<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------
                                    FORM 10-K

     [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                 FOR THE FISCAL YEAR ENDED DECEMBER 30, 2001 OR

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
    FOR THE TRANSITION PERIOD FROM ------------------- TO -------------------

                         COMMISSION FILE NUMBER: 0-21625

                         FAMOUS DAVE'S OF AMERICA, INC.
                                  (Registrant)

       Minnesota                               41-1782300
       (State or other jurisdiction of         (IRS Employer
       incorporation or organization)          Identification No.)
       7657 Anagram Dr.
       Eden Prairie, MN                        55344
       (Address of principal executive         (Zip Code)
       offices)

                    Issuer's telephone number: (952) 294-1300

   Securities to be registered pursuant to Section 12(b) of the Exchange Act:
                                      None

   Securities to be registered pursuant to Section 12(g) of the Exchange Act:
                          Common Stock, $.01 par value

   Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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[ ]

   Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

   The issuer had total revenues of $87,673,000 for its fiscal year ended
December 30, 2001.

   As of March 14, 2002, assuming as market value the price of $7.18 per share
(the last per share sales price of Famous Dave's of America, Inc.'s Common Stock
on The NASDAQ National Market(SM) on March 14, 2002), the aggregate market value
of shares held by non-affiliates was $68,167,803.14.

   As of March 14, 2002 we had outstanding 11,237,823 shares of Common Stock,
$.01 par value.

   Transitional Small Business Disclosure Format:  Yes [ ]    No [X]

   Documents Incorporated by Reference: Portions of our Proxy Statement for our
Annual Meeting of Shareholders to be conducted in May, 2002 (the "2002 Proxy
Statement") are incorporated by reference into Part III of this Form 10-K, to
the extent described in Part III. The 2002 Proxy Statement will be filed within
120 days after the end of the fiscal year ended December 30, 2001.

<PAGE>

                                TABLE OF CONTENTS

                                                                        PAGE NO.
   PART I

   Item 1.       Business ...............................................     3
   Item 2.       Properties .............................................     9
   Item 3.       Legal Proceedings ......................................    10
   Item 4.       Submission of Matters to a Vote of Security Holders.....    10

   PART II

   Item 5.       Market for Registrant's Common Equity and
                   Related Stockholder Matters ..........................    11
   Item 6.       Selected Financial Data ................................    12
   Item 7.       Management's Discussion and Analysis of
                   Financial Condition and Results of Operations ........    13
   Item 8.       Consolidated Financial Statements ......................    23
   Item 9.       Changes in and Disagreements with Accountants
                   on Accounting and Financial Disclosure ...............    23

   PART III

   Item 10.      Directors and Executive Officers of the Registrant .....    24
   Item 11.      Executive Compensation .................................    24
   Item 12.      Security Ownership of Certain Beneficial
                   Owners and Management ................................    24
   Item 13.      Certain Relationships and Related Transactions .........    24
   Item 14.      Exhibits and Reports on Form 8-K .......................    24
   SIGNATURES    ........................................................    25


                                       2
<PAGE>

                                     PART I

ITEM 1. BUSINESS

GENERAL

   Famous Dave's of America, Inc. ("Famous Dave's")(SM) was incorporated as a
Minnesota corporation in March 1994 and opened its first restaurant in
Minneapolis in June 1995. As of December 30, 2001, we operated thirty-seven
restaurants under the name "Famous Dave's". An additional nineteen franchise
restaurants were also operating under the name "Famous Dave's". Seventeen
restaurants were located in Minnesota, twelve in Illinois, six in Wisconsin,
four each in Virginia and Maryland, three in Iowa, two each in Utah and
Nebraska, and one each in Alabama, Georgia, Tennessee, Indiana, Ohio, and South
Dakota. Two additional franchise restaurants were under construction in
Belleview, Nebraska and Mountainside, New Jersey.

   Famous Dave's is also a 40% participant in a joint venture (FUMUME, LLC) to
operate themed restaurant concepts based on the entertainment artist Isaac
Hayes. Pursuant to the agreement governing the joint venture, the participants
in the joint venture formed a Delaware limited liability company named FUMUME,
LLC. FUMUME opened its first location in Chicago, Illinois in June 2001 and
opened the second location in Memphis, Tennessee in October 2001. Each location
is structured as a separate Delaware limited liability company, each of which is
wholly owned by FUMUME.

THE FAMOUS DAVE'S CONCEPT

   Our restaurants, a majority of which offer full table service, feature
hickory smoked off-the-grill meat entree favorites served in one of our three
casual formats: a "Northwoods" style lodge, a nostalgic roadhouse "shack," or a
Blues Club featuring nightly musical entertainment. We seek to differentiate
ourselves by providing high-quality food in these distinctive and comfortable
environments. In May 1997, Nation's Restaurant News, a leading restaurant
industry publication, named Famous Dave's of America, Inc. a "1997 Hot Concept".

Key elements of our concept include the following:

      High Quality Food. Each restaurant features a distinctive selection of
authentic hickory-smoked off-the-grill favorites such as flame-grilled St.
Louis-style ribs, Texas beef brisket, Georgia chopped pork, country-roasted
chicken, and generous signature sandwiches and salads. Enticing side items such
as honey-buttered corn bread, potato salad, coleslaw, Shack Fries(TM) and Wilbur
Beans(TM) accompany the broad entree selection. Homemade desserts, including
Famous Dave's Bread Pudding and Hot Fudge Kahlua(TM) Brownies, are a specialty.
To complement our smoked meat entree and appetizer items and to suit different
customer tastes, Famous Dave's BBQ Sauces come in six variations: Rich &
Sassy(TM), Texas Pit(TM), Georgia Mustard(TM), Hot & Sassy(TM), Devil's Spit(TM)
and Sweet and Zesty(TM). These sauces and a variety of prepared meats and
seasonings are also distributed throughout the country under licensing
agreements in retail grocery stores. We believe that our high quality food is a
principal point of differentiation between Famous Dave's and other casual dining
competitors and is a significant contributing factor to our level of repeat
business.

      Distinctive Environment -- Decor and Music. In late 1997, we introduced
the "Lodge" format which features decor reminiscent of a comfortable
"Northwoods" hunting lodge with a full service dining room and bar. Our original
theme, a nostalgic roadhouse shack ("Shack") is promoted by the abundant use of
rustic antiques, items of Americana from the '30s and '40s and emphasizes a very
casual experience with emphasis on value and speed of delivery. While initially
the Shack format only offered counter service, fourteen Shacks have been opened
as or converted to full service dining. In addition, we have developed a larger
"Blues Club" format that features authentic Chicago Blues Club decor and live
music seven nights a week. We currently operate one Blues Club in the
Minneapolis market.


                                       3
<PAGE>

      Broad-Based Appeal. We believe that our concept has broader appeal than
many other restaurant concepts because it attracts customers of all ages and the
menu offers a variety of items that appeal to many tastes. We believe that our
distinctive concept, combined with our high-quality food, make Famous Dave's
appealing to children, teenagers and adults of all ages.

OPERATING STRATEGY

Key elements of our operating strategy include the following:

      Operational Simplicity. In our restaurants, we strive to emphasize value
and speed of service by employing a streamlined operating system based on a
focused menu and simplified food preparation techniques. The menu focuses on a
number of popular smoked meat barbecue entree items and delicious side dishes
which are prepared using easy-to-operate kitchen equipment and processes that
use prepared seasonings, sauces and mixes. This streamlined food preparation
system helps lower the cost of operation by requiring fewer staff, lower
training costs and the elimination of a need for highly compensated chefs. To
enhance our appeal and expand our audience, we have added such items as catfish
fingers, specialty salads and other promotional products that fit with this menu
simplicity. As the menu broadens and food preparation techniques become more
focused on meals prepared to order, an increased training requirement is
necessary in order to prepare our staff for increased sophistication in guest
service.

      Recruiting, Training and Retaining Employees. We believe that a key
component of the success of our concept rests with the ability to hire, train
and motivate qualified restaurant employees. We believe that by providing
training, competitive compensation and opportunities for employee involvement
and advancement, we encourage a sense of personal commitment from our employees.
In 1997, we instituted Hog Heaven University, which augments our technical
training with programs aimed at improving the personal development skills of our
managers. We believe that our competitive compensation, employee involvement and
streamlined operating system help enable us to attract and retain qualified
restaurant managers and employees.

      Take-out - Focus on Customer Convenience. We seek to provide our customers
with maximum convenience by offering convenient take-out service in addition to
our lively and entertaining sit-down experience. We believe that Famous Dave's
entrees and side dishes are viewed by guests as traditional American "picnic
foods" that maintain their quality and travel particularly well, making them an
attractive choice to replace a home-cooked meal. We believe the high quality,
reasonable cost and avoidance of preparation time make take-out of our product
particularly attractive to customers, and approximately 23% of our restaurant
revenues are derived from this method. Our restaurants have been designed
specifically to accommodate a significant level of take-out sales, including a
separate take-out counter.

      Style of Service. A majority of our locations utilize a full service style
of serving guests. Through 1997, all of our shacks used a more limited,
counter-style of service with self-service seating and drink selection. In 1998,
four of these units were converted to full service locations, and six more
shacks were opened as full service facilities. On December 31, 1999, we acquired
four full service locations in the Washington D.C. market and converted them to
Famous Dave's during fiscal 2000. In fiscal 2000 we opened seven additional full
service locations, and in fiscal 2001, we opened six additional full service
locations. Full service locations are now our primary development format.

      Customer Satisfaction. We believe that we have achieved a significant
level of repeat business by providing high-quality food and efficient friendly
service, in an entertaining environment at moderate prices. We strive to
maintain quality and consistency in each of our restaurants through the training
and supervision of personnel and the establishment of and adherence to high
standards of personnel performance, food preparation and facility maintenance.
We have also built family-friendly strategies into each restaurant's food,
service and design by providing children's menus, smaller-sized entrees at
reduced prices and changing tables in restrooms.

      Attractive Value-to-Price Relationship. Famous Dave's offers high quality
food and distinctive atmosphere at competitive prices to encourage frequent
patronage. Lunch and dinner entrees range from $5 to $19 resulting in an average
check of approximately $11.94 during fiscal 2001.


                                       4
<PAGE>

EXPANSION STRATEGY

   We believe that the casual dining niche of the restaurant industry offers
strong growth opportunities for us because this niche of the restaurant market
is highly fragmented. The key elements of our growth strategy include the
following:

      Targeted Expansion: We believe that there are significant growth
opportunities for Famous Dave's restaurants throughout the United States. We
generally intend to enter new markets with a full service restaurant in high
profile, heavy traffic retail locations in order to build brand awareness. We
currently plan to concentrate our expansion primarily in markets where multiple
restaurants can be opened, thereby expanding consumer awareness and creating
opportunities for operating, distribution and marketing efficiencies. In late
1997, we opened our first full service lodge restaurant and currently anticipate
using this format as our primary growth vehicle. We anticipate opening eight to
ten additional units in fiscal 2002 and plan to target our expansion in the
Chicago, Washington D.C./Baltimore, Richmond, Virginia and Salt Lake City
markets. We intend to finance our development through the use of cash on hand,
cash flow, funds available under existing and future lines of credit, and
through forms of real estate related financing such as mortgages, sale-leaseback
financing, build to suit arrangements, and other similar financing. As of
December 30, 2001 we had mortgage financing in place that provided approximately
$8.8 million for continued development. There can be no assurance that any
future financing will be available, or on terms acceptable to us.

      Flexible Unit Formats: Because of variable unit formats, we believe we can
tailor the Famous Dave's concept to a variety of markets, demographic areas and
real estate locations. Management believes the flexibility in building size,
type of construction and configuration, as well as a variable service structure
permits locations in a variety of economic and demographic areas throughout
different markets. Our primary development in the past year has been converting
existing restaurant locations to Famous Dave's format, rather than building from
the ground up.

FRANCHISE PROGRAM

   At December 30, 2001 we had nineteen franchise units in operation, five in
Minnesota, four in Illinois, three in Wisconsin, and one each in South Dakota,
Nebraska, Georgia, Tennessee, Alabama, Ohio, and Indiana. Area Development
agreements representing commitments from franchisees to build an additional 61
restaurants were in place as of December 30, 2001. There can be no assurance
that these franchisees will fulfill these commitments. We continue to pursue a
more aggressive franchise program for our restaurants and anticipate that twelve
to fifteen additional franchise units will open during fiscal 2002.

RESTAURANT OPERATIONS - MANAGEMENT AND EMPLOYEES

   Our ability to manage multiple, geographically diverse units will be central
to our overall success. Our management team includes experienced personnel with
extensive restaurant experience. At the unit level, we place specific emphasis
on the position of general manager ("General Manager") and seek employees with
significant restaurant experience and management expertise. We strive to
maintain quality and consistency in each of our units through the careful
training and supervision of personnel and the establishment of, and adherence
to, high standards relating to personnel performance, food and beverage
preparation, and maintenance of facilities. We attempt to attract high quality,
experienced restaurant management and personnel with competitive compensation
and bonus programs.

   All General Managers must complete a seven week training program, during
which they are instructed in areas such as food quality and preparation,
customer service, and employee relations. We have prepared operations manuals
relating to food and beverage quality and service standards. New staff members
participate in approximately three weeks of training under the close supervision
of our management. We strive to instill enthusiasm and dedication in our
employees and regularly solicit employee suggestions concerning our operations
and endeavors in order to be responsive to employees' concerns. In addition, we
have numerous programs designed to recognize and reward employees for superior
performance. Staffing levels at each restaurant vary according to the time of
day and size of the restaurant. However, in general each shack or lodge unit has
between 25 and 120 employees.


                                       5
<PAGE>

PURCHASING

   We strive to obtain consistent quality items at competitive prices from
reliable sources. In order to maximize operating efficiencies and to provide the
freshest ingredients for our food products while obtaining the lowest possible
prices for the required quality, each unit's management team determines the
daily quantities of food items needed and orders such quantities from major
suppliers designated by us, which are then shipped directly to the restaurants.
For the company-owned restaurants, approximately 92% of the products used are
obtained under a supply arrangement with a major foodservice distributor.

   Contract pricing accounts for approximately 85% of all of our food purchases.
These contracts are typically negotiated during the third quarter of each year
and fix purchase prices for twelve months. As a result of our negotiated
purchase prices, the cost of these food items, taken as a whole, were
essentially flat from 1999 to 2000 and from 2000 to 2001. In 2002, we are
expecting a slight increase in food costs due to increases in some food
commodity markets, especially the cost of ribs. Famous Dave's seeks to minimize
any increased price fluctuations, and as part of that effort, has locked in on a
negotiated price for many items for the balance of 2002.

   We believe that our relationships with our distributor and food manufacturers
are excellent, and anticipate no interruption in the supply of product delivered
by any of these firms. In case of a supply disruption, however, we believe we
could obtain competitive products and prices on short notice from a number of
alternative suppliers.

MANAGEMENT INFORMATION SYSTEMS

   We have developed restaurant-level management information systems that
include a computerized point-of-sale system which facilitates the movement of
customer orders between the customer areas and kitchen operations, processes
credit card transactions, and provides management with revenue and other key
operating and financial information. We also use a time management system which
tracks the time worked by each employee, allowing management to more effectively
manage labor costs through better scheduling of employee work hours. In 2001 we
installed a wide area network that allows us to automate data polling, daily
sales and labor reporting, company-wide communications and file and form
downloads.

   Our unit-level point-of-sale, time management and inventory management
systems provide data for posting to our general ledger and to other accounting
subsystems. The general ledger system provides various management reports
comparing actual and budgeted results. The results are reported to and reviewed
by management. Such reporting includes: (i) daily reports of revenues, (ii)
weekly reports of selected controllable unit expenses and (iii) detailed monthly
reports of revenues and expenses. We continue to develop and implement new
enhancements to our systems, and a number of new developments in communication,
food and labor cost management and unit level efficiency are among the
enhancements we are evaluating at the present time.

MARKETING AND PROMOTION

   Marketing and promotion for the owned and operated restaurants have relied
primarily upon an extensive publicity effort, direct mail, and 4-walls/property
line marketing. Our 2002 business plan calls for the expenditure of
approximately 2.8% of revenues on marketing and advertising. In addition, we are
also creating awareness and equity in the Famous Dave's brand through
partnerships that extend our BBQ sauces, seasonings and prepared entrees in
retail outlets across the United States.


                                       6
<PAGE>

TRADEMARKS

   We have received various trademarks and have applied for registration of
additional service marks and intend to defend these marks. However, there can be
no assurance that we will be granted trademark registration for pending
applications or any or all of the proposed uses in our applications. In the
event our additional marks are granted registration, there can be no assurance
that we can protect such marks and designs against prior users in areas where we
conduct operations. There is also no assurance that we will be able to prevent
competitors from using the same or similar marks, concepts or appearance.

COMPETITION

   Competition in the restaurant industry is intense. Famous Dave's restaurants
compete with moderately priced casual dining restaurants primarily on the basis
of quality of food and service, atmosphere, location and value. In addition to
existing themed and barbecue restaurants, we expect to face competition from
steakhouses and other restaurants featuring large portions of red meat. We also
compete with other restaurants and retail establishments for quality sites.
Competition in the food service industry is affected by changes in consumer
taste, economic and real estate conditions, demographic trends, traffic
patterns, the cost and availability of qualified labor, product availability and
local competitive factors.

   Many of our competitors are well established and have substantially greater
financial, marketing and other resources than Famous Dave's. Regional and
national restaurant companies continue to expand their operations in our current
and anticipated market areas. We believe our ability to compete effectively
depends on our ongoing ability to offer high-quality, competitively priced food
in a distinctive and comfortable environment.

GOVERNMENT REGULATION

   We are subject to extensive state and local government regulation by various
governmental agencies, including state and local licensing, zoning, land use,
construction and environmental regulations and various regulations relating to
the sale of food and alcoholic beverages, sanitation, disposal of refuse and
waste products, public health, safety and fire standards. Our restaurants are
subject to periodic inspections by governmental agencies to ensure conformity
with such regulations. Any difficulty or failure to obtain required licensing or
other regulatory approvals could delay or prevent the opening of a new
restaurant, and the suspension of, or inability to renew, a license could
interrupt operations at an existing restaurant, any of which would adversely
affect our operations. Restaurant operating costs are also affected by other
government actions that are beyond our control, including increases in the
minimum hourly wage requirements, workers compensation insurance rates, health
care insurance costs and unemployment and other taxes. We are also subject to
"dram shop" statutes, which generally provide a person injured by an intoxicated
person the right to recover damages from an establishment that wrongfully served
alcoholic beverages to the intoxicated persons.

   To the extent that Famous Dave's offers and sells franchises, we are also
subject to federal regulation and certain state laws that govern the offer and
sale of franchises. Many state franchise laws impose substantive requirements on
franchise agreements, including limitations on non-competition provisions and
the termination or non-renewal of a franchise. Bills have been introduced in
Congress from time to time that would provide for federal regulation of
substantive aspects of the franchisor-franchisee relationship. As proposed, such
legislation would 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 Federal Americans with Disabilities Act prohibits discrimination on the
basis of disability in public accommodations and employment. We could be
required to expend funds to modify our restaurants in order to provide service
to or make reasonable accommodations for disabled persons. Our restaurants are
currently designed to be accessible to the disabled. We believe we are in
substantial compliance with all current applicable regulations relating to
accommodations for the disabled.


                                       7
<PAGE>

EMPLOYEES

   As of December 30, 2001, Famous Dave's had approximately 2,400 employees, of
which approximately 38% were full-time. None of our employees are covered by a
collective bargaining agreement. Management believes that our relationships with
our employees are satisfactory.


                                       8
<PAGE>

ITEM 2. PROPERTIES

The following table sets forth certain information about our existing
company-owned restaurant locations as of December 30, 2001:

<TABLE>
<CAPTION>
                                                              Square    Interior       Land Owned
                             Location               Format   Footage     Seats          or Leased            Date Opened
                             --------               ------   -------     -----          ---------            -----------
<S>             <C>                                 <C>      <C>        <C>            <C>                  <C>
        1       Roseville, MN                       Shack     4,800       105            Leased               June 1996
        2       Calhoun Square (Minneapolis, MN)     Club     10,500      380            Leased             September 1996
        3       Maple Grove, MN                     Shack     5,200       125            Owned*               April 1997
        4       Highland Park, St. Paul, MN         Shack     5,200       125            Leased               June 1997
        5       Stillwater, MN                      Shack     5,200       130            Owned*               July 1997
        6       Apple Valley, MN                    Shack     3,800        90            Owned*               July 1997
        7       Madison, WI                         Shack     4,800        95            Leased              August 1997
        8       Grand Chute, WI (Appleton, WI)      Shack     2,900        80             Owned              October 1997
        9       Forest Lake, MN                     Shack     4,500       100            Leased              October 1997
        10      Minnetonka, MN                      Lodge     5,500       140            Leased             December 1997
        11      Plymouth, MN                        Shack     2,100        20            Leased             December 1997
        12      West St. Paul, MN                   Shack     6,800       140            Leased              January 1998
        13      Janesville, WI                      Shack     5,200       130            Leased               March 1998
        14      West Des Moines, IA                 Shack     5,500       150            Leased               April 1998
        15      Des Moines, IA                      Shack     5,800       150            Leased               April 1998
        16      Naperville, IL                      Lodge     5,500       170            Leased               April 1998
        17      Cedar Falls, IA                     Shack     5,400       130            Leased             September 1998
        18      Bloomington, MN                     Shack     5,400       140            Leased              October 1998
        19      Woodbury, MN                        Lodge     5,900       180             Owned              October 1998
        20      Lincoln, NE                         Lodge     6,300       190             Owned             December 1999
        21      Columbia, MD                        Shack     7,200       270            Leased              January 2000
        22      Annapolis, MD                       Shack     7,000       210            Leased              January 2000
        23      Frederick, MD                       Shack     5,600       180            Leased              January 2000
        24      Woodbridge, VA                      Shack     5,600       190            Leased              January 2000
        25      Vernon Hills, IL                    Lodge     6,600       230            Leased             February 2000
        26      Addison IL                          Lodge     4,600       140             Owned               March 2000
        27      Lombard, IL                         Lodge     7,200       250            Leased               July 2000
        28      North Riverside, IL                 Shack     5,000       160            Leased              August 2000
        29      Midvale, UT                         Lodge     6,500       230            Leased              October 2000
        30      Layton, UT                          Lodge     5,900       190            Leased              October 2000
        31      Sterling, VA                        Lodge     5,200       200            Leased             December 2000
        32      Carpentersville, IL                 Lodge     6,000       227            Leased             February 2001
        33      Streamwood, IL                      Lodge     7,200       260            Leased               March 2001
        34      Oakton, VA                          Lodge     4,300       150            Leased                May 2001
        35      Laurel, MD                          Lodge     5,200       170            Leased              August 2001
        36      Palatine, IL                        Shack     7,200       260            Leased              August 2001
        37      Richmond, VA                        Lodge     5,200       165             Owned             December 2001
</TABLE>

All seat count and square footage amounts are approximate
*  Unit is collateral in a sale-leaseback financing

   The development cost of our restaurants varies depending primarily on the
size and style of the restaurant and whether it is a conversion of an existing
building or a newly constructed unit. Since inception and through fiscal 2001,
the development cost of existing shack or lodge restaurants has ranged from
approximately $865,000 to $1,750,000 per restaurant for conversions ranging in
size from 4,700 square feet to 8,000 square feet, and from $1,330,000 to
$2,400,000 per restaurant for new construction ranging in size from 4,500 square
feet to 6,300 square feet. Such development cost includes construction,
fixtures, furniture and equipment, and pre-opening costs, but does not include
the cost of purchased land, as it has been our general practice to lease the
majority of our sites.

   There can be no assurances that units planned for 2002 and later will open
when planned, or at all, due to the risks associated with the development of new
units, such as governmental approvals, the availability of sites, and the
availability of capital, many of which are beyond our control.

   Famous Dave's leased restaurant facilities are occupied under agreements with
terms ranging from three to 15 years, excluding renewal options. Such leases
generally provide for fixed rental payments plus operating expenses associated
with the properties. Our executive offices are located in approximately 13,500
square feet in Eden Prairie, Minnesota, under a lease expiring in 2003.


                                       9
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

   We are not a party to any material litigation and are not aware of any
threatened litigation that would have a material adverse effect on our business.


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

   No matter was submitted to a vote of our security holders during the fourth
quarter of the fiscal year ended December 30, 2001.


                                       10
<PAGE>

                                     PART II


ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
            MATTERS

PRICE RANGE OF COMMON STOCK

   Our Common Stock is traded on The NASDAQ National Market(SM) under the symbol
DAVE. Our Common Stock was quoted on The NASDAQ SmallCap Market from November 5,
1996 through July 24, 1997 and The NASDAQ National Market after July 24, 1997.

   The following table summarizes the high and low closing sale prices per share
of the Common Stock for the periods indicated, as reported on the NASDAQ
National Market(SM):

<TABLE>
<CAPTION>
                           2000                 HIGH    LOW
                           ----                 ----    ----
<S>                                             <C>     <C>
                           1st Quarter          2.88    1.94
                           2nd Quarter          5.00    2.19
                           3rd Quarter          5.00    3.28
                           4th Quarter          4.00    2.81
</TABLE>

<TABLE>
<CAPTION>
                           2001                 HIGH    LOW
                           ----                 ----    ----
<S>                                            <C>      <C>
                           1st Quarter          5.00    3.03
                           2nd Quarter          9.67    3.63
                           3rd Quarter         11.59    6.70
                           4th Quarter          9.48    6.70
</TABLE>

   On March 14, 2002, the last reported sale price for the Common Stock was
$7.18 per share. As of March 14, 2001, we had 416 record holders of Common Stock
plus an estimated 5,100 additional beneficial shareholders.

   Famous Dave's Board of Directors has not declared any dividends on our Common
Stock since its inception, and does not intend to pay out any cash dividends on
its Common Stock in the foreseeable future. The Board of Directors presently
intends to retain all earnings, if any, to finance the development and opening
of additional Units. The payment of cash dividends in the future, if any, will
be at the discretion of the Board of Directors and will depend upon such factors
as earnings levels, capital requirements, our financial condition and other
factors deemed relevant by the Board of Directors.

RECENT SALES OF UNREGISTERED SECURITIES

   On October 12, 2000, we completed an acquisition of certain assets comprising
two existing steakhouse restaurants from Timber Lodge Steakhouse, Inc., which
restaurants are located in the Salt Lake City, Utah suburbs of Midvale and
Layton. The purchase was completed in part through the issuance of 125,000
shares of our common stock, valued at $3.50 per share, to Santa Barbara
Restaurant Group, Inc., the shareholder of Timber Lodge Steakhouse, Inc. In
connection with this issuance, the company relied on the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended, based
on the Company's belief that the transaction did not involve any public
offering. We have undertaken to register the shares issued in connection with
the acquisition. In that regard, we filed a registration statement on Form S-3
covering the resale of such shares with the Securities and Exchange Commission
on October 24, 2000. The SEC declared this registration statement effective on
November 3, 2000. The Company will receive no proceeds from any sale of the
Company's common stock by the selling shareholders under the registration
statement.

   On December 1, 2000, we completed an acquisition from Hunter's Restaurant &
Pub of certain assets comprising one restaurant located in Oakton, Virginia. The
purchase was completed in part through the issuance of 19,000 shares of our
common stock valued at $3.406 per share to the individual shareholder of
Hunter's Restaurant and Pub.


                                       11
<PAGE>

   On December 4, 2000, we issued an additional 17,200 shares of our common
stock to the individual shareholder of Cascade Restaurant, Inc., d/b/a Hunter's
Restaurant & Pub, the corporation from which we purchased the assets comprising
one restaurant in Sterling, Virginia on August 22, 2000. This common stock
issuance was made in lieu of a $60,000 cash payment due in connection with the
Sterling restaurant acquisition. For purposes of this issuance, the common stock
was valued at $3.50 per share.

   On November 12, 2001, we issued 1,000,000 shares of common stock in a private
equity placement to a limited number of institutional investors at a price of
$6.00 per share, from which we received net cash proceeds after commissions and
related expenses of $5,322,000. The proceeds are to be used primarily to develop
new restaurants and for general corporate purposes. In connection with this
issuance, the Company relied upon the exemptions from federal registration under
Sections 4(2) and 4(6) of the Securities Act of 1933, as amended, and
specifically Rule 506 of Regulation D promulgated thereunder, based on the
Company's belief that the transaction did not involve a public offering and each
of the investors was "accredited" as defined in Rule 501(a) of Regulation D.

   In connection with the November 12, 2001 issuance, on November 16, 2001 we
filed a registration statement on Form S-3 covering the resale of such shares
with the Securities and Exchange Commission. This registration statement, SEC
File No. 333-73504, was declared effective by the SEC on November 21, 2001. The
Company will receive no additional proceeds from the sale of the Company's
common stock by the selling shareholders under this registration statement.


ITEM 6.     SELECTED FINANCIAL DATA (IN THOUSANDS, EXCEPT PER SHARE DATA)

   The Selected Financial Data presented below should be read in conjunction
with the Consolidated Financial Statements and notes included in Item 8 of this
Form 10-K, and in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in Item 7 of this Form
10-K.

<TABLE>
<CAPTION>
                                            For Fiscal        For Fiscal     For Fiscal        For Fiscal      For Fiscal
                                               Year              Year           Year              Year            Year
                                              Ending            Ending         Ending            Ending          Ending
                                             12/30/01          12/31/00        1/2/00            1/3/99         12/28/97
<S>                                         <C>               <C>            <C>               <C>             <C>
CONSOLIDATED STATEMENTS OF OPERATIONS
DATA
(in thousands):

Revenues, net                                 $87,673         $70,160         $47,629           $40,781        $18,202
Income (loss) from operations                 $ 6,209         $ 2,581         $(6,223)          $(4,977)       $(5,105)
Income (loss) before income taxes             $ 4,108         $ 2,112         $(6,610)          $(4,829)       $(4,575)
Benefit from income taxes                     $ 4,010         $     0         $     0           $     0        $     0
Net income (loss)                             $ 8,118         $ 2,112         $(6,610)          $(4,829)       $(4,575)
Basic net income (loss) per common            $   .81         $   .23         $  (.75)(1)       $  (.55)(1)    $  (.64)
share
Diluted net income (loss) per common          $   .75         $   .22         $  (.75)          $  (.55)       $  (.64)
share
</TABLE>


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                             For Fiscal      For Fiscal     For Fiscal     For Fiscal      For Fiscal
                                                Year            Year           Year            Year           Year
                                               ending          ending         ending          ending         ending
                                              12/30/01        12/31/00        1/2/00          1/3/99        12/28/97
<S>                                          <C>             <C>            <C>            <C>             <C>
CONSOLIDATED BALANCE SHEETS DATA (in
thousands):

Cash and cash equivalents                     $ 7,398         $ 1,895         $ 1,712        $ 1,951        $ 7,984
Total assets                                  $70,440         $52,963         $43,326        $41,169        $46,021
Current liabilities                           $ 7,309         $ 8,362         $11,239        $ 7,096        $ 7,523
Long-term obligations, net of current         $16,442         $14,540         $ 5,077        $ 1,000        $ 1,390
portion
Shareholders' equity                          $46,689         $30,061         $27,010        $33,073        $37,108
</TABLE>

(1)      Net loss for years January 2, 2000 and January 3, 1999 includes an
         impairment loss of long-lived assets of $5.5 million and $1.6 million,
         respectively.


ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

OVERVIEW

   The business of Famous Dave's of America, Inc. is to develop, operate
and/or franchise casual dining restaurants under the name "Famous Dave's". As
of December 30, 2001, there are 56 Famous Dave's restaurants:  thirty-seven
are company owned and operated, and nineteen are franchised.  The locations
are summarized in the table below:

<TABLE>
<CAPTION>
                   COMPANY
                    OWNED          FRANCHISED            TOTAL
    STATE        RESTAURANTS      RESTAURANTS         RESTAURANTS
    -----        -----------      -----------         -----------
<S>              <C>              <C>                 <C>
   Alabama            0                1                   1
   Georgia            0                1                   1
   Illinois           8                4                  12
   Indiana            0                1                   1
     Iowa             3                0                   3
   Maryland           4                0                   4
  Minnesota          12                5                  17
   Nebraska           1                1                   2
     Ohio             0                1                   1
 South Dakota         0                1                   1
  Tennessee           0                1                   1
     Utah             2                0                   2
   Virginia           4                0                   4
  Wisconsin           3                3                   6
                     --               --                  --
                     37               19                  56
</TABLE>

   Our future additional revenues and profits will depend upon various factors,
including additional market acceptance of the Famous Dave's concept, the quality
of the restaurant operations, the ability to successfully expand into new
markets, our ability to raise additional financing as required and general
economic conditions. There can be no assurance we will successfully implement
our expansion plans, in which case we will continue to be dependent on revenues
from existing operations. We also face all of the risks, expenses and
difficulties frequently encountered in the development of an expanding business.
Furthermore, to the extent that our expansion strategy is successful, we must
manage the transition to multiple-site and higher-volume operations, the control
of overhead expenses and the addition and retention of necessary personnel.

   Components of operating expenses include food and beverage costs, operating
payroll and employee benefits, occupancy costs, repair and maintenance, and
advertising and promotion. Certain of these costs are variable and will


                                       13
<PAGE>

increase with sales volume. The primary fixed costs are corporate and restaurant
management and occupancy costs. Our experience is that when a new restaurant
opens, it incurs higher than normal levels of labor and food costs until
operations stabilize, usually during the first three months of operation. As
restaurant management and staff gain experience following the opening, labor
scheduling, food cost management and operating expense control are improved to
levels similar to those at our more established restaurants.

   General and administrative expenses include all corporate and administrative
functions that serve to support existing operations and provide an
infrastructure to support future growth. Management, supervisory and staff
salaries, employee benefits, travel, rent, depreciation, general insurance and
marketing expenses are major items in this category.

   As of January 1, 1996, we elected a 52 or 53 week fiscal year ending on the
Sunday nearest December 31. Before January 1, 1996, we used a fiscal year ending
on December 31. Fiscal years 1999, 2000 and 2001 were all 52 week years.

   We were formed in March 1994 and opened our first restaurant in Minneapolis
in June 1995. As of December 30, 2001, we operated a total of thirty-seven
restaurants and franchised nineteen locations.


OPERATING RESULTS

   Overall results of operations for the 52 weeks ended December 30, 2001
reflect the opening of six new units during fiscal 2001. Our overall operating
results for fiscal 2001, fiscal 2000, and fiscal 1999, expressed as a percentage
of revenue, were as follows:

<TABLE>
<CAPTION>
                                                                              Fiscal Years Ended
                                                                              ------------------
                                                               December 30,       December 31,      January 2,
                                                                   2001               2000             2000
                                                                   ----               ----             ----
<S>                                                            <C>                <C>               <C>
Revenues .....................................................    100.0              100.0            100.0

Unit-Level Costs and Expenses:
  Food and Beverage Costs ....................................     30.8               32.2             33.8
  Labor and Benefits .........................................     27.2               28.1             27.9
  Operating Expenses .........................................     21.9               22.2             24.0
  Depreciation and Amortization ..............................      5.1                5.3              6.2
  Pre-opening Expenses .......................................      0.7                1.2              1.2
                                                                  -----              -----            -----
     Total Costs and Expenses ................................     85.7               88.9             93.1
                                                                  -----              -----            -----

Income from Unit-level Operations ............................     14.3               11.1             6.9

General and Administrative Expenses ..........................      7.3                7.4              8.9
Impairment Reserve on Restaurants and Other Assets ...........      0.0                0.0             11.6
                                                                  -----              -----            -----
Income(Loss) from Operations .................................      7.0                3.7            (13.2)

Interest and Other Income (Expense) ..........................     (1.4)              (1.6)            (0.7)
Gain on Sale of Property .....................................      0.2                0.9              0.0
Loss from investment in unconsolidated affiliate .............     (1.2)               0.0              0.0
                                                                  -----              -----            -----
Income (Loss) before taxes ...................................      4.6                3.0            (13.9)

Benefit from income tax ......................................      4.7                0.0              0.0
                                                                  -----              -----            -----
Net Income(Loss) .............................................      9.3                3.0            (13.9)
                                                                  =====              =====            =====
</TABLE>


                                       14
<PAGE>

   A breakdown of our restaurant (restaurant, ribfest and retail operations)
operating results are as follows (amounts in $000's):

<TABLE>
<CAPTION>
                                                             For Fiscal Year ending 12/30/01
                                                             -------------------------------
                                                   Restaurant Operations            Total Company
                                                   ---------------------            -------------
                                                                 % of                           % of
                                                   $ Amount     Revenue       $ Amount        Revenue
                                                   --------     -------       --------        -------
<S>                                                <C>          <C>           <C>             <C>
Revenue.....................................        85,360        100.0         87,673         100.0

Unit-Level Costs and Expenses:
  Food and Beverage Costs...................        26,980         31.6         26,980          30.8
  Labor and Benefits........................        23,830         27.9         23,834          27.2
  Operating Expenses........................        19,158         22.4         19,158          21.9
  Depreciation and Amortization.............         4,223          4.9          4,463           5.1
  Pre-opening Expenses......................             0          0.0            629           0.7
                                                    ------        -----         ------         -----
     Total Costs and Expenses...............        74,191         86.8         75,064          85.7
                                                    ------        -----         ------         -----
Income from Unit-level Operations...........        11,170         13.2         12,609          14.3
</TABLE>

<TABLE>
<CAPTION>
                                                            For Fiscal Year ending 12/31/00
                                                            -------------------------------
                                                   Restaurant Operations            Total Company
                                                   ---------------------            -------------
                                                                  % of                          % of
                                                   $ Amount      Revenue      $ Amount        Revenue
                                                   --------      -------      --------        -------
<S>                                                <C>           <C>          <C>             <C>
Revenue.....................................        69,192        100.0         70,160         100.0

Unit-Level Costs and Expenses:
  Food and Beverage Costs...................        22,611         32.7         22,611          32.2
  Labor and Benefits........................        19,686         28.5         19,686          28.1
  Operating Expenses........................        15,568         22.5         15,573          22.2
  Depreciation and Amortization.............         3,479          5.0          3,694          5.3
  Pre-opening Expenses......................             0          0.0            850           1.2
                                                    ------        -----         ------         -----
     Total Costs and Expenses...............        61,344         88.7         62,414          89.0
                                                    ------        -----         ------         -----
Income from Unit-level Operations...........         7,848         11.3          7,746          11.0
</TABLE>

<TABLE>
<CAPTION>
                                                             For Fiscal Year ending 01/02/00
                                                             -------------------------------
                                                   Restaurant Operations            Total Company
                                                   ---------------------            -------------
                                                                  % of                          % of
                                                  $ Amount       Revenue      $ Amount        Revenue
                                                  --------       -------      --------        -------
<S>                                               <C>            <C>          <C>             <C>
Revenue.....................................        47,575        100.0         47,629         100.0

Unit-Level Costs and Expenses:
  Food and Beverage Costs...................        16,081         33.8         16,081          33.8
  Labor and Benefits........................        13,286         27.9         13,286          27.9
  Operating Expenses........................        11,420         24.0         11,420          24.0
  Depreciation and Amortization.............         2,725          5.7          2,954           6.2
  Pre-opening Expenses......................             0          0.0            573           1.2
                                                    ------        -----         ------         -----
     Total Costs and Expenses...............        43,512         91.5         44,314          93.0
                                                    ------        -----         ------         -----
Income from Unit-level Operations...........         4,063          8.5          3,315           7.0
</TABLE>


                                       15
<PAGE>

FISCAL YEAR 2001 COMPARED TO FISCAL YEAR 2000

      Total Revenues -- The Company's total revenues were $87,673,000 for fiscal
2001, compared to $70,160,000 for fiscal 2000, a 25% increase. This increase is
due to additional restaurant openings, increased same store sales, increased
franchising and royalty revenues. Each of these components is further discussed
below.

      Restaurant Revenues -- Restaurant revenue increased by $16,168,000 or
23.4% to $85,360,000 for the year ended December 30, 2001 from $69,192,000 for
the year ended December 31, 2000. The increase in revenue was due primarily to
an additional six restaurants opened during fiscal 2001, adding to the base of
thirty-three restaurants open as of December 31, 2000 (approximately $8 million
of the increase), the contribution of a full year of revenue from restaurants
which were open for only part of 2000 (approximately $11.7 million of the
increase) and an increase in revenue from restaurants open for all of both
periods (approximately $1 million). The revenue increase was offset by the
decline in revenue from two existing restaurants, one which was contributed to
an unconsolidated affiliate, the other which was franchised in fiscal 2001
(approximately ($2.3) million), by the sales of our Ribfest and Retail units
(approximately ($1.4) million), and by the sale of two restaurant units during
fiscal 2000 (approximately ($.8 million). Because of the fiscal 2001 restaurant
openings, and expected additional restaurant openings in 2002, we anticipate
revenue and operating costs and expenses to continue to increase during fiscal
2002. During fiscal 2001, we increased menu prices an average of 1.5%.

      Other Revenue -- Other revenue for the Company consists of royalty
revenues, franchise fees and initial franchise fees. Franchise revenues for
fiscal 2001 were $2,121,000, a 134.6% increase when compared to $904,000 for the
same period in 2000. Franchise revenue includes both franchise royalty income
and initial franchise fees. Royalties are based on a percent of sales, while fee
amounts reflect initial non-refundable fixed fees and are recorded as revenue
when an agreement is signed and no additional material services are required by
the Company. The Company had nineteen franchises open at December 30, 2001,
compared to nine for December 31, 2000. During the second quarter of fiscal
2000, the Company sold its sauce and seasoning retail line of business and now
receives licensing royalty income. For fiscal year 2001, the licensing royalty
income was $192,000, compared to $64,000 for the same period in 2000.

      Same Store Sales -- It is our policy to include in our same store sales
base restaurants that have been open more than eighteen months. At the end of
fiscal 2001, there were twenty-seven restaurants included in this base. Same
store sales for fiscal 2001 increased approximately 2.9%, compared to fiscal
2000's increase of approximately 5.3%. Management believes that the increase in
comparable sales is a result of continued improvements in customer satisfaction
and favorable economic trends.

      Average Weekly Sales -- Average weekly volume for all of our restaurants
was $46,430. (Restaurants opened in the last two fiscal years averaged weekly
sales in 2001 of $48,800, while those opened in 1999 or prior averaged weekly
sales in 2001 of $44,900). Restaurant operating weeks during fiscal 2001 totaled
1,838 compared to 1,532 in fiscal 2000. The increase in average weekly volume is
due to the 2.9% increase in comparable restaurant sales combined with the
successful opening of new, higher volume restaurants. Average weekly volume for
all of our restaurants was $46,400.

      Food and Beverage Costs -- Food and beverage costs for fiscal 2001 were
$26,980,000 or 31.6% of restaurant revenue compared to $22,611,000 or 32.7% for
fiscal 2000. The decrease in food and beverage costs as a percent of restaurant
revenue was primarily due to an increase in higher margin liquor sales,
increased cost controls, and menu price increases.


                                       16
<PAGE>

      Labor and Benefits -- Labor and benefits were $23,830,000 or 27.9% of
restaurant revenue in fiscal 2001 compared to $19,686,000 or 28.5% of restaurant
revenue in fiscal 2000. The increase in labor and benefits in dollar amount was
primarily attributable to the opening of six new restaurants with full service
as well as a heightened emphasis on training and execution in our restaurants.
The decrease in labor and benefits as a percentage of restaurant revenue is
primarily due to increased efficiencies in scheduling and managing labor hours,
offset by increases in benefits costs. Full service restaurants that operate in
states without a "tip credit" (such as Minnesota) experience a higher wage rate
for dining room labor than do restaurants located in states where a tip credit
is available to reduce wages paid to foodservers. The migration toward full
service dining in most of our restaurants is part of our strategy for increasing
unit-level revenue, but does result in higher labor costs.

      Operating Expenses -- Operating expenses for fiscal 2001 were $19,158,000
or 22.4% of restaurant revenue, compared to $15,573,000 or 22.5% of restaurant
revenue for fiscal 2000. The dollar increase in operating expenses is related to
the increased number of restaurants. The decrease in operating expenses as a
percent of restaurant revenue in fiscal 2001, compared to fiscal 2000, is
primarily due to continued emphasis placed on cost reduction efforts as well as
the impact of fixed costs against a higher average volume, offset by sharp
increases in utility costs during the first quarter of 2001.

      Depreciation and Amortization -- Unit-level depreciation and amortization
for fiscal 2001 was $4,223,000 or 4.9% of restaurant revenue, compared to
$3,479,000 or 5.0% of restaurant revenue for fiscal 2000. Total company
depreciation and amortization for fiscal 2001 was $4,463,000, or 5.1% of
revenue, compared to $3,694,000 or 5.3% of revenue in fiscal 2000. The decrease
in depreciation and amortization, both at the unit level and for the total
company, as a percent of revenue is due primarily to increased revenue from both
new and existing restaurants in fiscal 2001. The increased dollar amount of
depreciation expense is the result of construction costs of new units opened in
fiscal 2001 and a full year's depreciation from locations open only part of
fiscal 2000.

      Income from Unit-level Operations -- Income from unit-level operations in
fiscal 2001 totaled $12,609.000, or 14.3% of revenue, compared to $7,746,000 or
11.0% of revenue for fiscal 2000. Income from unit-level operations represents
income from operations before general and administrative expenses. Although
income from unit-level operations should not be considered an alternative to
income/loss from operations as a measure of our operating performance, such
unit-level measurement is commonly used as an additional measure of operating
performance in the restaurant industry and certain related industries. The
change in income from unit-level operations from fiscal 2000 to fiscal 2001 is
primarily attributable to the increase in revenue both from existing units and
additional units opened and an increase in royalty income and franchise fees.
Other changes in costs and expenses discussed above also contributed to the
change in income from unit-level operations.

      Pre-opening Expenses -- Pre-opening expenses were $629,000 for 2001
compared to $850,000 for fiscal 2000. These expenses reflect the opening and
conversion of six new restaurants in fiscal 2001 compared to eleven new
restaurants in fiscal 2000.

      General and Administrative Expenses -- General and administrative expenses
totaled $6,400,000 or 7.3% of revenue in fiscal 2001 compared to $5,165,000 or
7.4% of revenue in fiscal 2000. The dollar increase reflects an increase in the
corporate infrastructure to support recent growth.

      Income From Operations -- Income from operations totaled $6,209,000 or
7.1% of revenue for fiscal 2001 compared to $2,581,000 or 3.7% of revenue for
fiscal 2000. The increase in income from fiscal 2000 to fiscal 2001 is due to
the increased income from new and existing restaurants and royalty income and
franchise fees.

      Interest Income (Expense), Net -- Interest income (expense), net, totaled
($1,439,000) or (1.6%) of revenue for fiscal 2001 compared to ($1,246,000) or
(1.8%) for fiscal 2000. This primarily represents interest expense from capital
lease obligations, a line of credit, notes payable and financing lease
obligations. The decrease in expense from fiscal 2000 to fiscal 2001 is
primarily due to additional interest income received via notes receivable the
company holds with franchisees, as well as a decrease in interest expense on our
variable rate line of credit. This was offset slightly by the increase in
interest expense due to increased borrowings.


                                       17
<PAGE>

      Gain on Sale of Property and Other Income -- During fiscal 2001, the
Company recorded a gain on sale of property and other income, net, of $367,000,
or 0.4% of revenue. This compares to $777,000, or 1.1% of revenue for fiscal
2000. These gains are attributable to various sales of property, offset by
losses on disposals of property.

      Equity in Loss from Unconsolidated Affiliate -- The equity in loss from
unconsolidated affiliate was ($1,029,000), or (1.2%) of revenue for fiscal 2001.
This relates to the Company's 40% investment in FUMUME, LLC. This equity in loss
was based on 100% of the cash loss (see notes to consolidated financial
statements for more information). Effective June 1, 2001, Famous Dave's Ribs-U,
Inc., our wholly-owned subsidiary, entered into a joint venture with
Memphis-based Lifestyle Ventures, LLC, H&H Holding Company, LLC and another
investor to develop a themed restaurant concept based on the entertainment
artist Isaac Hayes. Pursuant to the agreement governing the joint venture, the
participants in the joint venture formed a Delaware limited liability company
named FUMUME, LLC. FUMUME opened its first location in Chicago in June 2001 and
its second location in Memphis, Tennessee in October 2001. Each location is
structured as a separate Delaware limited liability company, each of which is
wholly owned by FUMUME.

   In exchange for a 40% interest in the LLC, the Company agreed to contribute:
(i) $825,507 in working capital (which as of December 30, 2001, has been
contributed), (ii) the assets comprising Famous Dave's Ribs and Blues Club in
Chicago and (iii) certain rights to use Famous Dave's various licensed marks.
Although the joint venture that owns the Chicago club is now responsible for the
payment of the rent for the Chicago club, the Company remains liable under the
lease with the landowner.

   The Company has agreed to reimburse the LLC for operating losses incurred at
the Memphis and Chicago clubs. The Company can terminate its reimbursement
obligation with respect to the Chicago club if after any two-year period ending
May 31 there has been a cumulative operating loss. With respect to the Memphis
club, the Company may terminate the reimbursement obligation if the cumulative
deficit of the club (excluding management fees) exceeds $2 million or, if after
any five-year period ending May 31, there has been a cumulative operating loss.

   The Company has agreed to provide various management services for the clubs.
In exchange for these services, the Company will receive a fee equal to 3% of
gross sales per year. The management agreement with respect to a particular club
terminates upon, among other things, the termination of our loss-reimbursement
obligations as described above.

      Benefit from income taxes -- The Company realized a benefit from income
taxes during fiscal 2001 of $4,010,000, which represents the value of the net
loss carryforwards available at December 30, 2001 that can be used to reduce
future tax liabilities. The deferred tax asset had been fully reserved in prior
years. We reversed the reserve in 2001 as we now expect to fully utilize the tax
loss carryforward. For the year ended December 30, 2001, the benefit from income
taxes represents $.37 per share on 10,879,000 weighted average shares
outstanding added to our net income per share.

      Net Income / Diluted Net Income per Share -- Net income for fiscal 2001
was $8,118,000 or $.75 per share on 10,879,000 weighted average shares
outstanding, compared to $2,112,000 or $.22 on 9,745,000 weighted average shares
outstanding for fiscal 2000. The increase in net income and diluted net income
per share in fiscal 2001 is due primarily to the benefit from income taxes
recorded during the year of $4,010,000. Without this tax benefit, the net income
for fiscal 2001 would have been $4,108,000 or $.38 per share on 10,879,000
weighted average shares outstanding. If net income had been reported fully taxed
in both years, earnings per share in fiscal 2001 and fiscal 2000 would have been
$.23 and $.13, respectively. The increase in net income and diluted net income
per share in fiscal 2001, net of the tax benefit, is due to increased income
from restaurant and franchise operations and an emphasis on controlled expenses,
offset by an increase in the number of shares outstanding and by the loss in
unconsolidated affiliate.


                                       18
<PAGE>

FISCAL YEAR 2000 COMPARED TO FISCAL YEAR 1999

      Restaurant Revenue -- Restaurant revenue increased by $21,617,000 or 45.4%
to $69,192,000 for the year ended December 31, 2000 from $47,575,000 for the
year ended January 2, 2000. The increase in revenue was due primarily to an
additional eleven restaurants opened and acquired during fiscal 2000, adding to
the base of twenty-four restaurants open as of January 2, 2000 (approximately
$16.3 million of the increase), the contribution of a full year of revenue from
restaurants which were open for only part of 1999 (approximately $6.7 million of
the increase) and an increase in revenue from restaurants open for all of both
periods (approximately $1.4 million), offset by a decline in revenue from two
existing restaurants that were franchised in fiscal 2000 (approximately $1.3
million) and the sale of the retail line of business in June 2000 (approximately
$1.5 million). Because of the fiscal 2000 restaurant openings, and expected
additional restaurant openings in 2001, we anticipate revenue and operating
costs and expenses to continue to increase during fiscal 2001. During fiscal
2000, we increased menu prices an average of 1.5%.

      Other Revenue -- Other revenue for the Company consists of royalty
revenues and franchise fees. Franchise revenues for fiscal 2000 were $904,000
compares to $54,000 for the same period in 1999. Franchise revenue includes both
franchise royalty income and franchise fees. Royalties are based on a percent of
sales, while fee amounts reflect initial non-refundable fixed fees and are
recorded as revenue when an agreement is signed and no additional material
services are required from the Company. The Company currently has nine
franchises open compared to two for the same period in 1999. During the second
quarter 2000, the Company sold its sauce and seasoning retail line of business
and now receives licensing royalty income. For fiscal year 2000, the licensing
royalty income was $64,000.

      Same Store Sales -- It is our policy to include in our same store sales
base restaurants that have been open more than eighteen months. During fiscal
2000, there were twenty-one restaurants included in this base. Same store sales
for fiscal 2000 increased approximately 5.3% compared to fiscal 1999's increase
of approximately 2.6%. Management believes that the increase in comparable sales
is a result of continued improvements in customer satisfaction and favorable
economic trends.

      Average Weekly Sales -- Average weekly sales from restaurant operations
increased to $44,270 in fiscal 2000 from $37,750 in fiscal 1999. Restaurant
operating weeks during fiscal 2000 totaled 1,532 compared to 1,183 in fiscal
1999. The increase in average weekly volume is due to the 5.3% increase in
comparable restaurant sales combined with the successful opening of new, higher
volume restaurants.

      Food and Beverage Costs -- Food and beverage costs for fiscal 2000 were
$22,611,000 or 32.7% of restaurant revenue compared to $16,081,000 or 33.8% for
fiscal 1999. The decrease in food and beverage costs as a percent of restaurant
revenue was primarily due to an increase in higher margin liquor sales and
increased cost controls.

      Labor and Benefits -- Labor and benefits were $19,686,000 or 28.5% of
restaurant revenue in fiscal 2000 compared to $13,286,000 or 27.9% of restaurant
revenue in fiscal 1999. The increase in labor and benefits both in amount and as
a percent of restaurant revenue was primarily attributable to the opening of
eleven new restaurants with full service as well as a heightened emphasis on
training and execution in our restaurants. Additionally, prior year revenue
included the retail sauce and seasoning division against which there was minimal
labor charges. Full service restaurants that operate in states without a "tip
credit" (such as Minnesota) experience a higher wage rate for dining room labor
than do restaurants located in states where a tip credit is available to reduce
wages paid to food servers. The migration toward full service dining in most of
our restaurants is part of our strategy for increasing unit-level revenue, but
does result in higher labor costs.

      Operating Expenses -- Operating expenses for fiscal 2000 were $15,573,000
or 22.5% of restaurant revenue compared to $11,420,000 or 24.0% of restaurant
revenue for fiscal 1999. The dollar increase in operating expenses is related to
the increased number of restaurants. The decrease in operating expenses as a
percent of restaurant revenue in fiscal 2000 compared to fiscal 1999 is
primarily due to continued emphasis placed on cost reduction efforts as well as
the impact of fixed costs against a higher average volume.


                                       19
<PAGE>

      Depreciation and Amortization -- Unit-level depreciation and amortization
for fiscal 2000 was $3,479,000 or 5.0% of restaurant revenue compared to
$2,725,000 or 5.7% of restaurant revenue for fiscal 1999. Total company
depreciation and amortization for fiscal 2000 was $3,694,000, or 5.3% of
operating revenue, compared to $2,954,000 or 6.2% of operating revenue for
fiscal 1999. The decrease in depreciation and amortization, both at the unit
level and for the total company, as a percent of revenue is primarily due to
increased revenue from both new and existing restaurants in fiscal 2000. The
increased dollar amount of depreciation expense is the result of increased
construction costs of new units opened in fiscal 2000 and a full year's
depreciation from locations open only part of fiscal 1999.

      Income from Unit-level Operations -- Income from unit-level operations
totaled $7,746,000 or 11.0% of revenue for fiscal 2000 compared to $3,315,000 or
7.0% of revenue for fiscal 1999. Income from unit-level operations represents
income from operations before general and administrative expenses. Although
income from unit-level operations should not be considered an alternative to
income/loss from operations as a measure of our operating performance, such
unit-level measurement is commonly used as an additional measure of operating
performance in the restaurant industry and certain related industries. The
change in income from unit-level operations from fiscal 1999 to fiscal 2000 is
primarily attributable to the increase in revenue both from existing units and
additional units opened and an increase in royalty income and franchise fees.
Other changes in costs and expenses discussed above also contributed to the
change in income from unit-level operations.

      Pre-opening Expenses -- Pre-opening expenses were $850,000 or 1.2% of
revenue for fiscal 2000 compared to $573,000 or 1.2% of revenue for fiscal 1999.
These expenses reflect the opening and conversion of eleven new restaurants in
fiscal 2000 compared to two new restaurants in fiscal 1999.

      General and Administrative Expenses -- General and administrative expenses
totaled $5,165,000 or 7.4% of revenue in fiscal 2000 compared to $4,025,000 or
8.9% of revenue in fiscal 1999. Included in the 1999 amount is $147,000
associated with severance and restructuring charges taken in the fourth quarter
of 1999. The dollar increase reflects an increase in the corporate
infrastructure to support recent growth. The reduction in general and
administrative expenses as a percentage of revenue reflects the company's
ability to leverage its current infrastructure against increased revenues.

      Income (Loss) From Operations -- Income from operations totaled 2,581,000
or 3.7% of revenue for fiscal 2000 compared to a loss of ($6,223,000) or (13.1%)
of revenue for fiscal 1999. The loss from operations in 1999 reflects
approximately $5.7 million in expenses associated with impairment charges on
certain restaurants, severance payments and other miscellaneous expenses taken
in the fourth quarter of fiscal 1999. Excluding these special provisions, the
comparable loss from operations for fiscal 1999 is ($617,000) or (1.3%). The
increase in income from fiscal 1999 to fiscal 2000 is due to the increased
income from new and existing restaurants and royalty income and franchise fees.

      Interest Income (Expense), Net -- Interest income (expense), net, which
primarily represents interest expense from capital lease obligations, a line of
credit, notes payable and financing lease obligations, totaled ($1,246,000) or
(1.8%) for fiscal 2000 compared to ($387,000) or (0.8%) for fiscal 1999. The
increase in expense from fiscal 1999 to fiscal 2000 is primarily due to
additional borrowings and the corresponding interest expense on notes payable,
interest incurred on a bank line of credit and the elimination of short-term
investments in fiscal 2000.

      Gain on Sale of Property and Other Income -- During June 2000 the Company
recorded a gain on sale of property associated with the sale of our sauce and
seasoning retail line of business and the sale of two company-operated
restaurants to franchisees. The Company also recorded a $394,000 deferred gain,
of which $19,000 was recognized in fiscal 2000. The gain on sale of property and
other income, net, was $777,000 or 1.1% of revenue. There was no corresponding
gain on sale of property or other income recorded in fiscal 1999.

      Net Income (Loss) / Diluted Net Income (Loss) per Share -- Net income for
fiscal 2000 was $2,112,000 or $.22 per share on 9,745,000 weighted average
shares outstanding, compared to a loss of ($6,610,000) or ($.75) on 8,842,000
weighted average shares outstanding for fiscal 1999. The fiscal 1999 loss
includes the accounting charges taken in the fourth quarter of fiscal 1999 for
impairment charges on certain restaurants, severance payments and other
miscellaneous expenses. There was no impairment reserve required for fiscal
2000. Exclusive of the accounting


                                       20
<PAGE>

charges taken in fiscal 1999, the comparable loss would have been ($950,000) or
($0.11). The increase in net income and diluted net income per share in fiscal
2000 is due to increased income from restaurant and franchise operations, an
emphasis on controlled expenses and no requirement for an impairment reserve,
but is offset by an increase in the number of shares outstanding.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

   Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended, is effective for
years beginning after June 15, 2000. SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge criteria are met. Special accounting
for qualifying hedges allows a derivative's gains or losses to offset related
results on the hedged item in the statement of operations and requires that a
company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting. The adoption of SFAS No. 133 did not
have a material effect on the Company's financial position or results of
operations.

   In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No. 143. "Accounting for Asset Retirement Obligations."  SFAS No. 143 is
effective for fiscal years beginning after June 15, 2002.  The Company
believes the adoption of SFAS No. 143 will not have a material effect on the
Company's consolidated financial position or results of operations.

   In October 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment
or Disposal of Long-Lived Assets." SFAS No. 144 supercedes SFAS No. 121. SFAS
144 primarily addresses significant issues relating to the implementation of
SFAS 121 and develops a single accounting model for long-lived assets to be
disposed of, whether primarily held, used or newly acquired. The provisions of
SFAS 144 will be effective for fiscal years beginning after December 15, 2001.
The provisions of SFAS No. 144 generally are to be applied prospectively. The
Company believes the adoption of SFAS No. 143 will not have a material effect on
the Company's consolidated financial position or results of operations.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

   As of December 30, 2001, we held cash and cash equivalents of approximately
$7.4 million compared to approximately $1.9 million as of December 31, 2000. As
reflected in the accompanying consolidated financial statements, this increase
in cash and cash equivalents during the fifty-two weeks ended December 30, 2001
reflects additional earnings, cash from a private equity placement, cash from
financing activities net of the use of cash for the purchase and/or development
of property, equipment and leasehold improvements (approximately $6.2 million)
and funding of our unconsolidated affiliate. Subsequent to year-end, we received
approximately $2,580,000 upon the sale of three restaurants to a franchisee.

   On November 12, 2001, the company issued 1,000,000 shares of common stock via
a private equity placement at a value of $6.00 per share, and for which the
company received net cash proceeds after commissions and expenses $5,322,000.
The proceeds are to be used primarily to develop new restaurants and for general
corporate purposes.

   At December 30, 2001, we were a party to a credit agreement with a bank that
provided approximately $4.5 million of borrowing capability to us, of which
approximately $100,000 was outstanding at year end. This agreement was secured
by substantially all of our property, and in addition was guaranteed by and
secured by certain of the assets of our Chairman, David Anderson. For fiscal
year 2001, the credit agreement carried an interest rate of 4% above the Prime
Rate, and provided for borrowing up to a maximum of 50% of the value of a
collateral pool which consisted of our property and certain of the property
pledged to secure the credit agreement by Mr. Anderson. Total availability on
this agreement as of December 30, 2001 was $1,680,000 due to collateral limits.
The credit agreement was paid off in January of 2002.


                                       21
<PAGE>

   During fiscal 2000, we secured a commitment for $2.5 million in financing for
restaurant equipment, software, and signage. As of December 30, 2001,
approximately $1.7 million of this financing had been utilized.

   As of December 31, 2000 we had in place mortgage financings secured by land
and buildings that provided proceeds of approximately $7.3 million for continued
development of Company owned restaurants. During the year ended December 30,
2001, approximately $1.5 million was added to this financing.

   The Company has agreed to reimburse FUMUME, LLC for operating losses incurred
at the Memphis and Chicago clubs. The Company can terminate our reimbursement
obligation with respect to the Chicago club if after any two-year period ending
May 31 there has been a cumulative operating loss. With respect to the Memphis
club, the Company may terminate the reimbursement obligation if the cumulative
deficit of the club (excluding management fees) exceeds $2 million or, if after
any five-year period ending May 31, there has been a cumulative operating loss.

   To continue our expansion, we anticipate that additional financing will
likely be required during fiscal 2002. We anticipate that future development and
expansion will be funded or financed primarily through currently held cash and
short-term investments, and proceeds from forms of financing such as lease
financing or other credit facilities. However, there are no assurances that
additional financing required for expansion will be available on terms
acceptable or favorable to us.

INCOME TAXES

   At December 30, 2001, we had federal and state loss carryforwards ("NOL's")
for tax reporting purposes of approximately $9.6 million, which if not used will
begin to expire in 2011 and tax credit carryforwards of approximately $719,000
which, if not used, will begin to expire in 2011. Future changes in ownership,
if any, may place limitations on the use of these NOL's.

QUARTERLY FLUCTUATIONS, SEASONALITY AND INFLATION

   Our restaurants typically generate higher revenues in the second and third
quarters and lower revenues in the first and fourth quarters as a result of
seasonal traffic increases experienced during the summer months, and possible
adverse weather which can disrupt customer and employee transportation to our
restaurants.

   The primary inflationary factors affecting our operations include food and
beverage and labor costs. In addition, our leases require us to pay taxes,
maintenance, repairs and utilities and these costs are subject to inflationary
increases. In addition, we are subject to interest rate changes based on market
conditions.

   We believe low inflation rates have contributed to relatively stable costs.
There is no assurance, however, that low inflation rates will continue.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   The Company's financial instruments include cash and cash equivalents and
long-term debt. The Company includes as cash and cash equivalents certificates
of deposits and all other investments with original maturities of three months
or less when purchased and which are readily convertible into known amounts of
cash. The Company's cash and cash equivalents are not subject to significant
interest rate risk due to the short maturities of these instruments. The total
outstanding long-term debt of the Company as of December 30, 2001 was
$9,581,000. The Company's long-term debt is not subject to interest rate risk
because all of the Company's long-term debt has fixed rates of interest. The
Company does not enter into contracts for speculative or investment purposes.

   The Company's primary exposure to market risk associated with changes in
interest rates previously involved the Company's revolving line of credit with
Associated Commercial Finance, Inc. (fka BNC Financial Corporation). Advances on
this line of credit were due on demand and accrued interest at the prime rate
plus 4%, payable monthly. This revolving line of credit was paid in full and
cancelled in January 2002.


                                       22
<PAGE>

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

   Certain Statements in this Form 10-K constitute "Forward-Looking Statements"
within the meaning of the private securities litigation reform act of 1995 (the
"Reform Act"). Such Forward-Looking statements involve known and unknown risks,
uncertainties, and other factors which may cause our actual results,
performance, or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: additional market
acceptance of the Famous Dave's concept; our ability to successfully expand into
new markets; our ability to execute our expansion strategy; changes in business
strategy or development plans; availability and terms of capital; changes in
costs of food, labor, and employee benefits; changes in government regulations;
competition; availability of locations and terms of sites for restaurant
development; development and operating costs; advertising and promotional
efforts; brand awareness and other factors referenced in this Form 10-K.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS

   The consolidated financial statements of Famous Dave's of America, Inc. are
included herein following the signatures, beginning at page F-1.

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

   None


                                       23
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

   Information in response to this Item is incorporated herein by reference to
our definitive proxy statement to be filed pursuant to Regulation 14 A within
120 days after the end of the fiscal year covered by this form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

   Information in response to this Item is incorporated herein by reference to
our definitive proxy statement to be filed pursuant to Regulation 14 A within
120 days after the end of the fiscal year covered by this form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   Information in response to this Item is incorporated herein by reference to
our definitive proxy statement to be filed pursuant to Regulation 14 A within
120 days after the end of the fiscal year covered by this form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   Information in response to this Item is incorporated herein by reference to
our definitive proxy statement to be filed pursuant to Regulation 14 A within
120 days after the end of the fiscal year covered by this form 10-K.

ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K

   (a)Exhibits.

     See "exhibit index" on the page following the Consolidated Financial
   Statements.

   (b)Reports on Form 8-K.

      None.


                                       24
<PAGE>

      SIGNATURES

      In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                    FAMOUS DAVE'S OF AMERICA, INC.
                                    ("REGISTRANT")


Dated: March 20, 2002               By  /s/ Martin J. O'Dowd
                                       ---------------------------
                                    Martin J. O'Dowd
                                    Chief Executive Officer, President and
                                    Secretary


      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on March 20, 2002 by the following persons on behalf of
the Registrant, in the capacities indicated.

<TABLE>
<CAPTION>
             SIGNATURE                     TITLE
<S>                                        <C>
             /s/ David W. Anderson         Chairman of the Board
             -------------------------
             David W. Anderson

             /s/ Martin J. O'Dowd          Chief Executive Officer, President, Secretary
             -------------------------     and Director (principal executive officer)
             Martin J. O'Dowd

             /s/ Kenneth J. Stanecki       Chief Financial Officer (principal accounting officer)
             -------------------------
             Kenneth J. Stanecki

             /s/ Thomas J. Brosig          Director
             -------------------------
             Thomas J. Brosig

             /s/ Richard L. Monfort        Director
             -------------------------
             Richard L. Monfort

             /s/ K. Jeffrey Dahlberg       Director
             -------------------------
             K. Jeffrey Dahlberg

             /s/ James W. Cox              Director
             -------------------------
             James W. Cox
</TABLE>


                                       25

<PAGE>

ITEM 8.                                       CONSOLIDATED FINANCIAL STATEMENTS



INDEPENDENT AUDITORS' REPORT



The Board of Directors and Shareholders
Famous Dave's of America, Inc.:

We have audited the accompanying consolidated balance sheets of Famous Dave's of
America, Inc. and subsidiaries as of December 30, 2001 and December 31, 2000,
and the related consolidated statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended December 30, 2001.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Famous
Dave's of America, Inc. and subsidiaries as of December 30, 2001 and December
31, 2000, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 30, 2001, in conformity
with accounting principles generally accepted in the United States of America.



                                                  VIRCHOW, KRAUSE & COMPANY, LLP

Minneapolis, Minnesota
January 30, 2002


                                      F-1
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                     DECEMBER 30, 2001 AND DECEMBER 31, 2000
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                  2001          2000
                                                                  ----          ----
<S>                                                            <C>           <C>
                                     ASSETS
Current assets:
  Cash and cash equivalents                                    $  7,398      $  1,895
  Accounts receivable, net                                        1,903         1,007
  Inventories                                                     1,441         1,394
  Prepaids and other current assets                               1,273           650
                                                               --------      --------
     Total current assets                                        12,015         4,946

Property, equipment and leasehold improvements, net              46,940        46,052

Other assets:
  Notes receivable, net of current portion                        1,146           832
  Deposits                                                          410           550
  Debt issuance costs, net                                          618           583
  Investment in unconsolidated affiliate                          4,301             0
  Deferred tax asset                                              5,010             0
                                                               --------      --------

                                                               $ 70,440      $ 52,963
                                                               ========      ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Line of credit                                               $    100      $    544
  Current portion of long-term debt                                 695           886
  Current portion of capital lease obligations                      865           420
  Accounts payable                                                2,419         3,678
  Accrued payroll and related taxes                               1,134         1,102
  Other current liabilities                                       2,096         1,732
                                                               --------      --------
     Total current liabilities                                    7,309         8,362

Long-term debt, net of current portion                            8,886         8,444
Financing lease obligation                                        4,500         4,500
Capital lease obligations, net of current portion                 1,193           203
Deferred rent                                                     1,553         1,047
Deferred gain, net of current portion                               310           346
                                                               --------      --------
     Total liabilities                                           23,751        22,902
                                                               --------      --------

Commitments and contingencies (note 16)

Shareholders' equity:
  Common stock, $.01 par value, 100,000 shares authorized,
   11,180 and 9,346 shares issued and outstanding                   112            93
  Additional paid-in capital                                     52,693        44,202
  Accumulated deficit                                            (6,116)      (14,234)
                                                               --------      --------
     Total shareholders' equity                                  46,689        30,061
                                                               --------      --------
                                                               $ 70,440      $ 52,963
                                                               ========      ========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                     F - 2
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
  FOR THE YEARS ENDED DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                            2001          2000          1999
                                                            ----          ----          ----
<S>                                                      <C>           <C>           <C>
Revenues:
  Restaurant revenues                                    $ 85,360      $ 69,192      $ 47,575
  Franchising royalty income                                1,270           335            54
  Franchise fees                                              851           569             0
  Licensing revenue                                           192            64             0
                                                         --------      --------      --------
     Total revenues                                        87,673        70,160        47,629
                                                         --------      --------      --------

Costs and expenses:
  Food and beverage costs                                  26,980        22,611        16,081
  Labor and benefits                                       23,834        19,686        13,286
  Operating expenses                                       19,158        15,573        11,420
  Depreciation and amortization                             4,463         3,694         2,954
  Pre-opening expenses                                        629           850           573
  Impairment reserve on restaurants and other assets            0             0         5,513
  General and administrative                                6,400         5,165         4,025
                                                         --------      --------      --------
     Total costs and expenses                              81,464        67,579        53,852
                                                         --------      --------      --------

Income (loss) from operations                               6,209         2,581        (6,223)
                                                         --------      --------      --------

Other income (expense):
  Interest income                                             158            58            58
  Interest expense                                         (1,597)       (1,304)         (445)
  Gain on sale of property                                    155           658             0
  Other income                                                212           119             0
  Equity in loss of unconsolidated affiliate               (1,029)            0             0
                                                         --------      --------      --------
     Total other income (expense)                          (2,101)         (469)         (387)
                                                         --------      --------      --------

Income (loss) before income taxes                           4,108         2,112        (6,610)

Benefit from income taxes                                   4,010             0             0
                                                         --------      --------      --------
Net income (loss)                                        $  8,118      $  2,112      $ (6,610)
                                                         ========      ========      ========
Basic net income (loss) per common share                 $   0.81      $   0.23      $  (0.75)
                                                         ========      ========      ========
Diluted net income (loss) per common share               $   0.75      $   0.22      $  (0.75)
                                                         ========      ========      ========
Weighted average common shares outstanding - basic          9,973         9,149         8,842
                                                         ========      ========      ========
Weighted average common shares outstanding - diluted       10,879         9,745         8,842
                                                         ========      ========      ========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                     F - 3
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
  FOR THE YEARS ENDED DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000
                                 (in thousands)

<TABLE>
<CAPTION>
                                                    Common Stock         Additional
                                                    ------------         Paid-in       Accumulated
                                                 Shares      Amount      Capital       Deficit         Total
                                                 ------      ------      -------       -------         -----
<S>                                              <C>       <C>           <C>         <C>            <C>
BALANCE - JANUARY 3, 1999                         8,838    $      88     $ 42,721     $ (9,736)      $ 33,073

   Issuance of common stock in
    connection with acquisition of
    property, equipment and leasehold
    improvements                                    211            3          427           --           430

   Issuance of warrants in connection
    with acquisition of property,
    equipment and leasehold
    improvements                                     --           --          110           --           110

   Exercise of stock options                          6           --            7           --             7

   Net loss                                          --           --           --       (6,610)       (6,610)
                                                 ------    ---------     --------     --------      ---------

BALANCE - JANUARY 2, 2000                         9,055           91       43,265      (16,346)       27,010

   Issuance of common stock in
    connection with acquisition of
    property, equipment and leasehold
    improvements (net of expenses
    of $10)                                         232            2          795           --           797

   Issuance of common stock for
    accounts payable                                 16           --           57           --            57

   Exercise of stock options                         43           --           85           --            85

   Net income                                        --           --           --        2,112         2,112
                                                 ------    ---------     --------     --------      --------

BALANCE - DECEMBER 31, 2000                       9,346           93       44,202      (14,234)       30,061

   Issuance of common stock (net of
    commissions and expenses of $678)             1,000           10        5,312           --         5,322

   Exercise of stock options                        774            8        1,881           --         1,889

   Exercise of warrants                              60            1          298           --           299

   Tax benefit for stock options exercised           --           --        1,000           --         1,000

    Net income                                       --           --           --        8,118         8,118
                                                 ------    ---------     --------     --------      --------
BALANCE - DECEMBER 30, 2001                      11,180    $     112     $ 52,693     $ (6,116)     $ 46,689
                                                 ======    =========     ========     ========      ========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                     F - 4
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
  FOR THE YEARS ENDED DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000
                                 (in thousands)


<TABLE>
<CAPTION>
                                                              2001         2000         1999
                                                              ----         ----         ----
<S>                                                         <C>          <C>          <C>
Cash flows from operating activities:
  Net income (loss)                                         $ 8,118      $ 2,112      $(6,610)
  Adjustments to reconcile net income (loss) to
  cash flows from operating activities:
    Depreciation and amortization                             4,463        3,694        2,954
    Impairment reserve for restaurants and other assets           0            0        5,513
    Reserve for other capital items                               0            0         (393)
    Gain on sale of property                                   (155)        (658)           0
    Deferred taxes                                           (4,010)           0            0
    Deferred rent                                               506          494          466
    Equity in loss of unconsolidated affiliate                1,029            0            0
    Changes in operating assets and liabilities:
     Accounts receivable, net                                  (896)        (344)        (478)
     Inventories                                                (83)        (284)        (200)
     Prepaids and other current assets                         (543)          (7)          53
     Deposits                                                   245         (235)         (29)
     Accounts payable                                        (1,259)        (485)      (1,252)
     Accrued payroll and related taxes                           32          295          236
     Other current liabilities                                  361           47           29
                                                            -------      -------      -------
      Cash flows from operating activities                    7,808        4,629          289
                                                            -------      -------      -------

Cash flows from investing activities:
  Proceeds from sale of available-for-sale securities             0            0        1,648
  Purchase of available-for-sale securities                       0            0          (24)
  Proceeds from sale of property                                870          530            0
  Purchases of property                                      (6,168)      (8,776)      (8,405)
  Investment in unconsolidated affiliate                     (2,772)           0            0
  Advances on notes receivable                                 (167)           0            0
  Payments received on notes receivable                          68           31            0
                                                            -------      -------      -------
      Cash flows from investing activities                   (8,169)      (8,215)      (6,781)
                                                            -------      -------      -------

Cash flows from financing activities:
  Payments for debt issuance costs                              (35)        (383)        (200)
  Net advances (payments) on line of credit                    (444)      (2,506)       2,367
  Refunds related to capital lease obligations                1,013            0            0
  Proceeds from financing lease obligation                        0            0        4,500
  Proceeds from long-term debt                                    0        7,300            0
  Payments on long-term debt                                 (1,233)        (263)           0
  Payments on capital lease obligations                        (947)        (454)        (421)
  Proceeds from exercise of stock options and warrants        2,188           75            7
  Proceeds from issuance of common stock, net                 5,322            0            0
                                                            -------      -------      -------
      Cash flows from financing activities                    5,864        3,769        6,253
                                                            -------      -------      -------

Increase (decrease) in cash and cash equivalents              5,503          183         (239)
Cash and cash equivalents, beginning of year                  1,895        1,712        1,951
                                                            -------      -------      -------
Cash and cash equivalents, end of year                      $ 7,398      $ 1,895      $ 1,712
                                                            =======      =======      =======
</TABLE>


          See accompanying notes to consolidated financial statements.


                                     F - 5
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

1)         NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS - Famous Dave's of America, Inc. (the Company) was
incorporated in Minnesota on March 14, 1994. The Company develops, owns,
operates and franchises restaurants under the name "Famous Dave's". At December
30, 2001, the Company had thirty-seven owned restaurants and nineteen franchises
in operation, with additional restaurants in development.

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of Famous Dave's of America, Inc. and its wholly owned subsidiaries.
All significant inter-company transactions and balances have been eliminated in
consolidation.

FISCAL YEAR - The Company has adopted a 52/53 week accounting period ending on
the Sunday nearest December 31 of each year. The years ended December 30, 2001,
December 31, 2000 and January 2, 2000 were 52 week years.

CASH AND CASH EQUIVALENTS - The Company includes as cash equivalents
certificates of deposit and all other investments with original maturities of
three months or less when purchased, which are readily convertible into known
amounts of cash. The Company deposits its cash in high credit quality financial
institutions. The balances, at times, may exceed federally insured limits.

ACCOUNTS RECEIVABLE - The Company provides an allowance for uncollectible
accounts on accounts receivable. The allowance for uncollectible accounts was
$45,000 and $85,000 at December 30, 2001 and December 31, 2000, respectively.
The Company believes all accounts receivable in excess of the allowance are
fully collectible. If accounts receivable in excess of the provided allowance
are determined uncollectible, they are charged to expense in the year that
determination is made. The Company extends unsecured credit to customers in the
normal course of business.

INVENTORIES - Inventories consist principally of food, beverages and retail
goods and are recorded at the lower of cost (first-in, first-out) or market.

DEPRECIATION - Property, equipment and leasehold improvements are recorded at
cost. Improvements are capitalized while repair and maintenance costs are
charged to operations when incurred. Furniture, fixtures, equipment and antiques
are depreciated or amortized using the straight-line method over estimated
useful lives ranging from three to seven years, while buildings are depreciated
over thirty years. Leasehold improvements are amortized using the straight-line
method over the shorter of the lease term, including renewal options, or the
estimated useful life of the assets which is twenty years.

DEBT ISSUANCE COSTS - Debt issuance costs are amortized over the life of the
loan using the straight-line method, which approximates the interest method.

CAPITALIZED INTEREST - Interest costs capitalized during the construction period
of restaurants were approximately $314,000, $286,000, and $328,000 for the years
ended December 30, 2001, December 31, 2000, and January 2, 2000, respectively.

ADVERTISING COSTS - Advertising costs are charged to expense as incurred.
Advertising costs were approximately $1,751,000, $1,244,000, and $1,290,000 for
the years ended December 31, 2000, January 2, 2000 and January 3, 1999,
respectively, and are included in operating expenses in the consolidated
statements of operations.

PRE-OPENING EXPENSES - The Company, pursuant to Statement of Position 98-5 ("SOP
98-5"), "Reporting on the Costs of Start-Up Activities," expenses all start-up
and pre-opening costs as incurred. This accounting standard accelerates the
Company's recognition of pre-opening costs, but benefits the post-opening
results of new restaurants.


                                     F - 6
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

RECOVERABILITY OF PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS - Pursuant to
Statement of Financial Accounting Standards (SFAS) No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of",
the Company evaluates restaurant sites and long-lived assets for impairment.
Restaurant sites are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of restaurant sites to be held and used is measured
by a comparison of the carrying amount of the restaurant site to future net cash
flows expected to be generated on a restaurant-by-restaurant basis. If such
restaurant site is considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the restaurant site
exceeds the fair value. Restaurant sites to be disposed of are reported at the
lower of their carrying amount or fair value on a restaurant-by-restaurant
basis, less estimated costs to sell. During the years ended December 30, 2001,
December 31, 2000, and January 2, 2000, the Company recorded charges of $0, $0,
and $5,513,000, respectively, to impairment of long-lived assets.

INCOME TAXES - The Company utilizes the liability method of accounting for
income taxes. Deferred tax assets and liabilities are recognized for the
expected future tax consequences attributable to temporary differences between
the financial statement and income tax reporting bases of assets and
liabilities. Deferred tax assets are reduced by a valuation allowance to the
extent that realization is not assured.

STOCK-BASED COMPENSATION - In accordance with Accounting Principles Board (APB)
Opinion No. 25, the Company uses the intrinsic value-based method for measuring
stock-based compensation cost which measures compensation cost as the excess, if
any, of the quoted market price of the Company's common stock at the grant date
over the amount the employee must pay for the stock. The Company's policy is to
grant stock options at fair value at the date of grant. Required pro forma
disclosures of compensation expense determined under the fair value method of
SFAS No. 123, "Accounting for Stock-Based Compensation," are presented in Note
12.

NET INCOME (LOSS) PER SHARE - Basic net income (loss) per share is computed by
dividing the net income (loss) by the weighted average number of common shares
outstanding for the reporting period. Diluted net income (loss) per share is
computed by dividing net income (loss) by the sum of the weighted average number
of shares of common stock outstanding plus all additional common stock that
would have been outstanding if potentially dilutive common shares related to
stock options had been issued. Weighted average common shares outstanding -
diluted include approximately 906,000 dilutive securities for the year ended
December 30, 2001 and 596,000 dilutive securities for the year ended December
31, 2000. Dilutive common equivalent shares have not been included in the
computation of diluted net loss per share for the year ended January 2, 2000
because their inclusion would be anti-dilutive.


                                     F - 7
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

Following is a reconciliation of basic and diluted net earnings (loss) per
share:

<TABLE>
<CAPTION>
                                                         Fiscal 2001     Fiscal 2000       Fiscal 1999
                                                         -----------     -----------       -----------
<S>                                                      <C>             <C>               <C>
Net earnings (loss) per share - basic:
  Net income (loss)                                        $ 8,118          $ 2,112          $(6,610)
  Weighted average shares
    Outstanding                                              9,973            9,149            8,842
                                                           -------          -------          -------
  Net earnings (loss) per share - basic                    $  0.81          $  0.23          $ (0.75)
                                                           =======          =======          =======

Net earnings (loss) per share - diluted:
  Net income (loss)                                        $ 8,118          $ 2,112          $(6,610)
  Weighted average shares
    Outstanding                                              9,973            9,149            8,842
  Common stock equivalents                                     906              596                0
                                                           -------          -------          -------
  Weighted average shares and
    potential diluted shares
    outstanding                                             10,879            9,745            8,842
                                                           -------          -------          -------
  Net income (loss) per share -
    Diluted                                                $  0.75          $  0.22          $ (0.75)
                                                           =======          =======          =======
</TABLE>

The diluted earnings (loss) per common share, assuming the common shares sold in
November 2001 (see Note 12) were issued on January 3, 1999 and assuming no
change in net income (loss) as a result of net proceeds received, would have
been $0.69, $0.20, and $(0.67) per share for the years ended December 30, 2001,
December 31, 2000, and January 2, 2000, respectively.

The Company uses the treasury method for calculating the dilutive effect of the
stock options and warrants (using the average market price).

Options to purchase 50,000 shares of common stock with a weighted average
exercise price of $7.54, and warrants to purchase 66,667 shares of common stock
with a weighted average exercise price of $7.00, were outstanding at December
30, 2001 but were excluded from the computation of common share equivalents
because their exercise prices were greater than the average market price of the
common shares for the fiscal year 2001.

Options to purchase 239,565 shares of common stock with a weighted average
exercise price of $4.18, and warrants to purchase 200,000 shares of common stock
with a weighted average exercise price of $6.00, were outstanding at December
31, 2000 but were excluded from the computation of common share equivalents
because their exercise prices were greater than the average market price of the
common shares for the fiscal year 2000. All options and warrants outstanding at
January 2, 2000 were anti-dilutive.

MANAGEMENT'S USE OF ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.

FINANCIAL INSTRUMENTS - The carrying amounts for all financial instruments
approximates fair value. The carrying amounts for cash and cash equivalents,
accounts receivable, accounts payable and accrued liabilities approximate fair
value because of the short maturity of these instruments. The fair value of
capital lease obligations and long-term debt approximates the carrying amounts
based upon the Company's expected borrowing rate for debt with similar remaining
maturities and comparable risk.


                                     F - 8
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

SEGMENT REPORTING - The Company operates restaurants and has franchised
restaurants in the United States within the casual dining industry, providing
similar products to similar customers. The restaurants and franchise restaurants
also possess similar pricing structures, resulting in similar long-term expected
financial performance characteristics. Revenues from customers are derived
principally from food and beverage sales. Management believes that the Company
meets the criteria for aggregating its operating segments into a single
reporting segment.

FRANCHISE ARRANGEMENTS - Individual franchise arrangements generally include a
license and initial fees, as well as royalty fees to the Company based upon a
percentage of sales. Famous Dave's franchisees are granted the right to operate
a restaurant using the Company's system for a range of ten to twenty years.
Franchisees pay related occupancy costs including property taxes, insurance and
maintenance. Franchisees pay a non-refundable initial fee for each franchised
location. Initial franchise revenues are recognized when the Company has
performed substantially all of its obligations as franchisor. The amount of
non-refundable initial fees for the years ended December 30, 2001, December 31,
2000 and January 2, 2000 was $851,000, $569,000 and $0, respectively. Royalty
fee income was approximately $1,270,000, $335,000, and $54,000 for the years
ended December 30, 2001, December 31, 2000 and January 2, 2000, respectively.

LICENSING AGREEMENTS - The Company has licensing agreements for its retail
products, one of which expires in April 2010 with a renewal option of five
years, the other of which is indefinite. Licensing royalty income for years
ended December 30, 2001, December 31, 2000 and January 2, 2000 was $192,000,
$64,000 and $0, respectively.

NEW ACCOUNTING PRONOUNCEMENTS -Statement of Financial Accounting Standards
(SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
as amended, is effective for years beginning after June 15, 2000. SFAS No. 133
establishes accounting and reporting standards requiring that every derivative
instrument, including certain derivative instruments embedded in other
contracts, be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge criteria are met. Special accounting for qualifying hedges allows a
derivative's gains or losses to offset related results on the hedged item in the
statement of operations and requires that a company must formally document,
designate and assess the effectiveness of transactions that receive hedge
accounting. The adoption of SFAS No. 133 did not have a material effect on the
Company's financial position or results of operations.

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
143. "Accounting for Asset Retirement Obligations." SFAS No. 143 is effective
for fiscal years beginning after June 15, 2002. The Company believes the
adoption of SFAS No. 143 will not have a material effect on the Company's
consolidated financial position or results of operations.

In October 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 supercedes SFAS No. 121. SFAS 144
primarily addresses significant issues relating to the implementation of SFAS
121 and develops a single accounting model for long-lived assets to be disposed
of, whether primarily held, used or newly acquired. The provisions of SFAS 144
will be effective for fiscal years beginning after December 15, 2001. The
provisions of SFAS No. 144 generally are to be applied prospectively. The
Company believes the adoption of SFAS No. 143 will not have a material effect on
the Company's consolidated financial position or results of operations.

RECLASSIFICATIONS - Certain accounts in the prior years' consolidated financial
statements have been reclassified for comparative purposes to conform with the
presentation in the current year consolidated financial statements. These
reclassifications had no effect on net income (loss) or shareholders' equity.

(2)   ACQUISITIONS

On September 30, 2000, the Company completed the acquisition of two restaurants
formerly known as Timber Lodge Steakhouse. The total purchase price was
approximately $1,676,000 which included the issuance of common stock. The
purchase price was allocated to the acquired assets based on the estimated fair
values as of the acquisition date. These


                                     F - 9
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

restaurants were converted to Famous Dave's, and the operating results are
included in the Company's consolidated results of operations from the date of
acquisition.

On December 31, 1999, the Company completed the acquisition of four restaurants
known as Red River Barbeque & Grille and assumed certain liabilities. The total
purchase price was approximately $2,868,000, which was comprised of assumption
of certain liabilities and issuance of common stock and warrants. The purchase
price was allocated to assets and liabilities based on the estimated fair values
as of the acquisition date. The operations of the restaurants are included in
the Company's consolidated results of operations from the date of acquisition.
The results of operations on an unaudited pro forma basis are not presented
separately as the results do not differ significantly from historical amounts
presented herein.

(3)   INVENTORIES

Inventories consisted approximately of the following at:

<TABLE>
<CAPTION>
                                                                 December 30,         December 31,
                                                                     2001                 2000
                                                                ------------          -----------
<S>                                                             <C>                   <C>
Food and beverage                                               $    477,000          $   496,000
Retail goods                                                         105,000               58,000
Smallwares and supplies                                              859,000              840,000
                                                                ------------          -----------
                                                                $  1,441,000          $ 1,394,000
                                                                ============          ===========
</TABLE>

(4)    NOTES RECEIVABLE

Notes receivable consisted approximately of the following at:

<TABLE>
<CAPTION>
                                                              December 30,   December 31,
                                                                  2001           2000
                                                               ----------     ----------
<S>                                                           <C>            <C>
Note receivable - Old School BBQ, Inc. - monthly
installments of approximately $8,000 including interest at
12%, due May 2010, secured by property and equipment and
guaranteed by the franchise owners                             $  486,000     $  518,000

Note receivable - Michael's First, LLC - monthly
installments of approximately $5,000 including interest at
9.6%, due May 2010, secured by property and equipment and
guaranteed by the franchise owner                                 346,000        371,000

Note receivable - Rivervalley BBQ, Inc. - quarterly
interest only payments through December 2003, quarterly
installments of approximately $19,000 including interest
at prime plus 1.50% (6.25% at December 30, 2001), due
December 2006, unsecured                                          225,000              0

Note receivable - FUMUME, LLC - quarterly installments of
approximately $9,000 including interest at 9%, due
December 2006, unsecured                                          147,000              0

Note receivable - Competition BBQ, Inc. - monthly
installments of approximately $2,000 including interest at
10.50%, due May 2004, unsecured                                    59,000              0

Line of credit for up to $50,000 - Rivervalley BBQ, Inc. -
monthly interest only through December 2002 with total
outstanding balance due December 2002 including interest
prime plus 1.50% (6.25% at December 30, 2001), unsecured           20,000              0
                                                               ----------     ----------
Total notes receivable                                          1,283,000        889,000
Less: current portion                                             137,000         57,000
                                                               ----------     ----------
Notes receivable, net                                          $1,146,000     $  832,000
                                                               ==========     ==========
</TABLE>


                                     F - 10
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

Future principal payments to be received on notes receivable are approximately
as follows for the years ending:

<TABLE>
<S>                                           <C>
                             2002             $    137,000
                             2003                  121,000
                             2004                  193,000
                             2005                  194,000
                             2006                  207,000
                             Thereafter            431,000
                                              ------------
                                 Total        $  1,283,000
                                              ============
</TABLE>

(5)   PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements consisted approximately of the
following at:

<TABLE>
<CAPTION>
                                                    December 30,   December 31,
                                                        2001            2000
                                                    -----------     -----------
<S>                                                 <C>             <C>
Land, buildings and improvements                    $40,402,000     $39,595,000
Furniture, fixtures and equipment                    18,087,000      15,627,000
Antiques                                              1,808,000       1,762,000
Less: accumulated depreciation and amortization      13,062,000       9,778,000
Less: reserve for loss on restaurants to be             819,000       1,632,000
disposed of
Less: reserve for loss on other capital items                 0         100,000
                                                    -----------     -----------
                                                     46,416,000      45,474,000
Construction in progress                                524,000         578,000
                                                    -----------     -----------
                                                    $46,940,000     $46,052,000
                                                    ===========     ===========
</TABLE>

Depreciation and amortization expense on property, equipment and leasehold
improvements was approximately $4,463,000, $3,694,000 and $2,954,000 for the
years ended December 30, 2001, December 31, 2000 and January 2, 2000,
respectively.

(6)   INVESTMENT IN UNCONSOLIDATED AFFILIATE

The investment in unconsolidated affiliate relates to the Company's 40%
investment in FUMUME, LLC (FUMUME), which is being accounted for on the equity
method of accounting. FUMUME operates two Isaac Hayes themed restaurants, one
each in Chicago, Illinois and Memphis, Tennessee. In May 2001 the Company
contributed (i) $825,507 in working capital, (ii) the assets comprising Famous
Dave's Ribs and Blues Club in Chicago and (iii) certain rights to use Famous
Dave's various licensed marks. Although FUMUME is responsible for the payment of
the rent for the Chicago club, the Company remains liable under the lease with
the landowner (see Note 16). The Company has an agreement with FUMUME to manage
and operate the Chicago club. In addition, FUMUME opened a second club in
Memphis in October 2001. The difference between the investment and the amount of
the underlying net assets of FUMUME relates to monies the Company funded for
leasehold improvements pursuant to the FUMUME operating agreement which are
being amortized over the lesser of the lease term or the estimated useful life
of the related improvements. The Company recorded equity in loss of
unconsolidated affiliate based on the greater of 40% of the net loss for the
year ended December 30, 2001 or 100% of the cash loss the Company was obligated
to fund pursuant to the FUMUME operating agreement. For the year ended December
30, 2001, the Company recorded 100% of the cash loss of $1,029,000.


                                     F - 11
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

The Company has agreed to reimburse FUMUME for operating losses incurred at the
Memphis and Chicago clubs. The Company can terminate our reimbursement
obligation with respect to the Chicago club if after any two-year period ending
May 31 there has been a cumulative operating loss. With respect to the Memphis
club, the Company may terminate the reimbursement obligation if the cumulative
deficit of the club (excluding management fees) exceeds $2 million or, if after
any five-year period ending May 31, there has been a cumulative operating loss.

Unaudited condensed financial statements of FUMUME as of and for the year ended
December 30, 2001 are as follows:

<TABLE>
<S>                                            <C>
             STATEMENT OF OPERATIONS:
               Sales                             $2,593,000
               Gross profit                       $ 256,000
               Loss from operations            ($1,586,000)
               Net loss                        ($1,586,000)
               Cash loss                       ($1,029,000)

             BALANCE SHEET DATA:
               Current assets                    $1,278,000
               Noncurrent assets                 $9,022,000
               Current liabilities                 $465,000
               Noncurrent liabilities              $320,000
               Members' equity                   $9,515,000
</TABLE>

(7)   LINE OF CREDIT

The Company had a revolving line of credit with Associated Commercial Financial,
Inc. (formerly known as BNC Financial Corporation) with maximum available
borrowings at December 30, 2001 and December 31, 2000 of approximately
$1,680,000 at each year end, of which approximately $100,000 and $544,000 was
outstanding at December 30, 2001 and December 31, 2000, respectively. Advances
are due upon demand and accrue interest at the prime rate plus 4% (8.75% at
December 30, 2001) payable monthly. The line of credit was secured by certain of
the Company's assets and was personally guaranteed (and partially secured) by
the Chairman of the Company.

(8)   LONG-TERM DEBT

Long-term debt consisted approximately of the following at:

<TABLE>
<CAPTION>
                                                              December 30,    December 31,
                                                                   2001           2000
                                                                   ----           ----
<S>                                                           <C>            <C>
Note payable - GE Capital Franchise Finance Corporation  -
monthly installments of approximately $20,000 including
interest at 10.53%, due February 2020, secured by              $1,938,000     $1,974,000
property and equipment

Note payable - GE Capital Franchise Finance Corporation  -
monthly installments of approximately $19,000 including
interest at 10.19%, due September 2020, secured by              1,861,000      1,893,000
property and equipment

Note payable - GE Capital Franchise Finance Corporation  -
monthly installments of approximately $18,000 including
interest at 10.53%, due February 2020, secured by               1,744,000      1,777,000
property and equipment
</Table>


                                     F - 12
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

<TABLE>
<CAPTION>
                                                              December 30,    December 31,
                                                                   2001           2000
                                                                   ----           ----
<S>                                                           <C>             <C>
Note payable - GE Capital Franchise Finance Corporation
monthly installments of approximately $16,000 including
interest at 10.19%, due September 2020, secured by
property and equipment                                          1,568,000      1,594,000

Note payable - GE Capital Franchise Finance Corporation -
monthly installments of approximately $13,000 including
interest at 8.75%, due January 2022, secured by property
and equipment                                                   1,483,000              0

Note payable - S&D Land Holdings, Inc. -  interest at 12%,
due January 2002, unsecured                                       460,000        650,000

Note payable - Santa Barbara Restaurant Group, Inc. -
monthly installments of approximately $10,000 including
interest at 10%, due October 2007, secured by property and
equipment                                                         527,000        590,000

Note payable - Meridian Financial Corporation - paid in
full during 2001                                                        0        554,000

Note payable - Suntrust Bank - paid in full during 2001                 0        298,000
                                                               ----------     ----------
Total long-term debt                                            9,581,000      9,330,000
Less: current portion                                             695,000        886,000
                                                               ----------     ----------
Long-term debt, net                                            $8,886,000     $8,444,000
                                                               ==========     ==========
</TABLE>

Future maturities of long-term debt are approximately as follows for the years
ending:

<TABLE>
<S>                                <C>
                          2002     $  695,000
                          2003        259,000
                          2004        285,000
                          2005        316,000
                          2006        350,000
                   Thereafter       7,676,000
                                   ----------
                   Total           $9,581,000
                                   ==========
</TABLE>

(9)   FINANCING LEASE OBLIGATION

In March 1999, the Company executed a $4.5 million sale and leaseback financing
involving three existing restaurants. Under this financing, the Company is
obligated to make monthly payments of $42,917 (which increases 4.04% every two
years) for a minimum of twenty years. The Company has the option to purchase the
leased restaurants for the greater of $4.5 million or fair market value at the
date of purchase at any time or renew the lease for two additional five year
terms. Based upon the Company's continued involvement in the leased property and
its purchase option, the transaction has been accounted for as a financing
arrangement. Accordingly, the three existing restaurants are included in
property, equipment and leasehold improvements and are being depreciated, and
the monthly payments are accounted for as interest expense in the consolidated
statements of operations.


                                     F - 13
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000


Future minimum payments due under the financing lease obligation are
approximately as follows for the years ending :

<TABLE>
<S>                                <C>
                          2002     $   515,000
                          2003         531,000
                          2004         536,000
                          2005         552,000
                          2006         557,000
                    Thereafter      15,687,000
                                   -----------
                    Total          $18,378,000
                                   ===========
</TABLE>

(10)  CAPITAL LEASE OBLIGATIONS

The Company has lease financing facilities for furniture, equipment and
leasehold improvements. Leases outstanding under this agreement bear interest at
an average rate of 9.15% and expire through February 2006. The obligations are
secured by the property under lease. Total cost and accumulated amortization of
the leased equipment was approximately $4,545,000 and $1,869,000 at December 30,
2001 and $2,163,000 and $1,190,000 at December 31, 2000.

Future minimum capital lease payments are approximately as follows for the years
ending:

<TABLE>
<S>                                                   <C>
2002                                                  $1,043,000
2003                                                     872,000
2004                                                     335,000
2005                                                     103,000
2006                                                       8,000
                                                      ----------
Total                                                  2,361,000
Less: amounts representing interest                      303,000
                                                      ----------
Present value of future minimum lease payments         2,058,000

Less: current portion                                    865,000
                                                      ----------
Capital lease obligations, net of current portion     $1,193,000
                                                      ==========
</TABLE>

(11)    RELATED PARTY TRANSACTIONS

FUMUME, LLC - FUMUME, LLC (FUMUME) is a 40% unconsolidated affiliate of the
Company. In 2001, the Company loaned $147,000 to FUMUME (See Note 4).

S&D LAND HOLDINGS, INC. - S&D Land Holdings, Inc. (S&D) is a company wholly
owned by the Chairman of the Company. The Company rents various properties from
S&D. The Company paid S&D rent of approximately $209,000, $202,000, and $293,000
for the years ended December 30, 2001, December 31, 2000, and January 2, 2000,
respectively. The Company owed S&D approximately $365,000 at December 30, 2001,
and $372,000 at December 31, 2000. During 2000, the Company purchased the land
of a restaurant location for a note payable of $750,000 of which $460,000 and
$650,000 was outstanding at December 30, 2001 and December 31, 2000,
respectively. This note was paid off in February 2002.

GRAND PINES RESORTS, INC. - Grand Pines Resorts, Inc. (Grand Pines) is a company
wholly owned by the Chairman of the Company. Through 1999, the Company charged
Grand Pines a royalty of 4% of its food sales. Royalty income was approximately
$62,000 for the year ended January 2, 2000.


                                     F - 14
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

(12)    SHAREHOLDERS' EQUITY

ISSUANCE OF COMMON STOCK AND WARRANTS - On November 12, 2001, the company issued
1,000,000 shares of common stock via a private equity placement at a value of
$6.00 per share, and for which the company received cash proceeds of $5,322,000,
net of commissions and expenses. The proceeds are to be used primarily to
develop new restaurants and for general corporate purposes.

During the year ended December 31, 2000, the Company purchased four restaurant
sites. The purchases were completed in part through the issuance of
approximately 232,000 shares of common stock ranging in value from $3.41 to
$3.50 per share.

On December 31, 1999, the Company completed the acquisition of four restaurants
known as Red River Barbeque & Grille. The purchase was completed in part through
the issuance of 211,389 shares of common stock at $2.03 per share. The
transaction also included the issuance of 200,000 warrants valued at $.55 each
at exercise prices ranging from $5.00 to $7.00 expiring in December 2004. During
2001, 60,000 warrants were exercised at an exercise price of $5.00. Net proceeds
of approximately $299,000 were received. At December 30, 2001, there were
140,000 remaining warrants outstanding with a weighted average price of $6.43
per share.

At December 30, 2001, there were 230,000 stock warrants outstanding at an
exercise price of $9.10 per share which expire in January 2002.

STOCK OPTION PLANS - The Company has a 1995 Stock Option and Compensation Plan,
1997 Employee Stock Option Plan and a 1998 Director Stock Option Plan (the
Plans), pursuant to which options and other awards to acquire an aggregate of
2,910,000 shares of the Company's common stock may be granted. Stock options,
stock appreciation rights, restricted stock, other stock and cash awards may be
granted under the Plans. In general, options vest over a period of five years
and expire ten years from the date of grant.

The Company applies APB No. 25 and related interpretations in accounting for its
Plans. Had compensation costs for the Company's stock options been determined
based on the fair value at the grant dates consistent with the method of SFAS
No. 123 "Accounting for Stock Based Compensation" (Statement 123), the Company's
net income (loss) and income (loss) per share would have been changed to the
approximate proforma amounts indicated below:

<TABLE>
<CAPTION>
                                                   Fiscal 2001       Fiscal 2000        Fiscal 1999
                                                   -----------       -----------        -----------
<S>                                              <C>               <C>                <C>
Net income (loss):
  As reported                                    $   8,118,000     $   2,112,000      $  (6,610,000)
  Pro forma                                      $   5,968,000     $    (107,000)     $  (8,240,000)
Basic net income (loss) per
share:
  As reported                                    $         .81     $         .23      $        (.75)
  Pro forma                                      $         .60     $        (.01)     $        (.93)
Diluted net income (loss) per
share:
  As reported                                    $         .75     $         .22      $        (.75)
  Pro forma                                      $         .55     $        (.01)     $        (.93)
</TABLE>


                                     F - 15
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

Information regarding the Company's stock options is summarized below:

<TABLE>
<CAPTION>
                                                                    Weighted
                                                     Number of       Average
                                                      Options     Exercise Price
                                                    ----------    --------------
<S>                                                 <C>           <C>
Options outstanding - January 3, 1999                1,004,000        $1.81
  Granted                                              928,000         2.40
  Canceled or expired                                 (214,000)        2.16
  Exercised                                             (6,000)        1.19
                                                    ----------        -----
Options outstanding - January 2, 2000                1,712,000         2.14
  Granted                                              740,000         2.97
  Canceled or expired                                 (118,000)        2.11
  Exercised                                            (43,000)        1.96
                                                    ----------        -----
Options outstanding - December 31, 2000              2,291,000         2.42
  Granted                                              373,000         4.34
  Canceled or expired                                 (143,000)        2.50
  Exercised                                           (774,000)        2.44
                                                    ----------        -----
Options outstanding - December 30, 2001              1,747,000        $2.82
                                                    ==========        =====
Options exercisable - December 30, 2001              1,017,000        $2.59
                                                    ==========        =====
Weighted average fair value of options
granted during the year ended December 30, 2001                       $3.98
                                                                      =====
Weighted average fair value of options
granted during the year ended December 31, 2000                       $2.51
                                                                      =====
Weighted average fair value of options
granted during the year ended January 2, 2000                         $1.83
                                                                      =====
</TABLE>

Options outstanding at December 30, 2001 have an exercise price ranging between
$1.00 and $7.54 and a weighted average remaining contractual life of 7.5 years.

The following table summarizes information about stock options outstanding at
December 30, 2001:

<TABLE>
<CAPTION>
                   ------------------------------------   ---------------------------
                           Options outstanding               Options exercisable
                   ------------------------------------   ---------------------------
                                   Weighted-
                                    average      Weighted-                Weighted-
                                  remaining       average                  average
      Exercise       Number       contractual    exercise     Number       exercise
        prices     outstanding       life         price     exercisable     price
        ------     -----------       ----         -----     -----------     -----
<S>                <C>           <C>            <C>         <C>           <C>
      $1.00 -
        $2.50       1,139,000     6.5 years      $ 2.21         712,000     $ 2.13

      $2.62 -
        $4.18         558,000     8.5 years      $ 3.64         305,000     $ 3.71

        $7.54          50,000     9.5 years      $ 7.54               0          -
      -------       ---------     ---------      ------       ---------     ------
      $1.00 -
        $7.54       1,747,000     7.5 years      $ 2.82       1,017,000     $ 2.59
      =======       =========     =========      ======       =========     ======
</TABLE>


                                     F - 16
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

In determining the compensation cost of the options granted during fiscal 2001,
2000, and 1999, as specified by Statement 123, the fair value of each option
grant has been estimated on the date of grant using the Black-Scholes option
pricing model and the weighted average assumptions used in these calculations
are summarized below:

<TABLE>
<CAPTION>
                                    Fiscal 2001      Fiscal 2000      Fiscal 1999
                                    -----------      -----------      -----------
<S>                                 <C>              <C>              <C>
Risk free interest rate                      5%               6%              6%
Expected life of options granted       10 years         10 years        10 years
Expected volatility range                104.6%            78.7%      58.7-66.2%
Expected dividend yield                      0%               0%              0%
</TABLE>

(13)    INCOME TAXES

The Company has generated net operating losses of approximately $9,600,000
which, if not used, will begin to expire in 2011 and tax credit carryforwards of
approximately $719,000 which, if not used, will begin to expire in 2011. Future
changes in the ownership of the Company may place limitations on the use of
these net operating loss carryforwards.

The benefit from income taxes consists of the following:

<TABLE>
<CAPTION>
                                         Fiscal 2001     Fiscal 2000      Fiscal 1999
                                         -----------     -----------      -----------
<S>                                      <C>             <C>              <C>
Current income tax expense                $        0      $        0      $        0
Deferred income tax benefit                4,010,000               0               0
                                          ----------      ----------      ----------
     Total benefit from income taxes      $4,010,000      $        0      $        0
                                          ==========      ==========      ==========
</TABLE>

The Company's deferred tax assets are as follows:

<TABLE>
<CAPTION>
                                            December 30,     December 31,
                                                2001             2000
                                                ----             ----
<S>                                         <C>              <C>
Net operating loss carryforwards             $3,705,000      $4,065,000
Property and equipment basis difference         586,000       1,175,000
Tax credit carryovers                           719,000         585,000
Other                                                 0          40,000
Less:  valuation allowance                            0       5,865,000
                                             ----------      ----------
  Net deferred tax asset                     $5,010,000      $        0
                                             ==========      ==========
</TABLE>

Reconciliation between the statutory rate and the effective tax rate for the
fiscal years is as follows:

<TABLE>
<CAPTION>
                                 Fiscal 2001      Fiscal 2000     Fiscal 1999
                                 -----------      -----------     -----------
<S>                              <C>              <C>             <C>
Federal statutory tax rate           35.0%            35.0%          (35.0%)
State taxes, net of federal           6.0%             6.0%           (6.0%)
benefit
Tax effect of permanent               3.7%             6.3%            4.4%
differences
Tax effect of tip credit             (5.7%)           (8.3%)          (2.4%)
Change in valuation allowance      (136.6%)          (39.0%)          39.0%
                                 ----------      -----------     -----------
    Effective tax rate              (97.6%)            0.0%            0.0%
                                 ==========      ===========     ===========
</TABLE>


                                     F - 17
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

(14)    SUPPLEMENTAL CASH FLOWS INFORMATION:

<TABLE>
<CAPTION>
                                                            Fiscal 2001      Fiscal 2000     Fiscal 1999
                                                            -----------      -----------     -----------
<S>                                                         <C>              <C>             <C>
Cash paid for interest                                       $1,674,000      $1,167,000      $  446,000
                                                             ==========      ==========      ==========
Cash paid for income taxes                                   $  122,000      $   40,000      $        0
                                                             ==========      ==========      ==========
Non-cash investing and financing activities:
  Property, equipment and leasehold improvements
     purchased with notes payable                            $1,483,000      $1,700,000      $        0
                                                             ==========      ==========      ==========
  Deposits transferred to investment in unconsolidated
    affiliate                                                $ 107,0000      $        0      $        0
                                                             ==========      ==========      ==========
  Property and equipment transferred to investment in
    unconsolidated affiliate                                 $2,665,000      $        0      $        0
                                                             ==========      ==========      ==========
  Deferred tax asset related to tax benefit of stock
    options exercised                                        $1,000,000      $        0      $        0
                                                             ==========      ==========      ==========
  Common stock issued in connection with restaurants
    acquired                                                 $        0      $  807,000      $  430,000
                                                             ==========      ==========      ==========
  Capital lease obligation refinanced with note payable      $        0      $  593,000      $        0
                                                             ==========      ==========      ==========
  Notes receivable in connection with sale of
    restaurants, net of deferred gain recorded               $        0      $  526,000      $        0
                                                             ==========      ==========      ==========
  Property and equipment acquired with accrued
    expenses                                                 $        0      $   70,000      $        0
                                                             ==========      ==========      ==========
  Common stock issued for accounts payable                   $        0      $   57,000      $        0
                                                             ==========      ==========      ==========
  Equipment purchased under capital lease obligations        $2,382,000      $   33,000      $   45,000
                                                             ==========      ==========      ==========
  Accounts payable assumed in connection with
    restaurants acquired                                     $        0      $        0      $1,299,000
                                                             ==========      ==========      ==========
  Capital lease obligations assumed in connection
    with restaurants acquired                                $        0      $        0      $  576,000
                                                             ==========      ==========      ==========
  Accrued expenses assumed in connection with
    restaurants acquired                                     $        0      $        0      $  375,000
                                                             ==========      ==========      ==========
  Common stock warrants issued in connection with
    restaurants acquired                                     $        0      $        0      $  110,000
                                                             ==========      ==========      ==========
</TABLE>

(15)    RETIREMENT SAVINGS PLAN

The Company has a pre-tax salary reduction/profit sharing plan under the
provisions of Section 401(k) of the Internal Revenue Code which covers employees
meeting certain eligibility requirements. Profit sharing contributions by the
Company are completely discretionary. Company contributions were approximately
$52,000, $35,000, and $31,000 for the years ended December 30, 2001, December
31, 2000, and January 2, 2000, respectively.


                                     F - 18
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

(16)    COMMITMENTS AND CONTINGENCIES

OPERATING LEASES - The Company has entered into various operating leases for its
existing and future restaurants and corporate office space with lease terms
ranging from three to thirty five years including lease options. Ten of the
leases require percentage rent of between 3% and 7% of annual gross sales,
typically above a natural breakeven point, in addition to the base rent. All of
these leases contain provisions for payments of real estate taxes, insurance and
common area costs. Total rent expense for the years ended December 30, 2001,
December 31, 2000, and January 2, 2000, including common area costs, real estate
taxes and percentage rent, was approximately $4,303,000, $3,686,000, and
$2,400,000, respectively. Percentage rent was $188,000, $95,000, and $98,000 for
the years ended December 30, 2001, December 31, 2000, and January 2, 2000,
respectively.

Future minimum rental payments (excluding percentage rents) are approximately as
follows for the years ending:

<TABLE>
<S>                                           <C>
                   2002                       $   2,339,000
                   2003                           2,303,000
                   2004                           2,305,000
                   2005                           2,362,000
                   2006                           2,452,000
                   Thereafter                    34,275,000
                                              -------------
                       Total                  $  46,036,000
                                              =============
</TABLE>

LEASE CONTINGENCY - In May 2001, the Company assigned their lease at one of
their restaurant locations to the unconsolidated affiliate. The Company is
liable for payment of this lease if the assignee defaults on the lease payments.
Future minimum rental payments are approximately $2,668,000.

LEGAL PROCEEDINGS - The Company is involved in legal actions in the ordinary
course of its business. Although the outcome of any such legal actions cannot be
predicted, management believes that there is no pending legal proceedings
against or involving the Company for which the outcome is likely to have a
material adverse effect upon the Company's financial position or results of
operations.

EMPLOYMENT AGREEMENT - At December 30, 2001, the Company had an amended
employment agreement with one of its officers. The agreement requires minimum
annual compensation of $450,000 and has a term of five years, expiring in July
2004. The agreement requires a one-year severance payment and $200,000. The
severance payment requires a resulting two year non-compete. The Company entered
into an area development option agreement with the officer for five years. The
purchase option of this agreement cannot be exercised until the third year
anniversary of the effective date, or October 2004.

CONSTRUCTION AND DEVELOPMENT CONTRACTS - In conjunction with its expansion
activity, the Company enters into fixed price construction contracts from time
to time. The balance remaining to be paid under these contracts was
approximately $164,000 and $705,000 at December 30, 2001 and December 31, 2000.


(17)  SUBSEQUENT EVENTS (UNAUDITED)

On January 21, 2002, the Company's note payable to S&D in the amount of $460,000
was paid in full.

On January 25, 2002, the Company's line of credit with Associated Commercial
Finance was paid in full. The payment made included $400,000 in principal, as
well as associated interest and prepayment penalties.


                                     F - 19
<PAGE>

                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            DECEMBER 30, 2001, DECEMBER 31, 2000 AND JANUARY 2, 2000

On January 28, 2002, the Company sold three of its restaurants to a franchisee,
who also signed an area development agreement for the development of six new
franchise restaurants in the Milwaukee and Green Bay area. Net proceeds from the
sale were approximately $2,580,000.

(18)  SELECTED QUARTERLY DATA (UNAUDITED):

<TABLE>
<CAPTION>
                                  Quarters During the Year Ended December 30, 2001
                           ---------------------------------------------------------------
                              April 1           July 1      September 30       December 30
                              -------           ------      ------------       -----------
<S>                        <C>               <C>            <C>                <C>
Revenues                    $20,469,000      $22,848,000      $23,105,000      $21,251,000
Income from operations      $   648,000      $ 1,953,000      $ 2,026,000      $ 1,582,000
Net income                  $   396,000      $ 1,420,000      $ 4,495,000      $ 1,807,000
Diluted net income per
common share                $      0.04      $      0.13      $      0.41      $      0.16
</TABLE>

<TABLE>
<CAPTION>
                                    Quarters During the Year Ended December 31, 2000
                           ---------------------------------------------------------------
                              April 2           July 2         October 1       December 31
                              -------           ------         ---------       -----------
<S>                         <C>              <C>              <C>              <C>
Revenues                    $15,091,000      $18,354,000      $18,994,000      $17,721,000
Income from operations      $   262,000      $   797,000      $   880,000      $   642,000
Net income                  $    51,000      $ 1,104,000      $   624,000      $   333,000
Diluted net income per
common share                $      0.01      $      0.11      $      0.06      $      0.03
</TABLE>

<TABLE>
<CAPTION>
                                          Quarters During the Year Ended January 2, 2000
                               -------------------------------------------------------------------
                                  April 4             July 4           October 3         January 2
                                  -------             ------           ---------         ---------
<S>                            <C>                <C>                <C>               <C>
Revenues                       $ 10,388,000       $ 12,647,000       $ 12,707,000      $ 11,887,000
Income (loss) from
operations                     $   (312,000)      $   (243,000)      $    328,000      $ (5,996,000)
Net income (loss)              $   (316,000)      $   (292,000)      $    137,000      $ (6,139,000)
Diluted net income (loss)
per common share               $       (.04)      $       (.03)      $        .02      $       (.70)
</TABLE>


                                     F - 20
<PAGE>

                                 EXHIBIT INDEX



Exhibit No.                      Description                          Page No.
-----------                      -----------                          --------

3.1           Articles of Incorporation, incorporated by
              reference from Exhibit 3.1 to our Registration
              Statement on Form SB-2 (File No. 333-10675) filed
              with the Securities and Exchange Commission on
              August 23, 1996

3.2           Bylaws, incorporated by reference from Exhibit 3.2
              to the Registration Statement on Form SB-2 (File
              No. 333-10675) filed on August 23, 1996

10.1          Lease Agreement dated as of January 1, 1996 by and
              between S&D Land Holdings, Inc. and Famous Dave's
              of Minneapolis, Inc. (Linden Hills), incorporated
              by reference from Exhibit 10.1 to the Registration
              Statement on Form SB-2 (File No. 333-10675) filed
              on August 23, 1996

10.2          Lease Agreement dated as of January 1, 1996 by and
              between S&D Land Holdings, Inc. and Famous Dave's
              of Minneapolis, Inc.  (Highland Park),
              incorporated by reference from Exhibit 10.2 to the
              Registration Statement on Form SB-2 (File No.
              333-10675) filed on August 23, 1996

10.3          Sublease Agreement dated as of January 1, 1996 by
              and between S&D Land Holdings, Inc. and Famous
              Dave's of Minneapolis, Inc. (Roseville),
              incorporated by reference from Exhibit 10.4 to the
              Registration Statement on Form SB-2 (File No.
              333-10675) filed on August 23, 1996

10.4          Trademark License Agreement between Famous Dave's
              of America, Inc. and Grand Pines Resorts, Inc.,
              incorporated by reference from Exhibit 10.11 to
              the Registration Statement on Form SB-2 (File No.
              333-10675) filed on August 23, 1996

10.5          1998 Director Stock Option Plan, incorporated by
              reference from Exhibit 10.5 to Form 10-K filed
              March 29, 2001

10.6          Employment Agreement dated as of July 1, 1999
              between Famous Dave's of America, Inc. and Martin
              J. O'Dowd, incorporated by reference from Exhibit
              10.2 to Form 10-QSB filed August 18, 1999


<PAGE>

10.7          Agreement, dated as of January 21, 2000, by and
              between S&D Land Holdings, Inc., Grand Pines
              Resorts, Inc. and Famous Dave's of America, Inc.,
              incorporated by reference from Exhibit 10.19 to
              Form 10-Q filed May 16, 2000

10.8          Promissory Note, dated January 21, 2000, by Famous
              Dave's of America, Inc. and payable to S&D Land
              Holdings, Inc., in the initial principal amount of
              $750,000, incorporated by reference from Exhibit
              10.20 to Form 10-Q filed May 16, 2000

10.9          Loan Agreement, dated as of January 21, 2000, by
              and between FFCA Acquisition Corporation and
              MinWood Partners, Inc., incorporated by reference
              from Exhibit 10.21 to Form 10-Q filed May 16, 2000

10.10         Master Lease, dated as of January 21, 2000, by and
              between MinWood Partners, Inc. and Famous Dave's
              of America, Inc., incorporated by reference from
              Exhibit 10.22 to Form 10-Q filed May 16, 2000

10.11         1997 Employee Stock Option Plan (as amended
              through March 1, 2000), incorporated by reference
              from Exhibit 10.11 to Form 10-K filed March 29,
              2001

10.12         1995 Stock Option and Compensation Plan (as
              amended through June 15, 2000), incorporated by
              reference from Exhibit 10.12 to Form 10-K filed
              March 29, 2001

10.13         Loan Agreement, dated as of August 4, 2000, by and
              between FFCA Funding Corporation and FDA
              Properties, Inc., incorporated by reference from
              Exhibit 10.13 to Form 10-K filed March 29, 2001

10.14         Master Lease, dated as of August 4, 2000, by and
              between FDA Properties, Inc. and Famous Dave's of
              America, Inc., incorporated by reference from
              Exhibit 10.5 to Form 10-K filed March 29, 2001

10.15         FUMUME, LLC Operating Agreement, incorporated by
              reference from Exhibit 10.1 to Form 10-Q filed
              August 13, 2001

10.16         Contribution Agreement, dated as of May 31, 2001,
              by and between Famous Dave's Ribs-U, Inc., and
              FUMUME, LLC. Agreement, incorporated by reference
              from Exhibit 10.2 to Form 10-Q filed August 13,
              2001

10.17         Management Agreement, dated as of May 18, 2001, by
              and among FUMUME, LLC, FUMUME II, LLC, FUMUME III,
              LLC, and  Famous Dave's Ribs-U, Inc. Agreement,
              incorporated by reference from Exhibit 10.3 to Form
              10-Q filed August 13, 2001


<PAGE>

10.18         Assignment and Assumption of Lease, dated as of
              May 18, 2001 dated September 16, 1997, between
              Famous Dave's Ribs-U, Inc. and FUMUME II, LLC
              (Chicago) Agreement, incorporated by reference
              from Exhibit 10.4 to Form 10-Q filed August 13,
              2001

10.19         Re-affirmation of Guaranty, dated as of May 31,
              2001, by Famous Dave's of America, Inc. of obligations
              under Lease dated September 16, 1997, between
              Famous Dave's Ribs-U, Inc.,  predecessor-in-interest
              of FUMUME II, LLC, and D&H Building Corporation.
              Agreement, incorporated by reference from Exhibit 10.5
              to Form 10-Q filed August 13, 2001

10.20         Service Mark License Agreement, dated as of May
              31, 2001, by and between Famous Dave's of America,
              Inc. and  FUMUME, LLC. Agreement, incorporated by
              reference  from Exhibit 10.6 to Form 10-Q filed
              August 13, 2001

10.21         Amendment No. 1 to Employment Agreement dated
              September 1, 2001 between Famous Dave's of
              America, Inc. and Martin J. O'Dowd, incorporated
              by reference from Exhibit 10.1 to Form 10-Q filed
              November 14, 2001

10.22         Area Development Option Agreement by and among
              Famous Dave's of America, Inc. and Martin O'Dowd,
              incorporated by reference from Exhibit 10.2 to
              Form 10-Q filed November 14, 2001

21            Subsidiaries of Famous Dave's of America, Inc.

23            Consent of Virchow, Krause & Company, LLP