<PAGE>   1







                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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



For the period ended                     May 20, 2001
                      ---------------------------------------------------------

Commission file number                     0-3833
                       --------------------------------------------------------

                                      Morgan's Foods, Inc.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Ohio                                                  34-0562210
--------------------------------------------------------------------------------
  (State or other jurisdiction of                           (I.R.S. Employer
   incorporation or organization)                        Identification Number)

24200 Chagrin Boulevard, Suite 126, Beachwood, Ohio               44122
--------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code:        (216) 360-7500
                                                    ---------------------------

--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


         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
                               ---       ---

       As of June 30, 2001, the issuer had 2,969,405 shares of common stock
outstanding.


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<PAGE>   2


                          PART I FINANCIAL INFORMATION

Item 1.  Financial Statements.
                              Morgan's Foods, Inc.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                       QUARTER  ENDED
                                                                                            -------------------------------------
                                                                                            MAY 20, 2001             MAY 21, 2000
                                                                                            ------------             ------------

<S>                                                                                          <C>                     <C>
Revenues........................................................................             $18,607,000             $17,566,000

Cost of sales:
 Food, paper and beverage.......................................................               5,784,000               5,403,000
 Labor and benefits ............................................................               4,920,000               4,883,000
Restaurant operating expenses ..................................................               4,714,000               4,440,000
Depreciation and amortization ..................................................                 921,000                 888,000
General and administrative expenses.............................................               1,194,000               1,258,000
Loss on restaurant assets.......................................................                   6,000                  19,000
                                                                                    --------------------      ------------------
Operating income................................................................               1,068,000                 675,000
Interest Expense:
 Bank debt and notes payable....................................................              (1,177,000)             (1,143,000)
 Capital leases.................................................................                 (16,000)                (19,000)
Other income and expense, net...................................................                  53,000                  48,000
                                                                                    --------------------      ------------------
Loss before income taxes .......................................................                 (72,000)               (439,000)
provision for income taxes......................................................                  (7,000)                  3,000
                                                                                    --------------------      ------------------
Net loss .......................................................................    $            (65,000)     $         (442,000)
                                                                                    ====================      ==================
Basic and diluted net loss per common share.....................................    $               (.02)     $             (.15)
                                                                                    ====================      ==================
Weighted average number of
 shares outstanding.............................................................               2,944,026               2,922,727
</TABLE>


                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


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<PAGE>   3


                              MORGAN'S FOODS, INC.

                           CONSOLIDATED BALANCE SHEETS

                                   (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                       MAY 20, 2001          FEBRUARY 25, 2001
                                                                                     ----------------        -----------------
<S>                                                                                 <C>                     <C>
ASSETS
 Current assets:
  Cash and equivalents..........................................................    $      6,267,000        $       5,840,000
  Receivables...................................................................             177,000                   78,000
  Inventories...................................................................             542,000                  488,000
  Prepaid expenses..............................................................             295,000                  222,000
                                                                                    ----------------        -----------------
                                                                                           7,281,000                6,628,000
 Property and equipment:
  Land..........................................................................          10,802,000               10,802,000
  Buildings and improvements....................................................          17,714,000               17,701,000
  Property under capital leases.................................................           1,006,000                1,006,000
  Leasehold improvements........................................................           7,296,000                7,294,000
  Equipment, furniture and fixtures.............................................          17,783,000               17,771,000
  Construction in progress......................................................             109,000                  110,000
                                                                                    ----------------        -----------------
                                                                                          54,710,000               54,684,000
  Less accumulated depreciation and amortization................................          14,863,000               14,130,000
                                                                                    ----------------        -----------------
                                                                                          39,847,000               40,554,000
 Other assets...................................................................           1,587,000                1,621,000
 Franchise agreements...........................................................           2,211,000                2,241,000
 Deferred taxes.................................................................             600,000                  600,000
 Acquired franchise rights......................................................           9,785,000                9,910,000
                                                                                    ----------------        -----------------
                                                                                    $     61,311,000        $      61,554,000
                                                                                    ================        =================
LIABILITIES AND SHAREHOLDERS' DEFICIT
 Current liabilities:
    Current maturities of long-term debt........................................    $      2,127,000        $       2,076,000
    Current maturities of capital lease
      obligations ..............................................................              94,000                   94,000
    Accounts payable............................................................           3,628,000                3,590,000
    Accrued liabilities.........................................................           3,643,000                3,322,000
                                                                                    ----------------        -----------------
                                                                                           9,492,000                9,082,000
  Long-term debt ...............................................................          50,493,000               51,046,000
  Long-term capital lease obligations ..........................................             629,000                  651,000
  Other long-term liabilities ..................................................           1,295,000                1,353,000


SHAREHOLDERS' DEFICIT
Preferred shares, 1,000,000 shares authorized,
  no shares outstanding
Common stock
 Authorized shares - 25,000,000
 Issued shares - 2,969,405......................................................              30,000                   30,000
 Treasury stock - 46,678 in 2000................................................              -                       (76,000)
Capital in excess of stated value...............................................          28,844,000               28,875,000
Accumulated deficit.............................................................         (29,472,000)             (29,407,000)
                                                                                    ----------------        -----------------
Total shareholders' deficit.....................................................            (598,000)                (578,000)
                                                                                    ----------------        -----------------
                                                                                    $     61,311,000        $      61,554,000
                                                                                    ================        =================
</TABLE>


                SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



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                              Morgan's Foods, Inc.

            CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)

                                   (unaudited)


<TABLE>
<CAPTION>
                                  COMMON SHARES            TREASURY SHARES       CAPITAL IN                          TOTAL
                              --------------------   -------------------------    EXCESS OF      ACCUMULATED     SHAREHOLDERS'
                               SHARES      AMOUNT       SHARES         AMOUNT    STATED VALUE      DEFICIT      EQUITY (DEFICIT)
                              ---------   --------   ------------    ---------    -----------    ------------   ---------------

<S>                           <C>         <C>             <C>        <C>          <C>            <C>             <C>
Balance, February 27, 2000    2,969,405   $ 30,000        (46,678)   $(111,000)   $28,875,000    $(27,864,000)   $   930,000

Net loss                           -          -              -            -              -         (1,543,000)    (1,543,000)

Issue of treasury shares for
 401(k) contributions              -          -            14,845       35,000           -               -            35,000
                              ---------   --------   ------------    ---------    -----------    ------------    -----------

Balance, February 25, 2001    2,969,405     30,000        (31,833)     (76,000)    28,875,000     (29,407,000)      (578,000)

Net loss                           -          -              -            -              -            (65,000)       (65,000)

Issue of treasury shares for
 401(k) contributions              -          -            31,833       76,000        (31,000)           -            45,000
                              ---------   --------   ------------    ---------    -----------    ------------    -----------

Balance, May 20, 2001         2,969,405   $ 30,000           -       $    -       $28,844,000    $(29,472,000)   $  (598,000)
                              =========   ========   ============    =========    ===========    ============    ===========
</TABLE>



                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




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                              Morgan's Foods, Inc.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)


<TABLE>
<CAPTION>
                                                             QUARTER ENDED
                                                      ---------------------------
                                                      MAY 20, 2001   MAY 21, 2000
                                                      ------------   ------------

<S>                                                    <C>            <C>
Cash flows from operating activities:
    Net loss                                           $   (65,000)   $  (442,000)
    Adjustments to reconcile to net cash
      provided by operating activities:
       Depreciation and amortization                       921,000        888,000
       Amortization of supply agreement advances           (41,000)          -
       Loss on restaurant assets                             6,000         19,000
       Change in assets and liabilities:
        Decrease (increase) in receivables                 (99,000)        28,000
        Decrease (increase) in inventories                 (54,000)         2,000
        Decrease (increase) in prepaid expenses            (73,000)        58,000
        Decrease in other assets                              -            15,000
        Increase (decrease) in accounts payable             38,000       (374,000)
        Increase in accrued liabilities                    350,000        330,000
                                                       -----------    -----------
    Net cash provided by operating activities              983,000        524,000
                                                       -----------    -----------
Cash flows from investing activities:
    Capital expenditures                                   (32,000)    (1,211,000)
    Purchase of franchise agreements and
      acquired franchise rights                               -           (71,000)
                                                       -----------    -----------
    Net cash used in investing activities                  (32,000)    (1,282,000)
                                                       -----------    -----------
Cash flows from financing activities:
    Proceeds from issuance of long-term debt,
      net of financing costs                                  -           640,000
    Principal payments on long-term debt                  (502,000)      (451,000)
    Principal payments on capital lease obligations        (22,000)       (47,000)
                                                       -----------    -----------
    Net cash provided (used) by financing activities      (524,000)       142,000
                                                       -----------    -----------
    Net change in cash and equivalents                     427,000       (616,000)
    Cash and equivalents, beginning balance              5,840,000      4,612,000
                                                       -----------    -----------
    Cash and equivalents, ending balance               $ 6,267,000    $ 3,996,000
                                                       ===========    ===========
</TABLE>


                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



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<PAGE>   6


                              Morgan's Foods, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  QUARTERS ENDED MAY 20, 2001 AND MAY 21, 2000
                                   (unaudited)


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The interim consolidated financial statements of Morgan's Foods, Inc.
have been prepared without audit. In the opinion of Company Management, all
adjustments have been included. Unless otherwise disclosed, all adjustments
consist only of normal recurring adjustments necessary for a fair statement of
results of operations for the interim periods. These unaudited financial
statements have been prepared using the same accounting principles that were
used in preparation of the Company's annual report on Form 10-K for the year
ended February 25, 2001. Certain prior year amounts have been restated to
conform to the current year presentation.


NOTE 2.  INCOME (LOSS) PER COMMON SHARE

         Basic net income (loss) per common share is computed by dividing net
income (loss) by the weighted average number of common shares outstanding during
the period. Diluted net income (loss) per common share is based on the combined
weighted average number of shares outstanding, which includes the assumed
exercise, or conversion of options. In computing diluted net income (loss) per
common share, the Company has utilized the treasury stock method. Since the
Company reported a net loss or the average share price during the periods
presented was below the exercise price of any outstanding stock options, the
calculation of diluted net income (loss) per common share does not include the
effect of the assumed exercise of outstanding options, as its effect would be
anti-dilutive.

NOTE 3.  ISSUANCE OF STOCK OPTIONS

         Stock Options for 11,500 common shares were issued to executives on
April 27, 2001 under the Key Employees Stock Option Plan at an exercise price of
$.85 per share, the market price on the date of grant. The plan provides that
the options are exercisable after a waiting period of 6 months and that each
option expires 10 years after its date of issue.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

         Description of Business. Morgan's Foods, Inc. ("the Company") operates
through wholly-owned subsidiaries KFC restaurants under franchises from KFC
Corporation and Taco Bell restaurants under franchises from Taco Bell
Corporation. As of June 30, 2001, the Company operates 76 KFC restaurants, 8
Taco Bell restaurants, and 17 KFC/Taco Bell "2n1's" under franchises from KFC
Corporation and franchises or licenses from Taco Bell Corporation and 2 Taco
Bell/Pizza Hut Express "2n1's" operated under franchisees from Taco Bell
Corporation and licenses from Pizza Hut Corporation. The Company's fiscal year
is a 52 - 53 week year ending on the Sunday nearest the last day of February.


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<PAGE>   7


                 SUMMARY OF EXPENSES AS A PERCENTAGE OF REVENUES

<TABLE>
<CAPTION>
                                                                        QUARTER ENDED
                                                            ------------------------------------
                                                            MAY 20, 2001            MAY 21, 2000
                                                            ------------            ------------

<S>                                                                 <C>                    <C>
Cost of sales:
  Food, paper and beverage................................          31.1%                  30.8%
  Labor and benefits......................................          26.4%                  27.8%
Restaurant operating expenses.............................          25.3%                  25.3%
Depreciation and amortization.............................           5.0%                   5.1%
General and administrative expenses.......................           6.4%                   7.2%
Operating income..........................................           5.7%                   3.8%
</TABLE>

         REVENUES. Revenues for the quarter ended May 20, 2001 were $18,607,000
compared to $17,566,000 for the quarter ended May 21, 2000. This increase of
$1,041,000 was due to $410,000 in revenues generated by newly built restaurants
and restaurants to which a concept was added and a 6.0% increase in comparable
restaurant revenues. The increase in comparable restaurant revenues was
primarily the result of effective product promotions by the franchisor during
the quarter. These increases were partially offset by lost revenues of $341,000
due to restaurants that were permanently closed during the prior fiscal year.

         COSTS OF SALES - FOOD, PAPER AND BEVERAGES. Food, paper and beverage
costs for the first quarter increased as a percentage of revenue from 30.8% in
fiscal 2001 to 31.1% in fiscal 2002. This increase was primarily the result of
the product promotions in the first quarter of fiscal 2002 having a higher food
cost than those which were promoted during the first quarter of fiscal 2001.
These increases were partially offset by the efficiencies gained from higher
average restaurant volumes.

         COST OF SALES - LABOR AND BENEFITS. Labor and benefits decreased as a
percentage of revenue for the quarter ended May 20, 2001 to 26.4% compared to
27.8% for the year earlier quarter. The decrease was primarily due to higher
average restaurant volumes, decreased workers compensation costs and improved
operating efficiencies.

         RESTAURANT OPERATING EXPENSES. Restaurant operating expenses were
consistent as a percentage of revenue at 25.3% in the first quarter of fiscal
2002 and fiscal 2001. This was caused by higher average restaurant volumes which
was offset by an increase in KFC national advertising expenses from 2.0% of KFC
revenue to 2.5% of KFC revenue. The increase in advertising was approved by the
national advertising co-op and will remain in effect for the foreseeable future.

         DEPRECIATION AND AMORTIZATION. Depreciation and amortization for the
fiscal 2002 first quarter increased to $921,000 compared to $888,000 in the
prior year first quarter. The increase is primarily due to the addition of the
newly built restaurants discussed above.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses decreased to $1,194,000 in the first quarter of fiscal 2002 from
$1,258,000 in the first quarter of fiscal 2001. The decrease of $64,000 was
mainly the result of improved cost control at both the Corporate and field
operations levels which was partially offset by the accrual of $65,000 for the
estimated costs and expenses associated with an employee benefit related
lawsuit.

         LOSS ON RESTAURANT ASSETS. The losses on disposal of restaurant assets
of $6,000 and $19,000 in the first quarters of fiscal 2002 and 2001
respectively, were the result of assets disposed of during the image enhancement
of several restaurants as well as the disposal of obsolete equipment.



                                       7
<PAGE>   8


         OPERATING INCOME. Operating income in the first quarter of fiscal 2002
increased to $1,068,000 or 5.7% of revenues compared to $675,000 or 3.8% of
revenues for the first quarter of fiscal 2001. This increase was primarily the
result of higher average restaurant volumes, the closing of several unprofitable
restaurants since the first quarter of fiscal 2001 and improved operating
efficiencies.

         INTEREST EXPENSE. Interest expense on bank debt increased to $1,177,000
in the first quarter of fiscal 2002 from $1,143,000 in fiscal 2001 due to higher
debt balances during the fiscal 2002 quarter necessary to fund the construction
of restaurants during the past year. Interest expense on capitalized leases was
substantially unchanged from the prior year first quarter.

         OTHER INCOME. Other income for the quarter ended May 20, 2001 increased
to $53,000 from $48,000 in the prior year first quarter. The increase is due
mainly to increased interest income on increased average cash balances during
the first quarter of fiscal 2002.

         PROVISION FOR INCOME TAXES. The provision for income taxes was a credit
of $7,000 for the quarter ended May 20, 2001 compared to expense of $3,000 in
the prior year quarter. This tax benefit resulted from an adjustment to previous
estimates for taxes that are paid in certain jurisdictions.

         LIQUIDITY AND CAPITAL RESOURCES. Cash flow activity for the twelve
weeks of fiscal 2002 and fiscal 2001 is presented in the Consolidated Statements
of Cash Flows. Cash provided by operating activities was $983,000 for the twelve
weeks ended May 20, 2001. The Company paid scheduled long-term bank and
capitalized lease debt of $524,000 in the first quarter of fiscal 2002.

         The KFC operations of the Company have historically provided sufficient
cash flow to service the Company's debt, refurbish and upgrade restaurant
properties and cover administrative overhead. Management believes that operating
cash flow will provide sufficient capital to continue to operate and maintain
its restaurants, service the Company's debt and support required corporate
expenses.

         Certain of the Company's debt arrangements require the maintenance of a
consolidated fixed charge coverage ratio of 1.2 to 1 regarding all of its
mortgage loans and individual restaurant coverage ratios on certain of its loans
as measured at each of the Company's fiscal year ends. At February 25, 2001, the
Company was in compliance with the consolidated ratio of 1.2 applicable to
$43,621,000 of its loans and fell short of compliance on the consolidated ratio
regarding $6,501,000 of its loans with another lender. Additionally, the Company
was not in compliance with the 1.4 to 1.0 unit level ratio on certain of its
restaurants. The Company obtained waivers of these violations from the
applicable lenders and expects to be in compliance with the minimum coverage
ratios and other terms and conditions of the agreements by the end of fiscal
2002.

         The Company is currently not in full compliance with the American Stock
Exchange financial condition guidelines for continued listing. Specifically, the
guidelines indicate that any company with shareholders' equity less than
$4,000,000 and losses in 3 of its last 4 fiscal years may be considered for
delisting. This condition has been reviewed with representatives of the American
Stock Exchange who indicated that the Company's performance will continue to be
monitored by the Exchange.

         The Board of Directors of the Company at its meeting on June 22, 2001
authorized the purchase of up to two hundred fifty thousand shares of the
Company's common stock in the open market from time to time over the next twelve
months.



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<PAGE>   9


         SEASONALITY. The operations of the Company are affected by seasonal
fluctuations. Historically, the Company's revenues and income have been highest
during the summer months with the fourth fiscal quarter representing the slowest
period. This seasonality is primarily attributable to weather conditions in the
Company's marketplace, which consists of portions of Ohio, Pennsylvania,
Missouri, Illinois, West Virginia and New York.

                            PART II OTHER INFORMATION


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

                  The Company's annual meeting of shareholders was held on June
22, 2001 and voting was conducted on the following proposals:


Proposal 1 - The election of seven Directors. The following seven Directors were
elected:

NAME                            FOR             WITHHOLD          ABSTAIN
----                            ---             --------          -------

Leonard Stein-Sapir           2,690,392          4,434            105,395
Richard Arons                 2,690,342          4,484            105,395
Lawrence S. Dolin             2,693,840            986            105,395
James J. Liguori              2,690,423          4,403            105,395
Steven S. Kaufman             2,693,842            984            105,395
Bernard Lerner                2,693,842            984            105,395
Kenneth L. Hignett            2,690,425          4,401            105,395







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<PAGE>   10



                                   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.




                                           Morgan's Foods, Inc.
                                   ----------------------------------
                                              (Registrant)


Dated:  July 5, 2001               By: /s/ Kenneth L. Hignett
        ------------                   ------------------------------
                                        Kenneth L. Hignett
                                        Senior Vice President,
                                        Chief Financial Officer & Secretary




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