<PAGE>

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

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

                  For the quarterly period ended April 24, 2001

                                       OR

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

             For the transition period from __________ to __________

                         Commission file number 0-21097

                            EINSTEIN/NOAH BAGEL CORP.
             (Exact name of registrant as specified in its charter)

               Delaware                                 84-1294908
    (State or other jurisdiction of                   (IRS Employer
    incorporation or organization)                 Identification No.)

                               1687 Cole Boulevard
                                Golden, CO 80401
          (Address of principal executive offices, including zip code)

                                 (303) 568-8300
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                        Yes     X               No
                             -------                -------

Number of shares of common stock, $.01 par value per share, outstanding as of
June 1, 2001: 34,083,681 (includes 813,146 shares of common stock held by a
subsidiary of the Company).
<PAGE>

                            EINSTEIN/NOAH BAGEL CORP.

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                  Page No.
                                                                                                  --------
PART I.  FINANCIAL INFORMATION

<S>                                                                                                 <C>
         Item 1.      Financial Statements

                      Consolidated Balance Sheets as of January 2, 2001 and
                      April 24, 2001........................................................         3

                      Consolidated Statements of Operations for the quarters
                      ended April 16, 2000 and April 24, 2001...............................         4

                      Consolidated Statements of Cash Flows for the quarters
                      ended April 16, 2000 and April 24, 2001...............................         5

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

         Item 2.      Management's Discussion and Analysis of Financial
                      Condition and Results of Operations...................................        16

         Item 3.      Quantitative and Qualitative Disclosures About Market Risk............        22

PART II. OTHER INFORMATION

         Item 1.      Legal Proceedings.....................................................        23

         Item 6.      Exhibits and Reports on Form 8-K and Form 8-K/A.......................        23

         Signature Page.....................................................................        24

         Exhibit List ......................................................................        25
</TABLE>

                                       2
<PAGE>

                   EINSTEIN/NOAH BAGEL CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                  January 2,         April 24,
                                                                                     2001              2001
                                                                                 -------------    -------------
<S>                                                                              <C>              <C>
ASSETS
------
Current Assets:
     Cash and cash equivalents.............................................      $      3,959     $      3,721
     Restricted deposits...................................................                80                -
     Accounts receivable, net..............................................             1,305            1,342
     Inventories...........................................................             7,819            7,959
     Prepaid expenses and other current assets.............................               971            3,038
                                                                                 ------------     ------------
         Total current assets..............................................            14,134           16,060

Property and Equipment, net................................................           120,342          119,131
Goodwill, net .............................................................           200,217          196,642
Trademarks, net............................................................             2,033            2,001
Recipes, net  .............................................................             2,045            1,949
Other Assets, net..........................................................             3,936            3,650
                                                                                 ------------     ------------
         Total assets......................................................      $    342,707     $    339,433
                                                                                 ============     ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities Not Subject to Compromise:
     Current Liabilities:
         Accounts payable..................................................      $     16,435     $     13,602
         Accrued expenses..................................................            24,199           28,273
         Debtor-in-Possession financing....................................            22,905           25,369
                                                                                 ------------     ------------
              Total current liabilities....................................            63,539           67,244
     Other Noncurrent Liabilities..........................................            11,697           11,626
                                                                                 ------------     ------------
              Total liabilities not subject to compromise..................            75,236           78,870
Liabilities Subject to Compromise..........................................           150,347          150,439
     Minority Interest.....................................................            30,379           30,145
                                                                                 ------------     ------------
              Total liabilities............................................           255,962          259,454

Stockholders' Equity:
     Preferred Stock - $.01 par value; 20,000,000 shares authorized;
         no shares issued and outstanding..................................                 -                -
     Common Stock - $.01 par value; 200,000,000 shares authorized;
         34,083,681 shares issued in January and April 2001................               341              341
     Additional paid-in capital............................................           377,616          377,616
     Treasury stock, at cost (813,146 shares at
         January and April 2001)...........................................            (5,261)          (5,261)
     Accumulated deficit...................................................          (285,951)        (292,717)
                                                                                 ------------     ------------
         Total stockholders' equity........................................            86,745           79,979
                                                                                 ------------     ------------
         Total liabilities and stockholders' equity........................      $    342,707     $    339,433
                                                                                 ============     ============
</TABLE>

     The accompanying notes to the consolidated financial statements are an
integral part of these statements.

                                       3
<PAGE>

                   EINSTEIN/NOAH BAGEL CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                          Quarter Ended
                                                                                 ------------------------------
                                                                                   April 16,         April 24,
                                                                                     2000              2001
                                                                                 -------------    -------------
<S>                                                                              <C>              <C>
Revenue:
     Store revenue.........................................................      $    118,323     $    111,778

Costs and Expenses:
     Store:
         Cost of products sold.............................................            38,893           36,671
         Salaries and benefits.............................................            36,738           33,462
         Other controllable costs..........................................            10,337            9,357
         Rent, occupancy and related costs.................................            11,222            9,997
         Marketing expenses................................................             4,972            5,223
         Depreciation and amortization.....................................             3,654            3,989
                                                                                 ------------     ------------
              Total store costs and expenses...............................           105,816           98,699
     Non-Store:
         Salaries, benefits, general and
              administrative...............................................            10,933            9,777
         Pre-petition reorganization expenses..............................             2,641                -
         Depreciation and amortization
              (excluding goodwill amortization)............................             1,479            1,479
         Goodwill amortization.............................................             3,564            3,575
                                                                                 ------------     ------------
              Total non-store costs and expenses...........................            18,617           14,831
                                                                                 ------------     ------------
              Total costs and expenses.....................................           124,433          113,530
                                                                                 ------------     ------------

Loss from Operations.......................................................            (6,110)          (1,752)

Other Income (Expense):
     Interest expense......................................................            (3,935)          (1,524)
     Other.................................................................                18               80
                                                                                 ------------     ------------
         Total other income (expense)......................................            (3,917)          (1,444)
                                                                                 ------------     ------------

Loss before Reorganization Expenses, Income Taxes, and
     Minority Interest.....................................................           (10,027)          (3,196)

Reorganization Expenses....................................................                 -            3,752
Provision for Income Taxes.................................................                30               52
Minority Interest in Loss of Subsidiary....................................              (726)            (234)
                                                                                 ------------     ------------
Net Loss ..................................................................      $     (9,331)    $     (6,766)
                                                                                 ============     ============

Basic Loss per Share.......................................................      $     (0.28)     $      (0.20)
                                                                                 ===========      ============
Diluted Loss per Share.....................................................      $     (0.28)     $      (0.20)
                                                                                 ===========      ============
Weighted Average Number of Common Shares Outstanding:
         Basic.............................................................            33,271           33,271
                                                                                 ============     ============
         Diluted...........................................................            33,271           33,271
                                                                                 ============     ============
</TABLE>

     The accompanying notes to the consolidated financial statements are an
integral part of these statements.

                                       4
<PAGE>

                   EINSTEIN/NOAH BAGEL CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                          Quarter Ended
                                                                                 ------------------------------
                                                                                   April 16,         April 24,
                                                                                     2000              2001
                                                                                 -------------    -------------
<S>                                                                              <C>              <C>
Cash Flows from Operating Activities:
     Net loss .............................................................      $     (9,331)    $     (6,766)
     Adjustments to reconcile net loss to net cash provided by
     operating activities:
         Depreciation and amortization.....................................             8,697            9,043
         Minority interest.................................................              (726)            (234)
         Provision for write-down of assets................................             1,280                -
         Loss on disposal of assets........................................               464               29
         Changes in assets and liabilities:
              Accounts receivable..........................................              (115)             (37)
              Accounts payable and accrued expenses........................             3,166            2,816
              Other assets and liabilities.................................              (388)          (2,277)
                                                                                 ------------     ------------
                      Net cash provided by operating activities............             3,047            2,574
                                                                                 ------------     ------------

Cash Flows from Investing Activities:
     Purchase of property and equipment....................................            (6,512)          (5,276)
     Purchase of other assets..............................................                (1)               -
                                                                                 ------------     ------------
         Net cash used in investing activities.............................            (6,513)          (5,276)
                                                                                 ------------     ------------

Cash Flows from Financing Activities:
     Borrowings under credit facility......................................            70,527          112,193
     Repayments under credit facility......................................           (68,225)        (109,729)
                                                                                 ------------     ------------
         Net cash provided by financing activities.........................             2,302            2,464
                                                                                 ------------     ------------
Net Decrease in Cash and Cash Equivalents..................................            (1,164)            (238)
Cash and Cash Equivalents, beginning of period.............................             2,708            3,959
                                                                                 ------------     ------------
Cash and Cash Equivalents, end of period...................................      $      1,544     $      3,721
                                                                                 ============     ============
</TABLE>

     The accompanying notes to the consolidated financial statements are an
integral part of these statements.

                                       5
<PAGE>

                   EINSTEIN/NOAH BAGEL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       Basis of Presentation

         The consolidated interim financial statements have been prepared by the
Company and are unaudited. The financial statements have been prepared in
accordance with the instructions for Form 10-Q and, therefore, do not
necessarily include all information and footnotes required by generally accepted
accounting principles. In the opinion of the Company, all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the Company's consolidated financial position, results of operations and cash
flows as of April 24, 2001 and for all periods presented have been made. The
statements are subject to year-end audit adjustment. A description of the
Company's accounting policies and other financial information are included in
the audited consolidated financial statements filed with the Securities and
Exchange Commission in the Company's Form 10-K for the year ended January 2,
2001. The consolidated results of operations for the quarter ended April 24,
2001 are not necessarily indicative of the results expected for the full year.

         Certain amounts set forth in the accompanying financial statements for
the quarter ended April 16, 2000 have been reclassified to conform to the
presentation for the current fiscal quarter.

2.       Petitions for Reorganization Under Chapter 11

         The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. On April 27, 2000,
the Company and its majority-owned subsidiary, Einstein/Noah Bagel Partners,
L.P. ("Bagel Partners"), filed voluntary petitions for reorganization under
Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District
of Arizona in Phoenix (the "Bankruptcy Court"). Effective upon such filings, the
Company and Bagel Partners are operating their businesses as
debtors-in-possession, subject to the jurisdiction of the Bankruptcy Court. The
Chapter 11 cases are being jointly administered for procedural purposes by the
Bankruptcy Court under Case No. 00-04447-ECF-CGC. Einstein/Noah Bagel Partners,
Inc., a wholly-owned subsidiary of the Company and the general partner of Bagel
Partners ("Bagel Partners, Inc."), is not included in the Chapter 11 filings.

         As of the petition date, actions to collect pre-petition indebtedness
are stayed and other contractual obligations may not be enforced against the
Company or Bagel Partners. In addition, the Company and Bagel Partners may
reject executory contracts and unexpired leases, and parties affected by these
rejections may file claims with the Bankruptcy Court in accordance with
procedures set by the Bankruptcy Court and the Bankruptcy Code. On April 28,
2000, the Bankruptcy Court approved the Company's payment of pre-petition
employee compensation, benefits and reimbursements and withholding taxes, and
the continued payment of these items. The Bankruptcy Court also approved the
timely payment, without interruption, of all pre-petition trade payables
incurred in the ordinary course of business, including vendor bills submitted
prior to the filing, provided that the vendors continued to offer the Company
and Bagel Partners credit terms that were the same or better than those offered
pre-petition. To date, substantially all pre-petition vendors are providing
credit on terms meeting the requirements set by the Bankruptcy Court.

         On May 2, 2000, the Bankruptcy Court set June 30, 2000 as the claims
bar date in the Chapter 11 cases.

         As debtors-in-possession, the Company and Bagel Partners are authorized
to operate their businesses, but may not engage in transactions outside the
ordinary course of business without approval, after notice and hearing, of the
Bankruptcy Court. An official committee of unsecured creditors, consisting of
HSBC Bank USA (indenture trustee for the holders of the Company's $125.0 million
7 1/4% Convertible Subordinated Debentures due 2004 (the "Debentures")), and
four holders of the Debentures, Loomis, Sayles & Company, L.P., Kayne Anderson,
Lonestar Partners, L.P. and Lampe, Conway & Co., L.L.C., was originally formed
by the U.S. Trustee on May 9, 2000 (the "Creditors Committee").

                                       6
<PAGE>

         On July 28, 2000, the Bankruptcy Court approved the Company's
employment contract with Robert M. Hartnett, the Company's chairman, chief
executive officer and president; the Company's severance agreements with certain
of its officers, providing certain severance benefits in the event of
termination of employment following a change in control of the Company; and the
Company's amended and restated employee retention program.

         Upon filing petitions under Chapter 11, the Company and Bagel Partners
filed a joint plan of reorganization. Such plan was modified on August 11, 2000,
October 31, 2000, January 3, 2001 and January 30, 2001. Under the terms of the
plan as originally filed, Bagel Partners would have been merged into the
Company, general unsecured creditors of the Company (primarily the holders of
the Debentures) would have received approximately 89 percent of the common stock
of the reorganized Company, the minority equity holders in Bagel Partners
(primarily Bagel Store Development Funding, L.L.C. ("Bagel Funding")) would have
received approximately 11 percent of the common stock of the reorganized
Company, and holders of the Company's common stock would have received warrants
to acquire 2% of the common stock of the Company on a fully diluted basis. The
Company had received from BNP Paribas a commitment for a $60.0 million secured
credit facility to be made available upon consummation of the plan; however,
such commitment was not extended beyond its October 31, 2000 expiration date.

         The Bankruptcy Court approved the disclosure statement pertaining to
the plan on July 28, 2000, and the disclosure statement was mailed on August 14,
2000.

         On September 14, 2000, the Company announced that it had reached
agreement with the Creditors Committee on all outstanding issues regarding the
plan of reorganization and that the Creditors Committee supported the plan,
although the Creditors Committee reserved the right to challenge the
distribution under the plan to Bagel Funding.

         On October 25, 2000, the Bankruptcy Court denied the motion of the
Company and Bagel Partners to extend the time periods during which the Company
and Bagel Partners had the exclusive right to file a plan of reorganization and
to solicit acceptances of a plan.

         The Bankruptcy Court conducted hearings on the confirmation of the plan
on various dates through February 2, 2001. The plan was accepted by the holders
of at least two-thirds in dollar amount and more than one-half in number of the
claims of the class consisting of the Company's pre-petition secured bank debt.
However, the plan was not accepted by the class consisting of the Company's
general unsecured creditors and the Bankruptcy Court denied the motion of the
Company and Bagel Partners to count certain ballots of unsecured creditors of
the Company that had been received by the solicitation agent after the voting
deadline. The Company and Bagel Partners also filed a motion, which remains
pending, to designate, pursuant to Section 1126(e) of the Bankruptcy Code,
certain votes of the Company's unsecured creditors cast by New World
Coffee-Manhattan Bagel, Inc. ("New World"), a competitor of the Company which
had purchased the Debentures, and certain other persons associated with New
World. In the event such motion were granted, the plan would be deemed accepted
by the class consisting of the Company's general unsecured creditors. In the
event the motion were denied, such class would not be deemed to have accepted
the plan, and it would be possible to confirm the plan only if the requirements
of Section 1129(b) of the Bankruptcy Code, as well as other applicable
requirements, were satisfied.

         Objections to the plan were filed by Bagel Funding, the Boston Chicken
Plan Trustee and New World. On January 3, 2001, the Company and Bagel Partners
filed modifications to the plan that provided for (a) an additional distribution
of $2.5 million in cash to minority holders in Bagel Partners, and (b) a
distribution to holders of the Company's common stock of (i) warrants to
purchase 10% of the common stock of the reorganized Company, on a fully-diluted
basis, for an exercise price of approximately $18.7 million and (ii) an amount
in cash equal to $1.0 million less the amount payable to the Boston Chicken Plan
Trustee for reimbursement of fees and expenses incurred by the Boston Chicken
Trustee in connection with the Chapter 11 cases of the Company and Bagel
Partners. At that time, Bagel Funding, the Boston Chicken Plan Trustee and the
Creditors Committee indicated that they intended to support the plan as so
modified.

                                       7
<PAGE>

         In January 2001, New World, and certain persons associated with New
World, on the one hand, and an affiliate of Three Cities Research, a private
equity investment firm (with its affiliates, "Three Cities"), on the other hand,
purchased positions in the Debentures sufficient to give each a "blocking
position" with respect to approval of the Company's joint plan of reorganization
in the event the Company and Bagel Partners were required to resolicit votes
with respect to the plan. In addition, certain members of the Creditors
Committee sold their Debentures and all of the members of the Creditors
Committee resigned; to date no other members have been appointed. After the
transactions in the Debentures described above, the Company and Bagel Partners
negotiated to resolve outstanding objections to the plan. These efforts were
unsuccessful, and support by the principal holders of claims and interests in
the Chapter 11 cases, including those who had previously supported the plan,
waned. On February 2, 2001, the Boston Chicken Plan Trustee filed a conditional
reinstatement of objections to the plan. Accordingly, the Company's plan faced a
number of obstacles, including, without limitation: the lack of sufficient votes
of the Company's general unsecured creditors unless the designation motion of
the Company and Bagel Partners was granted; the presence of objections to the
plan by New World and the Boston Chicken Plan Trustee (and the risk of
reinstatement of objections by Bagel Funding); the need to obtain exit financing
to facilitate emergence from Chapter 11 pursuant to the plan; and the risk that
the Bankruptcy Court would require resolicitation of votes to confirm the plan
as a consequence of plan modifications and changes in the terms of any exit
financing.

         On February 12, 2001, the Company announced that it had entered into an
agreement with ENB Acquisition LLC ("ENB"), an affiliate of Three Cities,
providing for the sale to ENB of substantially all of the assets of the Company
and Bagel Partners under Section 363 of the Bankruptcy Code, for a purchase
price consisting of $145.0 million in cash and the assumption of $22.7 million
in current liabilities and certain other liabilities and obligations. Under the
purchase agreement, if the agreement is terminated and the Company accepts an
acquisition proposal from a third party other than ENB, then in certain
circumstances the Company will be obligated to make a termination payment of
$5.0 million to ENB. On March 5, 2001, the Bankruptcy Court entered an order
approving such termination payment and bidding procedures (the "Bidding
Procedures Order"), and the court set May 23, 2001 as the date for the hearing
(the "Sale Hearing") on the motion (the "Sale Motion") to approve the sale to
ENB or to a party submitting a higher or better bid in conformity with the
Bidding Procedures Order.

         The Sale Hearing was conducted on June 1, 2001. At the Sale Hearing,
the Bankruptcy Court conducted an auction in which Einstein Acquisition Corp.
and Greenlight New World, LLC, affiliates of New World, were the successful
bidder. Upon the conclusion of the auction, the Bankruptcy Court approved the
sale to such affiliates of substantially all of the assets of the Company and
Bagel Partners for a purchase price consisting of $160.0 million in cash and the
assumption of current liabilities incurred in the ordinary course of business
and certain other liabilities and obligations. The cash purchase price will be
increased by the amount, if any, that the current liabilities assumed are less
than $22.7 million and it will be decreased by the amount, if any, that the
current liabilities assumed exceed $30 million.

         Under the sale order of the Bankruptcy Court, the New World affiliates
will be obligated to close the transaction not later than 12:01 p.m., Eastern
Time, on June 20, 2001. The transaction is subject to customary conditions,
including the expiration or termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

         In the event the New World affiliates do not consummate the acquisition
on or before 12:01 p.m., Eastern Time, on June 20, 2001, ENB will be obligated
to consummate the acquisition of substantially all of the assets of the Company
and Bagel Partners, on the terms provided for in its backup bid, on June 21,
2001. Under ENB's backup bid, ENB would acquire such assets for a purchase price
consisting of $155.0 million (of which $5.0 million consists of a credit for its
breakup fee), or $150.0 million net in cash, plus the assumption of liabilities
and obligations on substantially the same terms as those provided in the bid of
the New World affiliates. (The pending sale to New World or ENB is sometimes
herein referred to as the "Pending Sale Transaction.")

         On April 2, 2001, the Boston Chicken Plan Trustee filed a joint plan of
reorganization of the Company and Bagel Partners (the "BCP Plan"), together with
a form of disclosure statement relating to such plan, with the Bankruptcy Court.
Pursuant to the BCP Plan, as subsequently amended, the Debentures would have
allegedly been "reinstated" and other unsecured creditor claims would have been
paid in full. Holders of the Debentures would also have received a right to
exchange the principal amount of their Debentures and accrued interest thereon
for shares of

                                       8
<PAGE>

new common stock in the Company. Common stockholders in the Company would also
have received shares of new common stock in the reorganized Company. The equity
interests in Bagel Partners would have remained outstanding. Under the plan,
ENBC and Bagel Partners would have obtained new bank financing in the principal
amount of $85.0 million and the Company's pre-petition secured bank financing
and debtor-in-possession financing would have been satisfied in full.

         On May 23, 2001, the Bankruptcy Court denied the motion of New World,
as joined in by the Boston Chicken Plan Trustee, to continue the hearing on the
Sale Motion. The Bankruptcy Court vacated the dates that had previously been set
for a hearing on confirmation of the BCP Plan. At the Sale Hearing, New World
withdrew its previous objections to the sale under Section 363, and the
objections of the Boston Chicken Plan Trustee were overruled.

         As permitted under the Bankruptcy Code and approved by the Bankruptcy
Court, the Company and Bagel Partners have elected to reject certain real estate
leases. The Company and Bagel Partners maintain the right to assume or reject
additional leases or executory contracts.

         The accompanying consolidated financial statements have been prepared
on a going concern basis, which contemplates continuity of operations,
realization of assets and liquidation of liabilities in the ordinary course of
business. However, the uncertainty regarding the eventual outcome of the
reorganization of the Company and Bagel Partners, and the effect of other
unknown adverse factors, could threaten the debtors' existence as going
concerns. Continuing on a going concern basis is dependent upon, among other
things, the sale of the debtors' assets as a going concern or the confirmation
of a plan of reorganization, the success of future business operations, and the
generation of sufficient cash from operations and financing sources to meet the
debtors' obligations. The accompanying consolidated financial statements do not
reflect (a) adjustments that may be necessary to present the realizable value of
assets on a liquidation basis, (b) adjustments to pre-petition liability amounts
that may be allowed for claims or contingencies, or their status or priority,
(c) the effect of any changes to the debtors' capital structure or in their
business operations as the result of a confirmed plan of reorganization, or (d)
adjustments to the carrying value of assets or liability amounts that may be
necessary as the result of actions by the Bankruptcy Court, including the
Pending Sale Transaction.

         All costs and expenses associated with the Company's balance sheet
restructuring efforts incurred prior to the petition filing date have been
reflected as pre-petition reorganization expenses. Such expenses consisted
principally of professional fees paid to representatives of the Company and
Bagel Partners, and professional fees paid by the Company that were incurred by
the Company's lenders, the holders of the Debentures and the members of Bagel
Funding. Of such expenses, $1.3 million had been incurred in fiscal 1999 and had
previously been capitalized in anticipation of the issuance of securities by the
Company in a restructuring transaction.

         All costs and expenses incurred in connection with the Company's
reorganization since the petition filing date through April 24, 2001 have been
reflected as reorganization items in the accompanying consolidated statements of
operations. Through such date, the reorganization items consisted primarily of a
provision of $4.7 million for loss on disposal of assets, a provision of $3.2
million for rejected leases and executory contracts, and charges of $14.2
million for other expenses, consisting primarily of professional fees paid to
representatives of the Company and Bagel Partners, and professional fees
incurred by the Company's lenders and the Creditors Committee which are paid by
the Company.

3.       Use of Estimates

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the 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.

                                       9
<PAGE>

4.       Debtor-in-Possession Financing

         On May 22, 2000, the bankruptcy court gave final approval of the
Company's debtor-in-possession financing agreement, providing for borrowings of
up to $36.0 million (the "DIP Facility"). Of such amount, $26.0 million replaced
the Company's pre-petition revolving credit facility in its entirety and $10.0
million provided additional funding for the Company's and Bagel Partner's
operating expenses, including employee salaries and benefits, payments to
vendors, interest and certain other payments under the DIP Facility,
professional fees and permitted capital expenditures.

         On November 17, 2000, in consideration for continued extension of the
DIP Facility, the DIP Facility was modified to reduce the amount available
thereunder from $36.0 million to $34.0 million.

         Under the most recent amendment, the DIP Facility expires on June 15,
2001. The Company believes that it will be able to obtain an extension of the
DIP Facility at least through the required closing date of the Pending Sale
Transaction.

         Draws made under the DIP Facility bear interest at a rate equal to Bank
of America, N.A.'s reference rate plus 1.00% (8.5% at April 24, 2001). The
Company is required to pay an unused line fee of 0.5%. The DIP Facility is
secured by substantially all of the assets of the Company and its subsidiaries,
including Bagel Partners. The DIP Facility contains financial covenants
requiring the maintenance of minimum cumulative EBITDA (as defined in the DIP
Facility) and limiting capital expenditures and restructuring expenditures, as
well as negative covenants limiting additional indebtedness, liens and sales of
assets, and prohibiting dividend payments. As of April 24, 2001, the Company was
in compliance with the covenants included in the DIP Facility.

5.       Commitments and Contingencies

         The Company has entered into agreements with certain vendors which
provide for minimum purchases over specified terms. Such agreements call for
retroactive rate adjustments or cash settlement in the event of purchase
shortfalls. Management believes that the ultimate settlement of such commitments
will not have a material impact on the consolidated financial position or
results of operations of the Company.

         Bagel Funding has invested a total of approximately $89.6 million,
representing an equity interest of approximately 22%, in Bagel Partners. The
Company is the manager of Bagel Funding. Bagel Funding has the right (the "Put
Right") to require Bagel Partners or the Company (at Bagel Partners' election)
to redeem Bagel Funding's equity interest in Bagel Partners at a pre-determined
formula price based on store level cash flow of Bagel Partners in the event
that, at any time after December 5, 1999 and prior to June 5, 2001, the Company
does not consent to a public offering of such equity interests or the
termination of certain rights and obligations under franchise and license
agreements between the Company and Bagel Partners ("License Termination"). The
formula price is determined by multiplying Bagel Funding's percentage interest
in Bagel Partners by an enterprise valuation of Bagel Partners. Such enterprise
valuation is equal to Bagel Partner's income from operations before general and
administrative expenses, depreciation and amortization but after franchise
royalties and marketing expenses (determined by annualizing the highest of the
two fiscal quarters prior to the quarter in which the right is exercised),
multiplied by 6.5, less the amount of any outstanding indebtedness of Bagel
Partners plus the amount of any cash balances of Bagel Partners. The formula
price, if determined using annualized results of the highest of the two fiscal
quarters ending April 24, 2001, would be equal to approximately $58.6 million.
The Company or Bagel Partners may pay the purchase price for such equity
interests in cash, shares of the Company's common stock (valued based on the
average closing sales price per share for the 20 trading days ending with the
second business day prior to the date such shares are delivered) or a
combination thereof.

         On March 28, 2000, Bagel Partners received a notice from
representatives of Bagel Funding requesting on behalf of Bagel Funding that
Bagel Partners seek the License Termination, pursuant to the applicable
provisions of the partnership agreement governing Bagel Partners. Such
termination requires the consent of the Company. By notice dated March 29, 2000,
Bagel Partners, through its general partner, Einstein/Noah Bagel Partners, Inc.,
requested that the Company consent to the License Termination. Under the Bagel
Partners partnership agreement,

                                       10
<PAGE>

the Company had a period of 120 days to respond to such request. The Company did
not and has not consented to the License Termination.

         On March 30, 2000, Bagel Partners received a letter from a
representative of Bagel Funding stating that it was Bagel Funding's position
that the Company had already rejected the request for License Termination. The
letter further stated that Bagel Funding had determined to exercise its right to
require Bagel Partners to purchase Bagel Funding's interest in Bagel Partners
and that Bagel Funding demanded immediate cash payment of the purchase price for
such interest.

         On May 10, 2000, the Company and Bagel Partners filed a motion in the
Bankruptcy Court in which they asked the court to determine that the joint plan
of reorganization filed by them properly classifies the interest of Bagel
Funding as an equity interest in Bagel Partners. The Creditors Committee also
filed a motion seeking to characterize Bagel Funding's rights as an equity
interest or to subordinate any claims Bagel Funding may have.

         On August 7, 2000, the Bankruptcy Court issued a ruling with respect to
the Put Right. Specifically, the court held as to Bagel Partners that the Put
Right is an equity interest in, and not a debt claim against, Bagel Partners.
The court reserved for determination at the hearing on confirmation of the plan
the issue of what value, if any, should be ascribed to the Put Right and whether
the Put Right entitled Bagel Funding to a larger distribution than that provided
for in the plan.

         As to the Company, the Bankruptcy Court concluded that the Put Right
does not create an enforceable right to payment in favor of Bagel Funding
against the Company. Accordingly, the Bankruptcy Court found that any rights
that Bagel Funding may have against the Company are not claims against, but
equity interests in, the Company. The bankruptcy court further noted that even
if Bagel Funding held a claim against the Company based on the Put Right, such
claim would be subordinated to other claims in the Company's bankruptcy,
including those of the holders of the Debentures, pursuant to the Bankruptcy
Code.

         Bagel Funding filed a notice of appeal of the Bankruptcy Court's
ruling. Bagel Funding also filed a motion for leave to prosecute an
interlocutory appeal, which was denied by the Bankruptcy Appellate Panel for the
Ninth Circuit.

         The Company has become subject to various lawsuits, claims and other
legal matters in the course of conducting its business. The Company does not
believe that any such matters of which it is aware are material to the Company
individually or in the aggregate, but matters may arise which could adversely
affect the Company or its business operations.

6.       Liabilities Subject to Compromise

         Certain claims against the Company and Bagel Partners in existence
prior to the filing of the petitions for relief under Chapter 11 of the
Bankruptcy Code are stayed while the Company and Bagel Partners are operating
their businesses as debtors-in-possession. These pre-petition claims are
reflected in the April 24, 2001 consolidated balance sheet as "liabilities
subject to compromise." Liabilities subject to compromise consist of the
following (in thousands):

<TABLE>
<CAPTION>
                                                                         April 24, 2001     January 2, 2001
                                                                         --------------     ---------------
         <S>                                                             <C>                <C>
         Convertible Subordinated Debentures, 7 1/4%                           $125,000            $125,000
         Senior Term Loan                                                        16,070              16,070
         Accrued Interest, Convertible Subordinated Debentures, 7 1/4%            3,751               3,751
         Provision for Rejected Executory Contracts                               1,227               1,227
         Other Miscellaneous Claims                                               4,391               4,299
                                                                               --------            --------
                                                                               $150,439            $150,347
                                                                               ========            ========
</TABLE>

                                       11
<PAGE>

         Additional liabilities subject to compromise may arise subsequent to
the petition filing date resulting from rejection of executory contracts,
including leases, and from the determination by the Bankruptcy Court (or agreed
to by parties in interest) of allowed claims for contingencies and other
disputed amounts.

         Contractual interest on the Debentures for the quarter ended April 24,
2001, was $2.8 million. No interest was reported on the Debentures for the
quarter ended April 24, 2001, which reflects the Company's decision to cease
accruing interest on the Debentures as of the petition filing date.

7.       Condensed Combined Financial Statements

         Set forth below are condensed combined financial statements of the
Company and Bagel Partners for the quarter ended April 24, 2001. Such financial
statements present the financial position and results of operations of the
Company and Bagel Partners separately from the financial position and results of
operations of Einstein/Noah Bagel Partners, Inc., which is not in
reorganization. The financial position and results of operations of the Company
and Bagel Partners are shown on a combined basis under the caption entitled
"Entities in Reorganization - ENBC & ENBP, L.P." The financial position and
results of operations of Einstein/Noah Bagel Partners, Inc. are shown separately
under the caption entitled "Entity Not in Reorganization - ENBP, Inc."
Eliminations in consolidation are shown under the caption entitled
"Eliminations."

                                       12
<PAGE>

                   EINSTEIN/NOAH BAGEL CORP. AND SUBSIDIARIES

                        CONDENSED COMBINED BALANCE SHEETS
                              AS OF APRIL 24, 2001
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                          Entities In
                                                        Reorganization  Entity Not In
                                                            ENBC &     Reorganization                      ENBC
                                                           ENBP, LP      ENBP, Inc.     Eliminations    Consolidated
                                                        -------------- --------------   ------------    ------------
<S>                                                     <C>            <C>              <C>             <C>
ASSETS
------
Current Assets:
     Cash and cash equivalents.......................   $       3,721  $           -    $         -     $     3,721
     Accounts receivable, net........................           1,464              -           (122)          1,342
     Due (to)/from affiliates........................         (22,945)        22,945              -               -
     Inventories.....................................           7,959              -              -           7,959
     Prepaid expenses and other current assets.......           3,038              -              -           3,038
                                                        -------------  -------------    -----------     -----------
         Total current assets........................          (6,763)        22,945           (122)         16,060

Investments in Subsidiaries/Parent...................         363,032          1,829       (364,861)              -
Note Receivable from Subsidiary......................          17,468              -        (17,468)              -
Property and Equipment, net..........................          98,824          8,713         11,594         119,131
Goodwill, net .......................................         148,829              -         47,813         196,642
Trademarks, Net......................................           2,001              -              -           2,001
Recipes, Net  .......................................           1,949              -              -           1,949
Other Assets, net....................................           7,010              -         (3,360)          3,650
                                                        -------------  -------------    -----------     -----------
         Total assets................................   $     632,350  $      33,487    $  (326,404)    $   339,433
                                                        =============  =============    ===========     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities Not Subject to Compromise:
     Current Liabilities:
         Accounts payable............................   $      13,602  $           -    $         -     $    13,602
         Accrued expenses............................          28,394              -           (122)         28,272
     Debtor-in-Possession Financing..................          25,369              -              -          25,369
                                                        -------------  -------------    -----------     -----------
              Total Current Liabilities..............          67,365              -           (122)         67,243
     Note Payable to Parent..........................          17,468              -        (17,468)              -
     Other Noncurrent Liabilities....................          19,136              -         (7,510)         11,626
                                                        -------------  -------------    -----------     -----------
              Total liabilities not subject to
              compromise.............................         103,969              -        (25,100)         78,869

Liabilities Subject to Compromise....................         150,439              -              -         150,439
Minority Interest....................................               -              -         30,145          30,145
Total Stockholders' Equity...........................         377,942         33,487       (331,449)         79,980
                                                        -------------  -------------    -----------     -----------
         Total liabilities and stockholders' equity..   $     632,350  $      33,487    $  (326,404)    $   339,433
                                                        =============  =============    ===========     ===========
</TABLE>

                                       13
<PAGE>

                   EINSTEIN/NOAH BAGEL CORP. AND SUBSIDIARIES

                   CONDENSED COMBINED STATEMENTS OF OPERATIONS
                      FOR THE QUARTER ENDED APRIL 24, 2001
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                          Entities In
                                                        Reorganization  Entity Not In
                                                            ENBC &     Reorganization                      ENBC
                                                           ENBP, LP      ENBP, Inc.     Eliminations    Consolidated
                                                        -------------- --------------   ------------    ------------
<S>                                                       <C>               <C>            <C>          <C>
Revenue:
     Store revenue...................................     $   111,778    $         -    $         -     $   111,778
     Royalties and franchise-related fees............           5,737          1,177         (6,914)              -
                                                          -----------    -----------    -----------     -----------
         Total revenue...............................         117,515          1,177         (6,914)        111,778

Costs and Expenses:
     Store:
         Cost of products sold.......................          36,671              -              -          36,671
         Salaries and benefits.......................          33,462              -              -          33,462
         Other controllable costs....................           9,357              -              -           9,357
         Rent, occupancy and related costs...........          16,136              -         (6,139)          9,997
         Marketing expenses..........................           5,223              -              -           5,223
         Depreciation and amortization...............           3,492              -            497           3,989
                                                          -----------    -----------    -----------     -----------
              Total store costs and expenses.........         104,341                        (5,642)         98,699
     Non-Store:
         Salaries, benefits, general and
              administrative.........................           9,918              -           (141)          9,777
         Depreciation and amortization
              (excluding goodwill amortization)......           1,486              -             (7)          1,479
         Goodwill amortization.......................           2,608              -            967           3,575
                                                          -----------    -----------    -----------     -----------
              Total non-store costs and expenses.....          14,012                           819          14,831
                                                          -----------    -----------    -----------     -----------
              Total costs and expenses...............         118,353                        (4,823)        113,530
                                                          -----------    -----------    -----------     -----------

Income (Loss) from Operations........................            (838)         1,177         (2,091)         (1,752)

Total Other Income (Expense).........................          (1,988)             -            544          (1,444)
                                                          -----------    -----------    -----------     -----------

Income (Loss) before Reorganization Items,
     Income Taxes and Minority Interest..............          (2,826)         1,177         (1,547)         (3,196)

Reorganization Items:
     Fees and expenses...............................          (3,523)          (200)           (29)         (3,752)
                                                          -----------    -----------    -----------     -----------
              Total Reorganization Items.............          (3,523)          (200)           (29)         (3,752)

     Provision for Elimination of Minority Interest..               -              -            234             234
     Provision for Income Taxes......................             (52)             -              -             (52)
                                                          -----------    -----------    -----------     -----------
Net Income (Loss)....................................     $    (6,401)   $       977    $    (1,342)    $    (6,766)
                                                          ===========    ===========    ===========     ===========
</TABLE>

                                       14
<PAGE>

                   EINSTEIN/NOAH BAGEL CORP. AND SUBSIDIARIES

                   CONDENSED COMBINED STATEMENTS OF CASH FLOWS
                   FOR THE THREE QUARTERS ENDED APRIL 24, 2001
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                          Entities In
                                                        Reorganization  Entity Not In
                                                            ENBC &     Reorganization                      ENBC
                                                           ENBP, LP      ENBP, Inc.     Eliminations    Consolidated
                                                        -------------- --------------   ------------    ------------
<S>                                                     <C>            <C>              <C>             <C>
Cash Flows from Operating Activities:
     Net income (loss)...............................     $    (6,401)   $       977    $    (1,342)    $    (6,766)
     Adjustments to reconcile net income (loss) to
     net cash provided by operating activities:
         Depreciation and amortization...............           7,586              -          1,457           9,043
         Minority interest...........................               -              -           (234)           (234)
         Loss on disposal of assets..................              29              -                             29
         Changes in assets and liabilities:
              Accounts receivable....................              10              -            (47)            (37)
              Accounts payable and accrued expenses..           2,769              -             47           2,816
              Other assets and liabilities...........          (1,419)          (977)           119          (2,277)
                                                          -----------    -----------    -----------     -----------
                  Net cash provided by
                      operating activities...........           2,574              -              -           2,574
                                                          -----------    -----------    -----------     -----------

Cash Flows from Investing Activities:
     Purchase of property and equipment..............          (5,276)             -              -          (5,276)
                                                          -----------    -----------    -----------     -----------
         Net cash used in investing activities.......          (5,276)             -              -          (5,276)

Cash Flows from Financing Activities:
     Borrowings under debtor-in-possession facility..         112,193              -              -         112,193
     Repayments under debtor-in-possession facility..        (109,729)             -              -        (109,729)
                                                          -----------    -----------    -----------     -----------
         Net cash provided by financing activities...           2,464              -              -           2,464
Net Decrease in Cash and Cash Equivalents............            (238)             -              -            (238)
Cash and Cash Equivalents, beginning of period.......           3,959              -              -           3,959
                                                          -----------    -----------    -----------     -----------
Cash and Cash Equivalents, end of period.............     $     3,721    $         -    $         -     $     3,721
                                                          ===========    ===========    ===========     ===========
</TABLE>

                                       15
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

         Certain statements in this Form 10-Q, including, without limitation,
under "Management's Discussion and Analysis of Financial Condition and Results
of Operations," constitute "forward-looking statements" made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements reflect management's current expectations or
beliefs, but involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of Einstein/Noah
Bagel Corp. ("ENBC" or the "Company") and Einstein/Noah Bagel Partners, L.P., a
majority-owned subsidiary of the Company ("ENBP, L.P." or "Bagel Partners"), to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Except as may be
required by applicable law, the Company undertakes no obligation to update or
revise any "forward-looking statements" that may be included in this Form 10-Q.

         On April 27, 2000, the Company and Bagel Partners filed voluntary
petitions for reorganization under Chapter 11 of the United States Bankruptcy
Code (the "Bankruptcy Code"), and the Company and Bagel Partners filed a joint
plan of reorganization. Forward-looking statements related to the Chapter 11
cases also involve known and unknown risks, uncertainties and other factors,
including, without limitation, approval of the Company's plans and activities by
the Bankruptcy Court (including a plan of reorganization or a sale of
substantially all the assets of the Company and Bagel Partners), opposition of
holders of claims and interests in the Chapter 11 cases to the Company's
proposed plans and activities, uncertainties with respect to competing plans of
reorganization that might be prosecuted by holders of claims or interests in the
Chapter 11 cases, the ability of the Company to continue to operate as a going
concern, retention of management and other personnel during the Chapter 11
proceedings, the continued availability of debtor-in-possession financing, the
availability of exit financing to facilitate emergence from Chapter 11 pursuant
to a plan of reorganization, the duration of the Chapter 11 proceedings, the
ability of the Company to operate successfully under the Chapter 11 proceedings,
uncertainties with respect to the official committee of unsecured creditors and
uncertainties with respect to continued public trading in the Company's
securities.

         In addition to restructuring related risks and uncertainties, the
results, performance or achievements of the Company and Bagel Partners are
subject to a number of risks and uncertainties including, without limitation,
the following: the generation of sufficient cash from operations to repay debt
obligations; the ability to attract and retain necessary management and other
personnel; the ability to successfully build and open new stores; successful
development and implementation of a franchise system; the availability and cost
of food, beverages and other supplies; competition; success of operating
initiatives; development and operating costs; advertising and promotional
efforts; brand awareness; availability and terms of capital; adverse publicity;
acceptance of new product offerings; changes in business strategy or development
plans; achievement of development schedules; availability, locations, and terms
of sites for store development; food, labor, and employee benefit costs; changes
in government regulation; regional weather conditions; the Company's ability to
implement new information technology systems; and other factors referenced in
this Form 10-Q. The Company cannot predict which factors would cause actual
results to differ materially from those indicated by the forward-looking
statements. In addition to considering statements that explicitly describe such
risks and uncertainties, readers are urged to consider statements that include
the terms "believes," "belief," "expects," "plans," "anticipates," "intends" or
the like to be uncertain and forward-looking.

General

         On April 27, 2000, the Company and its majority-owned subsidiary,
Einstein/Noah Bagel Partners, L.P. ("Bagel Partners"), filed voluntary petitions
for reorganization under Chapter 11 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Arizona in Phoenix (the "Bankruptcy
Court"). Effective upon such filings, the Company and Bagel Partners are
operating their businesses as debtors-in-possession, subject to the jurisdiction
of the Bankruptcy Court. The Chapter 11 cases are being jointly administered for
procedural purposes by the Bankruptcy Court under Case No. 00-04447-ECF-CGC.
Einstein/Noah Bagel Partners, Inc., a wholly-owned subsidiary of the Company and
the general partner of Bagel Partners ("Bagel Partners, Inc."), is not included
in the Chapter 11 filings.

                                       16
<PAGE>

         As of the petition date, actions to collect pre-petition indebtedness
are stayed and other contractual obligations may not be enforced against the
Company or Bagel Partners. In addition, the Company and Bagel Partners may
reject executory contracts and unexpired leases, and parties affected by these
rejections may file claims with the Bankruptcy Court in accordance with
procedures set by the Bankruptcy Court and the Bankruptcy Code. On April 28,
2000, the Bankruptcy Court approved the Company's payment of pre-petition
employee compensation, benefits and reimbursements and withholding taxes, and
the continued payment of these items. The Bankruptcy Court also approved the
timely payment, without interruption, of all pre-petition trade payables
incurred in the ordinary course of business, including vendor bills submitted
prior to the filing, provided that the vendors continued to offer the Company
and Bagel Partners credit terms that were the same or better than those offered
pre-petition. To date, substantially all pre-petition vendors are providing
credit on terms meeting the requirements set by the Bankruptcy Court.

         On May 2, 2000, the Bankruptcy Court set June 30, 2000 as the claims
bar date in the Chapter 11 cases.

         As debtors-in-possession, the Company and Bagel Partners are authorized
to operate their businesses, but may not engage in transactions outside the
ordinary course of business without approval, after notice and hearing, of the
Bankruptcy Court. An official committee of unsecured creditors, consisting of
HSBC Bank USA (indenture trustee for the holders of the Company's $125.0 million
7 1/4% Convertible Subordinated Debentures due 2004 (the "Debentures")), and
four holders of the Debentures, Loomis, Sayles & Company, L.P., Kayne Anderson,
Lonestar Partners, L.P. and Lampe, Conway & Co., L.L.C., was originally formed
by the U.S. Trustee on May 9, 2000 (the "Creditors Committee").

         On July 28, 2000, the Bankruptcy Court approved the Company's
employment contract with Robert M. Hartnett, the Company's Chairman, Chief
Executive Officer and President; the Company's severance agreements with certain
of its officers, providing certain severance benefits in the event of
termination of employment following a change in control of the Company; and the
Company's amended and restated employee retention program.

         Upon filing petitions under Chapter 11, the Company and Bagel Partners
filed a joint plan of reorganization. Such plan was modified on August 11, 2000,
October 31, 2000, January 3, 2001 and January 30, 2001. Under the terms of the
plan as originally filed, Bagel Partners would have been merged into the
Company, general unsecured creditors of the Company (primarily the holders of
the Debentures) would have received approximately 89 percent of the common stock
of the reorganized Company, the minority equity holders in Bagel Partners
(primarily Bagel Store Development Funding, L.L.C. ("Bagel Funding")) would have
received approximately 11 percent of the common stock of the reorganized
Company, and holders of the Company's common stock would have received warrants
to acquire 2% of the common stock of the Company on a fully diluted basis. The
Company had received from BNP Paribas a commitment for a $60.0 million secured
credit facility to be made available upon consummation of the plan; however,
such commitment was not extended beyond its October 31, 2000 expiration date.

         The Bankruptcy Court approved the disclosure statement pertaining to
the plan on July 28, 2000, and the disclosure statement was mailed on August 14,
2000.

         On September 14, 2000, the Company announced that it had reached
agreement with the Creditors Committee on all outstanding issues regarding the
plan of reorganization and that the Creditors Committee supported the plan,
although the Creditors Committee reserved the right to challenge the
distribution under the plan to Bagel Funding.

         On October 25, 2000, the Bankruptcy Court denied the motion of the
Company and Bagel Partners to extend the time periods during which the Company
and Bagel Partners had the exclusive right to file a plan of reorganization and
to solicit acceptances of a plan.

         The Bankruptcy Court conducted hearings on the confirmation of the plan
on various dates through February 2, 2001. The plan was accepted by the holders
of at least two-thirds in dollar amount and more than one-half in number of the
claims of the class consisting of the Company's pre-petition secured bank debt.
However, the

                                       17
<PAGE>

plan was not accepted by the class consisting of the Company's general unsecured
creditors and the Bankruptcy Court denied the motion of the Company and Bagel
Partners to count certain ballots of unsecured creditors of the Company that had
been received by the solicitation agent after the voting deadline. The Company
and Bagel Partners also filed a motion, which remains pending, to designate,
pursuant to Section 1126(e) of the Bankruptcy Code, certain votes of the
Company's unsecured creditors cast by New World Coffee-Manhattan Bagel, Inc.
("New World"), a competitor of the Company which had purchased Debentures, and
certain other persons associated with New World. In the event such motion were
granted, the plan would be deemed accepted by the class consisting of the
Company's general unsecured creditors. In the event the motion were denied, such
class would not be deemed to have accepted the plan, and it would be possible to
confirm the plan only if the requirements of Section 1129(b) of the Bankruptcy
Code, as well as other applicable requirements, were satisfied.

         Objections to the plan were filed by Bagel Funding, the trustee under
the Boston Chicken plan of reorganization (the "Boston Chicken Plan Trustee"),
and New World. On January 3, 2001, the Company and Bagel Partners filed
modifications to the plan that provided for (a) an additional distribution of
$2.5 million in cash to minority holders in Bagel Partners, and (b) a
distribution to holders of the Company's common stock of (i) warrants to
purchase 10% of the common stock of the reorganized Company, on a fully-diluted
basis, for an exercise price of approximately $18.7 million and (ii) an amount
in cash equal to $1.0 million less the amount payable to the Boston Chicken Plan
Trustee for reimbursement of fees and expenses incurred by the Boston Chicken
Plan Trustee in connection with the Chapter 11 cases of the Company and Bagel
Partners. At that time, Bagel Funding, the Boston Chicken Plan Trustee and the
Creditors Committee indicated that they intended to support the plan as so
modified.

         In January 2001, New World, and certain persons associated with New
World, on the one hand, and an affiliate of Three Cities Research, a private
equity investment firm (with its affiliates, "Three Cities"), on the other hand,
purchased positions in the Debentures sufficient to give each a "blocking
position" with respect to approval of the Company's joint plan of reorganization
in the event the Company and Bagel Partners were required to resolicit votes
with respect to the plan. In addition, certain members of the Creditors
Committee sold their Debentures and all of the members of the Creditors
Committee resigned; to date no other members have been appointed. After the
transactions in the Debentures described above, the Company and Bagel Partners
negotiated to resolve outstanding objections to the plan. These efforts were
unsuccessful, and support by the principal holders of claims and interests in
the Chapter 11 cases, including those who had previously supported the plan,
waned. On February 2, 2001, the Boston Chicken Plan Trustee filed a conditional
reinstatement of objections to the plan. Accordingly, the Company's plan faced a
number of obstacles, including, without limitation: the lack of sufficient votes
of the Company's general unsecured creditors unless the designation motion of
the Company and Bagel Partners was granted; the presence of objections to the
plan by New World and the Boston Chicken Plan Trustee (and the risk of
reinstatement of objections by Bagel Funding); the need to obtain exit financing
to facilitate emergence from Chapter 11 pursuant to the plan; and the risk that
the Bankruptcy Court would require resolicitation of votes to confirm the plan
as a consequence of plan modifications and changes in the terms of any exit
financing.

         On February 12, 2001, the Company announced that it had entered into an
agreement with ENB Acquisition LLC ("ENB"), an affiliate of Three Cities,
providing for the sale to ENB of substantially all of the assets of the Company
and Bagel Partners under Section 363 of the Bankruptcy Code, for a purchase
price consisting of $145.0 million in cash and the assumption of $22.7 million
in current liabilities and certain other liabilities and obligations. Under the
purchase agreement, if the agreement is terminated and the Company accepts an
acquisition proposal from a third party other than ENB, then in certain
circumstances the Company will be obligated to make a termination payment of
$5.0 million to ENB. On March 5, 2001, the Bankruptcy Court entered an order
approving such termination payment and bidding procedures (the "Bidding
Procedures Order"), and the court set May 23, 2001 as the date for the hearing
(the "Sale Hearing") on the motion (the "Sale Motion") to approve the sale to
ENB or to a party submitting a higher or better bid in conformity with the
Bidding Procedures Order.

         The Sale Hearing was conducted on June 1, 2001. At the Sale Hearing,
the Bankruptcy Court conducted an auction in which Einstein Acquisition Corp.
and Greenlight New World, LLC, affiliates of New World, were the successful
bidder. Upon the conclusion of the auction, the Bankruptcy Court approved the
sale to such affiliates of substantially all of the assets of the Company and
Bagel Partners for a purchase price consisting of $160.0 million in cash and the
assumption of current liabilities incurred in the ordinary course of business
and certain other liabilities and obligations. The cash purchase price will be
increased by the amount, if any, that the current liabilities assumed

                                       18
<PAGE>

are less than $22.7 million and it will be decreased by the amount, if any, that
the current liabilities exceed $30 million.

         Under the sale order of the Bankruptcy Court, the New World affiliates
will be obligated to close the transaction not later than 12:01 p.m., Eastern
Time, on June 20, 2001. The transaction is subject to customary conditions,
including the expiration or termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

         In the event the New World affiliates do no consummate the acquisition
on or before 12:01 p.m., Eastern Time, on June 20, 2001, ENB will be obligated
to consummate the acquisition of substantially all of the assets of the Company
and Bagel Partners, on the terms provided for in its backup bid, on June 21,
2001. Under ENB's backup bid, ENB would acquire such assets for a purchase price
consisting of $155.0 million (of which $5.0 million consists of a credit for its
breakup fee), or $150.0 million net in cash, plus the assumption of liabilities
and obligations on substantially the same terms as those provided in the bid of
the New World affiliates.

         On April 2, 2001, the Boston Chicken Plan Trustee filed a joint plan of
reorganization of the Company and Bagel Partners (the "BCP Plan"), together with
a form of disclosure statement relating to such plan, with the Bankruptcy Court.
Pursuant to the BCP Plan, as subsequently amended, the Debentures would have
allegedly been "reinstated" and other unsecured creditor claims would have been
paid in full. Holders of the Debentures would also have received a right to
exchange the principal amount of their Debentures and accrued interest thereon
for shares of new common stock in the Company. Common stockholders in the
Company would also have received shares of new common stock in the reorganized
Company. The equity interests in Bagel Partners would have remained outstanding.
Under the plan, ENBC and Bagel Partners would have obtained new bank financing
in the principal amount of $85.0 million and the Company's pre-petition secured
bank financing and debtor-in-possession financing would have been satisfied in
full.

         On May 23, 2001, the Bankruptcy Court denied the motion of New World,
as joined in by the Boston Chicken Plan Trustee, to continue the hearing on the
Sale Motion. The Bankruptcy Court vacated the dates that had previously been set
for a hearing on confirmation of the BCP Plan. At the Sale Hearing, New World
withdrew its previous objections to the sale under Section 363, and the
objections of the Boston Chicken Plan Trustee were overruled.

Results of Operations

         Revenue. Total store net revenue decreased 5.5% to $111.8 million for
the quarter ended April 24, 2001 compared to $118.3 million for the prior
comparable quarter. The decrease in store net revenue was due to a decrease in
the average number of stores from 535 to 459. This decrease is offset by an
increase in average net weekly per store sales of 10.5% to $15,103 from $13,667
for the prior comparable period. Average net weekly per store sales represents
weekly per store average revenue, after customer and employee discounts, for all
stores open at the end of the periods presented. The increase in average net
weekly per store sales was due to several factors, including the closure of 85
under performing units, increased marketing spending, menu changes, higher menu
prices and focus on improved store level operations.

         Comparable store sales increased 3.7% from the prior comparable
quarter. Comparable store sales represent average net weekly per store sales for
stores open since the beginning of the prior year's comparable period. There
were 454 stores in the comparable store sales base.

         Store Costs and Expenses. Cost of products sold as a percent of store
net revenue remained relatively constant at 32.8% for the quarter ended April
24, 2001 from 32.9% for the prior comparable quarter.

         Salaries and benefits as a percent of store net revenue decreased to
29.9% for the quarter ended April 24, 2001 from 31.0% for the prior comparable
quarter. The decrease reflected the Company's ability to leverage store labor as
average net weekly per store sales increased.

                                       19
<PAGE>

         Other controllable costs (such as utilities, repair and maintenance,
and supplies) as a percent of store net revenue decreased to 8.4% for the
quarter ended April 24, 2001 from 8.7% for the prior comparable quarter. The
decrease was due primarily to the leverage achieved through the closure of under
performing stores.

         Rent, occupancy and related costs as a percent of store net revenue
decreased to 8.9% for the quarter ended April 24, 2001 from 9.5% for the prior
comparable quarter. The decrease reflects leverage gained by the closure of
under performing stores as well as the leverage gained by the increased average
net weekly per store sales.

         Marketing expenses as a percent of store net revenue increased to 4.7%
for the quarter ended April 24, 2001 from 4.2% for the prior comparable quarter.
The increase was the result of a decision to increase marketing spending in
fiscal 2001.

         As a result of the factors described above, store margins before
depreciation and amortization as a percent of store net revenue increased to
15.3% for the quarter ended April 24, 2001 compared to 13.7% for the prior
comparable quarter.

         Depreciation and amortization as a percent of store net revenue
remained relatively constant at 3.6% for the quarter ended April 24, 2001
compared to 3.1% for the prior comparable quarter.

         Non-Store Salaries, Benefits, General and Administrative. Non-store
salaries, benefits, general and administrative expenses as a percent of total
revenue remained relatively constant at 8.8% for the quarter ended April 24,
2001 compared to 9.2% for the prior comparable quarter. The majority of the net
change is represented by the $1.2 million retention bonus which was paid out in
the quarter ended April 16, 2000.

         Reorganization Expenses. The Company incurred reorganization expenses
of $3.8 million for the quarter ended April 24, 2001; compared to pre-petition
reorganization expense of $2.6 million. Such expenses consist primarily of
professional fees paid to representatives of the Company and professional fees
incurred by the Company's bank lenders, the holders of the Company's convertible
subordinated debt and the members of Bagel Funding.

         Non-Store Depreciation and Amortization. Non-store depreciation and
amortization (excluding goodwill amortization) as a percent of total revenue
remained relatively constant at 1.3% for the quarter ended April 24, 2001 from
1.2% for the prior comparable quarter. Goodwill amortization as a percent of
total revenue remained relatively constant at 3.2% for the quarter and 3.0% for
the prior comparable quarter.

         Other Expense. The Company incurred other expense of $1.4 million for
the quarter ended April 24, 2001 compared to other expense of $3.9 million for
the prior comparable quarter. The decrease was due to the exclusion of bond
interest due to the Company's Chapter 11 filing.

         Minority Interest. The minority interest in losses of Bagel Partners
was $0.2 million for the quarter ended April 24, 2001 compared to $0.7 million
for the quarter ended April 16, 2000.

         Income Taxes. The Company had a $52,000 income tax expense in the first
quarter of 2001, consisting of state and local taxes.

Liquidity and Capital Resources

         The Company's primary sources of capital in 2000 and the first quarter
of 2001 were from internally generated cash from operations and borrowings under
the Company's revolving credit facility. Cash provided by operations for the
quarter ended April 24, 2001 was $2.6 million compared to $3.0 million for the
quarter ended April 16, 2000. The decrease in cash from operations was primarily
the result of reorganization expenses in an amount in excess of increases in
store cash flow.

                                       20
<PAGE>

         The Company is a party to a debtor-in-possession financing agreement,
providing for borrowings in the form of a revolving loan of up to $34.0 million
(the "DIP Facility"). Under the terms of the DIP Facility, the revolving loan is
available to the Company until June 15, 2001, although the Company is currently
negotiating the terms of an extension to the DIP facility through the date of
the closing of the sale of substantially all of the assets of the Company and
Bagel Partners under Section 363 of the Bankruptcy Code. Draws made under the
DIP Facility bear interest at a rate equal to Bank of America, N.A.'s reference
rate plus 1.00% (8.5% at April 24, 2001). The Company is required to pay an
unused line fee of 0.5%. The DIP Facility is secured by substantially all of the
assets of the Company and its subsidiaries. The DIP Facility contains financial
covenants requiring the maintenance of minimum cumulative EBITDA (as defined in
the DIP Facility) and limiting capital expenditures and restructuring
expenditures, as well as negative covenants limiting additional indebtedness,
liens and sales of assets, and prohibiting dividend payments.

         Cash provided by financing activities was $2.5 million for the quarter
ended April 24, 2001, resulting from the net borrowings and repayments under the
Company's credit facility. Borrowings and repayments for the quarter ended April
16, 2000 were comparable.

         The Company's primary uses of capital in 2001, other than providing
working capital for normal operating expenses, are expected to consist primarily
of payment of professional fees in connection with the Company's capital
restructuring project and the Chapter 11 cases, expenditures related to the
development of business infrastructure and systems, including the acquisition of
hardware, software licenses, and implementation services for enterprise and
store systems, expenditures related to refurbishing existing stores,
expenditures related to the completion of work on the Company's support center,
and payment of interest and fees under the DIP Facility.

         The Company's primary sources of capital in 2001 are expected to
consist primarily of internally generated cash from operations and borrowings
under the DIP Facility.

                                       21
<PAGE>

Quantitative and Qualitative Disclosures About Market Risk

         Over time, the Company is exposed to market risks arising from changes
in interest rates. The Company has not historically used derivative financial
instruments.

         As of April 24, 2001, $41.4 million of floating-rate debt was exposed
to changes in interest rates compared to $39.0 million at January 2, 2001. This
exposure was primarily linked to the prime lending rate. A hypothetical 10%
change in the prime lending rate would not have had a material effect on the
Company's annual results of operations.

         As of April 24, 2001 and January 2, 2001, the Company also had $125.0
million of fixed-rate convertible subordinated debentures due 2004. A
hypothetical 10% change in interest rates on this debt would affect the market
value of these financial instruments.

                                       22
<PAGE>

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         The information set forth under Note 2 of the Company's Notes to
Consolidated Financial Statements contained in Part I of this Form 10-Q is
incorporated herein by reference thereto.

Item 6.  Exhibits and Reports on Form 8-K and Form 8-K/A

         A.       Exhibits: See Exhibit Index appearing elsewhere herein, which
                  is incorporated herein by reference.

         B.       Reports on Form 8-K: During the quarter ended April 24, 2001,
                  the Company filed four current reports on Form 8-K, dated
                  February 13, 2001, March 8, 2001, March 15, 2001 and April 3,
                  2001. The report on Form 8-K dated February 13, 2001 reported
                  that the Company was seeking Bankruptcy Court approval of the
                  sale of substantially all of the assets of the Company and
                  Bagel Partners to an affiliate of Three Cities. The report on
                  Form 8-K dated March 8, 2001 reported that the Bankruptcy
                  Court had approved bidding procedures and the terms of a
                  termination fee payable to the Three Cities affiliate under
                  certain circumstances. The report on Form 8-K dated March 15,
                  2001 reported preliminary financial results for the fiscal
                  year ended January 2, 2001, and it attached as an exhibit an
                  overview of the Company in the form being provided to
                  prospective bidders. The report on Form 8-K dated April 3,
                  2001, reported that the Boston Chicken Plan Trustee had filed
                  a proposed plan of reorganization.

         C.       Reports on Form 8-K/A: During the quarter ended April 24,
                  2001, the Company filed one current report on Form 8-K/A dated
                  April 12, 2001. The report on Form 8-K/A modified the report
                  on Form 8-K dated April 3, 2001, to clarify the amount of
                  common stock that would have been available under the proposed
                  plan of reorganization that had been filed by Boston Chicken
                  Plan Trustee.

                                       23
<PAGE>

                                   SIGNATURES

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


                                  EINSTEIN/NOAH BAGEL CORP.



Date:    June 8, 2001                  /s/ Robert M. Hartnett
                                  -------------------------------------
                                           Robert M. Hartnett
                                         Chairman of the Board,
                                  Chief Executive Officer and President



Date:    June 8, 2001                     /s/ Robert C. Ellis
                                  -------------------------------------
                                              Robert C. Ellis
                                         Chief Financial Officer

                                       24
<PAGE>

                                   EXHIBITS+

    Exhibit No.                             Description of Exhibit
---------------------          -------------------------------------------------

        2.1                    Letter dated May 24, 2001 from Einstein
                               Acquisition Corp. and Greenlight-New World,
                               LLC


--------
+        In the case of incorporation by reference to documents filed by the
         Company under the Securities Exchange Act of 1934, as amended (the
         "Exchange Act"), the Company's file number under that Act is 0-21097.

                                       25