensed consolidated financial statements.

                                        5
<PAGE>
                 PHOENIX RESTAURANT GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                   (UNAUDITED)


(1) BASIS OF PRESENTATION

The  accompanying  unaudited  condensed  consolidated  financial  statements  of
Phoenix Restaurant Group, Inc. and Subsidiaries have been prepared in accordance
with the rules and  regulations of the Securities and Exchange  Commission  Form
10-Q  and do not  include  all of the  information  and  footnotes  required  by
generally accepted accounting principles for complete financial  statements.  In
our  opinion,   all  adjustments   (consisting  of  normal  recurring  accruals)
considered necessary for a fair presentation have been included.  However, these
operating results are not necessarily indicative of the results expected for the
full year. These statements  should be read in conjunction with the consolidated
financial statements and notes thereto and Management's  Discussion and Analysis
of Financial  Condition and Results of Operations  included in our Annual Report
on Form 10-K for the fiscal year ended December 29, 1999.

We currently operate 189 family-oriented, full-service restaurants in 20 states,
primarily in the  southwestern,  midwestern,  western,  and southeastern  United
States.  We own and operate 92 Black-eyed Pea  restaurants,  primarily in Texas,
Arizona,  Oklahoma,  and the  Washington,  D.C. area. We also own and operate 97
Denny's restaurants,  which represents  approximately 5.4% of the Denny's system
and makes us the largest  Denny's  franchisee in terms of revenue and the number
of restaurants operated.

(2) ACQUISITIONS AND DIVESTITURES

During 1999, we sold or closed three Denny's and 16 Black-eyed Pea  restaurants.
All of these restaurants were underperforming and geographically undesirable. We
believe that these sales and closures have improved our restaurant portfolio. We
will  continue to evaluate the operating  results of all  remaining  restaurants
after  our  currently  anticipated  sales.  We will  sell or close  any of those
restaurants that do not meet our criteria for operating results.

In October  1999,  we retained CNL Advisory  Services to act as our agent in the
sale of our  remaining  Denny's  restaurants.  As of  March  29,  2000,  we have
received  letters of interest for the  proposed  sale of our  remaining  Denny's
restaurants.  These  proposals are subject to usual and customary  conditions to
closing, including the buyers' obtaining financing for such transactions. To the
extent that we sell some or all of our remaining Denny's restaurants,  we intend
to apply the proceeds to permanently reduce our outstanding indebtedness and pay
customary fees associated with the closing of the transactions.

(3) OTHER MATTERS

On June 30, 1999, we  consummated a $20.1 million  financing  agreement with CNL
APF Partners,  LP whereby CNL purchased the remaining  outstanding  indebtedness
under our  existing  senior  credit  facility and  advanced an  additional  $5.4
million  to us.  As a  result  of our  decision  to sell our  remaining  Denny's
restaurants, we and CNL have agreed to modify the financing agreement. In August
1999, this debt was modified to be interest only through January 31, 2000. As of
January 31, 2000, the entire principal balance was due. As no principal payments
have  been made we are  currently  in  default  on the  note.  Negotiations  are
currently  underway to modify the payment terms of the note so as to bring us in
compliance with the loan. We cannot provide assurance,  however, that we and CNL
will agree to an extension or other  revisions of the payment  terms of the note
that will be acceptable to us.

                                        6
<PAGE>
(4) BUSINESS SEGMENTS

We  operate   family-oriented,   full-service  restaurants  under  two  separate
concepts,  Black-eyed  Pea and  Denny's.  We own the  Black-eyed  Pea  brand and
operate the Denny's  restaurants  under the terms of franchise  agreements.  Our
revenue and  restaurant  operating  income for the  thirteen-week  periods ended
March 29, 2000 and March 31, 1999 are as follows:

     REVENUES                                           1999         2000
     --------                                          -------      -------
     Black-eyed Pea                                    $35,612      $31,478
     Denny's                                            25,329       24,993
                                                       -------      -------
          Total revenues                               $60,941      $56,471
                                                       =======      =======


     RESTAURANT OPERATING INCOME                        1999         2000
     ---------------------------                       -------      -------
     Black-eyed Pea                                    $ 3,441      $ 3,453
     Denny's                                             1,662        2,869
                                                       -------      -------
          Total restaurant operating income              5,103        6,322
          Administrative expenses                        2,831        2,974
                                                       -------      -------
          Total operating income                       $ 2,272      $ 3,348
                                                       =======      =======

                                        7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

GENERAL

We currently  operate 92 Black-eyed Pea  restaurants  in 8 states,  including 81
restaurants in Texas, Oklahoma, and Arizona.  Through March 29, 2000, comparable
same-store  sales  decreased  11.4%,  and average weekly sales decreased 3.7% as
compared  with the first  quarter of fiscal  1999.  This  decrease is  primarily
attributable to the shift from television  advertising to local store marketing.
We expect  minimal  impact to operating  income due to this shift in advertising
strategy.  Carry-out  sales  accounted  for  approximately  12.8%  and  11.6% of
restaurant sales for the first quarters of 2000 and 1999, respectively.

As of March 29, 2000, we operated 97 Denny's restaurants in 17 states, including
54  restaurants  in  Texas,  Florida,  and  Arizona.  Through  March  29,  2000,
comparable  same-store  sales increased 1.7%, and average weekly sales increased
1.7% as compared  with the first  quarter of fiscal  1999.  The  increase is the
result  of  the  disposal  of  certain   underperforming   restaurants  and  the
improvement in the overall asset base.

COMPARISON OF RESULTS OF OPERATIONS

     The following table presents,  for the periods indicated,  certain items in
the condensed consolidated statements of operations expressed as a percentage of
total restaurant sales.

                                                          March 31,    March 29,
                                                            1999         2000
                                                            -----        -----
                                                         (13 weeks)   (13 weeks)

Restaurant sales                                             100%         100%
                                                            -----        -----
Restaurant operating expenses:
  Food and beverage costs                                    27.0         27.0
  Payroll and payroll related costs                          34.2         34.3
  Depreciation and amortization                               2.8          1.2
  Other restaurant operating expenses                        27.7         26.3
                                                            -----        -----
      Total operating expenses                               91.7         88.8
                                                            -----        -----
Restaurant operating income                                   8.3         11.2
Administrative expenses                                       4.6          5.3
                                                            -----        -----
Operating income                                              3.7          5.9
Interest expense                                              4.3          5.1
                                                            -----        -----
Income (loss) before income taxes                             (.6)          .8
Income tax (benefit)                                          (.3)          --
                                                            -----        -----
Net income (loss)                                             (.3)          .8
                                                            =====        =====

                                        8
<PAGE>
THIRTEEN-WEEK  PERIOD ENDED MARCH 29, 2000  COMPARED WITH  THIRTEEN-WEEK  PERIOD
ENDED MARCH 31, 1999

     RESTAURANT  SALES.  Restaurant  sales  decreased $4.5 million,  or 7.3%, to
$56.5 million for the thirteen-week period ended March 29, 2000 as compared with
restaurant sales of $60.9 million for the  thirteen-week  period ended March 31,
1999. This decrease was primarily  attributable to a decline in same-store sales
of $3.7 million for the Black-eyed Pea restaurants due to a reduced  emphasis on
television  advertising.  Our Denny's restaurants  increased same-store sales by
1.7% during the first  quarter of 2000.  Restaurant  sales  attributable  to the
Black-eyed Pea  restaurants for the fiscal 2000 and 1999 periods totaled 56% and
58% of total restaurant sales, respectively.

     FOOD AND BEVERAGE COSTS. Food and beverage costs remained constant at 27.0%
of restaurant sales for the thirteen-week periods ended March 29, 2000 and March
31, 1999.

     PAYROLL AND PAYROLL  RELATED COSTS.  Payroll and payroll related costs were
34.3% of restaurant sales for the  thirteen-week  period ended March 29, 2000 as
compared with 34.2% of restaurant sales for the thirteen-week period ended March
31, 1999. This increase was primarily attributable to the lower sales volumes at
the Black-eyed Pea restaurants in 2000.

     DEPRECIATION AND AMORTIZATION.  Depreciation and amortization of restaurant
equipment,  leasehold  improvements,  intangible  assets,  and  other  items was
$676,000 for the  thirteen-week  period ended March 29, 2000,  as compared  with
$1.7 million for the thirteen-week period ended March 31, 1999. This decrease is
attributable  to the  reclassification  of  assets as being  held for  sale.  In
accordance with SFAS No. 121, we ceased  depreciation  of the assets  associated
with our Denny's  restaurants at the end of September 1999 after our decision to
sell all of those restaurants.

     OTHER RESTAURANT  OPERATING EXPENSES.  Other restaurant  operating expenses
were 26.3% of restaurant sales for the thirteen-week period ended March 29, 2000
as compared with 27.7% of restaurant  sales for the  thirteen-week  period ended
March 31,  1999.  As a result of a change in  accounting  principles,  new store
opening costs of approximately zero and $216,000, were expensed when incurred in
the first quarter of 2000 and 1999,  respectively.  Excluding these items, other
restaurant operating expenses,  expressed as a percentage of revenue, would have
been 26.3% and 27.3% in fiscal  2000 and 1999,  respectively.  This  decrease is
primarily due to the reduction in television advertising.

     RESTAURANT OPERATING INCOME.  Restaurant operating income increased to $6.3
million, or 11.2% of restaurant sales, for the thirteen-week  period ended March
29, 2000, as compared with $5.1 million,  or 8.3% of restaurant  sales,  for the
thirteen-week  period ended March 31, 1999.  This increase was  principally  the
result of the reduced level of expenses described above.

     ADMINISTRATIVE EXPENSES. Administrative expenses were $3.0 million, or 5.3%
of  restaurant  sales,  for the  thirteen-week  period ended March 29, 2000,  as
compared with $2.8 million,  or 4.6% of restaurant  sales, for the thirteen-week
period ended March 31, 1999. This increase of $143,000 is primarily attributable
to  increased  legal  and  professional   fees,   offset  by  the  reduction  in
administrative   costs   associated  with  the  restaurants   sold  and  closed.
Administrative  expenses expressed as a

                                        9
<PAGE>
percentage  of restaurant  sales,  however,  increased  primarily as a result of
decreased same-store sales at the Black-eyed Pea restaurants.

     INTEREST EXPENSE - NET. Interest expense, net, was $2.9 million, or 5.1% of
restaurant sales, for the thirteen-week  period ended March 29, 2000 as compared
with $2.6 million,  or 4.3% of restaurant  sales, for the  thirteen-week  period
ended March 31, 1999.  The change is the result of the  increase in  outstanding
debt in 1999.

     INCOME TAX (BENEFIT).  We did not record tax expense  (benefit)  associated
with  the  operating  income  in  2000  due to  the  uncertainty  of the  future
utilization of the deferred income tax asset.

     NET INCOME (LOSS). We recorded net income of approximately $477,000 for the
thirteen-week  period  ended March 29,  2000 and a net loss of $199,000  for the
thirteen-week  period ended March 31, 1999, as a result of the factors described
above.

LIQUIDITY AND CAPITAL RESOURCES

Our  strategy has been to (a)  concentrate  on  developing  the  Black-eyed  Pea
concept  and brand  identity;  (b) focus on  restaurants  that  achieve  certain
operational and geographic  efficiencies;  and (c) sell or close underperforming
restaurants and refinance our indebtedness. During 1999, we sold or closed three
Denny's  and 16  Black-eyed  Pea  restaurants.  All of  these  restaurants  were
underperforming and geographically  undesirable. We believe that these sales and
closures have improved our  restaurant  portfolio.  In October 1999, we retained
CNL Advisory  Services to act as our agent in the sale of our remaining  Denny's
restaurants.  As of March 29, 2000, we have received letters of interest for the
proposed sale of our remaining Denny's restaurants.  These proposals are subject
to usual and customary  conditions to closing,  including the buyers'  obtaining
financing for such  transactions.  To the extent that we sell some or all of our
remaining  Denny's  restaurants,  we intend to apply the proceeds to permanently
reduce our outstanding  indebtedness  and pay customary fees associated with the
closing of the transactions.  We will continue to evaluate the operating results
of our restaurants remaining after our currently anticipated sales. We will sell
or close any of those  restaurants  that do not meet our criteria for  operating
results.

We, and the restaurant  industry  generally,  operate  primarily on a cash basis
with a  relatively  small  amount of  receivables.  Therefore,  like many  other
companies in the restaurant industry, we operate with a working capital deficit.
Our working  capital deficit was $6.3 million at March 29, 2000 and $4.1 million
at December  29,  1999.  The working  capital  deficit  increased  $2.2  million
primarily  due to the collapse of a note  receivable  which was  currently  due,
offset by a long term subordinated  note. We anticipate that we will continue to
operate with a working capital deficit.

We  historically  have  satisfied  our  capital   requirements   through  credit
facilities and sale-leaseback financings. We require capital principally for the
development  of  new  restaurants  and  maintenance   expenditures  on  existing
restaurants.  We  estimate  that costs to develop  and open new  Black-eyed  Pea
restaurants,  excluding real estate and building  costs,  will be  approximately
$350,000 to $450,000 per restaurant.  We believe that our financing  commitments
will be adequate to meet our needs during the remainder of 2000.

On June 30, 1999, we  consummated a $20.1 million  financing  agreement with CNL
APF Partners,  LP whereby CNL purchased the remaining  outstanding  indebtedness
under our  existing  senior  credit  facility and  advanced an  additional  $5.4
million  to us.  As a  result  of our  decision  to sell our  remaining  Denny's
restaurants, we and CNL have agreed to modify the financing agreement. In August
1999, this debt was

                                       10
<PAGE>
modified to be interest  only through  January 31, 2000. As of January 31, 2000,
the entire principal balance became due. As no principal payments have been made
we are currently in default on the note.  Negotiations are currently underway to
modify the payment  terms of the note so as to bring us in  compliance  with the
loan. We cannot  provide  assurance,  however,  that we and CNL will agree to an
extension  or other  revisions  of the  payment  terms of the note  that will be
acceptable to us.

At March 29, 2000, we had outstanding  $15,449,000  principal amount of Series B
13% Subordinated  Notes due 2003. Certain holders of the Series B Notes have not
received interest  payments since March 31, 1997. As of March 29, 2000,  accrued
and unpaid interest due to these holders totals $7,630,000. In addition, we have
not received waivers from these holders for noncompliance of certain of the debt
covenants  under the  Series B Notes.  The fair  value of the  Series B Notes at
March 29, 2000 is $16,794,000.

SEASONALITY

Our  operating  results  fluctuate  from  quarter  to quarter as a result of the
seasonal  nature of the restaurant  industry and other  factors.  Our restaurant
sales are  generally  greater  in the second and third  fiscal  quarters  (April
through September) than in the first and fourth fiscal quarters (October through
March).  Occupancy and other operating costs, which remain relatively  constant,
have a  disproportionately  negative effect on operating results during quarters
with lower  restaurant  sales. Our working capital  requirements  also fluctuate
seasonally.

INFLATION

We do not believe that inflation has had a material effect on operating  results
in past years.  Although increases in labor, food or other operating costs could
adversely  affect  our  operations,  we  generally  have been able to modify our
operating  procedures  or to increase  prices to offset  increases  in operating
costs.

NEW ACCOUNTING STANDARDS

In June 1998, the FASB issued SFAS No 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS
AND HEDGING ACTIVITIES. This standard, as amended, is effective for fiscal years
beginning after June 15, 2000. SFAS No. 133 establishes accounting and reporting
standards  for  derivative  instruments,   including  those  imbedded  in  other
contracts,  and for  hedging  activities.  It  requires  all  derivatives  to be
recognized  as either  assets  or  liabilities  in the  statement  of  financial
position  and  measured  at fair  value.  We have not  completed  the process of
evaluating  the impact  that will  result  from  adopting  SFAS No.  133. We are
therefore  unable to disclose the impact that adopting SFAS No. 133 will have on
our financial position and results of operations when such statement is adopted.

FORWARD LOOKING STATEMENTS

This  Report  on  Form  10-Q  contains  forward-looking  statements,   including
statements regarding our business strategies,  our business, and the industry in
which we operate.  These  forward-looking  statements

                                       11
<PAGE>
are based primarily on the our expectations and are subject to a number of risks
and  uncertainties,  some of which are beyond our control.  Actual results could
differ  materially from the  forward-looking  statements as a result of numerous
factors,  including those set forth in Item 1 - "Special  Considerations" in our
Annual Report on Form 10-K for the fiscal year ended December 29, 1999.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

At  March  29,  2000,  we  did  not  participate  in  any  derivative  financial
instruments or other  financial and commodity  instruments  for which fair value
disclosure would be required under Statement of Financial  Accounting  Standards
No. 107. We do not hold investment  securities that would require  disclosure of
market  risk and we do not  engage in  currency  speculation  or use  derivative
instruments to hedge against known or forecasted market exposures.

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<PAGE>
PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Not applicable.

ITEM 2. CHANGES IN SECURITIES

     Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

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

     Not applicable.

ITEM 5. OTHER INFORMATION

     Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  EXHIBITS.

     27.1 Financial Data Schedule.

     (b)  REPORTS ON FROM 8-K.

          Not applicable.

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<PAGE>
                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                        PHOENIX RESTAURANT GROUP, INC.

Dated: May 13, 2000                     By: /s/ Brian S. McAlpine
                                            ------------------------------------
                                            Brian S. McAlpine
                                            Vice President - Finance and Acting
                                            Chief Financial Officer

                                            (Duly authorized officer of the
                                            registrant, principal financial and
                                            accounting officer)

                                       14