<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C.  20549


                                    FORM 10-Q

                 Quarterly Report under Section 13 or 15 (d) of
                       The Securities Exchange Act of 1934

For Quarter Ended:                           Commission File Number
  July 16, 1997                                   0-14370

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

       Minnesota                                  41-1462294
(State of incorporation)                (I.R.S. Employer Identification No.)


                   10260 Viking Drive, Eden Prairie, MN  55344
                    (Address of principal executive offices)

                                 (612) 942-9760
                         (Registrant's telephone number)

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


                    YES  X                   NO
                        ---                     ---

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date.

          Class                         Outstanding as of August 5,1997
          -----                         -------------------------------
Common Stock, $.01 par value                 45,226,549 shares


                                        1

<PAGE>


                         BUFFETS, INC. AND SUBSIDIARIES


                                      INDEX


                                                                     Page No.
                                                                     --------


 PART I.  FINANCIAL INFORMATION

 Item 1.  Consolidated Financial Statements:
          
          Consolidated Balance Sheets-
          January 1, 1997 and July 16, 1997 . . . . . . . . . . . . . . . 3

          Consolidated Statements of Operations-
          Twenty-Eight Weeks ended July 17, 1996
          and July 16, 1997 and Twelve Weeks ended
          July 17, 1996 and July 16, 1997 . . . . . . . . . . . . . . . . 4

          Consolidated Statements of Cash Flows-
          Twenty-Eight Weeks ended July 17, 1996
          and July 16, 1997 . . . . . . . . . . . . . . . . . . . . . . . 5
     
          Notes to Consolidated Financial
          Statement   . . . . . . . . . . . . . . . . . . . . . . . . . . 6
     
 Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations . . . . . . . . . . . . . . 7

 PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . .12


                                        2

<PAGE>

Part I. FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS

                         BUFFETS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                                                        JANUARY 1,     JULY 16,
                                                           1997         1997
                                                        ----------    ---------
                                                            (IN THOUSANDS)
                                   ASSETS
CURRENT ASSETS:
     Cash and cash equivalents . . . . . . . . . . . .  $  10,772     $ 29,399
     Receivable from landlords . . . . . . . . . . . .      2,642        3,368
     Inventory   . . . . . . . . . . . . . . . . . . .      3,653        4,032
     Notes receivable  . . . . . . . . . . . . . . . .         52           52
     Prepaid rents . . . . . . . . . . . . . . . . . .      2,782        1,544
     Other current assets  . . . . . . . . . . . . . .      2,587        1,753
     Deferred income taxes   . . . . . . . . . . . . .     11,975       12,686
                                                        ---------     --------
          TOTAL CURRENT ASSETS . . . . . . . . . . . .     34,463       52,834

PROPERTY AND EQUIPMENT:
     Land  . . . . . . . . . . . . . . . . . . . . . .     15,686       15,688
     Building. . . . . . . . . . . . . . . . . . . . .     30,537       31,014
     Equipment . . . . . . . . . . . . . . . . . . . .    228,046      241,080
     Leasehold improvements  . . . . . . . . . . . . .    185,263      195,738
                                                        ---------     --------
                                                          459,532      483,520
     Less accumulated depreciation and amortization. .    131,811      150,704
                                                        ---------     --------
                                                          327,721      332,816
GOODWILL, net of accumulated amortization of $1,615 and
     $1,803, respectively  . . . . . . . . . . . . . .      5,974        5,786
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . .      2,525        2,348
                                                        ---------     --------
                                                        $ 370,683     $393,784
                                                        ---------     --------
                                                        ---------     --------

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable  . . . . . . . . . . . . . . . .  $  29,483     $ 26,613
     Accrued payroll and related benefits  . . . . . .     16,229       18,122
     Accrued rents . . . . . . . . . . . . . . . . . .     13,892       13,936
     Accrued sales taxes . . . . . . . . . . . . . . .      3,497        4,854
     Accrued insurance . . . . . . . . . . . . . . . .      4,390        5,687
     Accrued store closing costs . . . . . . . . . . .      7,703        6,863
     Other accrued expenses  . . . . . . . . . . . . .      5,779        7,296
     Income taxes  . . . . . . . . . . . . . . . . . .        615        6,470
     Current portion of capital leases . . . . . . . .      2,055        2,007
                                                        ---------     --------
          TOTAL CURRENT LIABILITIES  . . . . . . . . .     83,643       91,848

LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . .     41,500       41,500
LONG-TERM PORTION OF CAPITAL LEASES. . . . . . . . . .      5,078        4,028
DEFERRED INCOME  . . . . . . . . . . . . . . . . . . .        405          193
DEFERRED INCOME TAXES  . . . . . . . . . . . . . . . .      3,266        4,189
MINORITY INTEREST. . . . . . . . . . . . . . . . . . .                      27

STOCKHOLDERS' EQUITY:
     Preferred stock, $.01 par value; authorized
          5,000 shares; none issued and outstanding
     Common stock, $.01 par value; authorized 60,000
          shares; issued and outstanding 45,159 and
          45,221 shares, respectively  . . . . . . . .        452          452
     Additional paid-in capital  . . . . . . . . . . .    116,330      116,671
     Retained earnings . . . . . . . . . . . . . . . .    120,009      134,876
                                                        ---------     --------
          TOTAL STOCKHOLDERS' EQUITY . . . . . . . . .    236,791      251,999
                                                        ---------     --------
                                                        $ 370,683     $393,784
                                                        ---------     --------
                                                        ---------     --------
                 See Notes to Consolidated Financial Statements.

                                        3
<PAGE>


                         BUFFETS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)


                                TWENTY-EIGHT WEEKS ENDED    TWELVE WEEKS ENDED
                                ------------------------    ------------------
                                    JULY 17,  JULY 16,      JULY 17,  JULY 16,
                                      1996      1997          1996      1997
                                    --------  --------      --------  --------
                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)

RESTAURANT SALES . . . . . . . . .  $399,991  $431,277      $182,539  $190,536

RESTAURANT COSTS:
   Food costs  . . . . . . . . . .   139,127   147,531        62,513    63,752
   Labor costs . . . . . . . . . .   114,456   129,913        50,451    56,112
   Direct and occupancy costs. .      93,203   104,719        41,551    45,768
                                    --------  --------      --------  --------
   Total restaurant costs  . . . .   346,786   382,163       154,515   165,632
                                    --------  --------      --------  --------

RESTAURANT PROFITS . . . . . . . .    53,205    49,114        28,024    24,904

SELLING, GENERAL AND
   ADMINISTRATIVE EXPENSES . . . .    24,289    24,111        11,249    10,841
                                    --------  --------      --------  --------
                                      28,916    25,003        16,775    14,063

OTHER EXPENSE. . . . . . . . . . .       414       632           154       147
                                    --------  --------      --------  --------
EARNINGS BEFORE INCOME TAXES . . .    28,502    24,371        16,621    13,916

INCOME TAXES . . . . . . . . . . .    10,998     9,504         6,414     5,424
                                    --------  --------      --------  --------

NET EARNINGS . . . . . . . . . . .  $ 17,504  $ 14,867      $ 10,207  $  8,492
                                    --------  --------      --------  --------
                                    --------  --------      --------  --------

NET EARNINGS PER COMMON AND
 COMMON EQUIVALENT SHARE . . . . .      $.38      $.33          $.22      $.19
                                    --------  --------      --------  --------
                                    --------  --------      --------  --------

WEIGHTED AVERAGE COMMON AND
 COMMON EQUIVALENT SHARES
 OUTSTANDING . . . . . . . . . . .    45,669    45,470        45,687    45,511




                 See Notes to Consolidated Financial Statements.


                                        4

<PAGE>


                         BUFFETS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                     Twenty-Eight Weeks Ended
                                                     ------------------------
                                                       JULY 17,     JULY 16,
                                                         1996         1997
                                                     ----------     --------
                                                         (IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net earnings  . . . . . . . . . . . . . . . . . . $   17,504     $14,867
   Adjustments to reconcile net earnings
      to net cash provided by operating activities:
     Depreciation and amortization . . . . . . . . .     22,140      21,735
     Tax benefit from early disposition of
        common stock . . . . . . . . . . . . . . . .         70         143
     Deferred income . . . . . . . . . . . . . . . .       (211)       (212)
     Deferred income taxes . . . . . . . . . . . . .        400         212
     Changes in assets and liabilities net of
      acquisitions:
         Inventory . . . . . . . . . . . . . . . . .         52        (379)
         Other current assets  . . . . . . . . . . .        497       2,072
         Refundable income taxes . . . . . . . . . .      1,829
         Other assets  . . . . . . . . . . . . . . .         (5)         (2)
         Accounts payable  . . . . . . . . . . . . .     (7,135)     (2,870)
         Accrued payroll and related benefits  . . .     (1,371)      1,893
         Accrued store closing costs . . . . . . . .                   (840)
         Other accrued expenses  . . . . . . . . . .      5,291       4,215
         Income taxes currently payable  . . . . . .      4,555       5,855
                                                     ----------     -------

         Total adjustments . . . . . . . . . . . . .     26,112      31,822
                                                     ----------     -------

         Net cash provided by operating activities. .    43,616      46,689

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures, net of retirements  . . .  .   (36,500)    (29,571)
   Cash received from landlords  . . . . . . . . .  .     1,553       2,409
   Purchase of minority interest in HTB1 . . . . .  .      (950)
   Purchase of investments . . . . . . . . . . . .  .  (106,349)
   Proceeds from sale of investments . . . . . . .  .   119,219
                                                     ----------     -------
         Net cash used in investing activities . .  .   (23,027)    (27,162)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from exercise of employee stock options .       636         198
   Payments of long-term debt  . . . . . . . . . .  .   (14,000)
   Payments on capital leases. . . . . . . . . . .  .      (999)     (1,098)
   Borrowings under long term debt . . . . . . . .  .     3,000
                                                     ----------     -------

         Net cash used in financing activities . .  .   (11,363)       (900)
                                                     ----------     -------

NET INCREASE IN CASH AND CASH EQUIVALENTS  . . . .  .     9,226      18,627

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . .  .    14,530      10,772
                                                     ----------     -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . .  .  $ 23,756     $29,399
                                                     ----------     -------
                                                     ----------     -------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for:
   Interest (net of capitalized interest of $164
   and $142 in 1996 and 1997, respectively). . . .  .  $  1,688     $ 1,922
   Income taxes  . . . . . . . . . . . . . . . . .  .     3,737       3,294


                 See Notes to Consolidated Financial Statements.


                                        5

<PAGE>


                         BUFFETS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   In the opinion of Management, the accompanying unaudited consolidated
     financial statements contain all adjustments (consisting only of normal
     recurring adjustments) necessary to present fairly the financial position
     of Buffets, Inc. and subsidiaries as of July 16, 1997 and the results
     of operations for the twelve weeks ended July 17, 1996 and July 16, 1997
     and the results of operations and cash flows for the twenty-eight
     weeks ended July 17, 1996 and July 16, 1997.

2.   Minority interest reflects a 20% ownership interest in Dinertainment, Inc.

3.   On May 13, 1997, the Company's Board of Directors approved the repricing of
     stock options to substantially all employees with outstanding options.  The
     employees had the opportunity from May 23, 1997 to June 30, 1997 to have
     their options repriced at the higher of $9.00 per share or at the fair
     market value of the Company's common stock on the date they elected to
     reprice their options if they surrendered 50% of the options being
     repriced.  Employees having stock options to purchase 907,226 shares of
     common stock with exercise prices ranging from $9.13 to $24.63 exchanged
     those options for stock options to purchase 453,613 shares of common stock
     with an average exercise price of $9.00.

     Also on May 13, 1997 the Board approved a stock option grant plan for three
     Executive Officers who were excluded from the repricing program.  The plan
     provides for the three Officers the option to purchase an aggregate of
     275,000 shares for $9.00 per share, the fair market value on the date
     awarded.  The options vest one third if the fair market value as of the
     close of trading exceeds $12 per share for thirty consecutive trading days,
     one third if the price exceeds $16 per share for thirty consecutive trading
     days and one third if the price exceeds $20 per share for thirty
     consecutive trading days.  The plan also provides that all options become
     exercisable no later than May 19, 2006.

4.   These statements should be read in conjunction with the Notes to
     Consolidated Financial Statements contained in the Company's Annual
     Report on Form 10-K for the fiscal year ended January 1, 1997 and with
     Management's Discussion and Analysis of Financial Condition and Results
     of Operations appearing on pages 7 through 11 of this quarterly report.


                                        6

<PAGE>

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

    The Company operates on a fifty-two or fifty-three week fiscal year, which
ends on the Wednesday nearest December 31. The Company's first quarter consists
of sixteen weeks; all other quarters are comprised of twelve weeks.  When a
fifty-three week year occurs, the Company's fourth quarter consists of thirteen
weeks.

RESULTS OF OPERATIONS

TWELVE WEEKS ENDED JULY 16, 1997

RESTAURANT SALES.  Restaurant sales of $190.5 million during the second quarter
of 1997 represented a 4.4% increase over sales of $182.5 million for the
comparable period of 1996, primarily due to sales generated by new restaurants
and higher sales at recently converted restaurants, partially offset by the
temporary closing of restaurants during conversion.  Two new restaurants opened
in the second quarter of 1997 compared to eight during the second quarter of
1996, bringing the total number of Company-owned restaurants to 357 at the end
of the quarter (250 Old Country Buffet, 103 HomeTown Buffet and four Roadhouse
Grill), compared to 334 restaurants open at the end of the second quarter of
1996.  Eight Old Country Buffet restaurants were converted to HomeTown Buffet
restaurants during the quarter.  Average weekly sales per restaurant for the
second quarter of 1997 decreased 1.2% to $45,543 from $46,092 in the comparable
period of 1996.  The twelve new restaurants opened during 1997 generated average
weekly sales of $53,134 during the second quarter.  Comparable restaurant sales
were down 3.9% for the comparable period.  Management believes that this
decrease is partially attributable to lower advertising expenditure in the
second quarter of 1997 than in the second quarter of 1996.  The Company's price
increases have been in line with inflation.

RESTAURANT COSTS.  As a percentage of restaurant sales, total restaurant costs
increased to 86.9% for the second quarter of 1997 from 84.6% for the second
quarter of 1996.  Food costs as a percentage of restaurant sales decreased to
33.5% from 34.2%, due primarily to a reduction in the cost of dairy products;
and labor costs increased to 29.4% of sales from 27.6%, primarily due to
increases in the base compensation of store level managers and higher
expenditure on hourly wages due to a system wide implementation of a menu change
and the rollout of a certified training program.  Direct and occupancy costs
increased as a percentage of restaurant sales to 24.0% in 1997 from 22.8% in
1996, due to increases in various restaurant costs including janitorial and
repair and maintenance expenses.


                                        7

<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses as a percentage of restaurant sales decreased to 5.7% in
the second quarter of 1997 from 6.2% in the second quarter of 1996.  Such
expenses in absolute terms decreased 3.6% to $10.8 million for the second
quarter of 1997 from $11.2 million for the comparable period of 1996, primarily
due to a decrease in advertising expense in the 1997 quarter.  The Company
expects to incur approximately $3.4 million in marketing expenditures in the
third quarter relating to the Company's new marketing campaign, which will cover
approximately 40% of the Company's buffet restaurants.  The Company expects to
spend approximately 1.2% of restaurant sales on advertising in fiscal 1997.

INCOME TAXES.  Income taxes were 39.0% of earnings before income taxes for the
1997 quarter and 38.6% in the 1996 quarter.

TWENTY-EIGHT WEEKS ENDED JULY 16, 1997

RESTAURANT SALES.  For the first twenty-eight weeks of 1997, restaurant sales
increased 7.8% to $431.3 million from $400.0 million in 1996, primarily due to
sales generated by new restaurants and higher sales at recently converted
restaurants, partially offset by the temporary closing of restaurants during
conversion.  Twelve new restaurants opened, and one restaurant (previously
reserved for) closed, in the first half of 1997, compared to 22 new restaurants
opened in the first half of 1996.  The average weekly sales per restaurant in
the 1997 period increased slightly by .1% to $44,139 from $44,093 in 1996.
Comparable restaurant sales were down 3.1% for the comparable periods.
Management believes that this decrease is partially attributable to lower
advertising expenditure in the first half of 1997 than in the first half of
1996.  The Company's price increases have been in line with inflation.

RESTAURANT COSTS.  Restaurant costs for the first twenty-eight weeks in 1997
increased to $382.2 million from $346.8 million in 1996.  As a percentage of
restaurant sales, the 1997 period costs were 88.6% and the 1996 period costs
were 86.7%.  Food costs decreased to 34.2% from 34.8% for the comparable
periods; and labor costs increased to 30.1% from 28.6%, primarily due to
increases in the base compensation of store level managers and higher
expenditure on hourly wages due to a system wide implementation of a menu change
and the rollout of a certified training program.  Direct and occupancy costs
increased to 24.3% in the first twenty-eight weeks of 1997 from 23.3% in the
comparable period in 1996, due to increases in various restaurant costs
including janitorial and repair and maintenance expenses.


                                        8


<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  For the first twenty-eight weeks
of 1997, selling, general and administrative expenses decreased to $24.1 million
from $24.3 million in 1996.  This decrease was primarily due to a decrease in
advertising expense in 1997.  As a percentage of sales, selling, general and
administrative expenses decreased to 5.6% in the 1997 period from 6.1% in the
1996 period.  Advertising for the first twenty-eight weeks of 1997 was .7% of
restaurant sales compared to 1.0% in the comparable 1996 period.

INCOME TAXES.  Income taxes were 39.0% of earnings before income taxes for the
1997 period and 38.6% for the 1996 period.

LIQUIDITY AND CAPITAL RESOURCES
     The Company's restaurants generate cash immediately through sales.  New
restaurants are generally profitable shortly after opening.  The Company does
not have significant assets in the form of trade receivables or inventory, and
often receives several weeks of trade credit from food and supply purveyors;
therefore, the Company's operations generate substantial cash which is available
to fund new restaurants.  The investment of cash flow from operations in
restaurant property and equipment results in a "working capital deficit"
(current liabilities exceeding current assets) which, to a considerable extent,
represents interest-free financing from trade creditors that the Company intends
to continue to utilize.

     The Company currently has an unsecured revolving line of credit  of up to
$50 million with interest payable at the option of the Company, at the
applicable "eurodollar rate", "certificate of deposit rate", or the "reference
rate" of the bank at the time of the advance.  The Company is also required to
pay a commitment fee equal to 1/4 of 1% per annum of the unused balance, payable
quarterly in arrears.  On July 1, 1999, providing no default or event of default
has occurred and is continuing, the line of credit is convertible, at the
Company's option, to a three-year term loan, maturing on July 1, 2002.  As of
July 16, 1997, the Company had no borrowings outstanding under this credit line.

     In 1995, HomeTown Buffet, Inc., a wholly-owned subsidiary of the Company
("HomeTown"), issued $41.5 million in aggregate principal amount of 7.0%
subordinated convertible notes due on December 1, 2002.  Interest is payable
semi-annually on June 1 and December 1, commencing June 1, 1996.  The notes are
convertible into shares of the Company's common stock at a conversion price of
$11.67, subject to adjustment under certain conditions, at any time until
maturity.  The notes are subordinated in right of payment to all existing and
future senior indebtedness of the Company.  The notes are redeemable in whole or
in part, at the option of the Company, at any time on or after December 2, 1998.


                                        9

<PAGE>

     The Company continues to require substantial amounts of capital to fund its
growth.  The Company currently expects to open a total of approximately 21 to 23
new restaurants and convert 25 to 30 restaurants, principally from Old Country
Buffets to HomeTown Buffets and one HomeTown Buffet to a Roadhouse Grill, during
1997, with 12 new restaurants already opened and 17 conversions completed at
July 16, 1997.
     The Company expects to spend an aggregate of approximately $10 to $13
million during the remainder of 1997 on its restaurants being opened in 1997,
depending on the level of contributions obtained from landlords for leasehold
improvements and the amount of land purchased for freestanding buildings.  The
Company anticipates that, as it further pursues the development of freestanding
locations, the cost per location and related cash requirements will increase
substantially over prior years and that these costs will not be offset by
landlord contributions that typically have been associated with strip mall
locations.  The capital expenditure required for a freestanding location can be
over 100% greater than for a mall location. The Company estimates that
approximately 50% of 1997 new locations will be freestanding units, and of the
freestanding restaurants virtually all will be ground leased rather than owned.
The Company expects to spend an aggregate of approximately $3 to $4 million
during the remainder of 1997 on the conversion of restaurants.  Sources of
capital for restaurant development projects are anticipated to be funds provided
by operations, credit received from trade suppliers, landlord contributions to
leasehold improvements and current bank financing.  The Company believes that
these sources will be adequate to finance operations and the additional
restaurants and restaurant conversions included in the Company's restaurant
development plans for at least through fiscal 1997 and early fiscal 1998.
However, in order to remain prepared for further significant growth in future
years, the Company will continue to evaluate its financing needs and seek
additional funding if appropriate.

NON-PERFORMING RESTAURANTS
     The Company evaluates impairment of individual restaurants whenever events
or changes in circumstances indicate the carrying amount of a restaurant may not
be recoverable.  If individual restaurant sales during the third quarter do not
meet management's expectations, it is reasonably possible although not currently
quantifiable that the Company will incur impairment charges. The Company has
seven locations that have incurred negative cash flows on a year to date basis
for 1997.  The Company is considering options for these locations including
expanding advertising or conversion to a different brand or concept.

ACCOUNTING PRONOUNCEMENT
     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 128, EARNINGS PER SHARE, which is
effective for interim and annual reporting periods ending after December 15,
1997.  SFAS No. 128 supersedes Accounting Principles Board Opinion No. 15,
EARNINGS PER SHARE, and replaces the presentation of primary earnings per share

                                       10

<PAGE>

with a presentation of basics earnings per share.  It also requires dual
presentation for all entities with complex capital structures and provides
guidance on other computational changes.  Basic earnings per share is not
expected to be materially different than primary earnings per share due to the
impact of common stock equivalents being insignificant.

FORWARD-LOOKING INFORMATION
     Certain statements in this quarterly report and in the Company's press
releases and oral statements made by or with the approval of the Company's
executive officers constitute or will constitute "forward-looking statements."
All forward-looking statements involve risks and uncertainties, and actual
results may be materially different.  The following factors are among those that
could cause the Company's actual results to differ materially from those set
forth in such forward-looking statements.
     The ability of the Company to open new restaurants depends on a number of
factors, including its ability to find suitable locations and negotiate
acceptable leases and land purchases, its ability to attract and retain a
sufficient number of qualified restaurant managers and the availability of
capital.  The proportion of new restaurants that will be free-standing units,
either owned or leased, rather than strip mall locations will depend upon the
availability of suitable mall locations.  The costs of restaurant development
and conversion will depend upon the level of contributions from landlords for
leasehold improvements, the actual number of free-standing sites utilized in
such development, and whether such sites involve land purchases, the cost of
building supplies and general construction risks and costs.  The Company's
ability to generate revenue as currently expected, unexpected expenses and the
need for additional funds to react to changes in the marketplace, including
unexpected increases in personnel costs and food supply costs, may impact
whether the Company has sufficient cash resources to fund its restaurant
development and conversion plans for 1997 and early 1998.

     Other factors that could cause actual results of the Company to differ
materially from those contained in any such forward-looking statements include
the success and timing of the continuing integration of the operations of the
Company and HomeTown, the number, cost and success of restaurant conversions,
changes in the cost and supply of food and labor, the impact of menu changes,
the timing of television advertising planned for the remainder of 1997 and the
cost and effectiveness of such advertising as well as the Company's other
marketing programs, general economic conditions, the actions of existing and
future competitors, weather factors, unforseen health and safety developments
regarding restaurant operations, and regulatory constraints.  The Company
assumes no obligation to publicly release the results of any revision or updates
to these forward-looking statements to reflect future events or unanticipated
occurrences.


                                       11

<PAGE>

PART II.  OTHER INFORMATION

 Item 1.  Legal Proceedings

               The Company is involved in various legal actions arising in the
          normal course of business.  Management is of the opinion that their
          outcome will not have a significant effect on the Company's
          consolidated financial statements.
               The Company and certain of its directors and executive officers
          have been named as defendants in a Third Amended Consolidated Class
          Action Complaint (the "complaint") brought on behalf of a putative
          class of all purchasers of common stock of the Company from October
          26, 1993 through October 25, 1994 (the "class period") in the United
          States District Court for the District of Minnesota.  The complaint
          alleges that the defendants made misrepresentations and omissions of
          material fact during the class period with respect to the Company's
          operations and restaurant development activities, as a result of which
          the price of the Company's  stock allegedly was artificially inflated
          during the class period.  The complaint further alleges that certain
          defendants made sales of common stock of the Company during the class
          period while in possession of material undisclosed information about
          the Company's operations and restaurant development activities.  The
          complaint alleges that the defendants' conduct violated the Securities
          Exchange Act of 1934 and seeks compensatory damages in an unspecified
          amount, prejudgement interest, and an award of attorneys fees, costs
          and expenses.  The defendants have moved to dismiss the current
          complaint with prejudice.  A hearing on the motion to dismiss was held
          before the Honorable Michael J. Davis, United States District Judge,
          on June 13, 1997.  Judge Davis took the motion under advisement, and
          has not indicated when or how he might rule.  The two previous
          complaints were dismissed without prejudice.  Management of the
          Company believes that the action is without merit and intends to
          defend it vigorously.  Although the outcome of this action cannot be
          predicted with certainty, the Company's management believes that while
          the outcome may have a material effect on earnings in a particular
          period, the outcome should not have a material effect on the financial
          condition of the Company.
               On August 9, 1996 HTB Restaurants, Inc. ("HTB Restaurants"), a
          franchisee of HomeTown, along with its parent entities, Summit Family
          Restaurants, Inc. ("Summit") and CKE Restaurants, Inc. (collectively,
          the "Plaintiffs"), filed suit against the Company and HomeTown in
          United States District Court for the District of Utah, Central
          Division.  The suit alleges, among other



                                       12

<PAGE>

          things, that the Company and HomeTown illegally conspired to restrict
          competition and to prevent the Plaintiffs from developing additional
          HomeTown restaurants under the Multiple Unit Agreement between
          HomeTown and HTB Restaurants (the "Multiple Unit Agreement").  The
          suit includes claims against the Company and HomeTown for violations
          of both federal and state antitrust laws, for unfair business
          practices, and for tortious interference with contract and economic
          relations.  The suit also alleges claims against HomeTown for breach
          of contract and breach of the covenant of good faith and fair dealing.
          Plaintiffs seek damages and attempted to enjoin the merger between the
          Company and HomeTown.  On September 19, 1996, the court denied
          Plaintiffs' motion for preliminary injunctive relief.  On January 31,
          1997, an arbitrator ruled in binding arbitration that HomeTown is
          entitled to terminate the Multiple Unit Agreement, along with all of
          HTB Restaurants' future development rights.  HTB Restaurants and
          Summit have moved to vacate the arbitrator's award, while HomeTown has
          moved to confirm it.  A hearing in court on both motions is scheduled
          for August 29, 1997.  Discovery continues on the remaining claims in
          the lawsuit.  The Company and HomeTown believe that the suit is
          without merit, and intend to vigorously defend the arbitrator's award
          and the remaining claims under the lawsuit.  Although the outcome of
          this action cannot be predicted with certainty, the Company's
          management believes that the outcome should not have a material effect
          on the financial condition of the Company.

 Item 2.  Changes in Securities

          None

 Item 3.  Defaults upon Senior Securities

          None

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

          The Annual Meeting of Shareholders of the Company was held on May 13,
          1997.  At the meeting the number of directors of the Company was set
          at six, six directors were elected, and the appointment of Deloitte &
          Touche LLP as the Company's independent auditors for the current year
          was approved, by the following votes:


          Election of Directors       FOR         WITHHOLD    NONVOTES
          ---------------------    ----------     --------    ---------
          Walter R. Barry, Jr.     40,088,679      383,741        0
          Roe H. Hatlen            40,101,277      371,143        0
          Christian F. Horn        40,146,581      325,839        0
          Alan S. McDowell         40,147,331      325,089        0
          C. Dennis Scott          40,147,231      325,189        0
          David Michael Winton     40,101,077      371,343        0


                                        FOR         AGAINST  ABSTAIN  NONVOTES
                                     ----------     -------  -------  --------
          Approval of auditors       40,364,321     60,934    47,165      0



                                       13

<PAGE>

 Item 5.  Other Information

          On August 5, 1997, the Board of Directors appointed an additional
          board member to serve until the next election.  Marvin W. Goldstein is
          currently the Chief Operating Officer of Regis Corporation, and was
          formerly Chairman, President and Chief Executive Officer of Pet Food
          Warehouse, Inc., and Chairman, Chief Executive Officer and President
          of the Department Store Division of Dayton Hudson Corporation.


 Item 6.  Exhibits and reports on Form 8-K

     a)   Exhibits
          3(a)      Composite Amended and Restated Articles of Incorporation (1)
          3(b)      By-laws of the Company (2)
          4(a)      Form of Rights Agreement, dated as of October 24, 1995
                    between the Company and the American Stock Transfer and
                    Trust Company, as Rights Agent (3)
          10(a)     Separation Agreement dated June 30, 1997 between the Company
                    and Rick H. White
          27        Financial Data Schedule


     b)   Reports on 8-K

          None




(1)  Incorporated by reference to Exhibit 4.1 to Registration  Statement on Form
     S-3 dated June 2, 1993 (Registration No. 33-63694).
(2)  Incorporated by reference to Exhibit 3(b) to Annual Report on Form 10-K for
     the fiscal year ended December 29, 1993.
(3)  Incorporated by reference to Exhibit 1 to Report on Form 8-K dated October
     24, 1995.


                                       14

<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.


                                        BUFFETS, INC.
                                        (Registrant)


August 12, 1997

                                        /s/ Roe H. Hatlen
                                        ---------------------------------------
                                        Roe H. Hatlen
                                        Chairman of the Board,
                                        Chief Executive Officer
                                        (Principal Executive Officer)



                                        /s/ Clark C. Grant
                                        ---------------------------------------
                                        Clark C. Grant
                                        Executive Vice President of
                                        Finance and Administration
                                        and Treasurer
                                        (Principal Financial
                                        Officer)


                                       15

<PAGE>


                                  EXHIBIT INDEX


          Exhibits                                          Page
          --------                                          ----

          3(a) Composite Amended and Restated
               Articles of Incorporation . . . . . Incorporated by Reference

          3(b) By-laws of the Company  . . . . . . Incorporated by Reference

          4(a) Form of Rights Agreement, dated
               as of October 24, 1995 between
               the Company and the American
               Stock Transfer and Trust Company,
               as Rights Agent   . . . . . . . . . Incorporated by Reference

         10(a) Separation Agreement dated
               June 30, 1997 between the
               Company and Rick H. White . . . . . Filed Electronically


         27    Financial Data Schedule . . . . . . Filed Electronically


____________________