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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended January 3, 2010
 Commission File No. 0-21625
 
 FAMOUS DAVES of AMERICA, INC.
  Minnesota
    
    41-1782300(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 12701 Whitewater Drive, Suite 200
Minnetonka, MN 55343
  952) 294-1300
 Common Stock, $0.01 par value
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, $0.01 par value
    
    The NASDAQ Stock Market, LLC
 None
 o þ
 o þ
 þ o
 o o
 þ
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non- Accelerated Filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE:




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TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    15Item 1B. Unresolved Staff Comments
    
    
    19Item 2. Properties
    
    
    19Item 3. Legal Proceedings
    
    
    21Item 4. Submission of Matters To a Vote of Security Holders
    
    
    21PART IIItem 5. Market for Registrants Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    22Item 6. Selected Financial Data
    
    
    24Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    43Item 8. Financial Statements and Supplementary Data
    
    
    44Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    44Item 9A. Controls and Procedures
    
    
    44Item 9B. Other Information
    
    
    45PART IIIItem 10. Directors and Executive Officers of the Registrant
    
    
    46Item 11. Executive Compensation
    
    
    46Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    46Item 13. Certain Relationships and Related Transactions and Director Independence
    
    
    47Item 14. Principal Accountant Fees and Services
    
    
    47PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    48SIGNATURESEX-21.0EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2
  2




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PART I
 
 ITEM 1.
    
    BUSINESS
 General Development of Business
     Financial Information about Segments
  Narrative Description of Business
  3




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High Quality Food TM TM ® TM TM ® TM
  Distinctive Environment  Décor and Music
 Broad-Based Appeal
 Operating Strategy
  4




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Operational Excellence 
   1 2
  Human Resources and Training 
 2009 People Report Best People Practices Award for Segment B
 5




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6




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Restaurant Operations
     Off-Premise Occasions  Focus on Convenience 
 7




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Customer Satisfaction
 Value Proposition and Guest Frequency
 8




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Marketing and Promotion
   st rd Minneapolis-St. Paul Magazine Minneapolis City Pages Chicago Daily Herald Phoenix Magazine, Fresno Bee, Best Wings  Grand Champion,
  Location Strategy
  9




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Company-Owned Restaurant Expansion
    Franchise-Operated Restaurant Expansion
  Purchasing
  10




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Information Technology
   
    
    Average guest check broken down by location, by server, by day part, and by revenue
center.
    
    Daily reports of revenue and labor (both current and forecasted).
    
    Weekly reports of selected controllable restaurant expenses.
    
    Monthly reporting of detailed revenue and expenses.
    
    Ideal vs. actual usage variance reporting for critical restaurant-level materials.
   
    
    Implementation of a back office food cost and supply chain management solution.
 11




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##### Table of Contents




    
    Selection of a Human Resource Information System (HRIS) which provides for a more
efficient HR management tool by facilitating strategic analysis and mitigating risk with
the consolidation of all information into a single system. This system is now
operational in 2010.
    
    An online ordering solution focusing on To-Go orders was implemented in a pilot market
to assess the impact an additional ordering channel has on sales and guest experience.
    
    Continued expansion of web technology to build guest community and to drive marketing
efforts including, but not limited to, an increased presence in the social media arena
with a strategy and brand presence on Facebook, YouTube, and Twitter.
    
    Business intelligence efforts were begun that will leverage existing technologies and
processes of our portal, and also provide long-term, flexible, enhanced reporting
capabilities.
    
    Server hardware infrastructure was evaluated which resulted in additional
implementation of virtual machines resulting in a significant reduction of hardware
maintenance.
   
    
    Expansion of the food cost/supply chain back-office solution to include predictive
features for ordering and product preparation that will enhance the effectiveness of
efforts to manage cost.
    
    Selection and implementation of an online ordering solution based on pilot analysis,
opportunities for operational efficiency, and associated sales building strategies.
    
    Implementation of financial utilities to comply with XBRL reporting requirements and to
optimize the process for creating and supporting the data.
    
    Continued implementation of business intelligence capabilities to facilitate
identification and communication of key business metrics to make more timely decisions.
    
    Evaluation and selection process for a budgeting, forecasting, and strategic planning
solution that will expand upon current capabilities, increase efficiencies, and integrate
with the evolution of other systems.
    
    Evaluation of options to provide technology support and strategic systems to franchise
partners.
 Trademarks
  Franchise Program
   12




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State
    
    Number of Franchise-Operated RestaurantsArkansas
    
    2Arizona
    
    5California
    
    12Colorado
    
    5Delaware
    
    2Florida
    
    3Idaho
    
    1Illinois
    
    3Indiana
    
    3Iowa
    
    3Kansas
    
    4Kentucky
    
    1Maine
    
    1Massachusetts
    
    1Michigan
    
    8Minnesota
    
    9Missouri
    
    3Montana
    
    4Nebraska
    
    5Nevada
    
    4New Hampshire
    
    1New Jersey
    
    7New York
    
    5North Dakota
    
    2Oregon
    
    1Ohio
    
    3Pennsylvania
    
    3South Dakota
    
    1Tennessee
    
    5Texas
    
    3Utah
    
    3Washington
    
    6West Virginia
    
    2Wisconsin
    
    11Total
    
    132
  13




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Seasonality
  Government Regulation
  14




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Associates
  
 ITEM 1A.
    
    RISK FACTORS
    15




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The Recent Disruptions in the Overall Economy and the Financial Markets May Adversely Impact
Our Business and Results of Operations and May Impact Our Ability to Comply with our Credit
Facilitys Financial Covenant .
    Our Future Revenue and Operating Income Are Dependent on Consumer Preference and Our Ability
to Successfully Execute Our Plan.
   Competition May Reduce Our Revenue and Operating Income.
  16




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Our Failure to Execute Our Franchise Program May Negatively Impact Our Revenue and Operating
Income.
   The Inability to Develop and Construct Our Restaurants Within Projected Budgets and Time
Periods Could Adversely Affect Our Business and Financial Condition.
  The Restaurant Industry is Subject to Extensive Government Regulation That Could Negatively
Impact Our Business.
  17




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We Are Subject to the Risks Associated With the Food Services Industry, Including the Risk
That Incidents of Food-borne Illnesses or Food Tampering Could Damage Our Reputation and
Reduce Our Restaurant Sales.
  Our Ability to Exploit Our Brand Depends on Our Ability to Protect Our Intellectual Property,
and If Any Third Parties Make Unauthorized Use Of Our Intellectual Property, Our Competitive
Position and Business Could Suffer.
  Our Financial Performance is Affected By Our Ability to Contract with Reliable Suppliers At
Competitive Prices.
  18




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Pursuant to its Authority to Designate and Issue Shares of Our Stock as it Deems Appropriate,
Our Board of Directors May Assign Rights and Privileges to Currently Undesignated Shares Which
Could Adversely Affect the Rights of Existing Shareholders.
   
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
 None.
 
 ITEM 2.
    
    PROPERTIES
    19




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Square
    
    Interior
    
    OwnedLocation
    
    Footage
    
    Seats
    
    or Leased
    
    Date Opened1
    
    Roseville, MN (3)
    
    
    4,800
    
    
    
    105
    
    
    Leased
    
    June 19962
    
    Calhoun Square (Minneapolis, MN)
    
    
    10,500
    
    
    
    380
    
    
    Leased
    
    September 19963
    
    Maple Grove, MN
    
    
    6,100
    
    
    
    146
    
    
    Leased (1)
    
    April 19974
    
    Highland Park (St. Paul, MN) (3)
    
    
    5,200
    
    
    
    125
    
    
    Leased
    
    June 19975
    
    Stillwater, MN
    
    
    5,200
    
    
    
    130
    
    
    Leased (1)
    
    July 19976
    
    Apple Valley, MN (3)
    
    
    3,800
    
    
    
    90
    
    
    Leased (1)
    
    July 19977
    
    Forest Lake, MN (3)
    
    
    4,500
    
    
    
    100
    
    
    Leased
    
    October 19978
    
    Minnetonka, MN
    
    
    5,500
    
    
    
    140
    
    
    Owned (2)
    
    December 19979
    
    Plymouth, MN (3)
    
    
    2,100
    
    
    
    49
    
    
    Owned (2)
    
    December 199710
    
    West Des Moines, IA
    
    
    5,700
    
    
    
    150
    
    
    Leased
    
    April 199811
    
    Des Moines, IA
    
    
    5,800
    
    
    
    150
    
    
    Leased
    
    April 199812
    
    Cedar Falls, IA
    
    
    5,400
    
    
    
    130
    
    
    Leased
    
    September 199813
    
    Bloomington, MN
    
    
    5,400
    
    
    
    140
    
    
    Leased
    
    October 199814
    
    Woodbury, MN
    
    
    5,900
    
    
    
    180
    
    
    Owned (2)
    
    October 199815
    
    Lincoln, NE
    
    
    6,200
    
    
    
    185
    
    
    Owned (2)
    
    December 199916
    
    Columbia, MD
    
    
    7,200
    
    
    
    270
    
    
    Leased
    
    January 200017
    
    Annapolis, MD
    
    
    6,800
    
    
    
    219
    
    
    Leased
    
    January 200018
    
    Frederick, MD
    
    
    5,600
    
    
    
    180
    
    
    Leased
    
    January 200019
    
    Woodbridge, VA
    
    
    6,000
    
    
    
    219
    
    
    Leased
    
    January 200020
    
    Vernon Hills, IL
    
    
    6,660
    
    
    
    222
    
    
    Leased
    
    February 200021
    
    Addison, IL
    
    
    5,000
    
    
    
    135
    
    
    Owned(2)
    
    March 200022
    
    Lombard, IL
    
    
    6,500
    
    
    
    233
    
    
    Leased
    
    July 200023
    
    North Riverside, IL
    
    
    4,700
    
    
    
    150
    
    
    Leased
    
    August 200024
    
    Sterling, VA
    
    
    5,800
    
    
    
    200
    
    
    Leased
    
    December 200025
    
    Oakton, VA
    
    
    4,400
    
    
    
    184
    
    
    Leased
    
    May 200126
    
    Laurel, MD
    
    
    5,200
    
    
    
    165
    
    
    Leased
    
    August 200127
    
    Palatine, IL
    
    
    9,100
    
    
    
    249
    
    
    Leased
    
    August 200128
    
    Richmond I (Richmond, VA)
    
    
    5,400
    
    
    
    180
    
    
    Owned(2)
    
    December 200129
    
    Gaithersburg, MD
    
    
    5,000
    
    
    
    170
    
    
    Leased
    
    May 200230
    
    Richmond II (Richmond, VA)
    
    
    5,200
    
    
    
    158
    
    
    Owned(2)
    
    June 200231
    
    Orland Park, IL
    
    
    5,400
    
    
    
    158
    
    
    Leased
    
    June 200232
    
    Tulsa, OK
    
    
    4,700
    
    
    
    180
    
    
    Owned(2)
    
    September 200233
    
    Virginia Commons, VA
    
    
    5,600
    
    
    
    186
    
    
    Owned (2)
    
    June 200334
    
    Chantilly, VA
    
    
    6,400
    
    
    
    205
    
    
    Leased
    
    January 200635
    
    Florence, KY
    
    
    5,900
    
    
    
    217
    
    
    Leased
    
    January 200636
    
    Waldorf, MD
    
    
    6,600
    
    
    
    200
    
    
    Leased
    
    June 200637
    
    Coon Rapids, MN
    
    
    6,300
    
    
    
    160
    
    
    Owned(2)
    
    December 200638
    
    Fredericksburg, VA
    
    
    6,500
    
    
    
    219
    
    
    Leased
    
    September 200739
    
    Owings Mills, MD
    
    
    6,700
    
    
    
    219
    
    
    Leased
    
    November 200740
    
    Bolingbrook, IL
    
    
    6,600
    
    
    
    219
    
    
    Leased
    
    November 200741
    
    Oswego, IL
    
    
    6,600
    
    
    
    219
    
    
    Leased
    
    December 200742
    
    Alexandria, VA
    
    
    6,600
    
    
    
    219
    
    
    Leased
    
    February 200843
    
    Algonquin, IL
    
    
    6,000
    
    
    
    219
    
    
    Leased
    
    September 200844
    
    Greenwood, IN
    
    
    5,700
    
    
    
    184
    
    
    Leased
    
    October 200845
    
    Salisbury, MD
    
    
    5,400
    
    
    
    192
    
    
    Leased
    
    October 2008
  
 (1)
    
    Restaurant is collateral in a financing lease.(2)
    
    Restaurant land and building are owned by the Company.(3)
    
    Counter service restaurant 20




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ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  21




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
 Market Information
  2009
    
    
    2008Period
    
    High
    
    
    Low
    
    
    High
    
    
    Low1st Quarter
    
    $
    4.41
    
    
    $
    2.00
    
    
    $
    14.36
    
    
    $
    8.552nd Quarter
    
    $
    7.00
    
    
    $
    3.02
    
    
    $
    11.28
    
    
    $
    7.603rd Quarter
    
    $
    7.25
    
    
    $
    5.20
    
    
    $
    10.81
    
    
    $
    5.264th Quarter
    
    $
    7.08
    
    
    $
    5.30
    
    
    $
    6.69
    
    
    $
    2.39
 Holders
  Dividends
  Stock Performance Graph
    22




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Comparison of Five-Year Cumulative Total Return
Among Famous Daves of America, Inc., a Peer Group
and the S&P 500 Index
 
 Total Return Analysis
 2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Famous Daves of America
    
    $
    100.00
    
    
    $
    88.39
    
    
    $
    129.33
    
    
    $
    100.94
    
    
    $
    21.57
    
    
    $
    47.45Peer Group*
    
    $
    100.00
    
    
    $
    95.57
    
    
    $
    99.40
    
    
    $
    68.84
    
    
    $
    39.81
    
    
    $
    71.70S&P 500
    
    $
    100.00
    
    
    $
    103.00
    
    
    $
    117.03
    
    
    $
    122.00
    
    
    $
    72.02
    
    
    $
    92.01
 
 *
    
    Peer Group includes the following restaurant companies: OCharleys, Dine Equity, Landrys, Red Robin, Ruby Tuesday, Steak n Shake, Buffalo
Wild Wings, Cracker Barrel, California Pizza Kitchen and PF Changs 23




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PURCHASES OF EQUITY SECURITIES BY THE ISSUER
   Maximum Number(or Approximate DollarTotal Number of Shares
    
    
    Value) of Shares(or Units)
    
    
    (or Units)Average Price Paid per
    
    
    Purchased as Part of
    
    
    that May Yet beTotal Number of Shares
    
    
    Share(1)
    
    
    Publicly Announced
    
    
    Purchased Under thePeriod
    
    (or Units) Purchased
    
    
    (or Unit)
    
    
    Plans or Programs
    
    
    Plans or ProgramsMonth #10 (September 28, 2009  October 25, 2009)
    
    
    -0-
    
    
    $
    -0-
    
    
    
    -0-
    
    
    
    924,588
    (3)Month #11 (October 26, 2009  November 22, 2009)
    
    
    -0-
    
    
    $
    -0-
    
    
    
    -0-
    
    
    
    924,588
    (3)Month #12 (November 23, 2009  January 3, 2010)
    
    
    31,600
    (2)
    
    $
    5.95
    
    
    
    31,600
    (2)
    
    
    892,988
    (3)
 
 (1)
    
    Excluding commissions.(2)
    
    Shares purchased under the 1.0 million share publicly announced repurchase plan adopted August 6, 2008.(3)
    
    Reflects the maximum number of shares that may be purchased in the future under the publicly announced share repurchase plan adopted on August 6, 2008. 
 ITEM 6. SELECTED FINANCIAL DATA
   24




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FINANCIAL HIGHLIGHTS
 FISCAL YEAR($'s in 000's, except per share data and average weekly sales)
    
    2009(1)
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005STATEMENTS OF OPERATIONS DATARevenue
    
    $
    136,018
    
    
    $
    140,382
    
    
    $
    125,873
    
    
    $
    116,621
    
    
    $
    102,354Asset impairment and estimated lease termination
and other closing costs (2)
    
    $
    (209
    )
    
    $
    (6,912
    )
    
    $
    (596
    )
    
    $
    (1,136
    )
    
    $
    Income from operations
    
    $
    10,514
    
    
    $
    2,030
    
    
    $
    10,436
    
    
    $
    9,243
    
    
    $
    8,735Income tax (expense) benefit
    
    $
    (2,989
    )
    
    $
    119
    
    
    $
    (3,100
    )
    
    $
    (2,737
    )
    
    $
    (2,719
    )Net income
    
    $
    5,701
    
    
    $
    389
    
    
    $
    6,070
    
    
    $
    4,954
    
    
    $
    4,425Basic net income per common share
    
    $
    0.63
    
    
    $
    0.04
    
    
    $
    0.61
    
    
    $
    0.47
    
    
    $
    0.41Diluted net income per common share
    
    $
    0.62
    
    
    $
    0.04
    
    
    $
    0.59
    
    
    $
    0.46
    
    
    $
    0.40BALANCE SHEET DATA(at year end)Cash and cash equivalents
    
    $
    2,996
    
    
    $
    1,687
    
    
    $
    1,538
    
    
    $
    1,455
    
    
    $
    4,410Total assets
    
    $
    68,381
    
    
    $
    73,401
    
    
    $
    73,942
    
    
    $
    65,859
    
    
    $
    67,426Long-term debt less current maturities(3)
    
    $
    17,989
    
    
    $
    29,252
    
    
    $
    11,693
    
    
    $
    13,025
    
    
    $
    16,374Total shareholders equity
    
    $
    32,994
    
    
    $
    26,184
    
    
    $
    30,400
    
    
    $
    36,171
    
    
    $
    38,194OTHER DATARestaurant Sales:Company-owned
    
    $
    117,934
    
    
    $
    122,016
    
    
    $
    107,820
    
    
    $
    100,026
    
    
    $
    89,248Franchise-operated
    
    $
    358,696
    
    
    $
    355,946
    
    
    $
    320,750
    
    
    $
    282,160
    
    
    $
    212,950Number of restaurants open at year end:Company-owned restaurants
    
    
    45
    
    
    
    47
    
    
    
    44
    
    
    
    41
    
    
    
    38Franchise-operated restaurants
    
    
    132
    
    
    
    123
    
    
    
    120
    
    
    
    104
    
    
    
    88Total restaurants
    
    
    177
    
    
    
    170
    
    
    
    164
    
    
    
    145
    
    
    
    126Company-owned comparable store
Sales increase (decrease) (4)
    
    
    (6.3
    )%(5)
    
    
    (2.0
    )%
    
    
    2.1
    %
    
    
    2.9
    %
    
    
    2.9
    %Average weekly sales:Company-owned restaurants
    
    $
    48,197
    
    
    $
    50,685
    
    
    $
    50,385
    
    
    $
    47,894
    
    
    $
    45,072Franchise-operated restaurants
    
    $
    53,016
    
    
    $
    56,535
    
    
    $
    56,727
    
    
    $
    58,334
    
    
    $
    55,011
 
 (1)
    
    Fiscal 2009 consisted of 53 weeks. Fiscal 2008, 2007, 2006, and 2005 all consisted of 52 weeks.(2)
    
    Fiscal 2009 primarily reflects closing costs for two company-owned restaurants. Fiscal 2008 reflects impairment charges for 8 restaurants. Four of these have closed and four are still
operating. Fiscal 2007 reflects impairment charges associated with one restaurant that is still operating. Fiscal 2006 reflects impairment charges associated with one restaurant and land held for sale: one which was
subsequently sold, the other which was subsequently closed.(3)
    
    Long-term debt additionally includes our line of credit in fiscal 2009 and fiscal 2008. Prior to fiscal 2008, the line of credit was included in current liabilities.(4)
    
    Our comparable store sales base includes company-owned restaurants that are open year round and have been open more than 24 months.(5)
    
    For purposes of computing comparable store sales, this computation assumes fiscal 2009 was a 52-week year. 
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  25




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Overview
  Impact of the Current Economic Environment
 
    
    A 6.3% decline in same store sales for company-operated restaurants and an 8.5% decline
in same store sales for franchise-operated restaurants, with decreases in all sales
drivers: dine-in, catering and to-go sales.
    
    Deteriorating financial health of some franchise partners that resulted in the closure
of four franchise restaurants and a slowing of our franchise partners development plans.
  Fiscal Year st
 Basis of Presentation
 Application of Critical Accounting Policies and Estimates
  26




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##### Table of Contents



Recognition of Franchise-Related Revenue 
  Asset Impairment and Estimated Lease Termination and Other Closing Costs ,
 Lease Accounting  ,
 Accounts Receivable, Net
 27




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Income Taxes
 Results of Operations
 Revenue
   Costs and Expenses
 28




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General and Administrative Expenses 
 (3)
 2009
    
    
    2008
    
    
    2007Food and beverage costs (1)
    
    
    30.1
    %
    
    
    30.8
    %
    
    
    30.1
    %Labor and benefits (1)
    
    
    31.4
    %
    
    
    31.3
    %
    
    
    30.3
    %Operating expenses (1)
    
    
    26.7
    %
    
    
    26.6
    %
    
    
    25.6
    %Depreciation & amortization (restaurant level) (1)
    
    
    3.9
    %
    
    
    4.1
    %
    
    
    4.2
    %Depreciation & amortization (corporate level) (2)
    
    
    0.4
    %
    
    
    0.4
    %
    
    
    0.4
    %Asset impairment and estimated lease termination
and other closing costs (1)
    
    
    0.2
    %
    
    
    5.7
    %
    
    
    0.6
    %General and administrative (2)
    
    
    11.8
    %
    
    
    11.8
    %
    
    
    12.4
    %Pre-opening expenses & net loss on disposal of property (1)
    
    
    
    
    
    
    0.9
    %
    
    
    1.5
    %Total costs and expenses (2)
    
    
    92.3
    %
    
    
    98.6
    %
    
    
    91.7
    %Income from operations (2)
    
    
    7.7
    %
    
    
    1.4
    %
    
    
    8.3
    %
 
 (1)
    
    As a percentage of restaurant sales, net(2)
    
    As a percentage of total revenue(3)
    
    Data regarding our restaurant operations as presented in the table, includes sales,
costs and expenses associated with our Rib Team, which had net income of $4,000, $5,000, and a net
loss of $60,000, respectively, in fiscal years 2009, 2008 and 2007. Our Rib Team travels around the
country introducing people to our brand of barbeque and builds brand awareness. Fiscal Year 2009 Compared to Fiscal Year 2008
 Total Revenue
 Restaurant Sales
 29




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##### Table of Contents



Franchise-Related Revenue
 Licensing and Other Revenue
  Same Store Net Sales
  Average Weekly Net Sales 
 Fiscal Years EndedJanuary 3,
    
    
    December 28,2010
    
    
    2008Company-Owned
    
    $
    48,197
    
    
    $
    50,685Full-Service
    
    $
    49,840
    
    
    $
    52,744Counter-Service
    
    $
    35,413
    
    
    $
    36,911Franchise-Operated
    
    $
    53,016
    
    
    $
    56,535
 Food and Beverage Costs
 30




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##### Table of Contents



Labor and Benefits rd rd
 Operating Expenses
  31




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##### Table of Contents



Depreciation and Amortization
 General and Administrative Expenses
 rd
  Restricted StockPerformance Shares
    
    
    Units
    
    
    Board of Directors Shares
    
    
    Total$
    724
    
    
    $
    136
    
    
    $
    232
    
    
    $
    1,092
  32




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##### Table of Contents



Asset
Impairment and Estimated Lease Termination and Other Closing Costs
  2009 Asset Impairment and Estimated Lease Termination and Other Closing Costs (in
thousands):
 Restaurants
    
    Reason
    
    AmountVarious
    
    Costs for closed restaurants(1)
    
    $
    231Various
    
    Gain on lease terminations (2)
    
    
    (162
    )Software
    
    Asset impairment (3)
    
    
    129Various
    
    Other
    
    
    11Total for 2009
    
    
    
    $
    209
 
 (1)
    
    The Company incurred costs for the following closed restaurants: Snellville,
Georgia, Alpharetta, Georgia, and Marietta, Georgia, which all closed in 2008.
Additionally, there were costs for West St. Paul, Minnesota and Naperville, Illinois which
were closed in 2009.(2)
    
    During the year, the Company negotiated lease buyouts for two Georgia locations,
for a restaurant that closed in fiscal year 2006, and negotiated a lease termination
settlement for a restaurant site where construction had never commenced. Total
termination fees were $1,313,000 less lease reserves of $1,475,000 for a net gain of
$162,000.(3)
    
    In accordance with FASB Standards Codification for Property, Plant and
Equipment, the asset impairment charge, which was recorded in the third quarter of fiscal
2009, was related to a software product that was replaced with an alternative solution
prior to implementation. 33




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##### Table of Contents



2008 Asset Impairment and Estimated Lease Termination and Other Closing Costs (in
thousands):
 Restaurant
    
    Reason
    
    AmountCarpentersville
    
    Store closure (net of deferred rent credits) (1)
    
    $
    177Calhoun
    
    Asset impairment (2)
    
    
    1,057Naperville
    
    Asset impairment (2)
    
    
    1,001Atlanta
    
    Asset impairment and lease reserve(2)(3)
    
    
    4,043Stillwater
    
    Asset impairment (2)
    
    
    188Vernon Hills
    
    Asset impairment (2)
    
    
    332Two
Prospective Restaurants
    
    Site costs for restaurants that were not opened(4)
    
    
    105Various
    
    Other
    
    
    9Total for 2008
    
    
    
    $
    6,912
 
 (1)
    
    The Company closed this restaurant in conjunction with the opening of a new
prototype restaurant within four miles of the existing restaurant, supporting the
companys strategy to reposition legacy restaurants in markets when opportunities arise.
The Company negotiated a lease buyout for this location and another location in the
Chicago market that had been previously closed for a total of $80,000. The agreement with
the landlord for these two locations was subject to a bankruptcy judges final approval,
which was obtained in the third quarter of 2009. The final settlement was contained in
the $1.3 million lease termination fees paid in 2009.(2)
    
    In accordance with FASB Standards Codification for Property Plant and Equipment,
based on the Companys assessment of expected cash flows from this location over the
remainder of the respective lease terms.(3)
    
    Includes the three restaurants in the Atlanta market which were acquired by the
company from a franchisee for amounts due that were subsequently closed. The lease
reserve was recorded in accordance with FASB Standards Codification for Exit and Disposal
Cost Obligations,and equals the net present value of the remaining lease obligations for
the 3 closed Atlanta restaurants, net of zero expected sublease income.(4)
    
    Write off of failed site preparation costs for two locations that the Company
decided not to open. Pre-opening Expenses 
 Loss on Early Extinguishment of Debt
 Interest Expense
 34




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##### Table of Contents



Interest Income 
 Income Tax Expense/Benefit
 Basic and Diluted Net Income Per Common Share 
  Fiscal Year 2008 Compared to Fiscal Year 2007
 Total Revenue
 Restaurant Sales
 Franchise-Related Revenue
 Licensing and Other Revenue
 35




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##### Table of Contents



Same Store Net Sales
 Average Weekly Net Sales 
 Fiscal Years EndedDecember 28,
    
    
    December 30,2008
    
    
    2007Company-Owned
    
    $
    50,685
    
    
    $
    50,385Full-Service
    
    $
    52,744
    
    
    $
    52,326Counter-Service
    
    $
    36,911
    
    
    $
    39,051Franchise-Operated
    
    $
    56,535
    
    
    $
    56,727
 Food and Beverage Costs
 Labor and Benefits
 Operating Expenses
 Depreciation and Amortization
 36




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##### Table of Contents



General and Administrative Expenses
  Asset Impairment and Estimated Lease Termination and Other Closing Costs
  37




---



##### Table of Contents



2008 Asset Impairment and Estimated Lease Termination and Other Closing Costs (in
thousands):
 Restaurant
    
    Reason
    
    AmountCarpentersville
    
    Store closure (net of deferred rent credits) (1)
    
    $
    177Calhoun
    
    Asset impairment (2)
    
    
    1,057Naperville
    
    Asset impairment (2)
    
    
    1,001Atlanta
    
    Asset impairment and lease reserve(2)(3)
    
    
    4,043Stillwater
    
    Asset impairment (2)
    
    
    188Vernon Hills
    
    Asset impairment (2)
    
    
    332Two
Prospective Restaurants
    
    Site costs for restaurants that were not opened(4)
    
    
    105Various
    
    Other
    
    
    9Total for 2008
    
    
    
    $
    6,912
 
 (1)
    
    The Company closed this restaurant in conjunction with the opening of a new
prototype restaurant within four miles of the existing restaurant, supporting the
companys strategy to reposition legacy restaurants in markets when opportunities arise.
The Company negotiated a lease buyout for this location and another location in the
Chicago market that had been previously closed for a total of $80,000. The agreement with
the landlord for these two locations was subject to a bankruptcy judges final approval,
which was obtained in the third quarter of 2009. The final settlement was contained in
the $1.3 million lease termination fees paid in 2009.In accordance with FASB Standard
Codification for Property, Plant and Equipment based on the Companys assessment of
expected cash flows from this location over the remainder of the respective lease terms.(2)
    
    Includes the three restaurants in the Atlanta market which were acquired by the
company from a franchisee for amounts due that were subsequently closed. We do not expect
to incur any significant additional costs related to these locations. The lease reserve
was recorded in accordance with FASB Standard Codification for Exit and Disposal Cost
Obligations,and equals the net present value of the remaining lease obligations for the
three closed Atlanta restaurants, net of zero expected sublease income.(3)
    
    Write off of failed site preparation costs for two locations that the Company
decided not to open.  Pre-opening Expenses 
 Loss on Early Extinguishment of Debt
 Interest Expense
 Interest Income 
 38




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##### Table of Contents



Income Tax Benefit/Expense
 Basic and Diluted Net Income Per Common Share 
  Financial Condition, Liquidity and Capital Resources
      39




---



##### Table of Contents



40




---



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41




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##### Table of Contents



Contractual Obligations
 (in thousands)Payments Due by Period(including interest)
    
    Total
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    ThereafterFinancing Leases
    
    $
    6,089
    
    
    $
    603
    
    
    $
    622
    
    
    $
    628
    
    
    $
    647
    
    
    $
    653
    
    
    $
    2,936Line of Credit
    
    
    13,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,500
    
    
    
    
    
    
    
    Operating Lease Obligation
    
    
    88,739
    
    
    
    4,489
    
    
    
    4,421
    
    
    
    4,212
    
    
    
    4,253
    
    
    
    4,225
    
    
    
    67,139Sublease Income
    
    
    (94
    )
    
    
    (20
    )
    
    
    (27
    )
    
    
    (28
    )
    
    
    (19
    )
    
    
    
    
    
    
    Total
    
    $
    108,234
    
    
    $
    5,072
    
    
    $
    5,016
    
    
    $
    4,812
    
    
    $
    18,381
    
    
    $
    4,878
    
    
    $
    70,075
  Off-Balance Sheet Arrangements
  Income Taxes
  Inflation
   
 ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Managements Discussion and Analysis of
Financial Condition and Results of Operations  Financial Condition, Liquidity and Capital
Resources.
 42




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##### Table of Contents



ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
  Managements Report on Internal Control over Financial Reporting
 Internal
Control-Integrated Framework
  Changes in Internal Control over Financial Reporting
   43




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##### Table of Contents



ITEM 9B.
    
    OTHER INFORMATION
  44




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##### Table of Contents



PART III
 
 ITEM 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
   
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
 Securities Authorized for Issuance under Equity Compensation Plans
    45




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##### Table of Contents



Number ofSecuritiesRemaining Availablefor Future IssuanceUnder EquityNumber of Securities
    
    
    
    
    
    
    Compensation Plansto be Issued Upon
    
    
    
    
    
    
    (ExcludingExercise of
    
    
    Weighted-Average
    
    
    SecuritiesOutstanding Options
    
    
    Exercise Price of
    
    
    Reflected in ColumnWarrants and Rights
    
    
    Outstanding Options
    
    
    (A))Plan Category
    
    (A)
    
    
    (B)
    
    
    (C)Equity compensation plans
approved by shareholders:1995 Stock Option and
Compensation Plan
    
    
    100,000
    (1)
    
    $
    5.96
    
    
    
    -0-1998 Director Stock Option Plan
    
    
    180,500
    
    
    $
    5.77
    
    
    
    -0-2005 Stock Incentive Plan
    
    
    503,369
    (1)
    
    $
    10.98
    
    
    
    338,042TOTAL
    
    
    783,869
    
    
    $
    6.01
    
    
    
    338,042Equity compensation plans not
approved by shareholders:1997 Employee Stock Option Plan
    
    
    98,421
    (1)
    
    $
    4.10
    
    
    
    -0-TOTAL
    
    
    882,290
    
    
    $
    5.69
    
    
    
    -0-
 
 (1)
    
    Includes restricted stock and shares reserved for issuance under the Companys
existing Performance Share Programs: 38,000 shares under the Employee Plan, 335,926
performance shares under the 2005 Plan and 157,443 restricted shares under the 2005 plan.  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  46




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##### Table of Contents



PART IV
 
 ITEM 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 Documents filed as part of this Form 10-K:
 Reports of Independent Registered Public Accounting Firm
 Consolidated Balance Sheets  January 3, 2010 and December 28, 2008
 Consolidated Statements of Operations  Years ended January 3, 2010, December 28, 2008
and December 30, 2007
 Consolidated Statements of Shareholders Equity  Years ended January 3, 2010, December
28, 2008 and December 30, 2007
 Consolidated Statements of Cash Flows  Years ended January 3, 2010, December 28, 2008
and December 30, 2007
 Notes to Consolidated Financial Statements
 Financial Statement Schedule:
 Schedule II. Schedule of Valuation and Qualifying Accounts
 Exhibits:
 See exhibit index on the page following the consolidated financial statements and
related footnotes
 47




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Internal Control  Integrated Framework
 /s/ Grant Thornton LLP 
 F-1




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 Internal ControlIntegrated Framework
    Internal ControlIntegrated Framework
  /s/ Grant Thornton LLP 
 F-2




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##### Table of Contents



FAMOUS
DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
JANUARY 3, 2010 AND DECEMBER 28, 2008
 ( in thousands, except share and per-share data )
 January 3,
    
    
    December 28,2010
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,996
    
    
    $
    1,687Restricted cash
    
    
    627
    
    
    
    1,170Accounts receivable, net
    
    
    3,279
    
    
    
    4,702Inventories
    
    
    2,198
    
    
    
    2,281Deferred tax asset
    
    
    714
    
    
    
    1,708Prepaid expenses and other current assets
    
    
    1,845
    
    
    
    1,689Current portion of notes receivable, net
    
    
    823
    
    
    
    54Total current assets
    
    
    12,482
    
    
    
    13,291Property, equipment and leasehold improvements, net
    
    
    54,818
    
    
    
    58,129Other assets:Notes receivable, net, less current portion
    
    
    327
    
    
    
    170Deferred tax asset
    
    
    206
    
    
    
    989Other assets
    
    
    548
    
    
    
    822$
    68,381
    
    
    $
    73,401LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt and financing lease
obligation
    
    $
    162
    
    
    $
    441Accounts payable
    
    
    3,974
    
    
    
    5,208Accrued compensation and benefits
    
    
    4,337
    
    
    
    2,279Other current liabilities
    
    
    3,991
    
    
    
    4,132Total current liabilities
    
    
    12,464
    
    
    
    12,060Long-term liabilities:Line of credit
    
    
    13,500
    
    
    
    18,000Long-term debt, less current portion
    
    
    
    
    
    
    6,600Financing lease obligations less current portion
    
    
    4,490
    
    
    
    4,652Other liabilities
    
    
    4,933
    
    
    
    5,905Total liabilities
    
    
    35,387
    
    
    
    47,217Shareholders equity:Common stock, $.01 par value, 100,000,000 shares authorized
9,202,000 and 9,079,000 shares issued and outstanding
at January 3, 2010 and December 28, 2008, respectively
    
    
    92
    
    
    
    91Additional paid-in capital
    
    
    17,536
    
    
    
    16,428Retained earnings
    
    
    15,366
    
    
    
    9,665Total shareholders equity
    
    
    32,994
    
    
    
    26,184$
    68,381
    
    
    $
    73,401
  F-3




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED
JANUARY 3, 2010, DECEMBER 28, 2008 AND DECEMBER 30, 2007
( in thousands, except share and per-share data)
 January 3,
    
    
    December 28,
    
    
    December 30,2010
    
    
    2008
    
    
    2007Revenue:Restaurant sales, net
    
    $
    117,934
    
    
    $
    122,016
    
    
    $
    107,820Franchise royalty revenue
    
    
    16,912
    
    
    
    17,026
    
    
    
    15,718Franchise fee revenue
    
    
    200
    
    
    
    492
    
    
    
    1,323Licensing and other revenue
    
    
    972
    
    
    
    848
    
    
    
    1,012Total revenue
    
    
    136,018
    
    
    
    140,382
    
    
    
    125,873Costs and expenses:Food and beverage costs
    
    
    35,489
    
    
    
    37,581
    
    
    
    32,419Labor and benefits
    
    
    37,016
    
    
    
    38,185
    
    
    
    32,673Operating expenses
    
    
    31,487
    
    
    
    32,510
    
    
    
    27,547Depreciation and amortization
    
    
    5,191
    
    
    
    5,522
    
    
    
    4,980General and administrative expenses
    
    
    16,079
    
    
    
    16,521
    
    
    
    15,603Asset impairment and estimated lease termination
and other closing costs
    
    
    209
    
    
    
    6,912
    
    
    
    596Pre-opening expenses
    
    
    
    
    
    
    1,103
    
    
    
    1,154Net loss on disposal of property
    
    
    33
    
    
    
    18
    
    
    
    465Total costs and expenses
    
    
    125,504
    
    
    
    138,352
    
    
    
    115,437Income from operations
    
    
    10,514
    
    
    
    2,030
    
    
    
    10,436Other expense:Loss on early extinguishment of debt
    
    
    (509
    )
    
    
    
    
    
    
    (12
    )Interest expense
    
    
    (1,443
    )
    
    
    (1,977
    )
    
    
    (1,577
    )Interest income
    
    
    129
    
    
    
    246
    
    
    
    293Other (expense) income, net
    
    
    (1
    )
    
    
    (29
    )
    
    
    30Total other expense
    
    
    (1,824
    )
    
    
    (1,760
    )
    
    
    (1,266
    )Income before income taxes
    
    
    8,690
    
    
    
    270
    
    
    
    9,170Income tax (expense) benefit
    
    
    (2,989
    )
    
    
    119
    
    
    
    (3,100
    )Net income
    
    $
    5,701
    
    
    $
    389
    
    
    $
    6,070Basic net income per common share
    
    $
    0.63
    
    
    $
    0.04
    
    
    $
    0.61Diluted net income per common share
    
    $
    0.62
    
    
    $
    0.04
    
    
    $
    0.59Weighted average common shares
outstanding-basic
    
    
    9,114,000
    
    
    
    9,406,000
    
    
    
    9,960,000Weighted average common shares
outstanding-diluted
    
    
    9,211,000
    
    
    
    9,542,000
    
    
    
    10,298,000
  F-4




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
FOR THE YEARS ENDED
JANUARY 3, 2010, DECEMBER 28, 2008, AND DECEMBER 30, 2007  (in thousands)
 AdditionalCommon Stock
    
    
    Paid-In
    
    
    RetainedShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    TotalBalance- December 31, 2006
    
    
    10,130
    
    
    $
    101
    
    
    $
    32,864
    
    
    $
    3,206
    
    
    $
    36,171Exercise of stock options
    
    
    305
    
    
    
    3
    
    
    
    1,442
    
    
    
    
    
    
    
    1,445Tax benefit for equity
awards issued
    
    
    
    
    
    
    
    
    
    
    473
    
    
    
    
    
    
    
    473Common stock issued
    
    
    41
    
    
    
    
    
    
    
    325
    
    
    
    
    
    
    
    325Repurchase of common stock
    
    
    (870
    )
    
    
    (8
    )
    
    
    (14,436
    )
    
    
    
    
    
    
    (14,444
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    360
    
    
    
    
    
    
    
    360Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,070
    
    
    
    6,070Balance- December 30, 2007
    
    
    9,606
    
    
    $
    96
    
    
    $
    21,028
    
    
    $
    9,276
    
    
    $
    30,400Exercise of stock options
    
    
    6
    
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    26Tax shortfall for equity
awards issued
    
    
    
    
    
    
    
    
    
    
    (76
    )
    
    
    
    
    
    
    (76
    )Common stock issued
    
    
    60
    
    
    
    
    
    
    
    90
    
    
    
    
    
    
    
    90Repurchase of common stock
    
    
    (593
    )
    
    
    (5
    )
    
    
    (5,067
    )
    
    
    
    
    
    
    (5,072
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    427
    
    
    
    
    
    
    
    427Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    389
    
    
    
    389Balance- December 28, 2008
    
    
    9,079
    
    
    $
    91
    
    
    $
    16,428
    
    
    $
    9,665
    
    
    $
    26,184Exercise of stock options
    
    
    17
    
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    57Tax benefit for equity awards
issued
    
    
    
    
    
    
    
    
    
    
    436
    
    
    
    
    
    
    
    436Common stock issued
    
    
    137
    
    
    
    1
    
    
    
    763
    
    
    
    
    
    
    
    764Repurchase of common stock
    
    
    (31
    )
    
    
    
    
    
    
    (188
    )
    
    
    
    
    
    
    (188
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    492
    
    
    
    
    
    
    
    492Deferred compensation
    
    
    
    
    
    
    
    
    
    
    (452
    )
    
    
    
    
    
    
    (452
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,701
    
    
    
    5,701Balance- January 3, 2010
    
    
    9,202
    
    
    $
    92
    
    
    $
    17,536
    
    
    $
    15,366
    
    
    $
    32,994
  F-5




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED
JANUARY 3, 2010, DECEMBER 28, 2008, AND DECEMBER 30, 2007  (in thousands)
 January 3,
    
    
    December 28,
    
    
    December 30,2010
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    5,701
    
    
    $
    389
    
    
    $
    6,070Adjustments to reconcile net income to cash flows
provided by operations:Depreciation and amortization
    
    
    5,191
    
    
    
    5,522
    
    
    
    4,980Amortization of deferred financing costs
    
    
    60
    
    
    
    22
    
    
    
    56Loss on early extinguishment of debt
    
    
    159
    
    
    
    
    
    
    
    12Net loss on disposal of property
    
    
    33
    
    
    
    18
    
    
    
    465Asset impairment and estimated lease termination and
other
closing costs
    
    
    209
    
    
    
    6,912
    
    
    
    596Inventory reserve
    
    
    45
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    1,777
    
    
    
    (542
    )
    
    
    1,781Deferred rent
    
    
    277
    
    
    
    570
    
    
    
    370Stock-based compensation
    
    
    832
    
    
    
    694
    
    
    
    838Changes in operating assets and liabilities:Restricted cash
    
    
    543
    
    
    
    1,250
    
    
    
    (995
    )Accounts receivable, net
    
    
    443
    
    
    
    (252
    )
    
    
    (1,761
    )Inventories
    
    
    48
    
    
    
    (294
    )
    
    
    (261
    )Prepaid expenses and other current assets
    
    
    (160
    )
    
    
    (372
    )
    
    
    99Deposits
    
    
    100
    
    
    
    (39
    )
    
    
    (234
    )Accounts payable
    
    
    (1,745
    )
    
    
    (1,668
    )
    
    
    993Accrued compensation and benefits
    
    
    2,023
    
    
    
    (909
    )
    
    
    (507
    )Other current liabilities
    
    
    (1,041
    )
    
    
    (115
    )
    
    
    497Long-term deferred compensation
    
    
    26
    
    
    
    (29
    )
    
    
    Cash flows provided by operations
    
    
    14,521
    
    
    
    11,157
    
    
    
    12,999Cash flows from investing activities:Purchases of property, equipment and leasehold
improvements
    
    
    (1,984
    )
    
    
    (10,537
    )
    
    
    (14,263
    )Sales of property, equipment and leasehold
improvements
    
    
    
    
    
    
    
    
    
    
    1,753Payments received on notes receivable
    
    
    54
    
    
    
    71
    
    
    
    180Cash flows used for investing activities
    
    
    (1,930
    )
    
    
    (10,466
    )
    
    
    (12,330
    )Cash flows from financing activities:Proceeds from draws on line of credit
    
    
    9,000
    
    
    
    26,000
    
    
    
    19,500Payments on line of credit
    
    
    (13,500
    )
    
    
    (21,000
    )
    
    
    (6,500
    )Payments for debt issuance costs
    
    
    (45
    )
    
    
    (37
    )
    
    
    Payments on long-term debt and financing lease obligations
    
    
    (7,042
    )
    
    
    (383
    )
    
    
    (1,350
    )Proceeds from exercise of stock options
    
    
    57
    
    
    
    26
    
    
    
    1,447Tax benefit (shortfall) for equity awards issued
    
    
    436
    
    
    
    (76
    )
    
    
    473Repurchase of common stock
    
    
    (188
    )
    
    
    (5,072
    )
    
    
    (14,156
    )Cash flows used for financing activities
    
    
    (11,282
    )
    
    
    (542
    )
    
    
    (586
    )Increase in cash and cash equivalents
    
    
    1,309
    
    
    
    149
    
    
    
    83Cash and cash equivalents, beginning of year
    
    
    1,687
    
    
    
    1,538
    
    
    
    1,455Cash and cash equivalents, end of year
    
    $
    2,996
    
    
    $
    1,687
    
    
    $
    1,538
  F-6




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 Nature of business
 Seasonality
 Principles of consolidation
 Managements use of estimates
 Reclassifications
 Financial instruments
 Segment reporting
 Fiscal year
 Unrestricted cash and cash equivalents
 F-7




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
 Accounts Receivable, Net
 Inventories
 Property, equipment and leasehold improvements, net
 Debt issuance costs
 F-8




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
 Construction overhead and capitalized interest
 Advertising costs
 Software implementation costs .
 Research and development costs 
 Pre-opening expenses
 Lease accounting ,
 Recoverability of property, plant, equipment and leasehold improvement, impairment charges,
and exit and disposal costs
 F-9




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
  .
 Asset retirement obligation 
 Public relations, marketing development fund and restricted cash
 Gift cards
 Interest income
 Net income per common share
 F-10




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
  Fiscal Year(in thousands, except per share data)
    
    2009
    
    
    2008
    
    
    2007Net income per common share  basic:Net income
    
    $
    5,701
    
    
    $
    389
    
    
    $
    6,070Weighted average shares outstanding
    
    
    9,114
    
    
    
    9,406
    
    
    
    9,960Net income per common share  basic
    
    $
    0.63
    
    
    $
    0.04
    
    
    $
    0.61Net income per common share  diluted:Net income
    
    $
    5,701
    
    
    $
    389
    
    
    $
    6,070Weighted average shares outstanding
    
    
    9,114
    
    
    
    9,406
    
    
    
    9,960Dilutive impact of common stock equivalents outstanding
    
    
    97
    
    
    
    136
    
    
    
    338Adjusted weighted average shares outstanding
    
    
    9,211
    
    
    
    9,542
    
    
    
    10,298Net income per common share  diluted
    
    $
    0.62
    
    
    $
    0.04
    
    
    $
    0.59
  Stock-based compensation
  F-11




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
  Revenue recognition
 Franchise arrangements 
 Licensing and other revenue
  F-12




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (2) INVENTORIES
  January 3,
    
    
    December 28,(in thousands)
    
    2010
    
    
    2008Small wares and supplies
    
    $
    1,331
    
    
    $
    1,360Food and beverage
    
    
    829
    
    
    
    884Retail goods
    
    
    38
    
    
    
    37$
    2,198
    
    
    $
    2,281
 (3) NOTES RECEIVABLE
  January 3,
    
    
    December 28,(in thousands)
    
    2010
    
    
    2008Star Ribs  monthly installment of approximately $39, payments
begin March 2010, including interest of 7.9% due September 2011.
This note is unsecured
    
    
    477
    (1)(2)
    
    
    North Country BBQ Ventures Inc.  payable in one installment
pursuant to the outcome of the Section 363 of Chapter 11 of the US
Bankruptcy Code. This note is unsecured. (See Note 16 for resolution of
this recievable)
    
    
    485
    (1)
    
    
    JPs Bar-B-Que, LLC  payable in monthly installments of
approximately $8 due February 2010. This note is unsecured
    
    
    14
    (1)(3)
    
    
    Old School BBQ, Inc.  monthly installments of approximately $5.7
including interest at 9.0%, due November 2012, secured by property
and equipment and guaranteed by the franchise owners
    
    
    174
    
    
    
    224Total notes receivable
    
    
    1,150
    
    
    
    224Less: current maturities
    
    
    (823
    )
    
    
    (54
    )Long-term portion of notes receivable
    
    $
    327
    
    
    $
    170
 
 (1)
    
    The note was originally classified
as accounts receivable, but was reclassified to a note
receivable due to the payment terms established by the
bankruptcy court.(2)
    
    This note is net of a reserve of $99(3)
    
    This note is net of a reserve of $1  (in thousands)
 Fiscal Year2010
    
    
    8232011
    
    
    2732012
    
    
    54Total
    
    $
    1,150
 F-13




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (4) PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET
  January 3,
    
    
    December 28,(in thousands)
    
    2010
    
    
    2008Land, buildings and improvements
    
    $
    62,585
    
    
    $
    65,496Furniture, fixtures and equipment
    
    
    30,609
    
    
    
    31,086Décor
    
    
    2,559
    
    
    
    2,866Construction in progress
    
    
    782
    
    
    
    391Accumulated depreciation and amortization
    
    
    (41,717
    )
    
    
    (41,710
    )Property, equipment and leasehold improvements, net
    
    $
    54,818
    
    
    $
    58,129
 (5) OTHER CURRENT LIABILITIES
  January 3,
    
    
    December 28,(in thousands)
    
    2010
    
    
    2008Gift cards payable
    
    $
    1,441
    
    
    $
    1,558Other liabilities
    
    
    1,381
    
    
    
    1,381Sales tax payable
    
    
    834
    
    
    
    856Accrued property and equipment purchases
    
    
    300
    
    
    
    197Deferred franchise fees
    
    
    35
    
    
    
    140$
    3,991
    
    
    $
    4,132
 (6) CREDIT FACILITY AND DEBT COVENANTS, LONG-TERM DEBT, AND FINANCING LEASE OBLIGATIONS
 Credit Facility and Debt Covenants
    F-14




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (6) CREDIT FACILITY AND DEBT COVENANTS, LONG-TERM DEBT, AND FINANCING LEASE OBLIGATIONS
(continued)
       F-15




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (6) CREDIT FACILITY AND DEBT COVENANTS, LONG-TERM DEBT, AND FINANCING LEASE OBLIGATIONS
(continued)
  January 3,
    
    
    December 28,(in thousands)
    
    2010
    
    
    2008Credit facility  Wells Fargo  balloon payment
of $13,500 due in May 2013
    
    $
    13,500
    
    
    $
    18,000Less current maturities
    
    
    
    
    
    
    Long-term credit facility net of current maturities
    
    $
    13,500
    
    
    $
    18,000
  (In thousands)Fiscal Year2010
    
    $
    2011
    
    
    2012
    
    
    2013
    
    
    13,500Total credit facility obligation
    
    $
    13,500
 Long-Term Debt
   January 3,
    
    
    December 28,(in thousands)
    
    2010
    
    
    2008Notes payable  GE Capital Franchise Finance
Corporation  monthly installments from
approximately $13 to $20 including interest
between 8.10% and 10.53%, due between January
2020 and October 2023, secured by property
and equipment.
    
    $
    
    
    
    $
    6,899Less current maturities
    
    
    
    
    
    
    (299
    )Long-term debt net of current maturities
    
    $
    
    
    
    $
    6,600
 F-16




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (6) CREDIT FACILITY AND DEBT COVENANTS, LONG-TERM DEBT, AND FINANCING OBLIGATIONS (continued)
 Financing Lease Obligation
 th
  January 3,
    
    
    December 28,(in thousands)
    
    2010
    
    
    2008Financing lease  Spirit Financial  monthly
installments of $48-$59   including an interest
rate of 9.63%, due in March 2019
    
    $
    4,652
    
    
    $
    4,794Less current maturities
    
    
    (162
    )
    
    
    (142
    )Long-term financing lease net of current maturities
    
    $
    4,490
    
    
    $
    4,652
  (in thousands)Fiscal Year2010
    
    $
    1622011
    
    
    1982012
    
    
    2242013
    
    
    2662014
    
    
    300Thereafter
    
    
    3,502Total financing lease obligation
    
    $
    4,652
 (7) OPERATING LEASE OBLIGATIONS
  F-17




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (7)
    
    OPERATING LEASE OBLIGATIONS (continued)
   (in thousands)Fiscal Year2010
    
    $
    4,4892011
    
    
    4,4212012
    
    
    4,2122013
    
    
    4,2532014
    
    
    4,225Thereafter
    
    
    67,139Total operating lease obligations
    
    
    88,739Sublease income
    
    
    (94
    )Net operating lease obligations
    
    $
    88,645
 (8)
    
    RELATED PARTY TRANSACTIONS
 Famous Ribs of Georgia, Snellville, Marietta and Alpharetta, LLC
  F-18




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (9)
    
    STOCK OPTIONS, PERFORMANCE SHARES, OTHER FORMS OF COMPENSATION, AND COMMON SHARE
REPURCHASES
  Stock-based Compensation
 For the Years EndedJanuary 3,
    
    
    December 28,
    
    
    December 30,(in thousands)
    
    2010
    
    
    2008
    
    
    2007Performance Share Programs:Fiscal 2005  2007 (1)
    
    
    
    
    
    
    
    
    
    
    (286
    )Fiscal 2006  2008 (1)
    
    
    
    
    
    
    17
    
    
    
    14Fiscal 2007  2009 (1)
    
    
    (19
    )
    
    
    156
    
    
    
    349Fiscal 2008  2010 (2)
    
    
    104
    
    
    
    129
    
    
    
    Fiscal 2009  2011 (2)
    
    
    247
    
    
    
    
    
    
    
    Performance Shares
    
    $
    332
    
    
    $
    302
    
    
    $
    77Director Shares
    
    
    340
    
    
    
    266
    
    
    
    478Stock Options (1)
    
    
    24
    
    
    
    85
    
    
    
    283Restricted Stock Units (2)(3)
    
    
    136
    
    
    
    41
    
    
    
    Deferred Stock Units
    
    
    
    
    
    
    
    
    
    
    (18
    )$
    832
    
    
    $
    694
    
    
    $
    820
 
 (1)
    
    In December 2007, our Chief Executive Officer ceased employment with
the Company. As a result, we adjusted our performance share expense under these programs
and stock option expense to reflect the cancellation of these unearned grants.(2)
    
    We hired a new Chief Executive Officer and his employment commenced on
April 21, 2008, at which time, performance share grants and a restricted stock unit grant
was made. This Chief Executive Officer ceased employment on September 11, 2008 at which
time all previous restricted stock unit expense was reversed.(3)
    
    On September 11, 2008, a new Chief Executive Officer was appointed
and, commensurate with his promotion, a 50,000 restricted stock unit grant was made. In
addition, on the same date, 25,000 restricted stock units were granted to our Chief
Financial Officer.  F-19




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (9)
    
    STOCK OPTIONS, PERFORMANCE SHARES, OTHER FORMS OF COMPENSATION, AND COMMON SHARE
REPURCHASES (continued)
  Number of
    
    
    Weighted Average(number of options in thousands)
    
    Options
    
    
    Exercise PriceOptions outstanding at December 31, 2006
    
    
    728
    
    
    
    5.24Canceled or expired
    
    
    (24
    )
    
    
    6.01Exercised
    
    
    (305
    )
    
    
    4.75Options outstanding at December 30, 2007
    
    
    399
    
    
    
    5.57Canceled or expired
    
    
    (4
    )
    
    
    4.98Exercised
    
    
    (6
    )
    
    
    4.62Options outstanding at December 28, 2008
    
    
    389
    
    
    
    5.59Canceled or expired
    
    
    (21
    )
    
    
    5.94Exercised
    
    
    (17
    )
    
    
    3.44Options outstanding at January 3, 2010
    
    
    351
    
    
    $
    5.68Options exercisable  December 30, 2007
    
    
    359
    
    
    $
    5.52Options exercisable  December 28, 2008
    
    
    382
    
    
    $
    5.58Options exercisable  January 3, 2010
    
    
    351
    
    
    $
    5.68
  (number outstanding and number exercisable in thousands)
 OptionsTotal outstanding
    
    
    ExercisableWeighted-average
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Exercise
    
    Number
    
    
    remaining
    
    
    average
    
    
    Number
    
    
    averageprices
    
    outstanding
    
    
    contractual life
    
    
    exercise price
    
    
    exercisable
    
    
    exercise price$3.19 - $4.82
    
    
    133
    
    
    1.69 years
    
    $
    3.99
    
    
    
    133
    
    
    $
    3.99$5.05- $8.07
    
    
    192
    
    
    3.71 years
    
    $
    6.15
    
    
    
    192
    
    
    $
    6.15$10.98 - $10.98
    
    
    26
    
    
    5.36 years
    
    $
    10.68
    
    
    
    26
    
    
    $
    10.68351
    
    
    3.06 years
    
    $
    $5.68
    
    
    
    351
    
    
    $
    5.68
  F-20




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (9)
    
    STOCK OPTIONS, PERFORMANCE SHARES, OTHER FORMS OF COMPENSATION, AND COMMON SHARE
REPURCHASES (continued)
  2005 Stock Incentive Plan
  Performance Shares
    F-21




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (9)
    
    STOCK OPTIONS, PERFORMANCE SHARES, OTHER FORMS OF COMPENSATION, AND COMMON SHARE
REPURCHASES (continued)
     No. ofTarget No. of
    
    Performance SharesPerformance
    
    Performance Shares
    
    (Outstanding at
    
    Estimated Payout ofAward Date
    
    Share Program
    
    (Originally Granted)(1)
    
    January 3, 2010)
    
    Performance Shares02/21/2007
    
    2007 - 2009
    
    96,100
    
    29,300(3)
    
    25,925(3)12/31/2007
    
    2008 - 2010
    
    78,800
    
    27,500(4)
    
    24,948(4)12/29/2008
    
    2009 - 2011
    
    280,300(2)
    
    269,600(2)(5)
    
    269,600(2)(5)
 
 (1)
    
    Assumes achievement of 100% of the applicable Cumulative EPS Goal.(2)
    
    The aggregate Target Number of Performance Shares awarded under this program increased significantly over prior years as a result of one-time grants related to the hiring of
several new executives and board members in late 2008 and early 2009, and a significantly lower stock price at the grant date.(3)
    
    Performance Share amount net of forfeitures due to employee departures. Based on actual achievement of 88.48% of the Cumulative EPS Goal over the completed three year performance
period.(4)
    
    Based on achievement of 90.7% of the Cumulative EPS Goal over the first two years of the performance period.(5)
    
    Assumes achievement of 100% of the applicable Cumulative EPS Goal. Restricted Stock Units
  F-22




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (9)
    
    STOCK OPTIONS, PERFORMANCE SHARES, OTHER FORMS OF COMPENSATION, AND COMMON SHARE
REPURCHASES (continued)
   Deferred Stock Unit Plan
   Common Share Repurchases
   F-23




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (9)
    
    STOCK OPTIONS, PERFORMANCE SHARES, OTHER FORMS OF COMPENSATION, AND COMMON SHARE
REPURCHASES (continued)
 Board of Directors Compensation
      Warrants
  F-24




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (9)
    
    STOCK OPTIONS, PERFORMANCE SHARES, OTHER FORMS OF COMPENSATION, AND COMMON SHARE
REPURCHASES (continued)
  Employee Stock Purchase Plan
  (10)
    
    INCOME TAXES
    (in thousands)
    
    2009
    
    
    2008
    
    
    2007Current:Federal
    
    $
    (523
    )
    
    $
    (310
    )
    
    $
    (758
    )State
    
    
    (235
    )
    
    
    (113
    )
    
    
    (367
    )(758
    )
    
    
    (423
    )
    
    $
    (1,125
    )Deferred:Federal
    
    
    (1,992
    )
    
    
    433
    
    
    
    (1,982
    )State
    
    
    (239
    )
    
    
    109
    
    
    
    7(2,231
    )
    
    
    542
    
    
    
    (1,975
    )Total tax (expense) benefit
    
    $
    (2,989
    )
    
    $
    119
    
    
    $
    (3,100
    )
 F-25




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10)
    
    INCOME TAXES (continued)
    (in thousands)Beginning balance on December 28, 2008
    
    $
    Increases attributable to tax positions taken during prior periods
    
    
    55Ending balance on January 3, 2010
    
    $
    55
      F-26




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10)
    
    INCOME TAXES (continued)
  (in thousands)
    
    January 3, 2010
    
    
    December 28, 2010Current deferred tax asset (liability):Tax credit carryover
    
    $
    500
    
    
    $
    1,470Accrued and deferred compensation
    
    
    708
    
    
    
    528Deferred revenue
    
    
    462
    
    
    
    Accrued expenses
    
    
    161
    
    
    
    Other
    
    
    26
    
    
    
    299Net operating loss carry-forwards
    
    
    
    
    
    
    347Financing lease obligations
    
    
    (81
    )
    
    
    187Inventories
    
    
    (498
    )
    
    
    (496
    )Prepaid expenses
    
    
    (564
    )
    
    
    (627
    )Total short-term deferred tax asset
    
    $
    714
    
    
    $
    1,708Long-term deferred tax asset (liability)Tax credit carryover
    
    $
    1,675
    
    
    $
    1,173State net operations loss carry forwards
    
    
    1,411
    
    
    
    1,255Accrued and deferred compensation
    
    
    152
    
    
    
    (48
    )Lease reserve
    
    
    124
    
    
    
    627Deferred revenues
    
    
    (221
    )
    
    
    Valuation allowance
    
    
    (1,368
    )
    
    
    (1,255
    )Property and equipment basis difference
    
    
    (1,567
    )
    
    
    (763
    )Total long-term deferred tax asset
    
    $
    206
    
    
    $
    989
 F-27




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10) INCOME TAXES (continued)
  Fiscal Year2009
    
    
    2008(1)
    
    
    2007Federal statutory tax rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State taxes, net of federal benefit
    
    
    3.6
    
    
    
    50.0
    
    
    
    2.7Tax effect of permanent differences 
meals and entertainment
    
    
    0.7
    
    
    
    24.1
    
    
    
    0.7Tax effect of permanent differences  Tip Credit
    
    
    2.1
    
    
    
    68.5
    
    
    
    1.6Tax effect of permanent differences  other
    
    
    (0.2
    )
    
    
    1.5
    
    
    
    0.1Tax effect of general business credits
    
    
    (6.4
    )
    
    
    (205.6
    )
    
    
    (5.0
    )Adjustment to beginning deferreds
    
    
    
    
    
    
    (22.2
    )
    
    
    (0.5
    )Uncertain tax positions
    
    
    0.6
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    5.6
    
    
    
    0.2Effective tax rate
    
    
    34.4
    %
    
    
    (44.1
    )%
    
    
    33.8
    %
 
 (1)
    
    2008 percentages are larger than prior years as a result of less income
before taxes in 2008 compared to other years, even though the dollar amounts of items are
similar to prior years. (11)
SUPPLEMENTAL CASH FLOWS INFORMATION
 Fiscal Year(in thousands)
    
    2009
    
    
    2008
    
    
    2007Cash paid for interest
    
    $
    1,418
    
    
    $
    1,823
    
    
    $
    1,477Cash paid for taxes
    
    $
    820
    
    
    $
    446
    
    
    $
    1,446Non-cash operating, investing and financing activities:Acquired the fixed assets and inventory from the
three Atlanta restaurants
    
    $
    
    
    
    $
    (1,745
    )
    
    $
    Write off note receivable, accounts receivable,
other assets and accounts payable from
the three Atlanta restaurants
    
    $
    
    
    
    $
    1,745
    
    
    $
    Accrued property and equipment purchases
    
    $
    (102
    )
    
    $
    1,335
    
    
    $
    791Redemption of note receivable by common
stock buyback
    
    $
    
    
    
    $
    
    
    
    $
    289Issuance of common stock to independent
board members
    
    $
    340
    
    
    $
    266
    
    
    $
    478Repurchase of common stock (performance
shares surrendered for tax)
    
    $
    (28
    )
    
    $
    (176
    )
    
    $
    (153
    )
 F-28




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 (12)
    
    RETIREMENT SAVINGS PLANS 401(k) Plan
  Non-Qualified Deferred Compensation Plan
     F-29




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (13) SELECTED QUARTERLY DATA (UNAUDITED)
  (in thousands, except per share data)
 First Quarter
    
    
    Second Quarter
    
    
    Third Quarter
    
    
    Fourth Quarter2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Revenue
    
    $
    33,787
    
    
    $
    33,715
    
    
    $
    36,325
    
    
    $
    38,774
    
    
    $
    33,305
    
    
    $
    35,088
    
    
    $
    32,601
    
    
    $
    32,805Income (loss) from
operations
    
    $
    2,430
    
    
    $
    1,739
    
    
    $
    4,448
    
    
    $
    3,873
    
    
    $
    2,202
    
    
    $
    (704
    )(1)
    
    $
    1,434
    
    
    $
    (2,878
    )(1)Net income (loss)
    
    $
    1,320
    
    
    $
    835
    
    
    $
    2,368
    
    
    $
    2,272
    
    
    $
    1,239
    
    
    $
    (763
    )(1)
    
    $
    774
    
    
    $
    (1,955
    )(1)Basic net income
(loss) per common
share
    
    $
    0.15
    
    
    $
    0.09
    
    
    $
    0.26
    
    
    $
    0.24
    
    
    $
    0.14
    
    
    $
    (0.08
    )
    
    $
    0.08
    
    
    $
    (0.22
    )Diluted net income
(loss) per common
share
    
    $
    0.15
    
    
    $
    0.09
    
    
    $
    0.26
    
    
    $
    0.23
    
    
    $
    0.13
    
    
    $
    (0.08
    )
    
    $
    0.08
    
    
    $
    (0.22
    )
 
 (1)
    
    Includes impairments, estimated lease term costs and other
closing costs of approximately $3,879 for the third quarter and $3,033 for the fourth quarter,
respectively. (14) LITIGATION
  (15) ASSET IMPAIRMENT AND ESTIMATED LEASE TERMINATION AND OTHER CLOSING COSTS
  .
 F-30




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (15) ASSET IMPAIRMENT AND ESTIMATED LEASE TERMINATION AND OTHER CLOSING (continued)
    ,
  F-31




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (15) ASSET IMPAIRMENT AND ESTIMATED LEASE TERMINATION AND OTHER CLOSING COSTS (continued)
 Additions
    
    
    DeductionsCredits to Costs andBalance at
    
    
    Charged to
    
    
    Expenses
    
    
    Balance atBeginning of
    
    
    Costs and
    
    
    and Other
    
    
    End ofPeriod
    
    
    Expenses
    
    
    Accounts
    
    
    PeriodReserve for lease termination costs
    
    $
    2,201.4
    
    
    $
    292.6
    
    
    $
    (1,905.0
    )
    
    $
    589.0
 (16) SUBSEQUENT EVENTS
    F-32




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (16) SUBSEQUENT EVENTS (continued)
  F-33




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 Financial Statement Schedule
 
 SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
 DeductionsAdditions
    
    
    Credits to CostsBalance at
    
    
    Charged to
    
    
    and ExpensesBeginning of
    
    
    Costs and
    
    
    and Other
    
    
    Balance at End(in thousands)
    
    Period
    
    
    Expenses
    
    
    Accounts
    
    
    of PeriodYear ended December 30, 2007:Allowance for doubtful accounts
    
    $
    14.2
    
    
    $
    19.6
    
    
    $
    (17.9
    )
    
    $
    15.9Reserve for lease termination costs
    
    $
    330.0
    
    
    $
    
    
    
    $
    (159.0
    )
    
    $
    171.0Year ended December 28, 2008:Allowance for doubtful accounts
    
    $
    15.9
    
    
    $
    658.8
    
    
    $
    (217.7
    )
    
    $
    457.0Reserve for lease termination costs
    
    $
    171.0
    
    
    $
    2,242.9
    
    
    $
    (212.5
    )
    
    $
    2,201.4Reserve for corporate severance
    
    $
    
    
    
    $
    269.0
    
    
    $
    (62.0
    )
    
    $
    207.0Year ended January 3, 2010:Allowance for doubtful accounts
    
    $
    457.0
    
    
    $
    226.5
    
    
    $
    (616.1
    )
    
    $
    67.4Reserve for lease termination costs
    
    $
    2,201.4
    
    
    $
    292.6
    
    
    $
    (1,905.0
    )
    
    $
    589.0Reserve for corporate severance
    
    $
    207.0
    
    
    $
    74.3
    
    
    $
    (281.3
    )
    
    $
    
 F-34




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##### Table of Contents



SIGNATURES
  FAMOUS DAVES OF AMERICA, INC.
(Registrant)Dated: March 19, 2010
    By:

/s/ Christopher ODonnellChristopher ODonnellPresident and Chief Executive Officer and Director
(Principal Executive Officer)By:
    /s/ Diana Garvis PurcelDiana Garvis PurcelChief Financial Officer and Secretary
(Principal Financial and Accounting Officer)  Signature
    
    Title/s/ Christopher ODonnell
    
    President and Chief Executive Officer and DirectorChristopher ODonnell/s/ K. Jeffrey Dahlberg
    
    DirectorK. Jeffrey Dahlberg/s/ Wallace B. Doolin
    
    DirectorWallace B. Doolin/s/ Lisa A. Kro
    
    DirectorLisa A. Kro/s/ Richard L. Monfort
    
    DirectorRichard L. Monfort/s/ Dean A. Riesen
    
    DirectorDean A. Riesen




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##### Table of Contents



EXHIBITS
 Exhibit No.
    
    Description3.1
    
    Articles of Incorporation,
incorporated by reference to Exhibit
3.1 to our Registration Statement on
Form SB-2 (File No. 333-10675) filed
with the Securities and Exchange
Commission on August 23, 19963.2
    
    Amended and Restated Bylaws,
incorporated by reference to Exhibit
3.1 to Form 10-Q filed November 7,
200810.1
    
    Trademark License Agreement between
Famous Daves of America, Inc. and
Grand Pines Resorts, Inc.,
incorporated by reference to Exhibit
10.11 to the Registration Statement
on Form SB-2 (File No. 333-10675)
filed on August 23, 199610.2
    
    1995 Employee Stock Option Plan (as
amended through May 22, 2002),
incorporated by reference from
Exhibit 10.1 to Form 10-Q filed
August 14, 200210.3
    
    1997 Stock Option and Compensation
Plan (as amended through May 22,
2002), incorporated by reference
from Exhibit 10.2 to Form 10-Q filed
August 14, 200210.4
    
    1998 Director Stock Option Plan (as
amended through May 22, 2002),
incorporated by reference from
Exhibit 10.3 to Form 10-Q filed
August 14, 200210.5
    
    Amended and Restated 2005 Stock
Incentive Plan, incorporated by
reference from Exhibit 10.1 to Form
10-Q filed August 8, 200810.6
    
    First Amended and Restated Executive
Elective Deferred Stock Unit Plan
dated January 1, 2008, incorporated
by reference from Exhibit 10.11 to
Form 10-K filed March 14, 200810.7
    
    Second Amendment to the Amended and
Restated Credit Agreement by and
between Wells Fargo Bank, National
Association and Famous Daves of
America, Inc., dated March 4, 2010,
incorporated by reference to Exhibit
10.2 to Form 8-K filed March 9, 201010.8
    
    Employee Stock Purchase Plan,
incorporated by reference to Exhibit
10.1 to Form 10-Q filed May 9, 200810.9
    
    Form of Amended and Restated
2005-2007 Performance Share
Agreement and Schedule of Grants
under such form, incorporated by
reference to Exhibits 10.3 and 10.4
to Form 10-Q filed May 13, 200510.10
    
    Second Amended and Restated
Non-Qualified Deferred Compensation
Plan, dated January 1, 2008, incorporated by
reference to Exhibit 10.16 to  Form 10-K filed March 14, 200810.11
    
    Amendment to 1995 Employee Stock
Option and Compensation Plan,
effective November 7, 2006,
incorporated by reference to Exhibit
10.2 to Form 10-Q filed November 9,
2006




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##### Table of Contents



EXHIBITS (continued)
 Exhibit No.
    
    Description10.12
    
    Form of 2007  2009 Performance Share Agreement and Schedule
of Grants under such form, incorporated by reference to
Exhibits 10.1 and 10.2 to Form 8-K filed February 27, 200710.13
    
    Form of Director Stock Grant, incorporated by reference to
Exhibit 10.3 to Form 8-K filed February 27, 200710.14
    
    Form of Severance Agreement dated January 4, 2008, between
Famous Daves of America, Inc. and each of Diana G. Purcel and
Christopher ODonnell, incorporated by reference to Exhibit
10.1 for Form 8-K filed January, 8, 200810.15
    
    Form of 2008  2010 Performance Share Agreement and Schedule
of Grants under such form, incorporated by reference to
Exhibits 10.1 and 10.2 to Form 8-K filed January 18, 200810.16
    
    Form of Director Stock Grant, incorporated by reference to
Exhibit 10.3 to Form 8-K filed February 21, 200810.17
    
    Restricted Stock Unit Agreement, between Famous Daves of
America, Inc. and Wilson L. Craft, incorporated by reference
to Exhibit 10.2 to Form 8-K filed March 24, 200810.18
    
    Restricted Stock Unit Agreement, between Famous Daves of
America, Inc. and each of Diana G. Purcel and Christopher
ODonnell, incorporated by reference to Exhibits 10.1 and
10.2, to Form 8-K filed September 17, 200810.19
    
    Form 2009  2011 Performance Share Agreement and
Schedule of Grants under such form, incorporated by reference
to Exhibits 10.1 and 10.2 to Form 8-K filed January 28, 200910.20
    
    Form of Restricted Stock Agreement dated May 5, 2009,
between Famous Daves of America, Inc. and K. Jeffrey
Dahlberg, incorporated by reference from Exhibit 10.1 to Form
10-Q filed on May 7, 200910.21
    
    Form of Restricted Stock Agreement dated May 5, 2009,
between Famous Daves of America, Inc. and Lisa A. Kro,
incorporated by reference from Exhibit 10.2 to Form 10-Q filed
on May 7, 200910.22
    
    Form of Restricted Stock Agreement dated May 5, 2009,
between Famous Daves of America, Inc. and Wallace B. Doolin,
incorporated by reference from Exhibit 10.1 to Form 10-Q filed
on November 5, 200910.23
    
    Amended and Restated Asset Purchase Agreement by and
between North Country BBQ Ventures, Inc. and Famous Daves of
America, Inc., dated February 26, 2010, incorporated by
reference to Exhibit 10.1 to Form 8-K filed March 9, 201021.0
    
    Subsidiaries of Famous Daves of America, Inc.23.1
    
    Consent of Grant Thornton LLP




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##### Table of Contents



EXHIBITS (continued)
 Exhibit No.
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C.
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C.
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002