SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                           FORM 10-KSB


(Mark One)

/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES AND EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the fiscal year ended December 29, 1996

                                OR

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ------------ to ------------

                  Commission file number 0-10213

                     FAST FOOD OPERATORS, INC.             
     (Exact name of Registrant as specified in its charter) 

            NEW YORK                              13-2974867      
(State or other jurisdiction of                 (I.R.S. Employer 
incorporation or organization)                  Identification
No.)

          42-40 Bell Boulevard, Bayside, New York 11361
       (Address of principal executive offices) (zip code)

                           718-229-1113     
                 (Registrant's telephone number,
                      including area code)  

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

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

              Common Stock, par value $.01 per share
                         (Title of Class)

Indicate by (X) 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 /   /

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form and will not
be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  / X /

State issuer's revenues for its most recent fiscal year: 
$5,349,978.

Aggregate market value of voting stock held by non-affiliates of
the Registrant as at April 11, 1997: $279,816*

Shares of Common Stock outstanding as at April 11, 1997:
8,914,300
-----------------------------
*    For purposes of this Report, shares held by non-affiliates
     were determined by aggregating the number of shares held by
     officers and directors of Registrant, as reflected on Form
     3's and Form 4's filed with the Commission with respect to
     Registrant's Common Stock and by others who, to Registrant's
     knowledge, own 5% or more of Registrant's Common Stock, and
     subtracting those shares from the total number of shares
     outstanding.  The resulting number of shares was multiplied
     by $1/16, the bid price for shares of Registrant's Common
     Stock on December 9, 1991, the last day on which any trading
     activity in the Common Stock was reported by the National
     Association of Securities Dealers Automated Quotation
     System.
                              PART I
                             ------
Item 1.   BUSINESS
-------   --------
Background
----------

     Fast Food Operators, Inc. (the "Company") was incorporated
on December 18, 1978, pursuant to the laws of the State of New
York. The Company conducts substantially all of its business
under the trade name "Popeyes Famous Fried Chicken of New York."

     On April 9, 1981, the Company's Registration Statement on
Form S-18 was declared effective by the United States Securities
and Exchange Commission.  Pursuant to such Registration
Statement, the Company offered and sold to the public 2,200,000
Units (each Unit consisting of one share of Common Stock and one
Common Stock Purchase Warrant to purchase a one-quarter
fractional share of Common Stock) and received net proceeds
therefrom of approximately $1,728,000.

     On December 27, 1978, the Company entered into an agreement
(the "Option Agreement") with Popeyes Famous Fried Chicken, Inc.,
a Louisiana corporation ("PFFC"), pursuant to which the Company
paid a total of $170,000 ($10,000 per option) for options to
establish and operate 17 Popeyes Famous Fried Chicken and
Biscuits restaurants in specified geographical areas within the
Counties of New York and Queens, in the City of New York.

     As of December 27, 1984, the date of the expiration of the
Option Agreement, the Company had exercised ten of its 17
options.  On January 22, 1985, the Company entered into a
Development Agreement (the "Development Agreement") with PFFC
pursuant to which the Company purchased the option to open up to
12 additional stores in specified geographical areas within the
Counties of Kings (Brooklyn) and Queens in the City of New York
and the right to open additional stores in Manhattan on a case-by-
case basis.  The Company paid PFFC $50,000 for the five
additional options and PFFC gave the Company credit for $70,000
previously paid under the Option Agreement for the seven options
which the Company did not exercise thereunder.  The Company
entered into a separate Development Agreement, dated July 6,
1987, with respect to its Popeyes Famous Fried Chicken and
Biscuits restaurant on 40 Empire Boulevard in Brooklyn, New York. 
Subsequently, in 1990, the Company sold two of its options under
the Development Agreement to third party purchasers for $10,000
per option.

     On January 26, 1988, the Company entered into a series of
transactions with Integrated Food Systems, Inc., a New Jersey
corporation ("IFS"), pursuant to which, among other things, the
Company agreed to be managed by IFS and borrowed $420,000 from
IFS.  See "Transactions with IFS."

     In 1992, PFFC, whose parent company had been in bankruptcy,
was acquired by America's Favorite Chicken Company, a Minnesota
corporation ("Franchisor").  See "The Franchisor."

     The Development Agreement provided that each time the
Company exercised an option it was required to pay a $15,000 fee
and to enter into a Franchise Agreement calling for the payments
of certain royalties on sales, as more fully described under the
heading "The Franchise" below.  Under the Development Agreement,
the Company had, until 60 days after the last store was opened
thereunder, the nonexclusive right to open Popeyes Famous Fried
Chicken and Biscuits restaurants in its specified areas in
Brooklyn, Queens and Manhattan.

     The Development Agreement provided that the options granted
thereunder must be exercised and restaurants opened no later than
as set forth therein.  On March 9, 1992, the Company entered into
a Fourth Amendment to the Development Agreement to reinstate two
options which expired unexercised in 1986 and to extend the date
by which each of the remaining eight stores under option was
required to be opened.  In October 1992, the Company sold the
option due to expire on March 1, 1993 to a third party for
$10,000.

     The Company permitted its September 1, 1993 and March 1,
1994 options to expire unexercised; however, management requested
the Franchisor to restore such options with revised expiration
dates of March 1, 1997 and September 1, 1997, respectively. 
Management had received verbal assurance that reinstatement of
the expired options with the requested expiration dates would be
granted; however, in 1994, the Company and the Franchisor were
unable to agree upon terms for the reinstatement of such expired
options.  The Company's option which was exercisable by September
1, 1994 also expired unexercised.  The Company recognized a loss
of $30,000 in fiscal 1994 as a result of the three expired
options.  The Company was accordingly in default of the
Development Agreement.

     As a result of the defaults described above, the Franchisor
had the right, among others, to terminate the Development
Agreement, or to reduce the number of options.  On January 30,
1995, the Franchisor notified the Company that pursuant to its
rights thereunder, it was terminating the Development Agreement
as a result of the Company's noncompliance with the amended
development schedule.  As of the date of such termination, the
Company had four unexpired options remaining under the
Development Agreement.  The Company recognized the related
$40,000 loss in the first quarter of fiscal 1995.

     As of March 31, 1997, the Company was operating six Popeyes
restaurants.  Six restaurants were sold and/or closed during the
fourteen-month period from October 1994 to November 1995.  The
termination of the Development Agreement had no effect on the
existing Franchise Agreements.  In January 1997, the Company
agreed to the sale of the Hillside, Queens Restaurant, which sale
is expected to be consummated in April, 1997. See Item 1."Recent
Restaurant Sales,"  "Recent Restaurant Closings," "Present
Operations," "Future Locations," "The Franchise" and "The
Franchisor."

Transactions with IFS
---------------------

     IFS is a wholly-owned subsidiary of Fast Food Systems, Inc.
("Fast Foods Systems"), a publicly-held corporation.  Such
entities presently manage two Wendy's franchises in New Jersey,
having disposed of nineteen Wendy's restaurants in the New York
Metropolitan area during the previous two years.

     On December 28, 1990, the Company and IFS entered into a
series of transactions (the "1990 Transactions").  The 1990
Transactions, by their terms, were subject to ratification by the
affirmative vote of the holders of a majority of the Company's
outstanding voting common stock at the Company's next occurring
annual meeting of shareholders.  In exchange for the cancellation
of $210,000 of the Company's secured debt to IFS representing
one-half of its note payable thereto and $240,000 owing to IFS by
the Company for unpaid management fees and interest charges, the
Company agreed to issue 3,000,000 shares of its Common Stock to
IFS.  Absent the 1990 Transactions, the $420,000 note payable to
IFS would have been convertible into 1,400,000 shares of Common
Stock, representing upon such conversion, 19.1% of the issued and
outstanding Common Stock of the Company.  The 3,000,000 shares of
Common Stock issued to IFS upon shareholder approval of the 1990
Transactions represent a 33.65% interest in the Company.  

     As part of the 1990 Transactions, a new $210,000 secured
promissory note due January 26, 1992 was issued by the Company. 
The new note was identical to the prior note except that it was
not convertible into Common Stock.  The new note bore interest,
payable monthly, at a rate equal to two points above the prime
interest rate.  As of January 26, 1992, the new note was amended
as to its principal repayment terms, in contemplation of the 1990
Transactions being approved by the stockholders.  The revised
repayment terms were:  (i) $30,000 on January 26, 1992, and (ii)
$10,000 per month for eighteen months commencing February 26,
1992.  The Company initially failed to meet its payment
obligations to IFS under the new note as they became due;
however, IFS did not declare a default thereon.  When the Company
reached its peak season, during the summer of 1992, it was able
to satisfy its past due obligations under the new note, although
as discussed below, other indebtedness to IFS increased.  The new
note was paid in full, according to its amended repayment
schedule, on July 26, 1993.

     Also in connection with the 1990 Transactions, the Company
and IFS further amended a Management Agreement (the "Management
Agreement") under which IFS provides, among other things,
consultative, supervisory and advisory services to the Company. 
Under the terms of the amendment, IFS was to receive $16,000 per
annum for each restaurant managed for the Company and
income-related incentive fees, previously provided for, were
eliminated.  By its terms, the December 28, 1990 amendment to the
Management Agreement required (and received) shareholder
ratification at the Company's next occurring annual meeting. 
Under the terms of the previous agreement, IFS received $16,000
per month without regard to the number of restaurants under
management, in addition to other income-related incentives
(which, historically were not met).  Based on 12 restaurants in
operation, IFS received $190,667 and $192,000 respectively in
1993 and 1992 (the slightly lower amount in 1993 reflects a pro-rata
reduction for the period between the closing of a restaurant
in Raritan, New Jersey and the opening of a new restaurant on
Eastern Parkway in Brooklyn, New York (which subsequently closed
in 1994)).  As amended in connection with the 1990 Transactions,
the Management Agreement would have remained in effect until
January 25, 1992; however, by an amendment dated January 26,
1992, the term of the Management Agreement was extended until
January 25, 1993.  By its terms, the January 26, 1992 amendment
to the Management Agreement was also subject to (and also
received) ratification by the Company's shareholders at the
Company's 1992 Annual Meeting.  Effective as of January 26, 1993,
the Management Agreement was further amended to extend its term
until January 25, 1994.  As of January 26, 1994, the Management
Agreement was extended until January 25, 1995 except that the
management fee was reduced to $12,000 per restaurant per year. 
As of January 26, 1995, the Management Agreement was extended
until January 25, 1996.  Management fees in fiscal 1995 and 1994
totalled $96,500 and $144,500, respectively.  Effective as of
January 26, 1996, the management agreement was extended until
January 25, 1997.  Per restaurant fees remained at $12,000 per
annum; however annual aggregate fees could not be less than
$108,000.  Management fees in fiscal 1996 were $105,000. 
Effective as of January 26, 1997, the management agreement was
extended until January 25, 1998.  Per restaurant fees remain at
$12,000 per annum; however, the annual aggregate minimum fee was
reduced to $96,000. See Item 6. Management's Discussion and
Analysis of Financial Conditions and Results of Operations.

     The Company's 1992 Annual Meeting took place on June 25,
1992, at which time the Company's stockholders ratified and
approved the 1990 Transactions.  In accordance therewith,
$450,000 of aggregate indebtedness to IFS, including $210,000 of
note principal, was converted to equity and IFS was issued
3,000,000 shares of the Company's Common Stock.  The amended
Management Agreement similarly went into effect, and as both the
stock subscription and amended Management Agreement provided for
their approval to be retroactive to December 28, 1990, an
additional $67,306, representing the difference in management
fees (attributable to the Company operating fewer than twelve
restaurants for portions of the intervening eighteen-month
period) and interest charges on the $210,000 of note principal
retroactively extinguished, was contributed to the paid-in
capital of the Company.

     At December 25, 1994, the Company owed IFS $536,385. 
However, in February 1995, IFS exercised its termination option
on its Bronx sublease to the Company pursuant to which the
Company received a credit of $51,000 applied as partial payment
to its open-account indebtedness.  The balance of such
intercompany indebtedness was retired from the proceeds of two
restaurant sales in May and July of 1995.  At December 31, 1995,
IFS owed the Company $153,010 pursuant to an interest-free,
short-term advance, repayment of which was made during the first
quarter of fiscal 1996.  At December 29, 1996, the Company owes
IFS $16,683 for the December 1996 management fee and other
miscellaneous items. See Item 1. "Recent Restaurant Sales," and
"Other Restaurant Closings," and Note 5 to the Consolidated
Financial Statements.

Recent Restaurant Sales
-----------------------

     On May 4, 1995, pursuant to a contract of sale dated March
14, 1995, the Company sold its Hillside, New Jersey restaurant to
an unrelated party for an all-cash sales price of $490,000,
subject to certain closing adjustments.  The Company
simultaneously retired its related mortgage indebtedness, earning
a $5,000 early payment discount.  The Company recorded an overall
gain on the sale, including the prepayment discount, of $274,875.

     On July 5, 1995, pursuant to a contract of sale dated June
19, 1995, the Company sold its East Orange, New Jersey restaurant
to an unrelated party for an all-cash sales price of $325,000,
subject to certain closing adjustments. The Company also obtained
an assignment of certain lease rights from the lessor which
rights were also sold to the purchaser at the Company's cost
therefor of $135,000, of which one-half was paid at closing and
the balance in various installments through December 2, 1995. 
The Company recorded a gain on the sale of $247,909.

     On November 20, 1995, pursuant to a contract of sale dated
October 5, 1995, the Company sold its Teaneck, New Jersey
restaurant to an unrelated party for an all-cash sales price of
$175,000 plus certain closing adjustments and realized a gain on
the sale of $150,409.

     The aggregate gain on the sale of all three restaurants was
$673,193.  After the last of such sales, the Company's six
remaining restaurants were all located in New York City.  See Item
2.  Properties and Note 8 to the Consolidated Financial
Statements. 

     On January 15, 1997, the Company and an unaffiliated party,
who had previously purchased two of the Company's restaurants and
is also managing one Brooklyn restaurant for the Company, agreed
to terms for the sale of the Company's Hillside Avenue, Queens
Restaurant.  The purchase price for this restaurant, the lease
for which expires on July 31, 1988, is $30,000 plus the usual
closing adjustments for inventory and prepaid/accrued items.  The
price is subject to increase by a minimum of $50,000 if the
purchaser obtains any extension of the lease.  For extensions of
the lease term in excess of five years, the price is increased by
an additional $10,000 per year to a maximum of $50,000. 
Accordingly, if the lease is extended for ten or more years, the
adjusted purchase price will be $130,000.  On April 8, 1997, the
Company received the required approval from the Franchisor for
the sale which is expected to close during the latter part of the
month.  See Item 6. Management's Discussion and Analysis of
Financial Condition and Results of Operations.

Recent Restaurant Closings
--------------------------

     On October 4, 1994, a robbery resulting in a homicide
occurred at the Eastern Parkway location.  The Company
immediately closed the store pending a reassessment of its
viability.  Sales at this restaurant had declined during 1994
following the restaurant's successful opening in 1993.  The
Company subsequently determined it would permanently close this
unprofitable location.  On December 7, 1994, the assets and lease
related to the Eastern Parkway restaurant were sold to an
unrelated party.  Also, in November 1994, the Company sold the
lease and assets of its restaurant located at 168-30 Hillside
Avenue in Queens to the same third party purchaser, which
restaurant was also unprofitable at the time of closure.  The
Company lost approximately $69,000 on these two transactions,
virtually all of which was attributable to the Brooklyn location.

     In February 1995, IFS, as sublessor of the Company's Bronx
restaurant, notified the Company it was exercising its
termination option included in the lease and, on February 22,
1995, this location closed.  As provided in the lease, the
Company was credited with a pro-rata early termination penalty
payment to compensate it for the store's unamortized leasehold
improvements.  Such credit in the amount of $51,000 was applied
to the Company's open account indebtedness due to IFS.

Present Operations
------------------

     Since June 1979, the Company exercised 12 of the options
purchased by it pursuant to the Option Agreement and the
Development Agreement, and acquired three existing Popeyes
restaurants in New Jersey and opened three Popeyes restaurants in
New York, pursuant to a separate Development Agreement.  During
the same period, the Company closed seven restaurants, one at 172
West 72nd Street in New York, New York, upon the expiration of
the lease; one at 46-05 Northern Boulevard in Queens, New York
and one at 125 West 42nd Street, New York, New York, both of
which were unprofitable restaurants at the time of closure; one
in Raritan, New Jersey, due to condemnation-related construction
activity at the site; one at 168-30 Hillside Avenue, Queens and
one at 1126 Eastern Parkway, Brooklyn, New York (which had opened
in August 1993 and to which the Raritan franchise rights had been
transferred) both of which were unprofitable at the time of
closure; and one at 46-48 161st Street, Bronx, New York, another
location which was unprofitable at the time of closure, and whose
lease was terminated by IFS, the sub-lessor.  In 1995, the Company
also sold at a gain three profitable restaurants, located at 1318
Liberty Avenue, Hillside, New Jersey; 372 Central Avenue
in East Orange, New Jersey; and 1307 Teaneck Road in Teaneck, New
Jersey.  See "Recent Restaurant Sales."  The Company has entered
into agreements ("Franchise Agreements") with PFFC and its
successor in interest with respect to its six continuing Popeyes
restaurant franchises in New York.  The Company has one
continuing subleased location.  In addition to the recently
terminated Bronx sublease, another subleased location was
discontinued in 1993 when the Company was allowed to terminate
the store lease.  The Popeyes restaurants are located at 722
Seventh Avenue in the Times Square area of the Borough of
Manhattan, City of New York; 850 Pennsylvania Avenue, 40 Empire
Boulevard and 2137 Nostrand Avenue (sub-lease) in the Borough of
Brooklyn, City of New York; 144-20 Hillside Avenue, and 122-10
Guy Brewer Boulevard in the Borough of Queens, City of New York. 
See Item 2.  Properties.

     Effective April 1, 1996 the Company entered into a
management agreement with an individual (The "Manager") to manage
the operations of its Popeye's Restaurant on Empire Boulevard in
Brooklyn.  The agreement, the initial term of which expired
December 31, 1996 is automatically renewable unless cancelled by
the Company or the Manager, in each case, upon written notice of
30 or 90 days, respectively. If the agreement is terminated by
reason of the Manager's breach or is otherwise terminated by the
Manager for any reason other than a breach by the Company, the
Manager must pay a $10,000 termination fee.  The Manager paid a
$15,000 security deposit upon the commencement of the agreement.

     The agreement provides for a monthly management fee to the
Manager equal to the restaurant's cash flow less the greater of
$200 or five percent of such monthly cash flow, calculated
monthly and not cumulatively.  Stated  conversely, the Company
receives the greater of $200 per month or 5% of the restaurant's
monthly cash flow.  Any negative cash flow in any month is borne
by the Manager and the Company still receives the $200 minimum
amount for such month.  The Company earned the minimum $1,800
amount for the nine months the agreement was in effect in fiscal
1996.  The amount retained by the Manager during this period
was $10,686.   

     At the time of its acquisition, the now-closed Raritan, New
Jersey location was subject to a condemnation proceeding.  Such
proceeding was concluded in December 1993 at a significant gain
to the Company.   In September 1994, the Raritan landlord
commenced a lawsuit against the Company.  In March 1997, the
lawsuit was adjudicated with the substantial and unexpected award
for the plaintiff.  In April 1997, the parties verbally agreed to
a settlement of the judgement amount. See Item 3. Legal
Proceedings, Item 6. Management's Discussion and Analysis of
Financial Condition and Results of Operations and Note 10B to the
Consolidated Financial Statements.  

     For the five fiscal years ended December 29, 1996, December
31, 1995, December 25, 1994, December 26, 1993 and December 27,
1992, the Company recorded sales of $5,349,978, $6,588,338,
$8,062,632, $8,240,781, and $7,929,720, respectively.  The
Company had a net loss of $137,412 in 1996, net income of
$518,705 in 1995 and net losses of $228,720, $57,465, and
$273,274, in 1994, 1993 and 1992, respectively.  See Item 6.
Management's Discussion and Analysis of Financial Condition and
Results of Operations and Item 7. Financial Statements.
 
     The Company's present restaurants range in size from
approximately 1,000 to 2,500 square feet of space and seat from
approximately 38 to 66 persons.  Restaurant hours of operation
vary, depending upon location.

     The Company obtains its equipment, supplies, and food
products from sources recommended and approved by the Franchisor. 
In order to serve its featured "New Orleans Style" spicy and mild
fried chicken, the Company must purchase its batter mix and
special spices from Franchisor approved distributors.

     The Franchisor maintains quality control over the operations
of its franchised restaurants by means of periodic, on-site
inspections and evaluations.  All aspects of business operations
are inspected and evaluated, including cleanliness, service, food
recipes and taste, and management.  The failure by the Company to
achieve satisfactory inspections and evaluations may be deemed to
be a default under those provisions of the Franchise Agreements
which require the Company to operate in accordance with the
Franchisor's franchising "system," which default, if not cured
within 30 days of written notice of default sent by the
Franchisor to the Company, may result in termination of the
Franchise Agreement.

     The Company has sought to find and establish restaurants in
high traffic areas, and advertises in each restaurant's local
area by means of discount coupons which are distributed
throughout the marketing area, electric and electronic sign
advertising and local community promotions.  The Company also
uses the nationally known and copyrighted figure of Popeye the
Sailorman and its related family of characters in the Company's
advertising and promotions, as well as throughout the decor of
its restaurants.  The Company has in the past undertaken limited
local television and radio advertising promotions.  Pursuant to
the Company's Franchise Agreements, 3% of the Company's gross
sales, exclusive of sales taxes, is to be contributed to the
Franchisor for advertising, as more fully described under the
heading "The Franchise."

Food Menu
---------

     Each of the Company's operating restaurants is a "limited
menu" restaurant which utilizes the Popeyes Famous Fried Chicken
and Biscuits fast food system and which specializes in the
preparation and sale of uniquely flavored "New Orleans Style"
spicy and mild fried chicken.  The Company depends upon the
distinctive taste of the batter used in the preparation of fried
chicken and other items in order to attract and retain customers. 
The recipe for the batter mix is the property and trade secret of
the Franchisor and the precise spices and ingredients and proper
proportions of such spices and ingredients are unknown to the
Company.  As a result, the Company is required to purchase the
batter mix and spices from distributors approved by the
Franchisor.

     In addition to featuring its "New Orleans Style" fried
chicken, the Company's restaurants offer for sale such
accompanying food items as barbecue chicken sandwiches, onion
rings, cole slaw, french fried potatoes, corn on the cob, cajun
rice, cajun nuggets, cajun popcorn bite-sized shrimp and red
beans, egg fried cajun style french fries and rice. Certain of
these items are also prepared utilizing the Franchisor's
proprietary spice blends.  Although the Company possesses the
recipe for preparing the above items, the blend of spices used
therefor are the property of the Franchisor, and the Company must
purchase such spices directly from the Franchisor's authorized
distributors.

Future Locations
----------------

     Under the Development Agreement, the Company had options to
open a specified number of additional Popeyes restaurants within
the territories and time periods set forth in the Development
Agreement and the right to submit additional locations in
Manhattan to the Franchisor on a case-by-case basis.  During the
sixteen-month period ended December 25, 1994, three of such
options expired unexercised.  As a result, the Company was in
default of the Development Agreement.  On January 30, 1995,
pursuant to its rights thereunder, the Franchisor terminated the
Development Agreement.  Such action did not affect the continuing
franchise agreements nor the Company's right to submit additional
locations as franchise sites to the Franchisor on a case-by-case
basis.  See "Background," "The Franchise, and Note 3 to the
Consolidated Financial Statements.

     Provided that the Company obtains the additional financing
which would be required, and further provided that the Company
successfully negotiates additional franchise rights, which may or
may not include partial or full credit against new franchise fees
for lapsed options and/or closed locations, the Company may in
the future seek to acquire additional Popeyes Famous Fried
Chicken and Biscuits restaurants in the New York Metropolitan
area.  However, the Company has no present plans to do so.

The Franchisor
--------------

     The Company originally purchased the right to establish and
operate Popeyes Famous Fried Chicken and Biscuits restaurant
franchises from PFFC, a privately-held company founded in 1972. 
In 1992, PFFC, whose parent company had been in bankruptcy, was
acquired by the Franchisor who continues to operate a national
fast food system consisting of company-owned and franchised
restaurants.  The Franchisor's executive offices are located in
Atlanta, Georgia.

     There are approximately 700 Popeyes Famous Fried Chicken and
Biscuits restaurants currently operating in 40 states, the
District of Columbia, and five countries.  Approximately 13% of
all restaurants are owned by the Franchisor, and the balance are
owned by franchisees.  To the Company's knowledge, the nearest
Popeyes Famous Fried Chicken and Biscuits restaurant not operated
by the Company is located in Manhattan on 34th Street.

The Franchise
-------------

     Historically, when the Company decided upon a site for a
Popeyes restaurant, it submitted such site to the Franchisor for
approval.  Under the Development Agreement, the Franchisor had 30
days to approve or disapprove any proposed site.  Within 90 days
after site approval, the Company was to submit to the Franchisor
proof that it owned the site or had a lease for such site
containing certain required provisions, including that the term
of the lease, together with renewal options was for at least 20
years (although such requirement had been waived in certain
instances).  In addition, the Company was required to submit
plans and specifications for such site to the Franchisor for
approval, which plans and specifications were to be in accordance
with the Franchisor's standards and specifications for franchised
locations.  After such approvals were given by the Franchisor,
the Company and the Franchisor entered into a Franchise Agreement
covering the establishment and operation of a Popeyes Famous
Fried Chicken and Biscuits restaurant franchise to be operated at
the chosen location.

     Although the Franchisor terminated the Development Agreement
as of January 30, 1995, such action did not irrevocably preclude
the Company from acquiring additional franchises.  While the
Company has no present plans to construct new restaurants, should
the Company seek to acquire existing restaurants, it expects it
would follow previously applicable procedures to be approved as
the unit franchisee and would also likely seek to negotiate
credits against the franchise fee from lapsed options and/or
closed locations.  See "Future Locations".

     PFFC, and as its successor in interest, the Franchisor, and
the Company have entered into Franchise Agreements for each of
the Company's restaurants of which six continue in effect.  Such
Franchise Agreements generally provided for the Company to pay a
franchise fee of $25,000 per franchise of which $10,000 was
credited from the applicable option being exercised.  The term of
each Franchise Agreement and the franchise granted thereunder is
20 years from the date the Franchise Agreement is executed, and
is thereafter renewable at the Company's option for one
additional ten-year period.  In order to renew, the Company must
satisfy certain conditions, including the payment of one-half of
the then current franchise fee; the execution of the then current
Franchise Agreement, which may include a higher royalty rate or
advertising fund contribution than currently; the execution of a
general release in favor of the Franchisor; satisfaction of all
monetary obligations to the Franchisor; and the reasonable
remodeling and/or modernization of the franchised location, in
accordance with the specifications contained in the Franchisor's
then current Franchise Agreement or Operating Manual.

     In addition to the payment of the $15,000 balance of the
franchise fee, each Franchise Agreement required, for all periods
through January 9, 1993, the Company to pay a continuing royalty
fee, payable on a weekly basis, in an amount, during the first
five years, equal to 5% of gross sales, exclusive of sales tax,
and, after the first five years, an amount equal to 5-1/2% of
gross sales, exclusive of sales tax.  Effective as of January 10,
1993, America's Favorite Chicken Company, as successor in
interest to PFFC, amended the royalty percentage to 5% for all
franchised restaurants, regardless of the number of years they
had been in operation.  The Company's previous weighted average
royalty rate had been approximately 5.34%.  The Company also has
been and is currently required to pay an additional sum equal to
3% of gross sales, exclusive of sales tax, payable on a weekly
basis, as and for its advertising contribution.  However,
commencing during 1993, three-fourths of such amount was required
to be contributed to a regional advertising cooperative which
purchases regional media advertising.  Previously, two-thirds of
the advertising contribution was expended for regional
advertising by the Franchisor and its predecessor.

     The occurrence of certain events constitutes a default under
the Franchise Agreement.  Such events include the failure to make
timely payments to the Franchisor; the failure to abide by the
Franchise Agreement; the filing of a petition in bankruptcy by
the Company, or the Company's consent to the filing of such a
petition by another; the adjudication of the Company as bankrupt;
the unauthorized transfer by the Company of any rights or
obligations under the Franchise Agreement; the Company's repeated
violation of the Franchise Agreement, whether or not cured; or
the cessation by the Company of business activities at the
franchised location.  In the event of default, the Franchisor, at
its option, may terminate the Franchise Agreement.

     Upon payment of the franchise fee and continuing royalty and
advertising fees, the Franchisor provides and will continue to
provide the Company with the following services: (a) standard
basic plans and specifications for equipment, furnishings, decor,
layouts and signs, together with advice and consultation
concerning the architectural layout of Company stores; (b) lease
review and approval; (c) a pre-opening and continuing training
program; (d) pre-opening and continuing management training at
the school operated by the Franchisor; (e) a Confidential
Operations Manual; (f) special recipe techniques; (g) food
preparation instructions; (h) standardized accounting methods;
(i) cost control methods; (j) portion control systems; and (k)
grand opening advertising and promotion supervision.

     The Franchise Agreements, among other things, require the
Company to maintain a high degree of cleanliness and repair, to
operate in conformity with procedures established by the
Franchisor, to use supplies conforming to the Franchisor's
standards purchased from suppliers approved by the Franchisor,
and to sell only items meeting the Franchisor's standards and
which have been expressly approved by the Franchisor.

     The Franchise Agreements also provide that during their
term, and for a period of one year thereafter, no officer,
director or 5% shareholder of the Company will divert or attempt
to divert any business of the Company to any competitor, to
employ or seek to employ any employee of the Franchisor or any
other franchisee, or own, operate, or have more than a 5%
beneficial interest in any restaurant which is similar to a
Popeyes restaurant.  In addition, no officer, director or 5%
shareholder of the Company may own, maintain, engage in, or have
a controlling interest in any business which is similar to or the
same as the franchised business (except other Popeyes
restaurants), within a five or ten mile radius of the Popeyes
restaurant subject to such Franchise Agreement.

Trademarks and Service Marks
----------------------------
     
     In much of its advertising, promotions and interior and
exterior decor, the Company utilizes Popeye the Sailorman and its
related family of characters pursuant to the rights conferred by
the Franchise Agreement with PFFC and the Franchisor, as
successor.  PFFC obtained its license from King Features
Syndicate, Inc. and the Company is not a party to such license
and has no control over its perpetuation.  The Company uses the
licensed characters in order to promote the public's awareness of
the Company's identity, but does not believe that it would be
materially adversely affected by the loss of the use of such
characters.

Competition
-----------

     The fast food, limited menu restaurant business is highly
competitive.  Competition is provided by an increasing number of
franchised units of national and regional fast food chains, as
well as by company-owned and locally-owned restaurants, drive-ins,
and diners.  The Company also competes with retail stores
and other restaurants for desirable locations. The Company does
not consider itself to be a significant factor in the fast food
industry and many of the Company's competitors have far greater
financial resources, management expertise, and physical
operations than the Company.  Competitive factors in the industry
include price, taste, location, advertising and trademarks.

Employees
---------

     The Company has approximately 125 employees.  Of such
number, approximately 36 are full-time and approximately 89 are
employed on a part-time basis.  All of the Company's employees
are trained to serve as food handlers and preparers, cooks,
cashiers, servers and maintenance personnel and are trained in
every phase of the Company's operations. The Franchisor requires
that certain of such employees be trained by the Franchisor.  In
addition, all employees rotate between positions, thus providing
each employee with a thorough knowledge of restaurant operations. 
Of the 36 full-time employees, 17 are employed in supervisory or
managerial positions.  None of the Company's employees are
covered by a collective bargaining agreement.

Item 2.   PROPERTIES
------    ----------

     The Company operates six Popeyes Famous Fried Chicken and
Biscuits restaurants at the locations set forth below:

          1.   722 Seventh Avenue, New York, New York
          2.   40 Empire Boulevard, Brooklyn, New York
          3.   144-20 Hillside Avenue, Queens, New York
          4.   122-10 Guy Brewer Boulevard, Queens, New York
          5.   850 Pennsylvania Avenue, Brooklyn, New York 
          6.   2137 Nostrand Avenue, Brooklyn, New York

     The leases in effect for the first five locations provide
expiration dates (including options to extend) ranging from July
31, 1998 to June 30, 2013.


     The lease for the sixth restaurant, a sub-lease, expired on
February 28, 1997 and the Company is presently in holdover status
at such location.  The sub-lessor acquired its lease (as lessee)
and the sub-lease (as sub-lessor) from Integrated Food Systems,
Inc. The sub-lessor is also in holdover status with respect to
its lease as lessee.

     The sub-lessor has advised the Company that its negotiations
to renew its lease for ten years should be concluded shortly at
which time the Company's sub-lease will be extended for a ten-year
coterminous period at a rental of 11% of sales for the first
five years and 13% of sales for the second five years.  Rent on
the sub-lease is currently 15% of sales.

     In July, 1996 the Company amended the Manhattan lease, which
was to expire on December 31, 1996.  The amendment extended the
term to December 31, 2002 and effective August 1, 1996 increased
the annual rent from $180,000 to $265,000 through July 31, 1999. 
The rent for the remainder of the extended term will be $270,000
annually.

     In addition to the foregoing, the Company has subleased to
an unrelated party a location at 1074 Washington Avenue in
Brooklyn, New York which had been used by the Company for a
restaurant which did not operate profitably. A second sublease
for certain premises formerly used as a Popeyes restaurant at 87-26
Roosevelt Avenue in Queens, New York was terminated August 1,
1996 when the Company, with the consent of the lessor, assigned
its lease to the sub-lessee.

     For further information concerning lease commitments, see
Note 6B to the Consolidated Financial Statements.

Item 3.   LEGAL PROCEEDINGS
------    -----------------

     At the time of its acquisition by the Company in August,
1991, the Raritan, New Jersey restaurant was subject to a
condemnation suit brought by the New Jersey Department of
Transportation.  The Company was one of three tenants at the
site.  Work on the related three-year construction project
commenced in October, 1991 and necessitated the closing of the
restaurant in July 1993.  A commission hearing was held on August
26, 1992 at which time, the commissioners determined an aggregate
award for all defendants, including the landlord.  The State
appealed the award.  In December 1993, the Superior Court of New
Jersey awarded the Company an aggregate of $399,302 which was
received in January, 1994.  The Company's attorney fees and
expenses totalled $105,909 and from the proceeds the Company also
paid the outstanding balance of the Raritan mortgage debt in the
amount of $131,972 together with accrued interest thereon of
$1,184.  The Company realized a net gain on the condemnation of
$143,061.  

     The Company considered the lease to be terminated and as
of February  1, 1994 ceased paying rent.  On September 30, 1994,
Host Marriott Corporation, as sublandlord, instituted litigation
against the Company seeking lost rent from February 1, 1994,
payment for alleged removal of equipment, alleged loss of
percentage rent, recovery of the amount allocated to the Company
as a result of the condemnation proceeding and punitive damages. 
On November 23, 1994, the Company filed an answer denying all
liability and asserting various affirmative defenses, among which
was the failure of Marriott to mitigate damages based on
Marriott's refusal to assign the sublease to another tenant.  

     In March 1996, the Company, as defendant, and Host Marriott
Corporation, as plaintiff, filed cross motions for summary
judgment.  The matter proceeded to trial in U.S. District Court
in February 1997.  On March 7, 1997, the Court decided in favor
of the plaintiff and awarded $229,893 plus reasonable legal fees. 
The result at trial was completely unexpected by the Company and
its counsel.  On March 19, 1997 the Company filed a notice of
appeal with the U.S. Circuit Court of Appeals for the Third
Circuit.  The Company also sought to negotiate a settlement of
the judgement with the plaintiff.  On April 9, 1997, the
settlement negotiations resulted in the plaintiff verbally
agreeing to accept the Company's offer of $143,500 in full
satisfaction of the judgement amount, provided such payment is
made by April 30, 1997. See Item 6.  Management's Discussion and
Analysis of Financial Condition and Results of Operations and
Notes 6D and 10B to the Consolidated Financial Statements.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------   ---------------------------------------------------

     No matters were submitted to a vote of security holders
during the fiscal year ended December 29, 1996.

                             PART II
                             -------

Item 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS
-------   -----------------------------------------------------  

     The Company's Common Stock was previously traded in the
over-the-counter market.  However, there has been no reported
trading activity in the Company's Common Stock since December 9,
1991.  The Company presently has no market maker and no NASDAQ
symbol.  The Company is unable to predict whether a trading
market for its Common Stock will resume in the future.

     As of April 10, 1997, there were approximately 1,822 holders
of record of the Company's Common Stock.

     On November 28, 1995, the Company's Board of Directors
declared a dividend in the nature of a return of capital of $.025
per share on its Common Stock.  The dividend, aggregating
$222,858, was paid on December 21, 1995 to holders of record as
of December 11, 1995.  On November 15, 1996, the Company declared
a second return of capital distribution of $.01 per share of
common stock.  This distribution, aggregating $89,143 was paid on
December 16, 1996 to holders of record as of December 11, 1995.
Prior to these return of capital distributions,  the Company had
never paid a cash dividend of any kind and does not anticipate
paying such a dividend in the foreseeable future.  See Item 6. 
Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Item 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS
-------   -------------------------------------------------
Results of Operations
---------------------

     The Company's net sales of $5,349,978 in fiscal 1996
decreased by $1,238,360, or 18.8%, from $6,588,338 in 1995.  All
of such decrease is  attributable to restaurants that were sold
or closed during 1995.  The Company operated six restaurants
throughout 1996.  However in January of 1997, the Company and an
unaffiliated party, who had previously purchased two restaurants
from the Company and was managing another, agreed to the sale of
the Hillside Avenue, Queens Restaurant.  Such sale has been
approved by the franchisor and is expected to close during the
latter part of April 1997. See Liquidity and Note 10A to the
Consolidated Financial Statements.

     Sales at the six continuing restaurants in New York City
increased by 7.0%.  However, fiscal 1995 comprised 53 weeks while
fiscal 1996 comprised 52 weeks.  Adjusted for the one-week
difference, sales in fiscal 1996 at continuing restaurants grew
by 9.0%.  All restaurants except the Brooklyn sub-leased location
recorded year-to-year gains.  Sales at such lone exception
decreased by 7.5%, as adjusted for the one-week shorter period. 
Such decrease was attributable to competitive factors; the sub-lessor,
who also operates a fast food restaurant on the premises,
offered a discounted chicken nugget promotion at certain times
during the year and another fast food chicken restaurant opened
across the street.  This competitor closed in early December 1996
and sales trends at the Company's store immediately turned
positive.  Four of the Company's other locations had gains, as
adjusted for the one-week difference, ranging from 5.6% for the
managed Brooklyn location to 8.0%, for the Manhattan location,
believed by the Company to be the world-wide franchise sales
leader.  The two Queens locations had adjusted gains of 5.9% and
6.4%.  The largest gain occurred at the newly remodeled Pennsylvania
Avenue, Brooklyn location where sales, as adjusted, increased by
23.2%.  The interior remodel was completed in the first quarter of
1996.  All stores benefitted from improved operations generally, as
well as the discontinuation of the $2.99 "Combo Meal" in January 1996.

     Cost of sales decreased by $445,791 or 20.0% to $1,781,065
in 1996 from $2,226,856 in 1995, principally as a result of the
overall sales decline.  As a percentage of sales they decreased
by 0.5% to 33.3% in 1996 from 33.8% in 1995.  Cost of sales
benefitted from the discontinuation of $2.99 "Combo Meals" in
January 1996.  This resulted in a 0.2% decrease in the raw food
cost as a percentage of sales, notwithstanding a 10% increase in
the cost of chicken during 1996.  Paper cost decreased by 0.3% of
sales as a result of the discontinued discounted "Combo Meals."

     Selling, general and administrative expenses decreased by
$874,881 or 19.3% to $3,652,223 in 1996 from $4,527,104 in 1995,
consistent with the Company's decreased sales. As a percentage of
sales, these expenses decreased by 0.4% to 68.3% in 1996 from
68.7% in 1995.  Within this category, labor costs decreased by
2.5% of sales, benefitting from the effective increase in average
menu prices resulting from the discontinuation of discounted
"Combo Meals."  Most of such improvement was realized in the
first three quarters of the year.  Due to the increase in the
minimum wage effective October 1, 1996, the Company expects labor
costs in 1997 to increase by 0.5% of sales.  Occupancy costs
increased by 0.8% including 0.5% attributable to higher base rent
effective August 1, 1996 at the Manhattan location, increased in
connection with the lease amendment and extension agreement
therefor; 0.4% attributable to higher percentage rent charges due
to sales increases at stores subject to percentage rent; 0.6%
attributable to higher per-store insurance costs, increased in
mid-1995 as a result of operating fewer stores; less the 0.6%
effect of reduced real estate taxes and other municipal charges
and a 0.1% reduction in depreciation and amortization expenses,
related principally to the latter. Controllable operating
expenses decreased by 0.5% of sales, principally as a result of
the increase in offered menu prices.  General and administrative
expenses increased by 1.1% consisting of a net 0.6% increase in
professional fees, a 0.2% increase in theft losses, a 0.1%
increase in corporate franchise taxes and a net 0.2% increase in
all other items in this category.  The increase in professional
fees results from increased charges for managerial accounting and
administrative services, net of reduced legal fees as three
restaurants were sold in 1995 and none were sold in 1996.

     Royalties and advertising expenses, both included in the
selling, general and administrative expense category, were
constant at 5.0% and approximately 3.0% of sales, respectively.

     Management fees increased by $8,500 to $105,000 in 1996 from
$96,500 in 1995, principally as a result of the provision in the
management agreement effective January 26, 1996 requiring an
annual minimum of $108,000.  The renewal effective January 26,
1997 reduced the minimum to $96,000.  The Company also incurred
net management fees of $8,886 (after deducting the $1,800 minimum
cash flow requirement payable to the Company) resulting from the
management agreement for the Empire Boulevard Restaurant in
Brooklyn.  The combined effect of both management agreements was
an increase in expenses of 0.7% of sales.

     Interest expense of $5,714 in 1996 did not recur as the
Company's last interest bearing debt was extinguished in May,
1995.

     Sublease income decreased by $20,612 or 30.7% to $46,537 in
1996 from $67,149 in 1995.  One of the Company's two subleases
was terminated August 1, 1996 when the Company's lease was
assigned to the sub-lessee.  See Note 6B to the Consolidated
Financial Statements.

     Neither the gain on restaurant dispositions nor the loss on
expiration of franchise options recurred in 1996.

     The Company has accrued at December 29, 1996 the $143,500
litigation settlement amount it has agreed to pay in satisfaction
of the judgement awarded to the plaintiff landlord for the closed
Raritan location.  See "Liquidity," Item 3. Legal Proceedings and Notes
6D and 10B to the Consolidated Financial Statements.

     Miscellaneous income increased by $15,843 or 58.6% to
$42,861 in 1996 from $27,018 in 1995.
     
     Due to available net operating tax loss carryforwards in
excess of taxable income for fiscal 1996 and 1995, the Company
did not incur any income taxes in either year. At December 29, 1996,
the Company has net operating loss and jobs tax credit carryforwards
of approximately $1,544,000 and $91,000, respectively, which expire
in 2009 and 2002.

Liquidity
---------

     The Company's working capital deficiency increased by
$215,172 to $226,904 at December 29, 1996 from $11,732 at
December 31, 1995. Operations required $19,733, capital
expenditures required $120,938 and the return of capital
distribution required $89,143.  Security deposits provided
$14,642.

     From a cash flow standpoint, operating activities provided
$327,602 while investing and financing required $114,424 and
$89,143, respectively, resulting in a $124,035 net increase in
cash, which brought the year-end cash balance to $230,604.

     The Company will realize minimum proceeds of $30,000, plus
closing adjustments, from the sale of the Hillside Avenue, Queens
Restaurant subject to a maximum increase thereon of $100,000 if
the purchaser renews the lease therefor.  Such additional
proceeds may not be received until 1998 as that location's lease
does not expire until July 31, 1998.  The Company will likely
incur an immediate cash shortfall from the sale as it will be
required to retire the Restaurant's trade liabilities.

     The Company has obtained a commitment to borrow $125,000 from a
bank, with interest at 10%, repayable over two years, to fund 
approximately seven-eighths of the judgement settlement amount it
has agreed to pay the plaintiff Host Marriott Corporation.  Such
financing, together with the available cash balance at December 29,
1996 and as augmented by operating cash flow are expected to be
sufficient to meet the Company's cash obligations in fiscal 1997.

Inflation
---------

     In the Company's recent fiscal years, inflation has not been
an overly significant factor.  While certain raw food costs have
fluctuated, such fluctuations have been cyclical rather than
representative of steady inflationary pressure.  Also, while unit
labor costs have gone up, such increases have generally been
offset by productivity improvements.

Item 7.   FINANCIAL STATEMENTS
-------   --------------------

            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
            ------------------------------------------
                                                       Page 
                                                       ----

Independent Auditor's Report                           F-1
     
Consolidated Balance Sheet at December 29, 1996        F-2

Consolidated Statement of Operations for the Years
Ended December 29, 1996 and December 31, 1995          F-3

Consolidated Statement of Stockholders' Equity for the
Years Ended December 29, 1996 and December 31, 1995    F-4

Consolidated Statement of Cash Flows for the Years
Ended December 29, 1996 and December 31, 1995          F-5

Notes to Consolidated Financial Statements             F-6
                                                       to
                                                       F-13
                           

                  INDEPENDENT AUDITOR'S REPORT




Board of Directors
Fast Food Operators, Inc.
Bayside, New York
     

I have audited the accompanying consolidated balance sheet of
Fast Food Operators, Inc. and Subsidiaries as of December 29,
1996, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the years in the
two-year period ended December 29, 1996. These financial
statements are the responsibility of the Company's management. 
My responsibility is to express an opinion on these financial
statements based on my audit.

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

In my opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of Fast Food Operators, Inc. and Subsidiaries as of
December 29, 1996, and the consolidated results of their
operations and cash flows for each of the years in the two-year
period ended December 29, 1996, in conformity with generally
accepted accounting principles.



                                   /S/ ERIC L. WESTON
                                   Certified Public Accountant






Westbury, New York
January 17, 1997, except for Note 10 as
to which the date is April 11, 1997
                                
                                
                              F-1
                                
                                
                                
                   Fast Food Operators, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                               December 29, 1996
                                                     
                                        
     ASSETS

Current assets:
   Cash                                                  $   230,604
   Inventory (Note 1B)                                        35,905
   Prepaid expenses and other current assets                  60,183
                                                         -----------
Total current assets                                         326,692
                                                         -----------
Property and equipment, net of accumulated
   depreciation (Notes 1C, 2, 8 and 10A)                     484,775
                                                         -----------
Other assets:
   Franchise fees, net of accumulated amortization
        of $122,083 (Notes 1D and 3)                           2,917
   Deferred lease costs (Note 1D)                             11,090
   Security deposits                                          13,500
                                                         -----------
Total other assets                                            27,507
                                                         -----------
TOTAL ASSETS                                             $   838,974
                                                         ===========

   LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                      $    81,248
   Accrued expenses                                          257,639
   Taxes, other than income taxes                             54,526
   Litigation settlement payable (Note 10B)                  143,500
   Due to Integrated Food Systems, Inc. (Note 5)              16,683
                                                         -----------
Total current liabilities                                    553,596

Security deposits payable                                     18,758
                                                         -----------
Total liabilities                                            572,354
                                                         -----------
Commitments and contingencies - 
   (Notes 5, 6, 9 and 10)
Stockholders' equity - (Notes 4 and 10B):
   Common stock, $.01 par value;
    authorized: 10,000,000 shares; issued
    and outstanding: 8,914,300 shares                         89,143
   Additional paid-in capital                              2,142,862
   Accumulated deficit                                    (1,965,385)
                                                         -----------
Total stockholders' equity                                   266,620
                                                         -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $   838,974
                                                         ===========

See notes to consolidated financial statements.
                                        
                                      F-2
                    Fast Food Operators, Inc. And Subsidiaries
                      Consolidated Statement of Operations
              Years Ended December 29, 1996 and December 31, 1995
                                        
               
                                              1996              1995
                                           -----------       -----------  
Sales                                      $ 5,349,978       $ 6,588,338 

Cost of sales                                1,781,065         2,226,856
                                           -----------       -----------
Gross profit                                 3,568,913         4,361,482
                                           -----------       -----------
Selling, general and administrative
   expenses (Notes 5, 6A and 6B)             3,652,223         4,527,104

Interest expense                                 -                 5,714

Sublease income (Note 6B)                     ( 46,537)         ( 67,149)

Gain on restaurant dispositions
   (Note 8)                                      -              (635,874)
    
Expiration of franchise options
 (Note 3)                                        -                40,000

Loss on litigation settlement
   (Notes 6D and 10B)                          143,500             -

Miscellaneous income, including
 interest income of $161 in 1996
 and $2,292 in 1995                           ( 42,861)         ( 27,018)
                                           -----------       -----------
                                             3,706,325         3,842,777
                                           -----------       -----------
Net income (loss) (Note 9)                 $  (137,412)      $   518,705
                                           ===========       ===========

Net income (loss) per share
 (Note 1G)                                 $      (.02)      $       .06
                                           ===========       ===========
Weighted average number of
 shares outstanding                          8,914,300         8,914,300
                                           ===========       ===========


See notes to consolidated financial statements.

                                        
                                        
                                      F-3

                   Fast Food Operators, Inc. and Subsidiaries
                 Consolidated Statement of Stockholders' Equity
                       Two Years Ended December 29, 1996
                                        


                    Common                                     Total
                    Stock         Additional                   Stock-
               ---------------     Paid-in      Accumulated    holders'
               Shares   Amount     Capital        Deficit      Equity
               ------   ------    ----------    -----------    -------



Balances,
December 26,
1994          8,914,300 $89,143  $ 2,454,863    $(2,346,678)  $   197,328

Return of
capital
distribution
(Note 4)          -       -       (  222,858)         -        (  222,858)

Net income
for 1995          -       -            -           518,705        518,705
             --------- -------   -----------   ------------   -----------    
BALANCES,
DECEMBER 31,
1995         8,914,300 89,143      2,232,005    (1,827,973)       493,175

Return of
capital
distribution
(Note 4)         -      -         (   89,143)        -         (   89,143)

Net loss
for 1996         -      -              -        (  137,412)    (  137,412)
            --------- -------    -----------   -----------    -----------
BALANCES,
DECEMBER 29,
1996        8,914,300 $89,143    $ 2,142,862   $(1,965,385)   $   266,620
            ========= =======    ===========   ===========    ===========


See notes to consolidated financial statements. 

                                        
                                      F-4


                   Fast Food Operators, Inc. And Subsidiaries
                      Consolidated Statement of Cash Flows
              Years Ended December 29, 1996 and December 31, 1995
                                       
                                        
                                        
                                             1996             1995     
                                           -----------      -----------
Cash flows from operating activities:
 Net income (loss)                         $(  137,412)     $   518,705 
                                           -----------      -----------
Adjustments to reconcile net
 income(loss) to net cash provided
 (required)by operating activities:
   Depreciation and amortization               117,679         151,774
   Loss on litigation settlement               143,500           -
   Gain on asset sales, net of
    write-off of expired options                 -         (   595,874)
   Increase in inventory                    (      229)    (     6,108)
   Decrease in prepaid expenses and
    other current assets                        78,393          19,157 
   Increase (decrease) in accounts
    payable                                     38,721     (   122,295)
   Increase in security deposits
    payable                                      8,128           -    
   Increase (decrease) in accrued
    expenses                                (   96,355)         79,793
   Increase (decrease) in taxes,
    other than income taxes                      5,484     (     3,920)
   Increase (decrease) in due to
    Integrated Food Systems, Inc.              169,693     (   638,395)
                                           -----------     -----------
Total adjustments                              465,014     ( 1,115,868)
                                           -----------     -----------
Net cash provided (required) by
 operating activities                          327,602     (   597,163)
                                           -----------     -----------
Cash flows from investing activities:
 Purchase of fixed and other assets         (  120,938)    (   178,841)
 Proceeds from sale of restaurant
  assets                                         -           1,026,399
 Security deposits refunded                      6,514           1,861 
                                           -----------     -----------
Net cash provided (required) by
 investing activities                       (  114,424)        849,419 
                                           -----------      -----------
Cash flows from financing activities:
 Return of capital distribution             (   89,143)    (   222,858)
 Payments of long-term debt                      -         (   133,221)
                                           -----------     -----------
Net cash required by
 financing activities                       (   89,143)    (   356,079)
                                           -----------     -----------
Net increase (decrease) in cash                124,035     (   103,823)

Cash, beginning of year                        106,569         210,392
                                           -----------     -----------
Cash, end of year                          $   230,604     $   106,569
                                           ===========     ===========
Supplemental cash flow information:
 Cash paid during the year
  for interest                             $     -         $     5,714
                                           ===========     ===========
Non-cash investing and financing
 activities:
   Net book value of assets sold, 
    disposed of or written off             $     -          $   435,510
                                           ===========      ===========

See notes to consolidated financial statements.

                                      F-5
                                
           Fast Food Operators, Inc. And Subsidiaries
           Notes to Consolidated Financial Statements


NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

(A)  Organization and Principles of Consolidation:
       
The Company is engaged in the business of operating retail fast
food restaurants under its trade name, Popeye's Famous Fried
Chicken and Biscuits of New York, in accordance with franchise
agreements. The Company is managed by Integrated Food Systems,
Inc. ("IFS") who has made loans both to and from as well as an
investment in the Company. (See Notes 1D, 3, 5 and 6A).

The consolidated financial statements include the accounts of the
Company's wholly owned subsidiaries, New Jersey Pop Corp., Royal
Foods, Inc., Empire Boulevard, Inc. and 1074 Washington Avenue,
Inc.  All intercompany accounts and transactions have been
eliminated.

At both December 1996 and 1995 the Company was operating six
restaurants.  The Company sold at a gain one restaurant in each
of the second, third and fourth quarters of fiscal 1995.  The
Company also closed one restaurant in February 1995. (See Notes
8 and 10A).

(B)  Inventory:

Inventory consists of food and paper supplies and is valued at
the lower of cost or market on a first-in, first-out basis.

(C)  Depreciation and Amortization:

The cost of property and equipment is depreciated using the
straight-line method at rates adequate to allocate the cost of
applicable assets over their expected useful lives.

Leasehold improvements are amortized over the lesser of the terms
of the related leases or the estimated useful lives of the
assets.

(D)  Intangible Assets:

Franchise fees and deferred option costs incurred in connection
with the acquisition of franchises are amortized on a straight-line
basis over 10 years from the date exercised.  The cost of
unexpired options was charged to expense when they could no
longer be exercised.  (See Notes 3 and 6A).

Deferred lease costs are amortized over the life of the lease.

(E)  Income Taxes:

The Company's consolidated federal income tax return includes all
of its subsidiaries.  The Company accounts for income taxes
pursuant to Financial Accounting Standard No. 109, ("FAS 109"),
adopted in 1993.  The adoption of this standard has had no impact
on the Company's reportable income tax expense or benefit.  (See
Note 9).

The Company is also subject to various state and local corporate
franchise taxes.  Such taxes, not constituting a tax on income,
are included in general and administrative expenses.

                              F-6

(F)  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 thereof and the reported amounts of
revenues and expenses during the reporting period.  Actual
results could differ from those estimates.

(G)  Income (loss) per Common Share:

Income (loss) per common share is computed by dividing such
amount by the weighted average number of common shares
outstanding during each year.

(H)  Fiscal Year:

The Company's fiscal year ends on the last Sunday in December. 
Fiscal 1996 and 1995 comprised 52 weeks and 53 weeks,
respectively.

NOTE 2 -  PROPERTY AND EQUIPMENT
 
Property and equipment at December 29, 1996 consist of the following:


Leasehold improvements               $1,238,027
Kitchen equipment                       934,360
Furniture and fixtures                  251,870
Register system                          77,103
Automobiles                              13,023
                                     ----------
                                      2,514,383
Less: Accumulated depreciation
       and amortization               2,029,608
                                     ----------
Net property and equipment           $  484,775
                                     ==========       

NOTE 3 -  FRANCHISE FEES AND DEVELOPMENT RIGHTS

The Company operates its Popeye's franchises pursuant to
franchise agreements.  The Company had also purchased
nonrefundable options, at $10,000 each, pursuant to a development
agreement, to establish and operate additional franchises within
specified geographical areas.  The franchisor granted the Company
franchise development rights within specified territories and
time periods as defined in the agreement.

At times, the Company and the franchisor had revised the
expiration schedule of the options.  At December 26, 1994, there
were four remaining options, scheduled to expire every six months
from March 1995 through September 1996.  However, as a result of
allowing three prior options to expire unexercised, the Company
was in default of the agreement.  In January 1995, the franchisor
exercised its right to terminate the development agreement and
the remaining four options lost all value.  The Company
accordingly recorded a loss thereon of $40,000 in 1995.
                                
                              F-7
                                
The agreements pertaining to each existing franchise are for a
20-year term.  The Company may, at its option, renew each
expiring franchise for one additional 10-year period for a fee
equal to 50% of the then current franchise fee.  Such renewal fee
is presently $12,500.

The franchise agreements also obligate the Company to pay the
franchisor fees for royalties and advertising. (See Note 6A).

NOTE 4 -  RETURN OF CAPITAL DISTRIBUTIONS

On November 15, 1996, the Company declared a return of capital
distribution of $.01 per share of common stock.  The
distribution, aggregating $89,143, was paid on December 16, 1996
to shareholders of record as of December 2, 1996.

On November 28, 1995, the Company declared a return of capital
distribution of $.025 per share of common stock.  The
distribution, aggregating $222,858, was paid on December 21, 1995
to shareholders of record as of December 11, 1995.

NOTE 5 -  RELATED PARTY TRANSACTIONS

The Company is managed by IFS pursuant to a management and other
related agreements originally entered into in January 1988.  In
December 1990, the Company and IFS conditionally amended the
various agreements between them.  Adoption of the amended
agreements, including a restructuring of the Company's debt and a
conversion of a part thereof to 3,000,000 shares of common stock,
all on a retroactive basis, required the ratification of the
Company's shareholders, which was obtained on June 25, 1992. The
management agreement was further amended effective January 26,
1994 to reduce the annual management fee by $4,000 per restaurant
to $12,000.

The management agreement was subsequently renewed for additional
one-year terms through January 25, 1996, 1997 and 1998; each
renewal provided for a per restaurant fee of $12,000.  However,
the renewal effective January 26, 1996 required a minimum annual
fee of $108,000; the renewal effective January 26, 1997 requires
a minimum annual fee of $96,000.

Management fees were $105,000 in fiscal 1996 and $96,500 in 1995.

At December 26, 1994, the Company owed IFS $536,385.  Such non-interest
bearing advance was repaid in full during fiscal 1995
from the proceeds of various asset sales.  At December 31, 1995,
IFS owed the Company a non-interest bearing advance of $153,010,
which was repaid during the first quarter of 1996.  At December
29, 1996 the Company owes IFS $16,683, for the December
management fee and miscellaneous items.

NOTE 6 -  COMMITMENTS AND CONTINGENCIES

(A)  Franchise Arrangements:

The Company is obligated to pay the franchisor fees for royalties
and advertising, equal to 5% and 3% of gross sales, respectively.

                              F-8

Royalty and advertising fees charged to operations were $267,375
and $162,486 for fiscal 1996 and $329,441 and $201,750 for 1995.

(B)   Operating Lease Commitments:

The Company has lease agreements for store premises expiring at
various dates through June 2007. Of these, one expires in 1997,
two in 1998, one (amended in 1996) in 2002 and one in 2003. (See
Note 10A). Only the lease expiring in 2003 may be extended - for
one ten-year term.  Three of the leases provide for percentage
rent at rates averaging 5% on annual sales in excess of stated
minimums.  One lease requires base rent equal to 15% of sales. 
In addition to monthly rental charges on all the leases, the
Company must pay certain property taxes, insurance and other
expenses.

The Company's lease for its Manhattan restaurant, previously
requiring an annual rental of $180,000 and due to expire on
December 31, 1996, was amended effective August 1, 1996.  The
amendment extended the lease term until December 31, 2002 and
increased the annual rental to $265,000 for the three-year period
ending July 31, 1999 and to $270,000 thereafter.

In February 1995, the Company closed its Bronx location.  (See
Note 8B).

In May, July and November of 1995, the Company sold the Hillside,
East Orange and Teaneck restaurants, respectively.  (See Note
8A).

The Company earns rental income from certain sublease
arrangements.  At December 29, 1996, the Company is a party to
one such lease.

A second sub-lease was terminated on August 1, 1996 when the
Company with the consent of the lessor, assigned its lease for
certain former restaurant premises in Queens, New York to the
sub-lessee.  The Company realized neither gain nor loss on the
assignment, but terminated its liability as lessee.  The Company
had been realizing net monthly income on the property of $1,000.

Minimum future annual rental and sublease payments under the
remaining operating leases are as follows:

     Year        Amount       Sublease      Net
  -----------  ----------     --------  ----------
     1997      $  413,390     $ 10,800  $  402,590
     1998         398,445       10,800     387,645
     1999         359,903       10,800     349,103
     2000         362,820       10,800     352,020
     2001         362,820       10,800     352,020
  2002-2004       498,165       32,400     465,765
  2005-2007       139,755       26,100     113,655
               ----------     --------  ----------
  Totals       $2,535,298     $112,500  $2,422,798
               ==========     ========  ==========    

                                
                              F-9
                                
Rent expense, including minimum, contingent and sublease rentals
for the last two fiscal years consists of the following:

                                 1996          1995
                              ---------      ---------
Minimum rentals               $ 431,238      $ 448,970   
Contingent rentals               94,683        143,116
                              ---------      ---------
                                525,921        592,086
Less: Sublease rentals           46,537         67,149
                              ---------      ---------
                              $ 479,384      $ 524,937
                              =========      =========

(C)  Management Agreement:

Effective April 1, 1996 the Company entered into a management
agreement with an individual (The "Manager") to manage the
operations of its Popeye's Restaurant on Empire Boulevard in
Brooklyn.  The agreement, the initial term of which expires
December 31, 1996 is automatically renewable unless cancelled by
the Company or the Manager, in each case, upon written notice of
30 or 90 days, respectively. If the agreement is terminated by
reason of the Manager's breach or is otherwise terminated by the
Manager for any reason other than a breach by the Company, the
Manager must pay a $10,000 termination fee.  The Manager paid a
$15,000 security deposit upon the commencement of the agreement.

The agreement provides for a monthly management fee to the
Manager equal to the restaurant's cash flow less the greater of
$200 or five percent of such monthly cash flow, calculated
monthly and not cumulatively.  Stated  conversely, the Company
receives the greater of $200 per month or 5% of the restaurant's
monthly cash flow.  Any negative cash flow in any month is borne
by the Manager and the Company still receives the $200 minimum
amount for such month.  The Company earned the minimum $1,800
amount for the nine months the agreement was in effect in fiscal
1996.  The amount retained by the Manager during this period
was $10,686.   

(D)  Litigation:

The Company is the defendant in an action brought in September
1994, by the landlord of the closed Raritan location, which had
been the subject of condemnation proceedings.  The plaintiff
alleged various damages to which the Company denied all
liability.  Subsequent to year-end, this matter was adjudicated
in U.S. District Court and then settled by the parties.  (See
Note 10B).

NOTE 7 -  FAIR VALUE OF FINANCIAL INSTRUMENTS

At December 29, 1996, the Company's financial instruments consist
of cash, due to Integrated Food Systems, Inc. and the litigation
settlement payable. (See Note 10B).  The fair value of these
accounts approximates their carrying value as of such date.

                              F-10
                                
NOTE 8 -  LOSS (GAIN) ON RESTAURANT DISPOSITIONS

(A)  Gain on Sale of Three New Jersey Restaurants;

On May 4, 1995, July 5, 1995 and November 20, 1995, the Company
sold the Hillside, East Orange and Teaneck, New Jersey
restaurants, respectively, for all-cash sales prices of $490,000,
$325,000 and $175,000 plus applicable closing adjustments; the
Company realized respective gains thereon of $274,875, $247,909
and $150,409.  The total book value of the assets sold was
$358,206, including $281,562 of property and equipment, $25,629
of intangibles, $21,633 of security deposits and $29,382 of
inventory and prepayments.

As a result of such sales, the Company's remaining restaurant
operations are all within New York City, of which three are in
Brooklyn, two are in Queens and one is in Manhattan.

(B)  Closing of Bronx Location:

In February 1995, IFS, the Company's management company and the
sub-lessor of the unprofitable Bronx restaurant, advised the
Company it was exercising its termination option provided in the
lease. Such restaurant closed February 22, 1995.  The Company
received a $51,000 credit applied against  its indebtedness to
IFS.  (See Note 5).  The Company lost $37,319 on the closing of
the store attributable to the excess of the unamortized leasehold
improvements over the $51,000 credit.

NOTE 9 -  INCOME TAXES

Due to available net operating tax loss carryforwards in excess
of taxable income for fiscal 1996 and 1995, the Company did not
incur any income taxes in either year.  At December 29, 1996, the
Company has net operating loss and jobs tax credit carryforwards
of approximately $1,544,000 and $91,000, respectively, which
expire in 2009 and 2002.

Under FAS 109, the loss and tax credit carryforwards referred to
above as well as certain other book-tax differences give rise to
deferred tax assets which at December 29, 1996 aggregated
$600,950, all of which was offset by an equivalent valuation
allowance based on an estimated likelihood of realizability of
less than 50%.
Reconciliation of the tax on (benefit from) income (loss) to the
expected tax (benefit) computed by applying the U.S. federal
income tax rate to income (loss) before income taxes is:

                         Percent of Pre-Tax Income (Loss)
                         --------------------------------
                                        1996        1995
                                        ----        ----
Computed expected tax (benefit)       (34.0)         34.0
Benefit from net operating
 tax loss carryforward                    -         (34.0)
Net operating loss, providing
 no federal income tax benefit         34.0           -
                                       -----        -----
                                         -            -  
                                       =====        =====
                                
                              F-11
                                
The tax effects of temporary differences that give rise to
deferred tax assets (before valuation allowances) and deferred
tax liabilities at December 29, 1996, none of which gave rise to
any deferred income tax provision or benefit in either fiscal
1996 or 1995, are as follows:

                                        Assets/Liabilities
       Assets                           ------------------
  Current:
     Litigation settlement payable         $ 43,050
                                           --------
  Total current deferred tax assets          43,050
                                           --------
  Non-current:
     Deferred costs and expenses, net of
      accumulated amortization                4,000
     Net operating loss carryforward        463,300
     Jobs tax credit carryforward            90,600
                                           --------
  Total non-current deferred tax assets     557,900
                                           --------
  Total deferred tax assets                $600,950
                                           ========
       Liabilities
  Non-current,
     Property and equipment, net of
      accumulated depreciation             $    300
                                           ========

For the year ended December 29, 1996, the valuation allowance
decreased by $26,950 to $600,650.  The net deferred tax asset at
December 29, 1996 was therefore $300, all of which was classified
as non-current and was accordingly offset by the non-current
deferred tax liability in the equivalent amount.  

NOTE 10 -SUBSEQUENT EVENTS

(A)  Contract for the Sale of the Hillside, Queens Restaurant:

On January 15, 1997, the Company and an unaffiliated party, who
had previously purchased two of the Company's restaurants and is
also managing one Brooklyn restaurant for the Company, agreed to
terms for the sale of the Company's Hillside Avenue, Queens
Restaurant.  The purchase price for this restaurant, the lease
for which expires on July 31, 1998, is $30,000 plus the usual
closing adjustments for inventory and prepaid/ accrued items. 
The price is subject to increase by a minimum of $50,000 if the
purchaser obtains any extension of the lease.  For extensions of
the lease term in excess of five years, the price is increased by
an additional $10,000 per year to a maximum of $50,000.
Therefore, for an extension of ten years or more, the adjusted
purchase price will be $130,000.  The contract has been approved
by the Company's franchisor and the sale is expected to be
consummated in April 1997.
                                
                              F-12
                                
(B)   Adjudication of Lawsuit and Subsequent Settlement:

In March 1997, the U.S. District Court reached a decision in the
lawsuit brought against the Company by the Host Marriott
Corporation.  Such plaintiff was the landlord for the Raritan,
New Jersey location which the Company had acquired and was
leasing from the plaintiff.  The property had been the subject of
a condemnation suit filed by the New Jersey Department of
Transportation.  The related construction project necessitated
the closing of the restaurant in July 1993.  In January of 1994,
the Company received condemnation proceeds of $399,302 of which
$105,909 comprised attorney fees and related expenses.  The
Company considered the lease to be terminated and as of February
1, 1994 ceased paying rent.  On September 30, 1994, the landlord
brought a lawsuit seeking lost rent, payment for alleged loss of
percentage rent, recovery of the condemnation award paid to the
Company and punitive damages.  In November 1994, the Company
filed an answer denying all liability and asserting various
affirmative defenses, among which was the failure of the
plaintiff to mitigate damages based on their refusal to assign
the lease to another tenant.  In March 1996 the Company, as
defendant, and the plaintiff filed cross motions for summary
judgement.  The matter subsequently proceeded to trial in U.S.
District Court in February 1997.  On March 7, 1997, the Court
decided in favor of the plaintiff and awarded $229,893 plus
reasonable legal fees.

Such result was completely unexpected by the Company and its
counsel. On March 19, 1997, the Company filed a notice of appeal
of the District Court's decision with the U.S. Court of Appeals
for the Third Circuit.  The Company also sought to negotiate a
settlement of the judgement amount with the plaintiff.  On April
9, 1997, such settlement negotiations resulted in the plaintiff
verbally agreeing to accept the Company's offer of $143,500 in
full satisfaction of the judgement amount, provided such payment
is made by April 30, 1997.  The Company has accrued the loss at
December 29, 1996 and for the year then ended in accordance with
Statement of Financial Accounting Standards No. 5, "Accounting
for Contingencies."
       
In order to fund the payment, the Company has obtained a commitment
from a bank to borrow $125,000, with interest at 10%, repayable over
two years.

 
                              F-13

Item 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE
-------   ------------------------------------------------

          Not applicable.
                                
                            PART III
                            --------

Item 9.   DIRECTORS AND EXECUTIVE OFFICERS
-------   --------------------------------

     The following table sets forth information relating to each
of the directors and executive officers of the Company.
                                        
     NAME                AGE       POSITION WITH THE COMPANY 

Lewis E. Topper          47        Director, Chairman of the
                                   Board, President, Chief
                                   Executive Officer, and
                                   Treasurer

Daniel A. Poganski       36        Director and Secretary

Wayne R. Lehrhaupt       49        Director

     Lewis E. Topper has been the President, Treasurer, and a
Director of the Company since January 1988.  Mr. Topper became
the Company's Chairman of the Board and Chief Executive Officer
on October 30, 1989.  Mr. Topper has been the President of IFS
since December 1985.  Mr. Topper is also Chairman of the Board,
Chief Executive Officer, President, Chief Financial Officer,
Chief Accounting Officer, Treasurer and a Director of Fast Food
Systems, Inc. the parent of IFS since November 1990.  Since 1989,
Mr. Topper has also been an officer and a minority stockholder of
numerous corporations which operate Wendy's restaurants.  Mr.
Topper was a partner with the accounting firm of Manton, Topper &
Gilbert from 1979 until December 1985 when he left to join IFS. 
Mr. Topper is a graduate of Baruch College and has been a
Certified Public Accountant since 1977.

     Daniel A. Poganski joined the Company in 1988 as its
Controller.  He has been the Secretary since October 1989 and
Director since January 22, 1990.  From October 1984 to 1986, he
was employed as the Controller of Steve's Ice Cream, Inc.  From
1986 to 1988, he was employed as a Divisional Assistant
Controller by Integrated Resources, Inc., a financial services
company and the parent of IFS prior to November 1990, and in such
capacity was responsible for accounting matters.  Mr. Poganski
has served as the Secretary and Controller of IFS since April
1989 and the Secretary and Assistant Vice President of Fast Food
Systems, Inc. since November 1990 and a Director of such Company
since December 1991. In January of 1996, Mr. Poganski resigned as
a full-time employee of IFS and Fast Food Systems, Inc. He
retained his positions as officer and director and now provides
virtually all management accounting and administrative services
to those entities and to the Company through his own service
company, A & B Accounting Services. He is a Certified Public
Accountant and a graduate of Moorhead State University.

     Wayne R. Lehrhaupt has been a Director of the Company since
January, 1994.  Mr. Lehrhaupt is an attorney at law and has been
a member of the New York Bar since 1974.  He is a graduate of
Queens College and has a J.D. degree from St. John's University. 
Since July 1992, Mr. Lehrhaupt has been counsel to the law firm
of Solovay, Marshall & Edlin in New York, New York.  From 1987
until 1992, he was a partner in the law firm of Litman &
Lehrhaupt, New York, New York.

Item 10.  EXECUTIVE COMPENSATION
--------  ----------------------

     During each of the fiscal years in the three-year period
ended December 29, 1996, the Company did not pay any executive
officers any compensation.  The Company was charged $105,000,
$96,500, and $144,500 by IFS pursuant to the Management Agreement
during fiscal 1996, 1995 and 1994, respectively. The management
agreement has been renewed through January 25, 1998 at an annual
per restaurant fee of $12,000 subject to an annual minimum of
$96,000.  In fiscal 1996, the Company paid fees of $60,000 to Mr.
Poganski's service company, A&B Accounting Services. 

     The Company maintains no employee benefit or stock option
plans, but may in the future adopt pension, profit sharing, stock
option, and other benefit plans.

Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT
--------  ---------------------------------------------------

     The following table sets forth as of April 10, 1997
information regarding the beneficial ownership of Common Stock
(i) by each person known by the Company to be the beneficial
owner of more than 5% of the outstanding Common Stock; (ii) by
each person who is a director or nominee for director; and (iii)
by all directors and executive officers as a group.

Name of Beneficial       Amount and Nature
Owner and Address of     of Beneficial            Percent
Owner of More Than 5%    Ownership                of Class
---------------------    -----------------        --------

Integrated Food
Systems, Inc.            3,000,000 shares (1)      33.7%
42-40 Bell Boulevard
Bayside, New York  11361

Lewis Topper             114,888 shares (1)         1.3%

Lois Schifrin            430,240 shares (2)         4.8%
300 East 56th Street
New York, NY  10022

Toni Wiener              430,240 shares (2)         4.8%
9 Harbor Court East
Roslyn, New York  11576

Bruce Schifrin           430,239 shares (2)         4.8%
16 Rodeo Circle
Syosset, New York  11791

Daniel A. Poganski       31,635 shares (1)          0.3%

Wayne R. Lehrhaupt             --                    --

All directors and executive
directors as a group
(three persons)          146,523 shares (1)         1.6%

------------------------
(Footnotes to table appearing on previous page.)

(1)  Represents 3,000,000 shares of Common Stock issued June 25,
     1992 upon shareholder approval of the 1990 Transactions. 
     See Item 1.  Business - Transactions with IFS.  Lewis
     Topper, the President and a Director of IFS, and the
     Chairman of the Board, Chief Executive Officer, Treasurer
     and a director of Fast Food Systems and Daniel A. Poganski,
     the Secretary, Controller and a Director of IFS and Fast Food
     Systems, each disclaims beneficial ownership of the shares of
     Common Stock owned by IFS.

(2)  Lois Schifrin, Toni Wiener and Bruce Schifrin are siblings. 
     Each has attained his or her majority and disclaims
     beneficial ownership as to any of the shares owned by such
     other persons.

     Except as set forth in the footnotes, none of such shares is
known by the Company to be shares with respect to which the
beneficial owner has the right to acquire beneficial ownership. 
Except as set forth in the footnotes, the Company believes the
beneficial holders listed above have sole voting and investment
power regarding the shares shown as being beneficially owned by
them.

Item 12.  Certain Relationships and Related Transactions
--------  ----------------------------------------------

     The Company is managed by IFS, which has a 33.65% equity
interest in the Company.  See Item 1. Business - Transactions
with IFS, and Item 6.  Management's Discussion and Analysis of
Financial Condition and Results of Operations and Note 5 to the
Consolidated Financial Statements.

     The removal of IFS's designees from the Company's Board of
Directors without IFS's consent and without cause, or the failure
of the stockholders to elect IFS's designees to such position, or
the removal of Lewis Topper or any other designee of IFS without
IFS's consent and without cause from the office of President
constitutes a default under the provisions of the Management
Agreement.

     Daniel A. Poganski, Secretary and Director of the Company
provides management accounting and administrative services to the
Company through his own service company, A&B Accounting Services.  For
the fiscal year ended December 29, 1996, fees for such service aggregated
$60,000.

     Wayne R. Lehrhaupt, a Director of the Company, provides
various legal services to the Company.  For the fiscal year ended
December 29, 1996, fees for such services aggregated $5,663. 
                                
                            PART IV
                            -------

Item 13.  EXHIBITS AND REPORTS ON FORM 8-K     
--------  --------------------------------
(a) (3)   Exhibits
                                
                         EXHIBIT INDEX

3.1   Certificate of Incorporation of the Company and all
      amendments thereto, except for amendment referred to as
      Exhibit 3.2.  (1)

3.2   Amendment, dated as of January 30, 1990, to Certificate of
      Incorporation. (7)

3.3   By-Laws of the Company.  (2)

10.1  Development Agreement, dated as of January 22, 1985,
      between the Company and Popeyes Famous Fried Chicken and
      Biscuits, Inc., together with form of Franchise Agreement. 
      (3)

10.2  Amendment to Development Agreement.  (5)

10.3  Secured Promissory Note, dated as of January 26, 1990,
      from the Company to IFS.  (4)

10.4  Loan Agreement, dated as of January 26, 1988, between the
      Company and IFS.  (4)

10.5  Security Agreement, dated as of January 26, 1988, between
      the Company and IFS.  (4)

10.6  Management Agreement, dated as of January 26, 1988,
      between the Company and IFS.  (4)

10.7  Amendment to Management Agreement, dated as of October 30,
      1989.  (7)

10.8  Amendment to Security Agreement, dated as of October 30,
      1989.  (7)

10.9  Amendment to Loan Agreement, dated as of October 30, 1989. 
      (7)

10.10 Secured Promissory Note, dated as of December 28, 1990,
      from the Company to IFS.  (6)

10.11 Amendment to Loan Agreement, dated as of December 28,
      1990, between the Company and IFS.  (6)

10.12 Amendment to Security Agreement, dated as of December 28,
      1990, between the Company and IFS.  (6)

10.13 Stock Subscription Agreement, dated as of December 28,
      1990, between the Company and IFS.  (6)

10.14 Amendment to Management Agreement, dated as of December
      28, 1990, between the Company and IFS.  (6)

10.15 Omnibus Agreement, dated as of December 28, 1990, between
      the Company and IFS.  (6)

10.16 Amended Secured Promissory Note, dated as of January 26,
      1990, from the Company to IFS.  (6)

10.17 Amendment to Loan Agreement, dated as of January 26, 1990,
      between the Company and IFS.  (6)

10.18 Amendment to Security Agreement, dated as of January 26,
      1990, between the Company and IFS.  (6)

10.19 Amendment to Management Agreement, dated as of January 26,
      1990, between the Company and IFS.  (6)

10.20 Amendment to Loan Agreement, dated as of January 26, 1992,
      from the Company to IFS.  (8)

10.21 Amended Secured Promissory Note, dated as of December 30,
      1991, from the Company to IFS.  (8)

10.22 Amendment to Management Agreement, dated as of January 26,
      1992, between the Company and IFS.  (8)

10.23 Amendment to Development Agreement, dated as of March 9,
      1992, between the Company and Popeyes Famous Fried Chicken
      and Biscuits, Inc.  (8)

10.24 Amendment to Management Agreement, dated as of January 26,
      1993, between the Company  and IFS.  (9)

10.25 Letter notification exercising renewal option for
      restaurant premises at 1307 Teaneck Road, Teaneck, New
      Jersey. (10)

10.26 Lease addendum extending and amending lease for restaurant
      premises at 168-30 Hillside Avenue, Queens, New York. (10)

10.27 Letter notification exercising renewal option for
      restaurant premises at 144-20 Hillside Avenue, Queens, New
      York. (10)

10.28 Letter notification exercising renewal option for
      subleased premises at 87-26 Roosevelt Avenue, Jackson
      Heights, New York. (10)

10.29 Agreement to amend and modify lease for restaurant
      premises at 372 Central Avenue, East Orange, New Jersey.
      (10)

10.30 Lease modification, extension and amendment for restaurant
      premises at 722 Seventh Avenue, New York, New York. (10)

10.31 Lease for restaurant premises at 1126 Eastern Parkway,
      Brooklyn, New York. (10)

10.32 Lease surrender and termination agreement for subleased
      premises at 848 Utica Avenue, Queens, New York. (10)

10.33 Second lease addendum extending and amending lease for
      restaurant premises at 168-30 Hillside Avenue, Queens, New
      York. (10)

10.34 Amendment to Management Agreement, dated as of January 26,
      1994 between the Company and IFS. (10)

10.35 Asset Purchase Agreement, made October 21, 1994 for the
      sale by the Company of the assets located at 168-30
      Hillside Avenue, Jamaica, New York.  (11)

10.36 Assignment and Assumption Agreement, made November 14,
      1994 for the Assignment by the Company of the lease for
      premises at 168-30 Hillside Avenue, Jamaica, New York. 
      (11)

10.37 Transfer and Release Agreement, made on or about November
      14, 1994 for the transfer of the franchise rights for the
      Company's restaurant at 168-30 Hillside Avenue, Jamaica,
      New York.  (11)

10.38 Asset Purchase Agreement, made on or about November 17,
      1994 for the sale by the Company of the assets located at
      1126 Eastern Parkway, Brooklyn, New York.  (11)

10.39 Assignment and Assumption of lease, dated December 5, 1994
      for the Assignment by the Company of the lease for
      premises at 1126 Eastern Parkway, Brooklyn, New York. 
      (11)

10.40 Transfer and Release Agreement made on or about December
      5, 1994 for the transfer of the franchise rights for the
      Company's restaurant at 1126 Eastern Parkway, Brooklyn,
      New York.  (11)

10.41 Notice of Termination dated January 30, 1995 from the
      Franchisor terminating the Development Agreement.  (11)

10.42 Letter dated March 1, 1995 from Fast Food Systems, Inc. to
      the Company detailing the credit to be given to the
      Company for the termination of the sublease at 46-48 161st
      Street, Bronx, New York.  (11)

10.43 Asset Purchase Agreement, dated March 10, 1995, for the
      sale of the Company's restaurant in Hillside New Jersey. 
      (11)

10.44 Amendment to Management Agreement dated as of January 26,
      1995 between the Company and IFS.  (11)

10.45 Asset Purchase Agreement, dated as of June 19, 1995,
      between New Jersey Pop Corp. and S&K Chicken, L.L.C.  (12)

10.46 Letter from Fast Food Operators, Inc. dated July 5, 1995,
      in favor of S&K Chicken, L.L.C.  (12)

10.47 Assignment dated July 1995, by and among 372 Central
      Operating Co., Inc., Trunz Food Stores, Inc., 372 Holding
      Corporation, A&T Management Co., Inc. and Robert Trunz. 
      (12)

10.48 Agreement dated as of July 5, 1995, by and among Fast Food
      Operators, Inc., New Jersey Pop Corp. and S&K Chicken,
      L.L.C.  (12)

10.49 Asset Agreement Relative to the Sale of the Teaneck
      Restaurant.  (13)

10.50 Amendment to Management Agreement dated November 22, 1995. 
      (14)

10.51 Management Agreement for the Company's Restaurant at 40
      Empire Boulevard, Brooklyn, New York.  (15)

10.52 Modification and Extension Agreement for lease of
      restaurant premises at 722 Seventh Avenue, New York, N.Y. 
      (15)

10.53 Assignment of Lease for premises at 97-26 Roosevelt
      Avenue, Queens, New York (15)

10.54 Amendment to Management Agreement dated as of January 26,
      1997.  (15)

10.55 Asset Purchase Agreement, dated January 15, 1997 for the
      sale by the Company of the lease for premises and assets
      located at 144-20 Hillside Avenue, Queens, N.Y.  (15)

22.   List of Subsidiaries. (7)
-------------------------------
(1)   Incorporated by reference to Exhibit "B" of the Company's
      Annual Report on Form 10-K for the year ended December 31,
      1981.

(2)   Incorporated by reference to Exhibit 3.2 of the Company's
      Annual Report on Form 10-K for the year ended December 31,
      1986.

(3)   Incorporated by reference to Exhibit 10 of the Company's
      Annual Report on Form 10-K for the year ended December 31,
      1984.

(4)   Incorporated by reference to the Exhibits to the Company's
      Current Report on Form 8-K, dated February 5, 1988.

(5)   Incorporated by reference to Exhibit 10.2 to the Company's
      Annual Report on Form 10-K for the fiscal year ended
      December 31, 1987.

(6)   Incorporated by reference to the Exhibits to the Company's
      Current Report on Form 8-K, dated January 4, 1991.

(7)   Incorporated by reference to Exhibit 22 to the Company's
      Annual Report on Form 10-K for the fiscal year ended
      December 30, 1990.

(8)   Incorporated by reference to Exhibits 10.20 through 10.23
      to the Company's Annual Report on Form 10-K for the fiscal
      year ended December 29, 1991.

(9)   Incorporated by reference to Exhibit 10.24 to the
      Company's Annual Report on Form 10-K for the fiscal year
      ended December 27, 1992.

(10)  Incorporated by reference to Exhibits 10.25 through 10.34
      to the Company's Annual Report on Form 10-K for the fiscal
      year ended December 26, 1993.

(11)  Incorporated by reference to Exhibits 10.35 through 10.44
      to the Company's Annual Report on Form 10-K for the fiscal
      year ended December 25, 1994.

(12)  Incorporated by reference to the Exhibits to the Company's
      Current Report on Form 8-K dated July 5, 1995.

(13)  Incorporated by reference to the Exhibits to the Company's
      Current Report on Form 8-K dated November 20, 1995.

(14)  Incorporated by reference to Exhibit 10.50 to the
      Company's Annual Report on Form 10-K for the fiscal year
      ended December 31, 1995.

(15)  Filed herewith.

(b)       Reports on Form 8-K
          -------------------
          None.
                                
                           SIGNATURES
                           ----------

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

                              FAST FOOD OPERATORS, INC.
                                   (Registrant)


                         By /s/ Lewis E. Topper                   
                    
                            ----------------------------------   
                              Lewis E. Topper
                              Chairman of the Board,
                              President, Chief Executive
                              Officer, Treasurer and Director

Date: April 14, 1997


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

      Signature                              Title

      /s/ Lewis Topper                  Chairman of the
      ----------------
          Lewis Topper                  Board, President,
      Date:    April 14, 1997           Chief Executive
                                        Officer, Treasurer,
                                        (Principal Financial
                                        Officer and Principal
                                        Accounting Officer),
                                        and Director


      /s/ Daniel A. Poganski            Director and Secretary
      ----------------------
          Daniel A. Poganski
      Date:    April 14, 1997


      /s/ Wayne R. Lehrhaupt            Director
      ----------------------
          Wayne R. Lehrhaupt  
      Date:    April 14, 1997

     The foregoing constitute all of the Board of Directors.