<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-K

(Mark One)
[X]  Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934
     For the fiscal year ended December 31, 2000
                                      OR
[_]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

                       Commission File Number:  0-21587

                               PJ AMERICA, INC.
            (Exact name of registrant as specified in its charter)

          Delaware                                          61-1308435
(State or other jurisdiction of                          (I.R.S. Employer
     Identification Number)                       incorporation or organization)

                              2300 Resource Drive
                          Birmingham, Alabama  35242
                   (Address of principal executive offices)

                                (205) 981-2800
             (Registrant's telephone number, including area code)
_______________________________________________________________________________

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

                                                      (Name of each exchange
     (Title of Each Class)                              on which registered)
               None                                            None

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

      Common Stock, $.01 par value                    The Nasdaq Stock Market
_______________________________________________________________________________

     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 ___
                ---
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment of this
form 10-K. [X]

     As of February 8, 2001, there were 4,323,648 shares of the Registrant's
Common Stock outstanding. The aggregate market value of the shares of
Registrant's Common Stock held by non-affiliates of the Registrant at such date
was $20,462,029 based on the last sale price of the Common Stock on February 8,
2001 as reported by the Nasdaq Stock Market. For purposes of the foregoing
calculation only, all directors and executive officers of the Registrant have
been deemed affiliates.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of Part III are incorporated by reference from the Registrant's
Proxy Statement for the Annual Meeting of Stockholders to be held June 5, 2001.
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<S>            <C>
PART I
------

     Item 1.   Business
     Item 2.   Properties
     Item 3.   Legal Proceedings
     Item 4.   Submission of Matters to a Vote of Security Holders


PART II
-------

     Item 5.   Market for Registrant's Common Equity
                and Related Stockholder Matters
     Item 6.   Selected Financial Data
     Item 7.   Management's Discussion and Analysis of
                Financial Condition and Results of Operations
     Item 7a.  Qualitative and Quantitative Disclosures About Market Risk
     Item 8.   Financial Statements and Supplementary Data
     Item 9.   Changes in and Disagreements with Accountants on
                Accounting and Financial Disclosure


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
     Item 13.  Certain Relationships and Related Transactions


PART IV
-------

     Item 14.  Exhibits, Financial Statement Schedules
                and Reports on Form 8-K
</TABLE>
<PAGE>

                                    PART I


Item 1.  Business

General

     PJ America, Inc. (the "Company") is the largest franchisee of "Papa John's"
pizza delivery and carry-out restaurants. At December 31, 2000, the Company
operated 176 Papa John's restaurants in nine states and Puerto Rico. In late
1998, the Company opened its first restaurants in California, Oregon, Washington
and Puerto Rico, and acquired restaurants in Utah ("New Markets"). The Company
also opened a commissary in Puerto Rico in December 1998. The Company also has
restaurants in Alabama, Louisiana, Ohio, Texas and Virginia ("Core Markets"). In
2000, the Company opened 21 of its 24 restaurants in the New Markets, and since
December 31, 1998, the Company has opened 48 of 57 restaurants in the New
Markets. At December 31, 2000, Papa John's International, Inc. ("PJI") and its
franchisees (including the Company) operated 2,614 Papa John's restaurants in 49
states, the District of Columbia and internationally.

Strategy

     The Company's objective is to become the leading chain of pizza delivery
restaurants in each of its targeted markets. To accomplish this objective, the
Company has developed a strategy designed to achieve high levels of customer
satisfaction and repeat business, as well as to establish recognition and
acceptance of the Papa John's concept. The key elements of the Company's
strategy include:

     Focused High Quality Menu. Papa John's restaurants offer a focused menu of
high quality pizza, breadsticks and cheesesticks. Papa John's traditional crust
pizza is prepared using fresh dough (never frozen), cheese made from 100% real
mozzarella, fresh-packed pizza sauce made from vine-ripened tomatoes (not from
concentrate) and a proprietary mix of savory spices, and a choice of high
quality meat and vegetable toppings. Papa John's thin crust pizza is made with a
prepared crust and the same high quality toppings. We believe our focused menu
creates a strong identity in the marketplace and simplifies operations.

     Purchasing and Distribution. PJI's commissary system supplies pizza dough
and other food and paper products twice weekly to each of its franchised
restaurants. PJI currently operates eleven regional commissaries across the
United States. PJI expects to open new commissaries and distribution centers as
PJI and its franchisees expand into new territories. PJI's commissary system
enables it to closely monitor and control product quality and consistency, while
lowering food and operating costs for its franchisees. All Papa John's
restaurants are required to purchase a proprietary mix of savory spices and
dough from PJI. Franchisees may purchase other goods from approved suppliers or
PJI, which has negotiated purchasing agreements with most of its suppliers. The
Company believes that these agreements enable it to benefit from volume
discounts which result in prices the Company believes are below those which it
could otherwise obtain. In addition, all the equipment, counters and smallwares
required to open a Papa John's restaurant are available from PJI. PJI also
provides layout and design services and recommends subcontractors, signage
installers and telephone systems to its franchisees. Although not required to do
so, the Company purchases substantially all of its food products and restaurant
equipment from PJI.

                                       1
<PAGE>

     Effective December 27, 1999, PJI's commissary entered into a purchasing
arrangement with a third-party entity formed for the sole purpose of reducing
cheese price volatility. Under this arrangement, the commissary will purchase
cheese at a fixed quarterly price based in part on historical average cheese
prices. Gains and losses incurred by the selling entity will be passed to the
commissary via adjustments to the selling price over time. Ultimately the
commissary will purchase cheese at a price approximating the actual average
market price, but with more predictability and less volatility than the previous
purchasing method. As the Company purchases cheese from PJI's commissary, this
arrangement also results in less volatility for cheese prices.

     In December 1998, the Company opened its own commissary in Puerto Rico to
service its Puerto Rico restaurants. The Company has been purchasing and expects
to be able to continue to purchase product from PJI suppliers under the same
terms and prices as PJI's commissaries.

     Commitment to Employee Training and Development. The Company is committed
to the development and motivation of its employees through on-going training
programs, incentive compensation and opportunities for advancement. The Company
offers financial and stock incentives to employees at various levels based on
the achievement of performance goals. The Company's growth also provides
significant opportunities for advancement. The Company believes these factors
create an entrepreneurial spirit throughout the organization, resulting in a
positive work environment and motivated, customer-oriented employees.

     Marketing Programs. The Company's restaurant-level marketing programs
target the delivery area of each restaurant, making extensive use of distinctive
print materials in direct mail and store-to-door couponing. Local marketing
efforts also include a variety of community-oriented activities with schools,
sports teams and other organizations. In markets in which the Company has a
significant presence, local marketing efforts are supplemented with radio and
television advertising.

Unit Economics

     The Company's unit economics in the Core Markets are significantly better
than restaurants in the New Markets. In total, the 152 restaurants that were
open throughout the entire 2000 fiscal year (53 weeks) generated average sales
of $692,000, average cash flow (operating income plus depreciation) of $113,000
(or 16.3% of average sales) and average restaurant operating income of $90,000
(or 13.0% of average sales). To date, the Company's restaurants in the New
Markets have not achieved sufficient profitable sales, thus the New Markets are
operating at significant losses.

     The average cash investment, including franchise fees for the 24
restaurants opened during the 2000 fiscal year was approximately $320,000,
exclusive of land and pre-opening costs. The Company expects the average cash
investment for restaurants to be opened in 2001 to be similar to 2000 and
anticipates that the new restaurants to be opened in 2001 will primarily be in
the New Markets.

Expansion and Site Selection

     The Company's growth strategy will focus on further developing the Papa
John's concept through (i) building out its existing markets; (ii) acquiring and
developing new territories; and (iii)

                                       2
<PAGE>

strategically acquiring existing Papa John's franchisee groups and territories,
if available. The Company's objective is to become the leading chain of pizza
delivery restaurants in each of its targeted markets. Through a market-by-market
expansion strategy focused on clustering restaurants, the Company seeks to
increase consumer awareness and take advantage of operational and advertising
efficiencies. During fiscal 2000, the Company opened 23 restaurants and acquired
one restaurant. In 2001, the Company expects to open approximately 8-10
additional restaurants primarily in New Markets. As part of its overall growth
strategy, the Company intends to supplement its new restaurant development
through acquisitions of existing Papa John's franchisees.

     Effective February, 2001, the Company merged all of its previous U.S.
geographic development agreements with PJI into a single development agreement.
In the new development agreement, the Company is required to open six
restaurants in 2001, then eight restaurants per year through 2006. In connection
with the new U.S. development agreement, the Company sold 22 development rights
in various geographic area back to PJI. Under the original development
agreements, the number of restaurants required to be opened in 2001, 2002, and
2003 was 18, 15 and 15 respectively, therefore the Company's pace of restaurant
openings is significantly slower.

     The Company is required to open four restaurants per year in Puerto Rico in
2001 and 2002, and three restaurants in 2003.

     The Company also has a right of first refusal with a term of five years
beginning September 1, 1996 to acquire from an affiliate of the Company, the
operations and development rights for Papa John's restaurants in Iowa, including
the Moline and Rock Island, Illinois areas (but excluding the Council Bluffs
area of Iowa), in which 24 restaurants were open at December 31, 2000 and
development rights with respect to such territory provide that a total of 6
additional Papa John's restaurants will be opened through 2002. There are no
agreements, however, with respect to the Company's acquisition of such
territory, and there can be no assurance that such territories will be acquired.
PJI has waived its right of first refusal with respect to the Company's possible
acquisition of the Iowa territory described above. In addition, certain
officers, directors and stockholders of the Company own interests in Papa John's
franchisees that operate in certain areas in Ohio and South Carolina. PJI has
waived its right of first refusal with respect to the Company's possible
acquisition of such franchisees.

     The Company devotes significant resources to the investigation and
evaluation of potential sites. The site selection process focuses on trade area
demographics, target population density, household income levels and competitive
factors. Management inspects each potential Company restaurant location and the
surrounding market before a site is approved. The Company's restaurants are
typically located in strip shopping centers or free-standing buildings that
provide visibility, curb appeal and accessibility. All site selections must be
approved by PJI. Papa John's restaurant design may be configured to fit a wide
variety of building shapes and sizes, thereby increasing the number of suitable
locations for Papa John's restaurants.

Menu

     Papa John's restaurants offer a focused menu of high quality pizza,
breadsticks and cheesesticks, as well as canned or bottled soft drinks. Papa
John's traditional crust pizza is prepared using fresh dough (never frozen), and
our thin crust pizza is made with a prepared crust. Papa John's

                                       3
<PAGE>

pizzas are made from hard wheat flour, cheese made from 100% real mozzarella,
fresh-packed pizza sauce made with vine-ripened tomatoes (not from concentrate)
and a proprietary mix of savory spices, and a choice of high-quality meat (no
artificial fillers) and vegetable toppings. Fresh onions and green peppers are
purchased from local produce suppliers and sliced daily in the restaurants.
Fresh baby portabella mushrooms are purchased from the commissary system, which
delivers twice weekly. Each traditional crust pizza is served with a container
of our special garlic sauce and two pepperoncinis, and each thin crust pizza is
served with a container of special seasonings and two pepperoncinis. We believe
our focused menu helps create a strong identity among consumers and simplifies
operations, resulting in lower restaurant operating costs, improved food quality
and consistency and superior customer service.

Marketing Programs

     The Company has restaurant-level marketing programs which target the
delivery area of each restaurant, making extensive use of distinctive print
materials in direct mail and store-to-door couponing. The Company tailors its
store-to-door coupons according to customer buying habits as tracked by the
Company's point-of-sale computer systems used in each restaurant. Local
marketing efforts also include a variety of community-oriented activities with
schools, sports teams and other organizations. The Company currently supplements
its local marketing efforts with a limited amount of radio and television
advertising. The Company believes that its marketing programs are cost-effective
and significantly increase Papa John's visibility among potential customers. The
Company's advertising expenditures as a percentage of restaurant sales for 2000
were 8.2%. Advertising expenditures as a percentage of sales are higher in the
New Markets, primarily due to lower average sales volumes while brand awareness
and market penetration are being generated.

     The Company's restaurant-level marketing efforts are supported by print and
electronic advertising materials that are produced by the Papa John's Marketing
Fund, Inc. (the "Marketing Fund") for use by both PJI and its franchisees. The
required Marketing Fund contribution is established from time to time by the
governing board of the Marketing Fund and in 2000 was 1.25% of restaurant sales,
and it is currently 1.25% of restaurant sales. The maximum required contribution
for PJI franchisees is 1.5% of restaurant sales and can be increased above 1.5%
only upon approval by not less than 60% of Marketing Fund members. In addition,
PJI may require the Company to participate in an advertising cooperative for its
designated market area and to contribute a minimum amount of restaurant sales
for local advertising. PJI also provides each of its franchisees with catalogs
for uniforms and promotional items and pre-approved, print marketing materials
that can be ordered from PJI.

Restaurant Operations

     Management and Employees. A typical Company restaurant employs a restaurant
manager, two assistant managers and approximately 25 hourly employees, most of
whom work part-time. The restaurant manager is responsible for the day-to-day
operation of the restaurant and for the maintenance of Company established
operating standards. The Company seeks to hire experienced restaurant managers
and staff and motivate and retain them by providing opportunities for
advancement and performance-based financial incentives.

                                       4
<PAGE>

     The Company employs area supervisors, each of whom has responsibility for
overseeing four to six Company restaurants. The Company also employs regional
operations directors who oversee area supervisors and managers within their
respective markets. These team members are also eligible to earn performance
based financial incentives, including stock option grants.

     Training. In February, 2000, the Company hired a Vice President of Training
to lead its personnel development. The Company has full-time training
coordinators in several of it's Core and New Markets. In addition, PJI provides
an on-site training team as needed. Each regional area supervisor and restaurant
manager is required to complete PJI's two-week training program in which
instruction is given on all aspects of PJI's systems and operations. The program
includes classroom instruction and hands-on training at an operating Papa John's
restaurant. In addition, the Company has developed a specific education and
safety program for its delivery drivers.

     Point-of-Sale System. All of the Company's existing restaurants are
equipped with the Papa John's PROFIT System. The Company believes that this
technology increases speed and accuracy in order taking and pricing, reduces
paperwork and allows the restaurant manager to better monitor and control food
and labor costs. The point-of-sale system enhances restaurant-level marketing
capabilities through a database that provides information on customers and their
buying habits with respect to the Company's products. The Company is able to
obtain current restaurant reporting information, thereby improving the speed,
accuracy and efficiency of restaurant-level reporting.

     Reporting. Managers at restaurants evaluate daily reports of sales, cash
deposits and operating costs. Physical inventories of all food and beverage
items are taken daily. The Company's area supervisors prepare weekly profit and
loss statements for each of the restaurants.

     Hours of Operation. The Company's restaurants are generally open seven days
a week, typically from 11:00 a.m. to 12:00 midnight Sunday through Thursday, and
from 11:00 a.m. to 1:30 a.m. on Friday and Saturday.

     Development and Franchise Agreements

          Franchise and Development Agreements. The Company has entered into
development agreements with PJI for the right to construct one or more Papa
John's restaurants pursuant to a development schedule within specified
geographic areas in nine states and Puerto Rico.

     Effective February, 2001, the Company merged all of its previous U.S.
geographic development agreements with PJI into a single development agreement.
In the new development agreement, the Company is required to open six
restaurants in 2001, then eight restaurants per year through 2006. In connection
with the new U.S. development agreement, the Company sold 22 development rights
in various geographic area back to PJI. Under the original development
agreements, the number of restaurants required to be opened in 2001, 2002, and
2003 was 18, 15 and 15 respectively, therefore the Company's pace of restaurant
openings is significantly slower.

     The Company's current development agreement in Puerto Rico is to open four
restaurants per year in 2001 and 2002, and three restaurants in 2003.

                                       5
<PAGE>

     Generally, a franchise agreement is executed when the Company secures a
restaurant location. Each per restaurant development fee is typically credited
against PJI's franchise fee, which is payable to PJI upon signing the franchise
agreement for a specific location. The current franchise fee payable with
respect to the Company's restaurants is $20,000.

     Under each of the Company's franchise agreements, the Company pays PJI a
royalty fee of 4% of sales, PJI's current standard royalty fee. Under such
agreements, PJI may increase the royalty fee to 5% of sales after the agreement
has been in effect for between three to five years. In no event may the royalty
fee be increased to an amount greater than the royalty fee currently in effect
for new PJI franchisees.

     PJI's franchise agreements authorize the Company to use its trade names,
trademarks and service marks with respect to specific Papa John's restaurants.
PJI also provides general construction specifications, designs, color schemes,
signs, equipment, preparation methods for food and beverages, marketing
concepts, operations and financial control methods, management training,
technical assistance and materials. Each franchise agreement prohibits the
Company from transferring a franchise without the prior approval of PJI. PJI has
the contractual right to terminate a franchise agreement for a variety of
reasons, including a franchisee's failure to make payments when due or failure
to adhere to PJI's policies and standards. Many state franchise laws limit the
ability of a franchisor to terminate or refuse to renew a franchise.

     The development agreement, and each of the franchise agreements, prohibit
the Company, during the term of the agreements and for a two-year period
following their termination or expiration, from owning or operating any other
pizza delivery or take-out restaurant within ten to fifty miles of the franchise
granted or any other Papa John's franchise.

     Franchise Restaurant Development. PJI assists the Company in selecting
sites and developing restaurants. PJI provides the Company with the physical
specifications for typical restaurants, both for free-standing restaurants and
restaurants located in strip shopping centers. The Company procures virtually
all of the design plans, counters and equipment for its restaurants from PJI at
prices the Company believes are favorable. The Company is responsible for
selecting the location for its restaurants but must obtain PJI's approval of
each restaurant design and each location based on accessibility and visibility
of the site and targeted demographic factors, including population, density,
income, age and traffic. The Company is responsible for all costs and expenses
incurred in locating, acquiring and developing restaurant sites.

     Franchise Training and Support. Each regional operations director and area
supervisor must satisfactorily complete PJI's two-week training program and must
also devote his or her full business time and efforts to the operation of the
Company's restaurants. Each of the Company's restaurant managers report to an
area supervisor and are also required to complete PJI's two-week training
program.

     Franchise Operations. All Company restaurants are required to operate in
compliance with PJI's policies, standards and specifications, including matters
such as menu items, ingredients, materials, supplies, services, fixtures,
furnishings, decor and signs. The Company has full discretion to determine the
prices to be charged to its customers.

                                       6
<PAGE>

     Reporting. PJI collects daily, weekly and monthly sales and other operating
information from the Company. The Company has agreements with PJI permitting PJI
to electronically debit the Company's bank accounts for the payment of
royalties, Marketing Fund contributions and purchases from PJI. This system
significantly reduces the resources needed to process payables.

Competition

The restaurant industry is intensely competitive with respect to price, service,
location and food quality, and there are many well-established competitors with
substantially greater financial and other resources than the Company.
Competitors include a large number of international, national and regional
restaurant chains, as well as local pizza operators. Some of our competitors
have been in existence for a substantially longer period than us and may be
better established in the markets where our restaurants are, or may be, located.
Within the pizza segment of the restaurant industry, we believe that our primary
competitors are the international pizza chains, including Pizza Hut, Domino's
and Little Caesar's, and several regional chains (Papa Murphy's, Donatos, etc.).
A change in the pricing and other marketing strategies of one or more of these
competitors could have an adverse impact on our sales and earnings.

     The restaurant business is often affected by changes in consumer tastes,
national, regional or local economic conditions, demographic trends, traffic
patterns and the type, number and location of competing restaurants. In
addition, factors such as inflation, increased cheese and other commodity costs,
labor and benefits costs and the lack of experienced management and hourly team
members may adversely affect the restaurant industry in general and our
restaurants in particular.

Government Regulation

     The Company is subject to various Federal, state and local laws affecting
its business. Each Papa John's restaurant is subject to licensing and regulation
by a number of governmental authorities, which include health, safety,
sanitation, building and fire agencies in the state or municipality in which the
restaurant is located. Difficulties in obtaining or failures to obtain required
licenses or approvals can delay or prevent the opening of a new restaurant in a
particular area. The Company is also subject to Federal and state environmental
regulations.

     The Company's relationship with PJI is governed by the laws of several
states which regulate substantive aspects of the franchisor-franchisee
relationship. Substantive state laws that regulate the franchisor-franchisee
relationship presently exist or are being considered in a substantial number of
states and bills have been introduced in Congress (some of which are now
pending) which would provide for Federal regulation of substantive aspects of
the franchisor-franchisee relationship. These current and proposed franchise
relationship laws limit, among other things, the duration and scope of non-
competition provisions, the ability of a franchisor to terminate or refuse to
renew a franchise and the ability of a franchisor to designate sources of
supply.

     The Company's restaurant operations are also subject to Federal and state
laws governing such matters as wages, working conditions, citizenship
requirements and overtime. Some states have set minimum wage requirements higher
than the Federal level. The Federal government last increased the Federal
minimum wage in September 1997. There is also current proposed legislation to
increase the

                                       7
<PAGE>

Federal minimum wage by $1.00. The Company has restaurants in California, Oregon
and Washington that have higher minimum wages than the Federal level.
Significant numbers of hourly personnel at the Company's restaurants are paid at
rates related to the Federal minimum wage and, accordingly, increases in the
minimum wage increase labor costs at the Company's restaurants. Other
governmental initiatives such as mandated health insurance, if implemented,
could adversely affect the Company as well as the restaurant industry in
general. The Company is also subject to the Americans With Disabilities Act of
1990, which, among other things, may require certain minor renovations to its
restaurants to meet Federally-mandated requirements. The cost of these
renovations is not expected to be material to the Company.

     The Company currently operates Papa John's restaurants in Puerto Rico. The
Company's ability to establish international operations is subject to various
risks, including changing political and economic conditions, adverse tax
consequences, and government regulations relating to, among other things, the
preparation and sale of food, building and zoning requirements, wages, working
conditions, and the Company's relationship with its employees. There can be no
assurance that the Company will be successful in establishing its international
operations or that such risks will not have a material adverse effect on the
Company in the future.

Trademarks

     The Company's rights to use PJI's trademarks and service marks are
significant to the Company's business. PJI is the owner of the Federal
registration of the trademark "Papa John's." PJI has also registered "Pizza Papa
John's" and design (logo), "Better Ingredients, Better Pizza", and "Pizza Papa
John's Better Ingredients, Better Pizza", and design as a trademarks and a
service marks. PJI owns Federal registrations for several ancillary marks,
principally advertising slogans. PJI is aware of the use by other persons in
certain geographic areas of names and marks which are the same as or similar to
the Company's marks. It is PJI's policy to pursue registration of its marks
whenever possible and to vigorously oppose any infringement of its marks.

Employees

     At December 31, 2000, the Company had approximately 5,500 employees of
which approximately 4,660 were restaurant employees, approximately 800 were
restaurant management and supervisory personnel and approximately 40 were
corporate personnel. Most restaurant employees are part-time and are paid on an
hourly basis. None of the Company's employees are currently represented by a
labor union, and the Company is not aware of any union organizing activity among
its employees. The Company believes that its relationship with its employees is
good.

Cautionary Statements

     Information provided in this Form 10-K under the captions "Business -
Strategy," "- Expansion and Site Selection," "- Development and Franchise
Agreements" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains, and from time to time the Company may
disseminate materials and make statements which may contain "forward-looking"
information, as that term is defined by the Private Securities Litigation Reform
Act of 1995 (the "Act"). These cautionary statements are being made pursuant to
the provisions of the Act and with the intention of obtaining the benefits of
the "safe harbor" provisions of the Act. The Company

                                       8
<PAGE>

cautions investors that any forward-looking statements made by the Company are
not guarantees of future performance and that actual results may differ
materially from those in the forward-looking statements as a result of various
factors, including but not limited to: (i) the ability to increase sales and
operate profitably in New Markets, (ii) the ability to upgrade Company's
infrastructure to support its operations and development plans, (iii) the
ability of the Company, PJI and PJI's franchisees to expand through the opening
of new restaurants which may be affected by the selection and availability of
suitable restaurant locations, negotiation of suitable leases or financing
terms, constraints on permitting and construction of restaurants, and the
hiring, training and retention of management and other personnel, (iv) the
Company's ability to acquire existing PJI's franchisees may be hindered by
competition from PJI, which has a right to approve and a right of first refusal
with respect to the sale of all Papa John's restaurants, (v) the overall success
of PJI, (vi) the restaurant industry is intensely competitive with respect to
price, service, location and food quality, and there are many well established
competitors with substantially greater financial and other resources than the
Company, PJI and PJI's franchisees and some of these competitors have been in
existence for a substantially longer period than the Company, PJI and PJI's
franchisees and may be better established in the markets where restaurants
operated by the Company, PJI or PJI's franchisees are, or may be, located (vii)
a change in the pricing or other marketing or impact on sales and earnings at
restaurants operated by the Company, PJI and PJI's franchisees, (viii) increases
in operating costs such as inflation, increased food costs, increased labor and
employee benefit costs and the availability of qualified management and hourly
employees, (ix) the availability of capital to the Company, PJI and PJI's
franchisees and (x) changes in governmental regulations, including further
increases in the minimum wage.

Item 2.  Properties

     At December 31, 2000, the Company operated 176 Papa John's restaurants.

                                       Number of
                                      Restaurants

                         Alabama          24
                         Louisiana        19
                         Ohio              9
                         Texas             9
                         Virginia         40
                                         ---
                         Core Markets    101
                                         ---

                         California      22
                         Oregon          16
                         Puerto Rico      9
                         Utah            25
                         Washington       3
                                        ---
                         New Markets     75
                                        ---
                         Total          176
                                        ===

All but seven of the Company's restaurants are located in leased space. The
initial terms of most of the Company's leases are three to five years and
provide for one or more options to renew for at least one

                                       9
<PAGE>

additional term. The Company's leases generally specify a fixed annual rent with
fixed increases, or increases based on changes in the Consumer Price Index, at
various intervals during the lease term.

     The Company also leases a commissary facility in Puerto Rico. In addition,
the Company leases approximately 7,000 square feet of corporate and operations
support space collectively in various states.

Item 3.  Legal Proceedings

     The Company is involved in lawsuits and claims arising in the normal course
of business. In the opinion of management of the Company, although the outcomes
of these lawsuits and claims are uncertain, in the aggregate they will not have
a material adverse effect on the Company's business, financial condition or
results of operations.

     Papa John's International, Inc. and Pizza Hut have been involved in
litigation since August, 1998, over the use of the "Better Ingredients, Better
Pizza" slogan. The case has currently been overturned in PJI's favor; however,
Pizza Hut has filed a petition for writ of certiorari with the United States
Supreme Court. PJI cannot predict whether the Supreme Court will accept the case
for hearing or, in the event it is accepted, what the outcome of any such
hearing will be.

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

     Not applicable.

                                       10
<PAGE>

                     EXECUTIVE OFFICERS OF THE REGISTRANT

     Set forth below are the current executive officers of the Company, together
with their ages, their positions with the Company and the year in which they
first became an officer of the Company:

<TABLE>
<CAPTION>
                                                                                       First Elected
Name                             Age    Position                                     Executive Officer
----                             ---    --------                                     -----------------
<S>                              <C>                                                 <C>
Richard F. Sherman               57     Chairman of the Board                               1991
Douglas S. Stephens              37     President, Chief Executive Officer                  1991
Louis M. Romanus                 42     Vice President - Chief Operating Officer            2001
D. Ross Davison                  39     Senior Vice President Administration -              1996
                                        Chief Financial Officer and Treasurer
John D. Rose                     47     Vice President - Real Estate & Development          1998
J. Robert Compton                33     Vice President - Training                           2000
Anita A. Bray                    31     Corporate Controller - Assistant Treasurer          2000
</TABLE>

     Richard F. Sherman has served as a director and Chairman of the Board of
the Company or certain predecessors since 1991 and in 1999 he was elected a
member of the Executive Committee. Mr. Sherman is a private investor who has
been a franchisee and a consultant to PJI since 1991. From 1993 to present, Mr.
Sherman has been a director of PJI. From 1987 to 1991, Mr. Sherman was Chairman
of the Board and President of Rally's Hamburgers, Inc. From 1984 to 1987, Mr.
Sherman was President and a director of Church's Chicken, Inc. From 1971 to
1984, Mr. Sherman was Group Executive Vice President and director of Hardee's
Food Systems, Inc. and its parent, Imasco USA, Inc. Mr. Sherman serves on the
board of directors of Reed's Jewelers, Inc.

     Douglas S. Stephens has served as a director, President and Chief Executive
Officer of the Company or certain predecessors since 1991 and in 1999 he was
elected a member of the Executive Committee. From 1989 to 1991, Mr. Stephens was
the Vice President of Information Systems for the Kentucky Lottery Corporation.
From 1986 to 1989, Mr. Stephens was a systems consultant for Andersen
Consulting, a division of Arthur Andersen, LLP, an international professional
services firm.

     Louis M. Romanus became Chief Operating Officer effective January 2001.
From 1997 to 2000, Mr. Romanus served as President/COO with PacPizza, L.L.C., a
Pizza Hut franchise with 150 restaurants. From 1977 to 1997, Mr. Romanus held
various operations positions from Cook and Restaurant Manager to Senior Market
Coach and Senior Director of Operations and Customer Satisfaction with Pizza Hut
Corporate.

     D. Ross Davison has served as Vice President Administration - Chief
Financial Officer and Treasurer of the Company since 1996. From 1985 to 1996,
Mr. Davison was with Arthur Andersen, LLP, an international professional
services firm, and his most recent position was Senior Manager. From 1983 to
1985, Mr. Davison was with Cotton and Allen, P.S.C., a certified public
accounting firm. Mr. Davison is a licensed Certified Public Accountant.

                                       11
<PAGE>

     John D. Rose has served as Vice President - Real Estate and Development
since August 1998. From 1996 to 1998, Mr. Rose was Vice President of Real Estate
for Famous Dave's of America. From 1992 to 1996 Mr. Rose held various positions
in the real estate department of PJI.

     J. Robert Compton has served as Vice President - Training since February
2000. From 1999 to 2000, Mr. Compton was the Training Director for Just for
Feet. From 1995 to 1999, Mr. Compton held various positions from Store Director
to Facilitator at Just for Feet University.

     Anita A. Bray became Controller and Assistant Treasurer in November 2000.
From 1995 to November 2000, Ms. Bray was with Caremark, Inc. her most recent
position being Director of External Reporting. From 1991 to 1996, Ms. Bray was
with Ernst & Young LLP. Ms. Bray is a licensed Certified Public Accountant.

                                       12
<PAGE>

PART II


Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters

     The Company's common stock has traded on the Nasdaq National Market System
under the trading symbol "PJAM" since October 25, 1996. At February 8, 2001,
there were approximately 70 record holders of the Company's common stock. The
following table sets forth the high and low sales prices of the Company's common
stock for the quarters indicated, as reported by the Nasdaq National Market
System:

               2000
          Quarter Ended              High          Low
          -------------              ----          ---

          First Quarter             $16.50        $10.00
          Second Quarter            $11.88        $ 8.75
          Third Quarter             $13.63        $ 6.63
          Fourth Quarter            $ 8.31        $ 5.31

               1999
          Quarter Ended              High          Low
          -------------              ----          ---

          First Quarter             $23.50        $16.00
          Second Quarter            $25.00        $19.38
          Third Quarter             $25.63        $18.13
          Fourth Quarter            $21.63        $12.00


Since its initial public offering of common stock in October 1996, the Company
has not paid dividends on its common stock, and has no plans to do so in the
foreseeable future.

                                       13
<PAGE>

Item 6.  Selected Financial Data (In thousands, except per share data)

The selected financial data presented below for each of the years in the five-
year period ended December 31, 2000 was derived from our audited consolidated
financial statements. The selected financial data should be read in conjunction
with Management's Discussion and Analysis of Financial Condition and Results of
Operations and the Consolidated Financial Statements and Notes thereto included
in Item 7 and Item 8, respectively, of the Form 10-K.

<TABLE>
<CAPTION>

                                                                           FOR THE YEARS ENDED (1)
                                                     ---------------------------------------------------------------
                                                              (2)          (2)
                                                            Dec. 29,      Dec. 28,   Dec. 27,  Dec. 26,     Dec. 31,
                                                             1996          1997       1998      1999         2000
                                                     ----------------------------------------------------------------
<S>                                                      <C>              <C>        <C>       <C>          <C>
Restaurant sales                                         $    24,550  $  48,128  $  68,586  $ 95,489    $  111,080
Cost and expenses:
   Cost of sales                                               8,064     15,251     22,153    29,285        33,104
   Salaries and benefits                                       6,113     12,508     18,272    26,649        32,284
   Other operating expenses                                    5,833     11,535     15,971    22,871        29,193
   General and administrative expenses                         1,402      2,558      3,466     4,811         6,803
   Depreciation and amortization                                 628      1,302      2,078     3,243         4,160
   Other charges (3)                                               -          -          -       690         9,465
                                                     ----------------------------------------------------------------
     Total costs and expenses                                 22,040     43,154     61,940    87,549       115,009
                                                     ================================================================
Operating income (loss)                                        2,510      4,974      6,646     7,940        (3,929)
Other income (expense), net                                       11        864        916       617           (62)
                                                     ----------------------------------------------------------------
Income (loss) before income taxes                              2,521      5,838      7,562     8,557        (3,991)
Provision (benefit)for income taxes                              941      2,040      2,495     2,909        (1,371)
                                                     ----------------------------------------------------------------
Income (loss) before cumulative effect of change in
    accounting principle                                 $     1,580  $   3,798  $   5,067  $  5,648    $   (2,620)
   Cumulative effect of change in accounting
    principle, net of tax                                          -          -          -      (181)            -
                                                     ----------------------------------------------------------------
Net income (loss)                                        $     1,580  $   3,798  $    5,067 $  5,467    $   (2,620)
                                                     ================================================================

Basic earnings (loss) per share: (4)
  Income (loss) before cumulative effect of
     change in
   accounting principle                                  $      0.61  $    0.71  $     0.88 $   0.98    $    (0.55)
  Cumulative effect of accounting change, net of
     tax                                                           -          -           -    (0.03)            -
                                                     ----------------------------------------------------------------
Basic earnings (loss) per share                          $      0.61  $     0.71 $     0.88 $   0.95    $    (0.55)
                                                     ================================================================

Diluted earnings (loss) per share: (4)
   Income (loss) before cumulative effect of
     change in
    accounting principle                                 $      0.61  $     0.69 $     0.86 $   0.95    $    (0.55)
   Cumulative effect of accounting change, net of                  -           -          -    (0.03)            -
     tax
                                                     ----------------------------------------------------------------
Diluted earnings (loss) per share                        $      0.61  $     0.69 $     0.86 $   0.92    $    (0.55)
                                                     ================================================================
   Weighted average shares outstanding - Basic                 2,583       5,369      5,777    5,744         4,739
                                                     ================================================================
   Weighted average shares outstanding - Diluted               2,610       5,483      5,919    5,942         4,739
                                                     ================================================================
Balance sheet data (end of period):
   Total assets                                          $    23,614  $   40,283 $   48,813 $ 47,937    $   37,571
   Total debt, including current maturities                       70           -          -        -         4,000
   Stockholders' equity                                       21,518      36,807     41,746   41,538        28,304
 </TABLE>


                                       14
<PAGE>

Item 6.  Selected Financial Data (continued)

(1)  The Company operates on a 52-53 week year ending on the last Sunday in
     December each year. Fiscal 2000 was a 53 week year.

(2)  Net income reflects a pro forma provision for income taxes assuming the
     Company's predecessors and an aquisition were C corporations rather than
     S corporations.

(3)  Other charges include asset impairment charges on the Company's long-lived
     assets. The pre-tax charges were $9,465,000 and $690,000 in 2000 and 1999
     respectively. The tax benefit of these charges was $3,288,000 and $235,000,
     thus the charges net of taxes were $6,177,000 ($1.30 per share) and
     $455,000 ($0.08 per share) in 2000 and 1999, respectively.

(4)  Excluding the charges described in footnote 3, basic earnings per share
     were $0.75 and $1.06 in 2000 and 1999, respectively. Diluted earnings per
     share were $0.75 and $1.03 in 2000 and 1999, respectively.


                                       15
<PAGE>

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

Introduction

     The Company is the largest franchisee of Papa John's pizza delivery and
carry-out restaurants. At December 31, 2000, the Company operated 176 Papa
John's restaurants in nine states and Puerto Rico.

     The Company's restaurants operate under separate franchise agreements,
which generally have terms between five and ten years (with renewal options
between five and ten years) and require payment of monthly royalties equal to 4%
of restaurant sales. The Company also has entered into development agreements
with PJI to open a certain number of restaurants over a defined period of time
within specific geographic areas. The Company's development agreements required
it to pay a non-refundable fee per restaurant covered by the respective
agreements and which fee is typically credited against the initial franchise fee
that the Company is required to pay for each new restaurant opened. The Company
amortizes development and franchise fees over a 20-year period, beginning with
the opening of a restaurant.

     Effective February, 2001, the Company merged all of its previous U.S.
geographic development agreements with PJI into a single development agreement.
In the new development agreement, the Company is required to open six
restaurants in 2001, then eight restaurants per year through 2006. In connection
with the new U.S. development agreement, the Company sold 22 development rights
in various geographic area back to PJI. Under the original development
agreements, the number of restaurants required to be opened in 2001, 2002, and
2003 was 18, 15 and 15 respectively. Therefore, the Company's pace of restaurant
openings is significantly slower.

     The Company is also required to open four restaurants per year in Puerto
Rico in 2001 and 2002, and three restaurants in 2003.

     The Company's growth strategy focuses on further developing the Papa John's
concept through: (i) building out its existing markets; (ii) acquiring and
developing new territories; and (iii) strategically acquiring existing Papa
John's franchisee groups and territories, if available.

     The average cash investment including franchise fees for the 24 restaurants
opened or acquired during 2000 was approximately $320,000, exclusive of land and
pre-opening costs. The Company expects the average cash investment for
restaurants opened in 2001 to be similar to 2000. The unit openings in 2001 will
primarily be in the New Markets. The average cash investment for domestic and
international restaurants in 2000 was approximately $280,000 and $450,000
respectively. The Company is focusing on reducing the cash investment of future
restaurants, especially international.

     For restaurants open throughout 2000, average sales were $692,000, compared
to average sales in 1999 of $731,000, with the restaurant base increasing 30%
(152 restaurants from 117 restaurants).

                                       16
<PAGE>

2000 Compared to 1999

     Restaurant Sales. Restaurant sales increased 16% to $111.1 million in 2000,
from $95.5 million in 1999. This increase was primarily due to a 23% increase in
the number of equivalent restaurants open during 2000 as compared to 1999.
"Equivalent restaurants" represents the number of restaurants open at the
beginning of a given period, adjusted for restaurants opened, acquired, or sold
during the period on a weighted average basis. Fiscal 2000 was also a 53 week
year. Also, comparable sales decreased 0.1% in 2000 over 1999, for restaurants
open throughout both years. The total average unit sales decreased 5.0% from the
comparable periods in 1999 due to the significant increase in restaurants in the
Company's "New Markets", which primarily are restaurants located in Utah,
California, Oregon and Puerto Rico. The Company has also increased the level of
marketing expenditures; however, aggregate sales in 2000 have been less than
management's expectations. The Company's New Markets are experiencing a longer
time to mature, and based on the higher operating costs, specifically labor and
occupancy, losses in these markets have increased as the number of stores have
increased.

     Costs and Expenses. Cost of sales, which consists of food, beverage, and
paper costs, increased $3.8 million, and decreased as a percentage of restaurant
sales to 29.8% in 2000 from 30.7% in 1999. This percentage decrease is primarily
attributable to significantly lower average cheese costs in 2000, offset by
significant additional discounting, higher box costs and higher meat topping
costs. All of the Company's restaurants in the domestic United States receive
product from Papa John's International, Inc. ("PJI"), and each restaurant is
charged the same price for product, regardless of the location of the
restaurant.

     Salaries and benefits, which consist of all store level employee wages,
taxes and benefits, increased $5.6 million, and increased as a percentage of
restaurant sales to 29.1% in 2000 from 27.9% in 1999. The increase in salaries
and benefits as a percentage of restaurant sales was primarily due to the
increase in the proportion of restaurants in New Markets, a higher minimum wage
in California and Oregon, an average wage rate increase of approximately 3%, and
less leverage on projected sales.

     Other operating expenses include other restaurant level operating costs,
the material components of which are automobile mileage reimbursement for
delivery drivers, rent, royalties, utility expenses, and advertising expenses.
Other operating expenses increased $6.3 million, and increased as a percentage
of restaurant sales to 26.3% in 2000 compared to 24.0% in 1999. This percentage
increase is primarily attributable to less leverage on projected sales volumes,
higher advertising expenses, and a higher proportion of restaurants in New
Markets which have higher occupancy costs. Also, utility expenses in the second
half of 2000 were significantly higher than the comparable period in 1999.

     General and administrative expenses, which includes restaurant support
personnel and related costs of operations increased $2.0 million, and increased
as a percentage of restaurant sales to 6.1% in 2000 from 5.0% in 1999. This
increase was primarily due to additional corporate and field operations support
personnel to support current and future growth, and less leverage on sales. In
the second half of 2000, the Company also incurred approximately $350,000 of
costs associated with operations management restructuring, including recruitment
and relocation expenses. Also, in the fourth quarter of 2000, the Company
increased salaries for its restaurant supervisory and corporate operations
support personnel, to bring base compensation closer to market.

                                       17
<PAGE>

     Depreciation and amortization increased by $.9 million, and increased as a
percentage of restaurant sales to 3.7% in 2000 from 3.4% in 1999. The dollar and
percentage increases were primarily attributable to a higher proportion of newer
restaurants in New Markets (thus lower sales and less leverage), and higher
costs of restaurants.

     Other Charges. The Company periodically reviews the carrying value of its
long-lived assets (primarily property, equipment, leasehold improvements and
intangible assets) to assess the recoverability of these assets. The Company
records impairment losses on long-lived assets used in operations when events
and circumstances indicate that the assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amount of those assets. When a determination is made that the
carrying value is not recoverable, the assets are written down to their
estimated fair value.

     During the fourth quarter of fiscal 2000, the Company recorded an
impairment charge of $9.5 million of which $.7 million related to goodwill, $1.6
million related to development and franchise fee, and $7.2 million related to
property and equipment. Based upon current and future estimated operating
results and cash flows, management believed that numerous restaurants would
likely continue to generate operating and cash flow losses over the related
remaining lease terms and therefore reduced the carrying value of the impaired
assets to estimated fair market value. As is the case with all estimates that
involve predictions of future outcomes, management's estimates of future
operating results, cash flows and fair market value is subject to change. The
impairment charge related primarily to restaurants in the New Markets. The
Company is evaluating these restaurants to determine an appropriate course of
action to improve the operations or potential closure and recently hired a Chief
Operating Officer in January 2001, who is assisting in this evaluation. If the
Company continues to experience declines in operating and cash flow results, the
Company may incur additional asset impairment charges in the future. As a result
of the impairment charge, the depreciation and amortization expense will
decrease by approximately $400,000.

     Other Income (Expense). Other income (expense), which consists primarily of
investment income offset by interest expense decreased $.7 million from 1999.
During 2000, the Company used its available investment balance to partially fund
stock repurchase. At the end of 2000, the Company had no investment balance
remaining, and the Company had $4.0 million of debt outstanding on its revolving
line of credit.

     Income Tax Expense (Benefit). Income tax expense (benefit) reflects a
combined federal, state and local effective tax (benefit) rate of 34.3% for
2000, compared to 34.0% in 1999. The effective income tax rate in 2000 increased
as compared to the 1999 rate as a result of a significant decrease in the
relative level of tax-exempt investment income to total pre-tax income, and that
the remaining difference was the result of less state tax benefit in 2000 due to
the impairment loss.

                                       18
<PAGE>

1999 Compared to 1998

     Restaurant Sales. Restaurant sales increased 39% to $95.5 million in 1999,
from $68.6 million in 1998. This increase was primarily due to a 50.5% increase
in the number of equivalent restaurants open during 1999 as compared to 1998.
"Equivalent restaurants" represents the number of restaurants open at the
beginning of a given period, adjusted for restaurants opened, acquired, or sold
during the period on a weighted average basis. Also, comparable sales increased
2.3% in 1999 over 1998, for restaurants open throughout both years. The total
average unit sales decreased 7.2% from the comparable periods in 1998 due to the
significant increase in new and acquired restaurants in the Company's "New
Markets".

     Costs and Expenses. Cost of sales, which consists of food, beverage, and
paper costs, increased $7.1 million, and decreased as a percentage of restaurant
sales to 30.7% in 1999 from 32.3% in 1998. This percentage decrease is primarily
attributable to significantly lower average cheese costs in the last quarter of
1999, partially offset by a slight shallowing of discounts, and a higher
proportion of units in New Markets. For fiscal 2000, the Company anticipates
cheese costs, the most volatile food cost, to be less volatile based on the
Company's participation in a franchisee-owned cheese cooperative. All of the
Company's restaurants in the domestic United States receive product from PJI,
and each restaurant is charged the same price for product, regardless of the
location of the restaurant. In 1999, the Company's selling prices were higher in
California, Oregon, and Puerto Rico, thus cost of sales as a percentage of
restaurant sales was lower.

     Salaries and benefits, which consist of all store level employee wages,
taxes and benefits, increased $8.4 million, and increased as a percentage of
restaurant sales to 27.9% in 1999 from 26.6% in 1998. The increase in salaries
and benefits as a percentage of restaurant sales was primarily due to the
increase in the proportion of new and acquired restaurants in New Markets, and
also a higher minimum wage in California, Oregon and Washington.

     Other operating expenses include other restaurant level operating costs,
the material components of which are automobile mileage reimbursement for
delivery drivers, rent, royalties, utility expenses, and advertising expenses.
Other operating expenses increased $6.9 million, and increased as a percentage
of restaurant sales to 24.0% in 1999 compared to 23.3% in 1998. This percentage
increase is primarily attributable to a higher proportion of newer restaurants
(thus lower sales and less leverage) and higher occupancy costs in New Markets.

     General and administrative expenses increased $1.4 million and decreased as
a percentage of restaurant sales to 5.0% in 1999 from 5.1% in 1998.

     Depreciation and amortization increased by $1.2 million, and increased as a
percentage of restaurant sales to 3.4% in 1999 from 3.0% in 1998. The dollar and
percentage increases were primarily attributable to a higher proportion of newer
restaurants in New Markets (thus lower sales and less leverage), and
amortization of goodwill of acquired businesses in 1998.


                                       19
<PAGE>

Special charges include litigation compliance and asset impairment costs
consists of $.3 million related to signage and other costs for the re-imaging of
the Papa John's slogan and $.4 million related to asset impairment of
restaurants.

     Other Income. Other income which consists primarily of investment income
decreased $.3 million from 1998. The decrease in investment income is a result
of a lower investment balance due to the acquired businesses in 1998 and the
Company's stock repurchases in 1999.

     Income Tax Expense. Income tax expense (exclusive of the cumulative effect
of accounting change and related taxes) reflects a combined federal, state and
local effective tax rate of 34.0% in 1999, compared to 33.0% in 1998. The
effective income tax rate increased as compared to 1998 as a result of a
decrease in tax exempt income compared to total income.

Liquidity and Capital Resources

     The Company requires capital primarily for the development of new
restaurants, (which include franchise and development fees), and for existing
restaurant improvements. In 2000, capital expenditures of $9.7 million and share
repurchases of $10.7 million were primarily funded by cash flow from operations,
liquidation of available cash and investments, and from increases in the line of
credit facility.

     Additionally, the Company also may repurchase its common stock from time to
time. In September 2000, the Company's Board authorized an additional $10.0
million stock buyback, for a total authorization of $30 million. Through
December 31, 2000, the Company had repurchased 1,624,000 shares for a total of
$19.0 million; therefore, approximately $11.0 million remained on the buyback
authorization.

     Capital expenditures are expected to be approximately $4.0 million for
2001, all of which is expected to be for restaurant development and existing
restaurant improvements. The Company also may acquire the operations of other
Papa John's franchisees if such operations become available on terms
satisfactory to the Company. Capital resources at December 31, 2000 include $2.4
million of cash and $6.0 million remaining in the Company's $10.0 million line
of credit facility. The Company plans to fund its capital expenditures in 2001
and future years from available cash, cash generated from operations, and credit
line availability.

     In February 2001, the Company entered into a two year $15 million Revolving
Line of Credit Facility with Bank One, Kentucky NA, that matures January 31,
2003, and replaces the above mentioned $10 million credit line.

                                       20
<PAGE>

Impact of Inflation

     Excluding labor costs, the Company does not believe inflation has
materially affected earnings during the past three years. Substantial increases
in costs, particularly labor, employee benefits or food costs, could have a
significant impact on the Company in the future. Rising labor costs have
pressured margins, especially in 2000. The Company has increased wages to remain
competitive in the restaurant industry.

     Cheese, representing approximately 40% of our food cost, is subject to
seasonal fluctuations, weather, demand and other factors that are beyond our
control. Effective December 27, 1999, PJI's commissary entered into a purchasing
arrangement with a third-party entity formed at the direction of the PJI's
Franchise Advisory Council for the sole purpose of reducing cheese price
volatility. Under this arrangement, the commissary will purchase cheese at a
fixed quarterly price based, in part, on historical average cheese prices. Gains
and losses incurred by the selling entity will be passed to the commissary via
adjustments to the selling price over time. Ultimately the commissary will
purchase cheese at a price approximating the actual average market price, but
with more predictability and less volatility than previous purchasing method.

     Impact of Year 2000

     The Company is now Year 2000 compliant and there were no adverse events
that occurred and no contingency plans were required to be implemented relating
to the Year 2000 problem at year-end 1999. The Company spent approximately
$10,000 in the year 1999 for its year 2000 readiness efforts. These expenses
included replacing some outdated, non-compliant hardware and non-compliant
software as well as identifying and remediating known Year 2000 problems. The
Company does not anticipate any future exposure related to the year 2000 issue.

Forward Looking Statements

     Certain information contained in this annual report, particularly
information regarding future financial performance and plans and objectives of
management, is forward looking. Certain factors could cause actual results to
differ materially from those expressed in forward looking statements. These
factors include, but are not limited to, our ability to obtain suitable
locations and financing for new restaurant development; the hiring, training,
and retention of management and other personnel; competition in the industry
with respect to price, service, location, and food quality; an increase in food
cost due to seasonal fluctuations, weather, and demand; changes in consumer
tastes and demographic trends; changes in federal and state laws, such as
increases in minimum wage; and risks inherent to international development.

Item 7a.  Qualitative and Quantitative Disclosures About Market Risk

     We had no holdings of derivative financial or commodity instruments at
December 31, 2000.

     The Company's exposure to financial market risks in 2000 and going forward
is the impact that interest rate changes could have on the interest expense
incurred on borrowings under our revolving credit agreement (see "Note 8" of
"Notes to Consolidated Financial Statement"). All such borrowings bear interest
at a variable rate based on the prime rate, the London Interbank Offered Rate
(LIBOR), or certain alternative short-term rates. A change in interest rates of
100 basis points would not significantly affect our net income.

                                       21
<PAGE>

Item 8.  Financial Statements and Supplementary Data

The following table sets forth the percentage relationship to restaurant sales
for certain income statement of operations data for the Company:

<TABLE>
<CAPTION>
                                                                        For the Years Ended (1)
                                                       ------------------------------------------------------------
                                                               Dec. 27,            Dec. 26,            Dec. 31,
                                                                 1998                1999                2000
                                                       ------------------------------------------------------------
<S>                                                    <C>                          <C>                 <C>
Restaurant sales                                                100.0%              100.0%              100.0%
Cost and expenses:
     Cost of sales                                               32.3                30.7                29.8
     Salaries and benefits                                       26.6                27.9                29.1
     Other operating expenses                                    23.3                24.0                26.3
     General and administrative expenses                          5.1                 5.0                 6.1
     Depreciation and amortization                                3.0                 3.4                 3.7
     Other charges                                                  -                 0.7                 8.5
                                                       ------------------------------------------------------------
          Total costs and expenses                               90.3                91.7               103.5
                                                       ------------------------------------------------------------
Operating income (loss)                                           9.7                 8.3                (3.5)
Other income (expense)                                            1.3                 0.7                (0.1)
                                                       ------------------------------------------------------------
Income (loss) before income taxes and cumulative
  effect ofchange in accounting principle                        11.0                 9.0                (3.6)
Income tax expense (benefit)                                      3.6                 3.1                (1.2)
                                                       ------------------------------------------------------------
Income (loss) before cumulative effect of change
  in accounting principle                                         7.4                 5.9                (2.4)
Cumulative effect of accounting change, net of tax                  -                (0.2)                  -
                                                       ------------------------------------------------------------
Net income (loss)                                                 7.4%                5.7%               (2.4)%
                                                       ============================================================

Restaurant data - the Company:                                   1998                1999                2000
                                                       ------------------------------------------------------------
     Percentage change in comparable restaurant sales             4.5%                2.3%               (0.1)%
     Average sales for restaurants open for
        full year (in thousands)                              $   774             $   731             $   693
                                                       ============================================================

Number of restaurants:
     Beginning of year                                             73                 119                 152
     Opened                                                        25                  35                  23
     Acquired                                                      21                   -                   1
     Sold                                                           -                  (2)                  -
                                                       ------------------------------------------------------------
     End of year                                                  119                 152                 176
                                                       ============================================================
</TABLE>

(1)  The Company operates on a 52-53 week year ending on the last Sunday in
     December each year. 2000 was a 53 week year.






                                       22
<PAGE>

             Index to Financial Statements and Supplementary Data

<TABLE>
<CAPTION>
                                                                                                  Page
                                                                                                  ----
<S>                                                                                               <C>
Audited Consolidated Financial Statements

Consolidated Balance Sheets as of December 26, 1999 and December 31, 2000.......................   24

Consolidated Statements of Operations for the Years Ended December 27, 1998,
     December 26, 1999 and December 31, 2000 ...................................................   25

Consolidated Statements of Stockholders' Equity for the Years Ended
     December 27, 1998, December 26, 1999 and December 31, 2000.................................   26

Consolidated Statements of Cash Flows for the Years Ended December 27, 1998,
     December 26, 1999 and December 31, 2000....................................................   27

Notes to Consolidated Financial Statements......................................................   28

Report of Management............................................................................   42

Report of Independent Auditors..................................................................   43
</TABLE>

                                       23
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                       Dec. 26,       Dec. 31,
(In thousands, except per share data)                                    1999           2000
                                                                      -----------------------
<S>                                                                   <C>             <C>
                             ASSETS
                             ------
Current assets:
     Cash and cash equivalents                                        $ 2,648         $ 2,354
     Inventories                                                          910             685
     Prepaid expenses and other                                           420              86
     Investments                                                        2,879               -
     Deferred income taxes                                                294             124
                                                                      -----------------------
          Total current assets                                          7,151           3,249
Investments                                                             4,050               -
Net property and equipment                                             28,187          26,953
Deferred franchise and development costs, net of
  accumulated amortization of $410 in 1999 and
  $618 in 2000                                                          3,854           2,067
Goodwill, net of accumulated amortization of $295 in 1999
  and $471 in 2000                                                      4,413           3,511
Deferred income taxes                                                       -           1,375
Other assets                                                              282             416
                                                                      -----------------------
          Total assets                                                $47,937         $37,571
                                                                      =======================

     LIABILITIES AND STOCKHOLDERS' EQUITY
     ------------------------------------
Current liabilities:
     Accounts payable                                                 $   583         $   810
     Accrued expenses                                                   4,325           4,457
                                                                      -----------------------
          Total current liabilities                                     4,908           5,267

Deferred income taxes                                                   1,491               -
Long term debt-net of current portion                                       -           4,000

Stockholders' equity:
     Preferred stock ($1.00 par value per share;
      authorized
        1,000 shares, no shares issued and outstanding)                     -               -
     Common stock ($.01 par value per share; authorized
        20,000 shares; issued and outstanding shares of
        5,416 in 1999 and 4,324 in 2000)                                   54              43
     Additional paid-in-capital                                        31,675          25,078
     Retained earnings                                                  9,809           3,183
                                                                      -----------------------
          Total stockholders' equity                                   41,538          28,304
                                                                      -----------------------

          Total liabilities and stockholders' equity                  $47,937         $37,571
                                                                      =======================

</TABLE>
                           (See accompanying notes)

                                       24
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                       For the Years Ended
                                                        -------------------------------------------------
                                                                Dec. 27,        Dec. 26,         Dec. 31,
                                                                 1998            1999             2000
                                                        -------------------------------------------------
<S>                                                      <C>                     <C>            <C>
(In thousands, except per share amounts)
Restaurant sales                                                 $68,586         $95,489         $111,080

Restaurant operating expenses:
     Cost of sales                                                22,153          29,285           33,104
     Salaries and benefits                                        18,272          26,649           32,284
     Other operating expenses                                     15,971          22,871           29,193
     Depreciation and amortization                                 2,078           3,243            4,160
                                                        -------------------------------------------------
                                                                  58,474          82,048           98,741
                                                        -------------------------------------------------

Restaurant operating income                                       10,112          13,441           12,339
General and administrative expenses                                3,466           4,811            6,803
Other charges                                                          -             690            9,465
                                                        -------------------------------------------------
Operating income (loss)                                            6,646           7,940           (3,929)

Other income (expense)                                               916             617              (62)
                                                        -------------------------------------------------

Income (loss) before income taxes and
 cumulative
  effect of change in accounting principle                         7,562           8,557           (3,991)
Income tax expense (benefit)                                       2,495           2,909           (1,371)
                                                        -------------------------------------------------
Income (loss) before cumulative effect of change
  in accounting principle                                          5,067           5,648           (2,620)
Cumulative effect of change in accounting
  principle, net of taxes                                              -            (181)               -
                                                        -------------------------------------------------
Net income (loss)                                                $ 5,067         $ 5,467         $ (2,620)
                                                        =================================================
Basic earnings (loss) per share:
     Income (loss) before cumulative effect of
       change in accounting principle                            $  0.88         $  0.98         $  (0.55)
     Cumulative effect of accounting change,
       net of taxes                                                    -            (.03)               -
                                                        -------------------------------------------------
     Net income (loss) per share - Basic                         $  0.88         $  0.95         $  (0.55)
                                                        =================================================
Diluted earnings (loss) per share:
     Income (loss) before cumulative effect of
       change in accounting principle                            $  0.86         $  0.95         $  (0.55)
     Cumulative effect of accounting change
       net of taxes                                                    -            (.03)               -
                                                        -------------------------------------------------

     Net income (loss) per share - Diluted                       $  0.86         $  0.92         $  (0.55)
                                                        =================================================
Weighted average shares outstanding - Basic                        5,777           5,744            4,739
                                                        =================================================
Weighted average shares outstanding - Diluted                      5,919           5,942            4,739
                                                        =================================================
</TABLE>

                           (See accompanying notes)

                                      25


<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                   Common Stock            Additional                     Total
                                             -----------------------------
                                                                           Paid-In       Retained    Stockholders'
                                                Shares        Amount       Capital       Earnings        Equity
                                             ------------------------------------------------------------------------
<S>                                             <C>           <C>          <C>           <C>         <C>
(In thousands)

Balance, December 28, 1997                         5,782          $ 58       $32,197       $ 4,552        $ 36,807
     Net income                                        -             -             -         5,067           5,067
     Proceeds from exercise of stock options          45             -           675             -             675
     Repurchases of common stock (retired)           (55)            -          (307)         (496)           (803)
                                             ---------------------------------------------------------------------
Balance, December 27, 1998                         5,772            58        32,565         9,123          41,746

     Net income                                        -             -             -         5,467           5,467
     Proceeds from exercise of stock options         116             1         1,841             -           1,842
     Repurchases of common stock (retired)          (472)           (5)       (2,731)       (4,781)         (7,517)
                                             ---------------------------------------------------------------------
Balance, December 26, 1999                         5,416            54        31,675         9,809          41,538

     Net (loss)                                        -             -             -        (2,620)         (2,620)
     Proceeds from exercise of stock options           5             -            71             -              71
     Repurchases of common stock (retired)        (1,097)          (11)       (6,668)       (4,006)        (10,685)
                                             ---------------------------------------------------------------------
Balance, December 31, 2000                         4,324          $ 43       $25,078       $ 3,183        $ 28,304
                                             =====================================================================
</TABLE>


                           (See accompanying notes)


                                       26
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOW

<TABLE>
<CAPTION>
                                                                          For the Years Ended
                                                           ----------------------------------------------
                                                                   Dec 27,        Dec 26,         Dec 31,
                                                                    1998            1999            2000
                                                           ----------------------------------------------
<S>                                                       <C>                  <C>              <C>
Operating activities:
Net income (loss)                                               $  5,067        $  5,467        $ (2,620)
Adjustments to reconcile net income to net
  cash provided by operating activities:
Depreciation and amortization                                      2,078           3,243           4,160
Other charges                                                          -             690           9,465
Deferred income taxes                                                380             397          (2,696)
Changes in operating assets and liabilities:
     Inventories                                                    (140)           (361)            225
     Prepaid expenses and other                                       31            (156)            334
     Accounts payable                                               (127)             75             227
     Accrued expenses                                                402             259             132
     Other                                                           362               -               -
Other assets                                                          53             (73)           (134)
                                                           ---------------------------------------------
Net cash provided by operating activities                          8,106           9,541           9,093

Investing Activities:
Purchases of property, equipment, franchise and
  development fees                                               (10,005)        (11,119)         (9,702)
Purchases of investments                                         (36,154)        (45,130)              -
Proceeds from maturity of investments                             44,040          51,547           6,929
Acquisitions                                                      (9,049)              -               -
                                                           ---------------------------------------------
Net cash used in investing activities                            (11,168)         (4,702)         (2,773)

Financing Activities:
Proceeds from (payments on) PJI borrowings                         1,345          (1,345)              -
Proceeds from exercise of stock options                              675           1,842              71
Repurchases of common stock                                         (803)         (7,517)        (10,685)
Proceeds from Credit Line                                              -               -           6,000
Payments on Credit Line                                                -               -          (2,000)
Issuance of stockholder notes                                        197            (197)              -
                                                           ---------------------------------------------
Net cash provided by (used in) financing activities                1,414          (7,217)         (6,614)
                                                           ---------------------------------------------

Net increase (decrease) in cash and cash equivalents              (1,648)         (2,378)           (294)
Cash and cash equivalents at beginning of year                     6,674           5,026           2,648
                                                           ---------------------------------------------
Cash and cash equivalents at end of year                        $  5,026        $  2,648        $  2,354
                                                           =============================================
</TABLE>
                           (See accompanying notes)

                                      27
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   Description of Business

     The Company operates pizza delivery and carry-out restaurants under the
trademark "Papa John's" in nine states and Puerto Rico. At December 31, 2000,
the Company operated 176 restaurants.

2.   Significant Accounting Policies

Principles of Consolidation

     The accompanying consolidated financial statements include the accounts of
PJ America, Inc. and its wholly-owned subsidiaries (the Company). All
significant inter-company transactions between the consolidated companies have
been eliminated.

Fiscal Year

     The Company's fiscal year ends on the last Sunday in December of each year.
Fiscal 2000 was a 53 week year.

Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from these estimates.

Cash Equivalents

     At December 31, 2000, the Company did not have any significant cash
equivalents. Cash equivalents historically consisted of highly liquid
investments with a maturity of three months or less at date of purchase. These
investments were carried at cost, which approximated fair value.

Inventories

     Inventories consist of food products, paper goods and supplies and are
stated at the lower of cost, determined under the first-in, first-out (FIFO)
method, or market. Virtually all of the Company's food products and supplies are
purchased from PJI.

                                       28
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


2.   Significant Accounting Policies (continued)


Property and Equipment

     Property and equipment are stated at cost. Depreciation is provided using
the straight-line method over the estimated useful lives of the assets, which
range from three to ten years for restaurant, commissary, and other equipment,
20 to 25 years for restaurant buildings and improvements, and 40 years for the
Company's office building. Leasehold improvements are amortized over the terms
of the respective leases, including the first renewal period (generally five to
ten years). Normal repair and maintenance costs are expensed as incurred.

Investments

     At December 31, 2000, the Company did not have any investments.
Historically, the Company determined the appropriate classification of
investment securities at the time of purchase and reevaluated such designation
as of each balance sheet date. All investment securities held by the Company had
been classified as held-to-maturity. Held-to-maturity investment securities are
stated at amortized cost with any amortization of premiums and accretion of
discounts included in other income.

Development and Franchise Fees

     Development fees paid by the Company to PJI (or for the acquisition of
another franchisee territory) for the right to open restaurants in a geographic
area are deferred and amortized to expense on a pro rata basis as each
restaurant is opened. Franchise fees are generally paid when each restaurant is
opened and are deferred and amortized. Deferred development and franchise fees
are amortized over a 20 year period using the straight-line method beginning
with the opening of each restaurant.

Goodwill

     Goodwill represents the excess of cost over fair value of assets acquired
and is being amortized over 20-30 years using the straight-line method. The
Company reviews the carrying value of goodwill if the facts and circumstances
suggest that it may be impaired. If this review indicates that goodwill will not
be recoverable based upon the undiscounted expected future cash flows over the
remaining amortization periods, the Company's carrying value of goodwill is
reduced by the excess of the carrying value over the estimated fair value of the
entity acquired.

                                       29
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


2.   Significant Accounting Policies (continued)


Advertising and Related Costs

     Advertising and related costs include restaurant activities such as mail
coupons, doorhangers, promotional items, and required contributions to PJI's
production fund (1.25% of restaurant sales). Such amounts are expensed as
incurred and were approximately $4.6 million, $7.1 million and $9.3 million in
1998, 1999 and 2000, respectively, and are included in other operating expenses
in the consolidated statements of income.

Long-Lived Assets

     In accordance with Financial Accounting Standards Board (FASB) Statement
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, the Company records impairment losses on long-lived
assets used in operations and intangible assets including allocated goodwill
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amounts. In fiscal 2000, the Company recorded an impairment charge of which $7.2
million related to property and equipment, $1.6 million related to development
and franchise fees, and $.7 million related to goodwill. (See Note 3)

Stock-Based Compensation

     The Company follows the provisions of Accounting Principles Board Opinion
(APB) No. 25 for its stock-based compensation awards (see Note 14).

Net Income (Loss) Per Share

     Net income (loss) per share is based on the weighted average number of
shares of common stock outstanding (Basic) and common stock equivalents during
the period (Diluted). (see Note 14).

Income Taxes

     The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes." In accordance with the
provisions of SFAS No. 109, deferred income taxes reflect the temporary tax
consequences on future years of differences between the tax and financial
statement basis of assets and liabilities.

Pre-Opening Costs - Restaurants

     Restaurant pre-opening costs, which represent expenses incurred before a
restaurant opens, are expensed as incurred.

                                       30
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


2.   Significant Accounting Policies (continued)

Deferred Commissary Start-Up Costs - Accounting Changes

     In the first quarter of 1999, the Company adopted the American Institute of
CPAs Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-up
Activities," which requires entities to expense all start-up and pre-opening
costs as they are incurred. The Company previously deferred commissary start-up
costs and amortized them over a period of one year from the facility's opening
date. The cumulative effect of this change in accounting principle, net of tax,
was $181 thousand or $.03 per share and has been recorded in the first quarter
of 1999 as required by the SOP.

Prior Year Data

     Certain prior year data has been reclassified to conform to the 2000
presentation.

3.   Other Charges

     During the fourth quarter of 2000, the Company recorded an asset impairment
charge of $9.5 million to reduce the carrying value of equipment, leaseholds,
and intangible assets of the Company's restaurants to their estimated fair
market value (See Note 2). Based upon current and future estimated operating
results and cash flows, management believed that numerous restaurants would
likely continue to generate operating and cash flow losses over the related
remaining lease terms and therefore reduced the carrying value of the impaired
assets to estimated fair market value. As is the case with all estimated that
involve predictions of future outcomes, management's estimates of future
operating results, cash flows and fair market value is subject to change. The
impairment charge related primarily to restaurants in New Markets. The Company
is evaluating these restaurants to determine an appropriate course of action to
improve the operations or potential closure and recently hired a Chief Operating
Officer in January 2001, who is assisting in this evaluation.

4.   Business Combinations

     In May 1998, the Company acquired a 22-restaurant Papa John's territory in
Southern Louisiana, which included nine existing restaurants, five restaurants
under development, and development rights for eight additional restaurants. The
purchase price was $4.3 million in cash and a short term note payable to
sellers, plus the assumption of $1.4 million of debt, which was immediately
retired. The above acquisition was with certain Company directors and officers,
including the Chairman of the Board and Chief Executive Officer.

                                       31
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



4.   Business Combinations  (continued)

     In September 1998, the Company acquired a 30-restaurant Papa John's
territory in Utah, which included 12 existing restaurants and development rights
for 18 additional restaurants. The purchase price was $.8 million in cash plus
the assumption of $2.5 million of debt, which was immediately retired. The above
acquisition was with certain Company directors and officers, including the
Chairman of the Board and Chief Executive Officer.

     The above business combinations were accounted for by the purchase method
of accounting, whereby operating results subsequent to the acquisition date have
been included in the Company's consolidated financial statements.

                                       32
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


5.   Investments

     At December 31, 2000, the Company had no investments.

     A summary of the Company's held-to-maturity securities, principally
corporate debt securities and municipal bonds, as of December 26, 1999 follows
(in thousands):

<TABLE>
<CAPTION>
                                       Gross              Gross
                     Amortized       Unrealized         Unrealized       Estimated
                       Cost         Holding Gains     Holding Losses     Fair Value
                     ----------------------------------------------------------------
<S>                  <C>            <C>               <C>                <C>
1999                  $6,929         $      -             $  (49)          $6,880
                     ================================================================
</TABLE>


6.   Net Property and Equipment

     Net property and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                         December 26,       December 31,
                                                            1999                2000
                                                         ------------------------------
<S>                                                      <C>                <C>
          Land                                            $ 1,276            $  1,276
          Building and leasehold improvements              18,066              18,603
          Commissary and restaurant equipment              16,691              18,273
          Construction in process                             648                 275
                                                         ----------------------------
                                                           36,681              38,427
          Less accumulated depreciation                    (8,494)            (11,474)
                                                         ----------------------------
          Net property and equipment                      $28,187            $ 26,953
                                                         ============================
</TABLE>

                                       33
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


7.   Accrued Expenses

     Accrued expenses consists of the following (in thousands):


                                               1999               2000
                                          ------------------------------

          Salaries and wages                 $  782              $  907
          Taxes, other than income              655                 750
          Advertising and royalties             396                 518
          Other                               2,492               2,282
                                          -----------------------------
                                             $4,325              $4,457
                                          =============================

8.   Revolving Credit Facility

     As of December 31, 2000, the Company had a $10.0 million committed line of
     credit agreement expiring on May 2, 2001. At December 31, 2000, $4.0
     million was outstanding. Effective January 31, 2001, the Company entered
     into a new $15.0 million unsecured revolving line of credit facility with
     an expiration date of January 31, 2003. Outstanding balances for this
     facility currently accrue interest at 100.0 basis points over LIBOR or
     other developed rates at our option. The commitment fee on the unused
     balance is 25.0 basis points per annum. The increment over LIBOR and the
     commitment fee are determined quarterly based upon the ratio of total
     indebtedness to earnings before interest, taxes, depreciation and
     amortization (EBITDA). On February 8, 2001, $3.5 million was outstanding
     under this facility.

9.   Cheese Pricing Arrangement

     Papa John's Franchise Advisory Council has initiated a program that allows
     the cost of cheese to Papa John's restaurants to be established on a
     quarterly basis. An independent franchisee-owned corporation, BIBP
     Commodities, Inc. ("BIBP"), purchases cheese at the market price and sells
     it to PJI's distribution subsidiary, PJ Food Service, Inc. (PJFS), at a
     fixed quarterly price based in part upon historical average market prices.
     PJFS in turn sells cheese to Papa John's restaurants (Franchisor-owned and
     franchised) at a set quarterly price. Gains or losses incurred by BIBP due
     to differences in the actual market price of cheese purchased and the
     established quarterly sales price are factored into determining the price
     for the following quarter.

     The company owns 18% of BIBP, and the investment is recorded in other
     assets and is carried at cost.

                                       34
<PAGE>

                      PJ AMERICA, INC. AND  SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


10.  Income Taxes

     A summary of income tax expense is as follows (in thousands):


                                               1998        1999         2000
          Current                              ----        ----         ----

            Federal                           $1,925      $2,283      $ 1,135
            State and local                      190         229          190
          Deferred (federal and state)           380         397       (2,696)
                                              -------------------------------
          Income tax expense                  $2,495      $2,909      $(1,371)
                                              ===============================


     Net deferred tax assets (liabilities) as of December 26, 1999 and December
31, 2000 are comprised of the following (in thousands):


<TABLE>
<CAPTION>
                                                                     1999          2000
                                                                     ----          ----
<S>                                                                <C>          <C>
         Deferred tax assets - short-term - nondeductible
               reserves and accruals                               $   294      $   124
          NOL carry forward - international and state                  176          364
          Deferred tax asset - asset impairment charge                   -        3,106
          Deferred tax liabilities - accelerated depreciation       (1,667)      (2,095)
                                                                   --------------------
          Net deferred tax assets (liabilities)                    $(1,197)     $ 1,499
                                                                   ====================
</TABLE>

     The reconciliation of income tax computed at the U.S. federal statutory
rate to income tax expense is as follows (in thousands):


<TABLE>
<CAPTION>
                                                                    1998           1999           2000
                                                                    ----           ----           ----
<S>                                                                <C>            <C>           <C>
Income tax expense at U.S. federal statutory rates (34%)           $2,571         $2,909        $(1,357)
Increases (decreases) resulting from:
State and local income taxes - net                                    125            151            125
Tax exempt interest income                                           (242)          (135)           (12)
Other                                                                  41            (16)          (127)
                                                                   ------------------------------------
Income tax expense                                                 $2,495         $2,909        $(1,371)
                                                                   ====================================
</TABLE>

Income tax payments amounted to $1.8 million, $1.8 million and $1.1 million in
1998, 1999, and 2000, respectively.

                                       35
<PAGE>

                      PJ AMERICA, INC. AND  SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


11.  Related Party Transactions

Franchisor

     Under the terms of the current area development agreements between the
Company and PJI, the Company paid development fees of $5,000 per restaurant.
Currently, franchise fees of $15,000 have been paid as each new restaurant was
opened. Royalties in the amount of 4% of restaurant sales are paid monthly to
PJI, and a monthly contribution of 1.25% of sales is paid to the Marketing Fund
of PJI. The Company is required to buy certain proprietary food products from
PJI's commissary subsidiary and has elected to buy substantially all other food
products, supplies, marketing materials and equipment from PJI or its
subsidiaries.

     The Company's franchise and development agreements with PJI contain certain
requirements regarding the number of units to be opened in the future. Should
the Company fail to comply with the required development schedule or with the
requirements of the agreements for restaurants within areas covered by the
development agreements, PJI has the right to terminate the exclusive nature of
the Company franchises. The franchise agreements also provide PJI with
significant rights regarding the business and operations of the Company.

     In connection with the Company's Initial Public Offering in October 1996,
the Company issued a warrant to PJ USA (a subsidiary of PJI) to purchase 225,000
shares of common stock at $11.25 per share. The warrant was issued in
consideration for, among other things, the rights to enter into development
agreements and the waiver of rights of first refusal of certain affiliated
franchisees. The Company expects to pay all standard development and franchise
fees in connection with operating restaurants in these territories. The warrant
is exercisable in whole or in part at any time until October 30, 2001.

Affiliate Market

     Certain officers and directors of the Company own equity interests in other
entities that franchise Papa John's restaurants. The Company has obtained a
right of first refusal to acquire franchise and development rights for PJ Iowa,
LLC. However, there is no agreement or understanding between the Company and
these entities or stockholders to acquire such entities or their assets.

     As noted in Note 4, the acquisitions have been made between the Company and
certain Company directors and officers.

                                       36
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


12.  Leases

     The Company primarily leases restaurant retail space under operating leases
with terms generally ranging from three to five years and providing for at least
one renewal. Certain leases further provide that the lease payments may be
increased annually based on the Consumer Price Index. Future minimum lease
payments are as follows (in thousands):


               2001             3,677
               2002             3,361
               2003             2,623
               2004             1,704
               2005             1,030
               Thereafter       1,307
                              -------
                              $13,702
                              =======

     Rent expense was approximately $1.5 million, $2.4 million and $3.2 million
in 1998, 1999, and 2000, respectively.


13.  Stock Repurchases

     In September 2000, the Board of Directors authorized the Company to
purchase an additional $10 million of its common stock in both open market
purchases as well as private transactions. This brought the total authorization
to $30 million. As of December 31, 2000, the Company had repurchased and
immediately retired 1,624,000 shares at various prices totaling $19.0 million.

14.  Stock Options

     In 1996, the Company adopted Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). In accordance
with SFAS 123, the Company has elected to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and
related Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under SFAS
123 requires the use of option valuation models that were not developed for use
in valuing employee stock options. Under APB 25, because the exercise price of
the Company's employee stock options equals or exceeds the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

     The Company awards stock options under the PJ America, Inc. 1996 Stock
Ownership Incentive Plan (the "Incentive Plan") and the PJ America, Inc. 1996
Non-Employee Directors' Stock Option Plan (the "Directors' Plan"). Shares of
common stock authorized for issuance are 1,500,000 under the Incentive Plan and
240,000 under the Directors' Plan. Options granted under both plans generally
expire ten years from the date of grant and vest over one to four year periods.

                                       37
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


14.  Stock Options (continued)

     The Incentive Plan also provides for awards of restricted stock, however
the Company has not granted any such awards.

     SFAS 123 requires disclosure of pro forma net income and earnings per share
as if the Company had accounted for employee stock options granted subsequent to
December 25, 1994 under the fair value method. The fair value for these options
was estimated at the dates of grant using a Black-Scholes option pricing model
with the following weighted-average assumptions for 2000, 1999, and 1998,
respectively: risk-free interest rates of 5.75% for 2000 and 6.0% for 1999 and
1998; a dividend yield of 0%; volatility factors of the expected market price of
the Company's common stock of .55, .93, and .49, respectively; and a weighted-
average expected life of the options of 4.0, 3.5 and 4.0 years, respectively.

     The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair market value of its employee stock options.

     For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting periods. The Company's
pro forma information follows (in thousands, except per share amounts):


                                                 1998     1999      2000
--------------------------------------------------------------------------
Pro forma net income (loss)                     $4,475   $4,464   $(3,420)
Pro forma earnings (loss) per share - Basic       0.77     0.78     (0.72)
Pro forma earnings (loss) per share - Diluted     0.75     0.75     (0.72)

                                       38
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


14.  Stock Options (continued)

     Information pertaining to options for 1998, 1999 and 2000 is as follows
(number of options in thousands):


<TABLE>
<CAPTION>
                                           1998                       1999                       2000
------------------------------------------------------------------------------------------------------------------
                                                  Weighted                   Weighted                   Weighted
                                                  Average                    Average                    Average
                                                  Exercise                   Exercise                   Exercise
                                      Options      Price         Options      Price       Options        Price
------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>            <C>          <C>          <C>           <C>
Outstanding - beginning
   of year                                540         $13.15         858         $13.50         966         $14.27
Granted                                   429          13.95         266          16.38          67           8.63
Exercised                                 (45)         13.21        (116)         13.39          (5)         13.34
Cancelled                                 (66)         13.82         (42)         13.82         (99)         14.56
------------------------------------------------------------------------------------------------------------------
Outstanding - end of year                 858         $13.50         966         $14.27         928         $13.84
==================================================================================================================
Exercisable - end of year                 229         $13.47         342         $13.41         535         $13.72
==================================================================================================================
Weighted-average fair value of
 options granted during the year        $6.24                     $10.35                      $5.13
==================================================================================================================
Weighted-average contractual
   life                                   8.2                        8.7                        7.4
==================================================================================================================
</TABLE>

At December 31, 2000, approximately 625,000 shares were available for future
issuance under the Incentive Plan, and 20,000 shares are available for future
issuance under the Directors' Plan.

     The following table sets forth the reconciliation of basic and diluted
weighted average shares outstanding for 1998 through 2000:

<TABLE>
<CAPTION>
(In thousands)                                                   1998          1999          2000
                                                                -----         -----         -----
<S>                                                             <C>           <C>           <C>
Weighted-average shares outstanding - Basic                     5,777         5,744         4,739
Shares issuable upon the exercise of outstanding
     stock options and warrants                                   142           198             -
                                                       ==========================================
Weighted-average shares outstanding - Diluted                   5,919         5,942         4,739
                                                       ==========================================
</TABLE>
                                       39
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


15.  Quarterly Data (Unaudited) in thousands, except per share data

<TABLE>
<CAPTION>
                                      1/st/ Quarter     2/nd/ Quarter    3/rd/ Quarter     4/th/ Quarter
-----------------------------------------------------------------------------------------------------------
                                    1999      2000     1999     2000     1999     2000     1999(1)  2000(1)
-----------------------------------------------------------------------------------------------------------
<S>                              <C>       <C>      <C>      <C>      <C>      <C>      <C>         <C>
Restaurant sales                 $21,855   $25,825  $24,001  $27,642  $24,425  $27,483  $25,207     $30,130

Operating income (loss)            2,066     1,749    2,299    1,660    1,960      818    1,614      (8,156)
Income (loss)
   before cumulative
   effect of change in
   accounting principle            1,475     1,206    1,620    1,092    1,403      453    1,150      (5,371)

Cumulative effect of
   accounting change,
    net of tax                      (181)        -        -        -        -        -        -           -
                               ----------------------------------------------------------------------------
Net income (loss)                $ 1,294   $ 1,206  $ 1,620  $ 1,092  $ 1,403  $   453  $ 1,150     $(5,371)
                               ============================================================================

Income (loss) per share
   before cumulative effect of
   accounting change - Basic     $   .26   $   .23  $   .28  $   .23  $   .24  $   .13  $   .20     $ (1.24)

Cumulative effect of
   accounting change, net
   of tax                           (.03)        -        -        -        -        -        -           -
                               ----------------------------------------------------------------------------
Net income (loss) per share -
   Basic                         $   .23   $   .23  $   .28  $   .23  $   .24  $   .13  $   .20     $ (1.24)
                               ============================================================================

Income (loss) per share
   before cumulative effect of
   accounting change  -
   Diluted                       $   .25   $   .23  $   .27  $   .23  $   .23  $   .13  $   .20     $ (1.24)

Cumulative effect of
   accounting change, net
   of taxes                         (.03)        -        -        -        -        -        -           -
                               ----------------------------------------------------------------------------
Net income (loss)                $   .22   $   .23  $   .27  $   .23  $   .23  $   .13  $   .20     $ (1.24)
                               ============================================================================
</TABLE>




(1)  Other charges include asset impairment charges on the Company's long-lived
     assets. The pre-tax charges were $9,465,000 and $690,000 in 2000 and 1999
     respectively. The tax benefit of these charges was $3,288,000 and $235,000,
     thus the charges net of taxes were $6,177,000 ($1.30 per share) and
     $455,000 ($0.08 per share) in 2000 and 1999, respectively.

                                       40
<PAGE>

                       PJ AMERICA, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

16.  Defined Contribution Benefit Plan

     Effective January 1, 2001, the Company established the PJ America, Inc.
401(k) Plan (the "Plan"), as a defined contribution benefit plan, in accordance
with Section 401(k) of the Internal Revenue Code.  The Plan is open to all
employees who meet certain eligibility requirements (excluding highly
compensated employees) and allows participating employees to defer receipt of a
portion of their compensation and contribute such amount to one or more
investment funds.  Effective January 1, 2001, the Company began contributing up
to 1.5% of a participating employee's earnings.  Administrative costs of the
Plan are paid by the Company and are not significant.

                                       41
<PAGE>

Report of Management

     The consolidated financial statements appearing in this Annual Report have
been prepared by management, which is responsible for their preparation,
integrity and fair presentation.  The statements have been prepared in
accordance with generally accepted accounting principles and necessarily include
some amounts that are based on management's best estimates and judgments.

     Management is responsible for the system of internal controls over
financial reporting at PJ America, Inc. and its subsidiaries, a system designed
to provide reasonable assurance regarding the preparation of reliable published
financial statements.  This system is augmented by written policies and
procedures and the selection and training of qualified personnel.  Management
believes that the Company's system of internal controls over financial reporting
provides reasonable assurance that the financial records are reliable for
preparing financial statements.

     The Audit Committee of the Board of Directors meets with the independent
auditors and management periodically to discuss internal controls over financial
reporting and other auditing and financial reporting matters.  The Committee
reviews with the independent auditors the scope and results of the audit effort.
The Committee also meets with the independent auditors without management
present to ensure that the independent auditors have free access to the
Committee.  The independent auditors are recommended by the Audit Committee of
the Board of Directors and selected by the Board of Directors.  Based upon their
audit of the consolidated financial statements, the independent auditors, Ernst
& Young LLP, have issued their Report of Independent Auditors, which follows.



 /s/ Douglas S. Stephens                   /s/   D. Ross Davison
 ---------------------------        -------------------------------------------
 Douglas S. Stephens                D. Ross Davison
 President and C.E.O.               Senior Vice President Administration, C.F.O.
                                    and Treasurer

                                       42
<PAGE>

               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


The Board of Directors and Stockholders
PJ America, Inc.

     We have audited the accompanying consolidated balance sheets of PJ America,
Inc. and Subsidiaries as of December 26, 1999 and December 31, 2000, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the years ended December 27, 1998, December 26, 1999 and December 31,
2000.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

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

          In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of PJ
America, Inc. and Subsidiaries, at December 26, 1999 and December 31, 2000, and
the consolidated results of their operations and their cash flows for the years
ended December 27, 1998, December 26, 1999 and December 31, 2000 in conformity
with accounting principles generally accepted in the United States.

          As discussed in Note 2 to the consolidated financial statements, in
1999 the Company changed its method of accounting for the costs of start-up
activities.


                                              Ernst & Young LLP

Birmingham, Alabama                       /s/ Ernst & Young LLP
February 8, 2001

                                       43
<PAGE>

Item 9.  Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure

      None

                                    PART III

Items 10, 11, 12 and 13.  Directors and Executive Officers of the Registrant;
     Executive Compensation; Security Ownership of Certain Beneficial Owners and
     Management; and Certain Relationships and Related Transactions.

     The information required by these items, other than information set forth
in this Form 10-K under Item I, "Executive Officers of Registrant," is omitted
because the Company is filing a definitive proxy statement pursuant to
Regulation 14A not later than 120 days after the end of the fiscal year covered
by this Form 10-K which includes the required information.  The required
information contained in the Company's proxy statement is incorporated herein by
reference.

                                       44
<PAGE>

                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)(1) The following consolidated financial statements of PJ America, Inc. and
       Subsidiaries and the reports of management and independent auditors are
       included in Item 8:

<TABLE>
<CAPTION>
                                                                                                    Page
                                                                                                    ----
       <S>                                                                                          <C>
       Consolidated Balance Sheets as of December 26, 1999 and December 31, 2000.............         24
       Consolidated Statements of Operations for the Years Ended December 27, 1998
          December 26, 1999 and December 31, 2000............................................         25
       Consolidated Statements of Stockholders' Equity for the Years Ended
          December 27, 1998, December 26, 1999 and December 31, 2000.........................         26
       Consolidated Statements of Cash Flows for the Years Ended December 27, 1998,
          December 26, 1999 and December 31, 2000............................................         27
       Notes to Consolidated Financial Statements............................................         28
       Report of Management..................................................................         42
       Report of Ernst & Young LLP Independent Auditors......................................         43
</TABLE>

(a)(2) Consolidated Financial Statement Schedules:

       All schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are not applicable and therefore have been omitted.

(a)(3) Exhibits:

3.1       The Company's Certificate of Incorporation.  Exhibit 3.1 to the
          Company's Registration Statements on Form S-1 (Registration No. 333-
          11253) is incorporated herein by reference.

3.2       The Company's By-laws. Exhibit 3.2 to the Company's Registration
          Statement on Form S-1 (Registration No. 333-11253) is incorporated
          herein by reference.

4         Specimen Stock Certificate.  Exhibit 4 to the Company's Registration
          Statement on Form S-1 (Registration No. 333-11253) is incorporated
          herein by reference.

10.1      Form of Registration Rights Agreement. Exhibit 10.1 to the Company's
          Registration Statement on Form S-1 (Registration No. 333-11253) is
          incorporated herein by reference.

10.2      Form of 1996 Stock Ownership Incentive Plan. Exhibit 10.2 to the
          Company's Registration Statement on Form S-1 (Registration No. 333-
          11253) is incorporated herein by reference.

10.3      Form of Non-Employee Directors 1996 Stock Incentive Plan. Exhibit 10.3
          to the Company's Registration Statement on Form S-1 (Registration No.
          333-11253) is incorporated herein by reference.

                                       45
<PAGE>

10.8      Warrant issued to PJI. Exhibit 10.8 to the Company's Registration
          Statement on Form S-1 (Registration No. 333-11253) is incorporated
          herein by reference.

10.10     Development Agreement relating to the Utah territory. Exhibit 10.10 to
          the Company's Registration Statement on Form S-1 (Registration No.
          333-11253) is incorporated herein by reference.

10.11     Development Agreement relating to the development of an aggregate of
          ten restaurants in Birmingham, Tuscaloosa and Auburn, Alabama. Exhibit
          10.11 to the Company's Registration Statement on Form S-1
          (Registration No. 333-11253) is incorporated herein by reference.

10.11(a)  First Amendment to the Alabama Development Agreement.  Exhibit
          to the Company's Registration Statement on Form S-1 (Commission File
          No. 333-11253) is hereby incorporated by reference.

10.11(b)  Second Amendment to the Alabama Development Agreement. Exhibit to the
          Company's Registration Statement on Form S-1 (Commission File No. 333-
          11253) is hereby incorporated by reference.

10.11(c)  Third Amendment to the Alabama Development Agreement.  Exhibit
          10.11(c) to the Company's Registration Statement on Form S-1
          (Commission File No. 333-11253) is hereby incorporated by reference.

10.17     Development Agreement relating to the Virginia development of an
          aggregate of 47 restaurants in Virginia Beach, Richmond and Norfolk,
          Virginia. Exhibit 10.17 to the Company's Registration Statement on
          Form S-1 (Registration No. 333-11253) is incorporated herein by
          reference.

10.17(a)  First Amendment to the Virginia Development Agreement.  Exhibit
          10.17(a) to the Company's Registration Statement on Form S-1
          (Commission File No. 333-11253) is hereby incorporated by reference.

10.17(b)  Second Amendment to the Virginia Development Agreement.  Exhibit
          10.17(b) to the Company's Registration Statement on Form S-1
          (Commission File No. 333-11253) is hereby incorporated by reference.

10.17(c)  Third Amendment to the Virginia Development Agreement.  Exhibit
          10.17(c) to the Company's Registration Statement on Form S-1
          (Commission File No. 333-11253) is hereby incorporated by reference.

10.17(d)  Fourth Amendment to the Virginia Development Agreement.  Exhibit
          10.17(d) to the Company's Registration Statement on Form S-1
          (Commission File No. 333-11253) is hereby incorporated by reference.

10.19     PJI's Waiver of Right of First Refusal (certain Utah, Iowa markets and
          other markets). Exhibit 10.19 to the Company's Registration Statement
          on Form S-1 (Registration No. 333-11253) is incorporated herein by
          reference.

                                       46
<PAGE>

10.20     The Company's Right of First Refusal relating to certain Iowa
          territories. Exhibit 10.20 to the Company's Registration Statement on
          Form S-1 (Registration No. 333-11253) is incorporated herein by
          reference.

10.30     Development Agreement relating to development of 60 restaurants in
          California.  Exhibit 10.30 is hereby incorporated by reference from
          the Form 10-K for the fiscal year ended December 27, 1998.

10.31     Commissary License Agreement relating to the Company's agreement to
          operate a commissary in Puerto Rico.  Exhibit 10.31 is hereby
          incorporated by reference to the Form 10-K for the fiscal year ended
          December 27, 1998.

10.32     Development Agreement relating to development of 20 restaurants in
          Puerto Rico. Exhibit 10.32 is hereby incorporated by reference to the
          Form 10-K for the fiscal year ended December 27, 1998.

10.33     Development Agreement relating to development of 36 restaurants in
          Portland, Oregon, and surrounding areas.  Exhibit 10.33 is hereby
          incorporated by reference to the Form 10-K for the fiscal year ended
          December 27, 1998.

10.34     Stock Purchase Agreement among PJ America, Inc., PJ Louisiana, Inc.
          and Douglas S. Stephens, Robert W. Curtis, Jr., Michael M. Fleishman,
          Merida Sherman, Nicholas Sherman, Richard F. Sherman, Frank O. Keener,
          and Stephen P. Langford dated May 13, 1998. Exhibit 10.34 is hereby
          incorporated by reference to the Form 10-K for the fiscal year ended
          December 27, 1998.

10.35     Purchase Agreement among PJ America, Inc., Ohio Pizza Delivery Co.,
          Inc., PJ Utah, LLC, and Members dated September 3, 1998. Exhibit 10.35
          is hereby incorporated by reference to the Form 10-K for the fiscal
          year ended December 27, 1998.

10.36     Merger of Development Agreements among PJ America and PJI dated
          February 1, 2001. (Domestic U.S. restaurants)

10.37     First Amendment to Loan Agreement between PJ America, Inc. and Bank
          One, Kentucky NA dated January 31, 2001, amending the revolving line
          of credit to $15.0 million.

21        Subsidiaries of the Company:
          (a)  PJ Cheese, Inc. an Alabama corporation
          (b)  Ohio Pizza Delivery Co., Inc. an Ohio corporation
          (c)  PJ Louisiana, LLC, a Louisiana limited liability corporation
          (d)  PJ Utah, LLC, a Utah limited liability corporation
          (e)  Pizza Caribe, Inc. a Puerto Rico corporation

23        Consent of Ernst & Young LLP, Independent Auditors

                                       47
<PAGE>

99.1      Other Statements.

(a)       Reports on Form 8-K

          1.   The Company filed a Current Report on Form 8-K (Item 5) dated
               December 13, 2000 attaching a press release dated December 7,
               2000 announcing a fourth quarter 2000 charge and anticipated 2001
               restaurant openings.

                                       48
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Date:  February 26, 2001          PJ AMERICA, INC.


                                  By:        /s/    Douglas S. Stephens
                                      ---------------------------------------
                                                 Douglas S. Stephens
                                      Chief Executive Officer and President

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

<TABLE>
<CAPTION>
Signature                         Title
---------                         -----
<S>                               <C>                                           <C>
/s/   Richard F. Sherman          Chairman of the Board                         February 26, 2001
--------------------------
      Richard F. Sherman

/s/   Douglas S. Stephens         Chief Executive Officer,                      February 26, 2001
--------------------------
      Douglas S. Stephens         President and Director

/s/   D. Ross Davison             Senior Vice President                         February 26, 2001
--------------------------
      D. Ross Davison             Administration, Chief Financial
                                  Officer and Treasurer (Chief
                                  Financial and Accounting Officer)

/s/   Michael M. Fleishman        Director                                      February 26, 2001
--------------------------
      Michael M. Fleishman

/s/   Martin T. Hart              Director                                      February 26, 2001
--------------------------
      Martin T. Hart

/s/   Frank O. Keener             Director                                      February 26, 2001
--------------------------
      Frank O. Keener

/s/   Kim V. Knapp                Director                                      February 26, 2001
--------------------------
      Kim V. Knapp

/s/   Stephen P. Langford         Director                                      February 26, 2001
--------------------------
      Stephen P. Langford

/s/   Charles W. Schnatter        Director                                      February 26, 2001
--------------------------
      Charles W. Schnatter
</TABLE>

                                       49