##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K/A
 (Amendment No. 2)
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number:
    0000-23278
      BRAZIL FAST FOOD
    CORP.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

13-3688737(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   Rua Voluntários da Pátria 89,
    9o
    andar
 Botafogo, CEP 22.270-010, Rio de Janeiro, Brazil
 (Address of principal executive
    offices)
  Registrants telephone number, including area code:
    55 21
    2536-7500
      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 $.0001 per share (Title of Class)
      o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated
filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 



Explanatory
Note
   TABLE OF
    CONTENTS









|                                               |          |  |  |                                                                                                                        |  |  |    | 
|---------------------------------------------- | -------- |  |  | ---------------------------------------------------------------------------------------------------------------------- |  |  | -- | 
|                                               | PART I   |  |  |                                                                                                                        |  |  | 2  | 
|                                               | ITEM 1.  |  |  | BUSINESS                                                                                                               |  |  | 2  | 
|                                               | ITEM 1A. |  |  | RISK FACTORS                                                                                                           |  |  | 8  | 
|                                               | ITEM 1B. |  |  | UNRESOLVED STAFF COMMENTS                                                                                              |  |  | 11 | 
|                                               | ITEM 2.  |  |  | PROPERTIES                                                                                                             |  |  | 11 | 
|                                               | ITEM 3.  |  |  | LEGAL PROCEEDINGS                                                                                                      |  |  | 11 | 
|                                               | ITEM 4.  |  |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS                                                                |  |  | 12 | 
|                                               |          |  |  |                                                                                                                        |  |  |    | 
|                                               |          |  |  |                                                                                                                        |  |  |    | 
|                                               | PART II  |  |  |                                                                                                                        |  |  | 13 | 
|                                               | ITEM 5.  |  |  | MARKET FOR REGISTRANTS COMMON STOCK AND
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES |  |  | 13 | 
|                                               | ITEM 6.  |  |  | SELECTED CONSOLIDATED HISTORICAL FINANCIAL
    DATA                                                                    |  |  | 15 | 
|                                               | ITEM 7.  |  |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS                              |  |  | 16 | 
|                                               | ITEM 7A. |  |  | QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT
    MARKET RISK                                                         |  |  | 32 | 
|                                               | ITEM 8.  |  |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY
    DATA                                                                        |  |  | 32 | 
|                                               | ITEM 9.  |  |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
    ON ACCOUNTING AND FINANCIAL DISCLOSURE                               |  |  | 46 | 
|                                               | ITEM 9A. |  |  | CONTROLS AND PROCEDURES                                                                                                |  |  | 46 | 
|                                               | ITEM 9B. |  |  | OTHER INFORMATION                                                                                                      |  |  | 47 | 
|                                               |          |  |  |                                                                                                                        |  |  |    | 
|                                               |          |  |  |                                                                                                                        |  |  |    | 
|                                               | PART III |  |  |                                                                                                                        |  |  | 47 | 
|                                               | ITEM 10. |  |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE
    REGISTRANT                                                                 |  |  | 47 | 
|                                               | ITEM 11. |  |  | EXECUTIVE COMPENSATION                                                                                                 |  |  | 47 | 
|                                               | ITEM 12. |  |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
    OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                     |  |  | 47 | 
|                                               | ITEM 13. |  |  | CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS                                                                     |  |  | 48 | 
|                                               | ITEM 14. |  |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                 |  |  | 48 | 
|                                               |          |  |  |                                                                                                                        |  |  |    | 
|                                               | PART IV  |  |  |                                                                                                                        |  |  | 48 | 
|                                               | ITEM 15. |  |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
    REPORTS ON FORM 8-K                                                    |  |  | 48 | 
|EX-31.1 Section 302 Certification of CEO & CFO
|EX-32.1 Section 906 Certification of CEO & CFO





ii



---



##### Table of Contents



Unless otherwise specified, all references in this report to
    Reais, the Real or R$ are to
    the Brazilian Real (singular), or to the Brazilian Reais
    (plural), the legal currency of Brazil, and
    U.S. Dollars or $ are to United
    States Dollars. Unless otherwise specified, all financial
    statements and other financial information presented herein are
    stated in R$ and are in accordance with generally accepted
    accounting principles in the United States (U.S. GAAP).
 PART I  ITEM 1.
    BUSINESS  (a)
    GENERAL
    DEVELOPMENT OF BUSINESS      o 2536-7500.
  Recent
    Developments
        (b)
    FINANCIAL
    INFORMATION ABOUT INDUSTRY SEGMENTS   2




---



##### Table of Contents



(c)
    NARRATIVE
    DESCRIPTION OF BUSINESS  Restaurant
    Operations
  Bobs
    Brand
    and/or
        Years Ended December 31,2007


2006


2005Stores


Kiosks


Stores


Kiosks


Stores


KiosksOwned and operated restaurants:Opened during period


1



3



0



3



0



4Closed during period


1



2



5



2



1



0Sold to franchisees


3



2



0



0



0



0Bought from franchisees


1



0



0



0



1



0Open at end of period


42



16



44



17



49



16Franchised restaurants:Opened during period


30



56



40



43



36



48Closed during period


17



7



7



6



13



5Sold to us by our franchisees


1



0



0



0



1



0Bought from us by our franchisees


3



2



0



0



0



0Open at end of period


307



215



292



164



259



127Total stores & kiosks at end of period:


349



231



336



181



308



143  3




---



##### Table of Contents



KFC
    Brand
    Growth
    Strategy
           4




---



##### Table of Contents



Franchise
    Program
    10-year
  one-day
         5




---



##### Table of Contents



Advertising
    and Promotions
    15-day
        Sources
    of Supply
   6




---



##### Table of Contents



Coca-Cola, Coca-Cola
  Trademarks
      Trademark or Service Mark

Expiration DateBobs Double Cheeseburger

September 8th, 2009Big Bob

January 5th, 2012Bobs

June 5th, 2012Franfilé

March 24th, 2013       Competition
     7




---



##### Table of Contents



Employees
    city-by-city
  Availability
    of Reports and Other Information
  Form 10-K, Form 10-Q, Form 8-K, o
  ITEM 1A.
    RISK
    FACTORS  FORWARD
    LOOKING STATEMENTS
   8




---



##### Table of Contents



Risks
    Relating to Our Operations
  Our
    success depends on our ability to efficiently compete in the
    food service industry.
    Our
    future success is dependent upon the success and expansion of
    our franchise program.
    We are
    subject to extensive regulatory requirements applicable to the
    food service industry.
    Risks
    Relating to Brazil
  Our
    business are subject to changes in Brazils
    economy.
   9




---



##### Table of Contents



Our
    business may be affected by political and constitutional
    uncertainty in Brazil.
    Controls
    on foreign investments may limit our ability to receive capital
    from our Brazilian operating subsidiary.
    Risks
    Related to Our Common Stock
  Our
    common stock has been delisted from The Nasdaq SmallCap
    Market.
      Risks
    Related to Past Due Fiscal Obligations of VENDEX
  Past
    due fiscal obligations of VENDEX.
       10




---



##### Table of Contents



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES      ITEM 3.
    LEGAL
    PROCEEDINGS    
    Value
    Added State Tax  ICMS    
    Services
    Municipal Tax  ISS   11




---



##### Table of Contents




    Franchisees    
    Operational
    Leases    
    Labor
    Contingencies    
    Public
    Civil Actions          ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   12




---



##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Information
    Common StockThree Months Ended

High


LowMarch 30, 2007

$
5.50


$
4.10June 29, 2007


5.85



4.51September 28, 2007


8.00



5.30December 31, 2007


7.77



6.00March 31, 2006

$
1.85


$
1.35June 30, 2006


4.85



1.70September 29, 2006


3.20



2.45December 29, 2006


5.50



2.60   Holders
    Dividends
      Equity
    Compensation Plans
    Form S-8 No. 333-133981,
 13




---



##### Table of Contents



EQUITY
    COMPENSATION PLAN INFORMATION
  Remaining AvailableSecurities to be





for Future IssuanceIssued Upon





Under EquityExercise of


Weighted-Average


Compensation PlansOutstanding


Exercise Price of


(ExcludingOptions, Warrants


Outstanding


Securitiesand Rights


Options, Warrants


Reflected in ColumnPlan Category

(a)


and Rights


(a)(c)Equity compensation plans approved by security holders


68,750


$
1.22



Total


68,750


$
1.22



  14




---



##### Table of Contents



ITEM 6.
    SELECTED
    CONSOLIDATED HISTORICAL FINANCIAL DATA    Year Ended December 31,2007


2006


2005


2004


2003R$ 000REVENUESNet Revenues from Own-operated Restaurants

R$
85,904


R$
80,931


R$
75,559


R$
65,338


R$
60,466Net Revenues from Franchisees


18,811



16,385



11,963



8,035



6,663Revenues from Supply Agreements


6,673



6,059



3,655



3,949



2,503Other Income


3,056



2,953



1,283



(3,541
)


(5,595
)TOTAL REVENUES


114,444



106,328



92,460



73,781



64,037OPERATING COST AND EXPENSESStore Costs and Expenses


(83,349
)


(74,689
)


(68,384
)


(60,653
)


(57,296
)Franchise Costs and Expenses


(3,623
)


(3,176
)


(2,144
)


(1,916
)


(2,150
)Marketing Expenses


(2,082
)


(4,018
)


(2,453
)


342



(659
)Administrative Expenses


(13,430
)


(11,333
)


(9,192
)


(7,828
)


(6,520
)Other Operating Expenses


(2,945
)


(4,213
)


(3,848
)


445



2,053Net result of assets sold


842



145



(52
)


432



48Impairment of assets






(180
)


(148
)






(204
)TOTAL OPERATING COST AND EXPENSES


(104,587
)


(97,464
)


(86,221
)


(69,178
)


(64,728
)OPERATING INCOME


9,857



8,864



6,239



4,603



(691
)Interest Expense, net


(697
)


(623
)


537



(3,151
)


(3,017
)Foreign Exchage and Monetary Restatement Loss






(42
)


(84
)


(252
)


(410
)NET INCOME BEFORE INCOME TAX


9,160



8,199



6,692



1,200



(4,118
)Income taxes  deferred


4,343



4,543











Income taxes  current


(46
)


(2,808
)


(2,248
)


(599
)


NET INCOME

R$
13,457


R$
9,934


R$
4,444


R$
601


R$
(4,118
)NET INCOME PER COMMON SHARE BASIC AND DILUTED

R$
1.65


R$
1.22


R$
0.55


R$
0.07


R$
(0.51
)WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:BASIC AND DILUTED


8,169,496



8,137,291



8,061,317



8,061,317



8,061,317Balance Sheet Data (End of Period):WORKING CAPITAL (DEFICIT)


5,577



(3,543
)


(4,371
)


(5,235
)


(5,882
)TOTAL ASSETS


61,742



46,843



38,070



37,859



35,805ACCUMULATED DEFICIT


(35,296
)


(48,753
)


(58,687
)


(63,131
)


(63,732
)TOTAL SHAREHOLDERS EQUITY (DEFICIT)


23,519



10,278



34



(4,192
)


(5,103
)  15




---



##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    Background
    Brazilian
    Political Environment
        Brazilian
    Economic Environment
       16




---



##### Table of Contents



Year Ended December 31,2007


2006


2005


2004


2003


2002


2001


2000GDP(1)


5.4
%


3.8
%


3.2
%


5.7
%


1.1
%


2.7
%


1.3
%


4.3
%Inflation(2)


4.5
%


3.1
%


5.7
%


7.6
%


9.3
%


12.5
%


7.7
%


6.0
%Interest Rates(3)


11.2
%


13.2
%


18.1
%


17.8
%


16.3
%


24.9
%


19.1
%


15.8
%Exchange Rates(4)


17.2
%


8.7
%


11.8
%


8.1
%


18.2
%


(52.3
)%


(18.7
)%


(9.3
)%     (1)
    
    GDP calculation were revised by the IBGE  Brazilian
    Institute of Geography and Statistics in 2007(2)
    
    Inflation as measured by IPCA  Broad Consumers Price
    Index(3)
    
    Nominal Interest Rates (p.a.) as measured by the average
    interest rate (SELIC) in daily transactions with federal
    government bond(4)
    
    Devaluation/Revaluation of the Brazilian (R$) currency against
    U.S. Dollar ($)    OUR
    BUSINESS
       17




---



##### Table of Contents



RESULTS
    OF OPERATIONS
      12 Months





12 Months





12 MonthsEnded





Ended





Ended31-Dec-07


%


31-Dec-06


%


31-Dec-05


%R$ 000REVENUESNet Revenues from Own-operated Restaurants

R$
85,904



75.1
%

R$
80,931



76.1
%

R$
75,559



81.7
%Net Revenues from Franchisees


18,811



16.4
%


16,385



15.4
%


11,963



12.9
%Revenues from Supply Agreements


6,673



5.8
%


6,059



5.7
%


3,655



4.0
%Other Income


3,056



2.7
%


2,953



2.8
%


1,283



1.4
%TOTAL REVENUES


114,444



100.0
%


106,328



100.0
%


92,460



100.0
%OPERATING COST AND EXPENSESStore Costs and Expenses


(83,349
)


(72.8
)%


(74,689
)


(70.2
)%


(68,384
)


(74.0
)%Franchise Costs and Expenses


(3,623
)


(3.2
)%


(3,176
)


(3.0
)%


(2,144
)


(2.3
)%Marketing Expenses


(2,082
)


(1.8
)%


(4,018
)


(3.8
)%


(2,453
)


(2.7
)%Administrative Expenses


(13,430
)


(11.7
)%


(11,333
)


(10.7
)%


(9,192
)


(9.9
)%Other Operating Expenses


(2,945
)


(2.6
)%


(4,213
)


(4.0
)%


(3,848
)


(4.2
)%Net result of assets sold


842



0.7
%


145



0.1
%


(52
)


(0.1
)%Impairment of assets






0.0
%


(180
)


(0.2
)%


(148
)


(0.2
)%TOTAL OPERATING COST AND EXPENSES


(104,587
)


(91.4
)%


(97,464
)


(91.7
)%


(86,221
)


(93.3
)%OPERATING INCOME


9,857



8.6
%


8,864



8.3
%


6,239



6.7
%Interest Expense, net


(697
)


(0.6
)%


(623
)


(0.6
)%


537



0.6
%Foreign Exchage and Monetary Restatement Loss






0.0
%


(42
)


0.0
%


(84
)


(0.1
)%NET INCOME (LOSS) BEFORE INCOME TAX


9,160



8.0
%


8,199



7.7
%


6,692



7.2
%Income taxes  deferred


4,343



5.1
%


4,543



5.6
%






0.0
%Income taxes  current


(46
)


(0.1
)%


(2,808
)


(3.5
)%


(2,248
)


(3.0
)%NET INCOME


13,457



15.7
%


9,934



12.3
%


4,444



5.9
%   Introduction
  Pan-American Pan-American
 18




---



##### Table of Contents



Net
    Revenues from Own-Operated Restaurants
      Pan-American Pan-American
    Net
    Franchise Revenues
    12 Months EndedDecember, 312007


2006


2005R$ 000Net Franchise Royalty Fees


16,205



13,638



10,167Initial Fee


2,606



2,747



1,796Net Franchise Revenues


18,811



16,385



11,963      19




---



##### Table of Contents



Revenue
    from Supply Agreements and Other Income
        Store
    Costs and Expenses
      12 Months





12 Months





12 MonthsEnded





Ended





Ended31-Dec-07


%


31-Dec-06


%


31-Dec-05R$ 000STORE RESULTSNet Revenues from Own-operated Restaurants


85,904



100.0
%


80,931



100.0
%


75,559



100.0
%Store Costs and ExpensesFood, Beverage and Packaging


(31,334
)


(36.5
)%


(30,240
)


(37.4
)%


(28,306
)


(37.5
)%Payroll & Related Benefits


(22,807
)


(26.5
)%


(19,447
)


(24.0
)%


(17,094
)


(22.6
)%Restaurant Occupancy


(10,107
)


(11.8
)%


(9,311
)


(11.5
)%


(8,926
)


(11.8
)%Contracted Services


(11,681
)


(13.6
)%


(9,523
)


(11.8
)%


(8,624
)


(11.4
)%Depreciation and Amortization


(2,416
)


(2.8
)%


(2,319
)


(2.9
)%


(2,194
)


(2.9
)%Other Store Costs and Expenses


(5,004
)


(5.8
)%


(3,849
)


(4.8
)%


(3,240
)


(4.3
)%Total Store Costs and Expenses


(83,349
)


(97.0
)%


(74,689
)


(92.3
)%


(68,384
)


(90.5
)%STORE OPERATING INCOME


2,555



3.0
%


6,242



7.7
%


7,175



9.5
%   Food,
    Beverage and Packaging Costs
       20




---



##### Table of Contents



Payroll &
    Related Benefits
    Pan-American Pan-American
    Restaurant
    Occupancy Costs
      Contracted
    Services
    Pan-American Pan-American
      Depreciation
    and Amortization
     21




---



##### Table of Contents



Other
    Store Costs and Expenses
        Franchise
    Costs and Expenses
      12 Months





12 Months





12 MonthsEnded





Ended





Ended31-Dec-07


%


31-Dec-06


%


31-Dec-05


%R$ 000FRANCHISE RESULTSNet Revenues from Franchisees


18,811



100.0
%


16,385



100.0
%


11,963



100.0
%Franchise Costs and Expenses


(3,623
)


(19.3
)%


(3,176
)


(19.4
)%


(2,144
)


(17.9
)%FRANCHISE OPERATING INCOME


15,188



80.7
%


13,209



80.6
%


9,819



82.1
%         Marketing,
    General and Administrative and Other Expenses
  Marketing
    expenses
       22




---



##### Table of Contents



Administrative
    Expenses
         23




---



##### Table of Contents



Other
    Operating Expenses
    December 31,2007


2006


2005R$ 000Uncollectable receivables


(1,288
)


(482
)


(2,470
)Reassessed tax and other tax adjustments


424



(701
)


1,552Accruals for contingencies


215



(936
)


(1,482
)Depreciation of Headquarters fixed assets


(833
)


(626
)


(1,158
)Professional fees for tax consulting


(1,793
)


(1,175
)


Preopening and other (expenses) income


330



(293
)


(290
)R$
(2,945
)

R$
(4,213
)

R$
(3,848
)         Impairment
    of Assets and Net Result of Assets Sold
      INTEREST
    EXPENSES AND FOREIGN EXCHANGE GAIN (LOSS)
  Interest
    Expenses
        Foreign
    Exchange and Monetary Restatement Gain (Loss)
  and/or
 24




---



##### Table of Contents



INCOME
    TAXES
            A)
    Introduction           25




---



##### Table of Contents



B)
    Debt
    Obligation  financial institutions    December 31,


December 31,2007


2006R$ 000Revolving lines of credit(a)

R$
3,242


R$
Leasing Facilities(b)


1,729



4,971



Less: current portion


(4,010
)


R$
961


R$
     R$ 0002008

R$
4,0102009


7682010


192R$
4,971     (a)
    
    Due on demand from two Brazilian financial institutions with
    interest rates of approximately 17.0% and guaranteed by certain
    officers and receivables.(b)
    
    Comprised of various lease facilities with Brazilian private
    institutions for the funding of store equipment; payable in
    27 monthly payments, together with interests range from
    12.9% per annum to 14.3% per annum;  C)
    Debt
    Obligation  taxes        
    Tax on Products and Services Circulation, a value added state
    tax  ICMS    
    Federal Taxes and Social Security penalties  PAES   26




---



##### Table of Contents



D)
    Debt
    Obligation  summary of tax debts    E)
    Other
    Obligations      ContractualFiscal Year

LeasesR$ 0002008


4,1072009


3,2702010


2,4662011


1,9492012


891Thereafter


565Total


13,248      27




---



##### Table of Contents



ContractualFiscal Year

Leases


Financial Debt


Fiscal Debt


TotalR$ 0002008


4,107



4,010



1,696



9,8132009


3,270



768



1,069



5,1072010


2,466



192



1,069



3,7272011


1,949







1,069



3,0182012


891







1,069



1,960Thereafter


565







6,411



6,976Total


13,248



4,971



12,383



30,602       
    the expansion of Companys franchisee base, which may be
    expected to generate additional cash flows from royalties and
    franchise initial fees without significant capital expenditures;
    the improvement of food preparation methods in all stores to
    increase the operational margin of the chain, including
    acquiring new stores equipment and hiring a consultancy
    firm for stores personnel training program;
    the continuing of motivational programs and menu expansions to
    meet consumer needs and wishes;
    the improvement and upgrade of our IT system
    the negotiation with suppliers in order to obtain significant
    agreements in long term supply contracts; and
    the renegotiation of past due receivables with franchisees. 28




---



##### Table of Contents



CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
    and/or
  Constant
    currency restatement
    Foreign
    currency
    Accounts
    receivable
        Long-Lived
    Assets
   29




---



##### Table of Contents



Revenue
    recognition
          Marketing
    fund and expenses
              Income
    taxes
   30




---



##### Table of Contents



Stock
    options
      Share-Based Payment
  NEW
    ACCOUNTING STANDARDS
  Share-Based Payment
       31




---



##### Table of Contents



SFAS No. 160,
  OFF-BALANCE
    SHEET ARRANGEMENTS
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE INFORMATION ABOUT MARKET RISK      ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  page F-1 Form 10-K. page F-2 Form 10-K,
 32




---



##### Table of Contents



MANAGEMENT
    ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL
    REPORTING
  1.
    INTRODUCTION                 33




---



##### Table of Contents



2.
    BFFCS
    ACTIVITIES        3.
    ORGANIZATIONAL
    CHARTS    4.
    PROCESSES
    THAT INFLUENCE THE ACCOUNTING AND FINANCIAL STATUS  4.1
    STORES  4.1.1
    Supplies     34




---



##### Table of Contents



4.1.2
    Inventories    4.1.3
    Consumption
    of products sold    4.1.4
    Waste    4.1.5
    Human
    Resources    4.1.6
    Other
    expenses    4.1.7
    Sales   35




---



##### Table of Contents



4.1.8
    Sales
    Costs        4.1.9
    Manuals
    and other controls    4.1.10
    MOMIX    4.2
    SUPPORT
    TO THE CHAIN AND FRANCHISEES  4.2.1
    Supplies   36




---



##### Table of Contents



4.2.2
    Human
    Resources    4.2.3
    Rents and
    public bills    4.2.4
    Other
    expenses    4.2.5
    Revenues
    from Franchise Application Fees and Royalties  10-year-old
  and/or
  4.2.6
    Marketing
    Fund   37




---



##### Table of Contents



4.2.7
    Other
    expenses    5.
    REVIEW OF
    THE PAST FINANCIAL YEARS SINCE 2002 AND OF 2007 IN
    SPECIAL  5.1
    INTRODUCTION    (a)
    STORES
    INFORMATION SYSTEM       38




---



##### Table of Contents



(b)
    CENTRAL
    IT SYSTEMS AND ACCOUNTING    back-ups
    (c)
    EXPENSES
    CONTROL     39




---



##### Table of Contents



(d)
    REVENUE
    CONTROLS  (d)1
    STORES       40




---



##### Table of Contents



(d)2
    FRANCHISES      th th
   41




---



##### Table of Contents



(e)
    CHAIN
    EXPANSION          (f)
    OPERATION    (g)
    TRAINING   42




---



##### Table of Contents



(h)
    HUMAN
    RESOURCES            (i)
    SUPPLIES       43




---



##### Table of Contents



6.
    CONCLUSIONS             44




---



##### Table of Contents



45




---



##### Table of Contents



THE
    MANAGEMENT
  ORGANIZATIONAL CHARTS
  
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Rules 13a-15(e) 15d-15(e),
   46




---



##### Table of Contents



ITEM 9B.
    OTHER
    INFORMATION          2007#of Shares


R$ 0001st quarter






2nd quarter


23,194



2353rd quarter






4th quarter


1,361



1724,555



252  PART III  ITEM 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT    ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS   47




---



##### Table of Contents



ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES    page F-1
    Form 8-K
     ExhibitIndex

Description3
.1

Certificate of Incorporation of the Registrant, as amended(1)3
.2

By-laws of the Registrant(2)10
.1

Amended and Restated 1992 Stock Option Plan(2)10
.2

Capitalization and Administrative Restructuring Intentions
    Protocol dated May 15, 2002 by and among Brazil Fast Food
    Corp., Gustavo Figueredo Bomeny, CCC Emprendimentos e
    Participacoes Ltda., BigBurger Ltda., Jose Ricardo Bousquet
    Bomeny, Omar Carneiro da Cunha, Seaview Venture Group, Peter van
    Voorst Vader and Shampi Investments A.E.C.(3)21
.1

Subsidiaries of Registrant(4)24
.1

Power of Attorney (comprises a portion of the signature page of
    this report)31
.1*

Certification by Ricardo Figueiredo Bomeny, Chief Executive
    Officer and Acting Chief Financial Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1*

Certification by Ricardo Figueiredo Bomeny, Chief Executive
    Officer and Acting Chief Financial Officer, pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Filed herewith.(1)
    
    Filed as an exhibit to Registrants Registration Statement
    on
    Form S-1
    (File
    No. 333-3754).(2)
    
    Filed as an exhibit to Registrants Registration Statement
    on
    Form S-1
    (File
    No. 33-71368).(3)
    
    Filed as an exhibit to Registrants Current Report on
    Form 8-K,
    dated May 15, 2002(4)
    
    Filed as an exhibit to Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 1997 (File
    No. 0-23278). 48




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  INDEX TO
    FINANCIAL STATEMENTS
  PageReport Of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets


F-3Consolidated Income Statements


F-4Consolidated Statements of Comprehensive
    Income


F-5Consolidated Statements of Changes in
    Shareholders Equity


F-6Consolidated Statements of Cash Flows


F-7Notes to Consolidated Financial Statements


F-8  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            BDO
    Trevisan Auditores Independentes
    F-2




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(In thousands of Brazilian Reais, except share amounts)CURRENT ASSETS:Cash and cash equivalents (note 3)

R$
7,345


R$
3,810Inventories


3,278



2,187Accounts receivable (note 4)


8,617



7,312Prepaid expenses


1,401



814Other current assets (note 5)


2,267



1,690TOTAL CURRENT ASSETS


22,908



15,813Property and equipment, net (note 6)


19,536



17,454Deferred charges, net (note 7)


4,567



4,554Deferred tax asset (note 11)


8,886



4,543Other receivables and other assets (note 5)


5,845



4,479TOTAL ASSETS

R$
61,742


R$
46,843LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Notes payable (note 8)

R$
4,010


R$
Accounts payable and accrued expenses (note 9)


6,606



10,714Payroll and related accruals


2,924



2,826Income taxes accruals






331Taxes, other than income taxes


1,069



980Current portion of deferred income (note 12b)


956



986Current portion of contingencies and reassessed taxes
    (note 12c)


1,696



3,253Other current liabilities


70



266TOTAL CURRENT LIABILITIES


17,331



19,356Deferred income, less current portion (note 12b)


4,626



1,064Notes payable, less current portion (note 8)


961



Contingencies and reassessed taxes, less current portion
    (note 12c)


15,305



16,145TOTAL LIABILITIES


38,223



36,565SHAREHOLDERS EQUITY:Preferred stock, $.01 par value, 5,000 shares
    authorized; no shares issued






Common stock, $.0001 par value, 12,500,000 shares
    authorized; 8,404,177 and 8,384,177 shares issued;
    8,177,687 and 8,182,242 shares outstanding


1



1Additional paid-in capital


60,988



60,818Treasury Stock (226,490 and 201,935 shares)


(1,060
)


(808
)Accumulated Deficit


(35,296
)


(48,753
)Accumulated comprehensive loss


(1,114
)


(980
)TOTAL SHAREHOLDERS EQUITY


23,519



10,278TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

R$
61,742


R$
46,843    F-3




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  CONSOLIDATED INCOME STATEMENTS
   Year Ended December 31,2007


2006


2005(In thousands of Brazilian Reais,except share amounts)REVENUESNet Revenues from Own-operated Restaurants

R$
85,904


R$
80,931


R$
75,559Net Revenues from Franchisees


18,811



16,385



11,963Revenues from Supply Agreements


6,673



6,059



3,655Other Income


3,056



2,953



1,283TOTAL REVENUES


114,444



106,328



92,460OPERATING COST AND EXPENSESStore Costs and Expenses (note 17)


(83,349
)


(74,689
)


(68,384
)Franchise Costs and Expenses


(3,623
)


(3,176
)


(2,144
)Marketing Expenses


(2,082
)


(4,018
)


(2,453
)Administrative Expenses


(13,430
)


(11,333
)


(9,192
)Other Operating Expenses (note 14)


(2,945
)


(4,213
)


(3,848
)Net result of assets sold


842



145



(52
)Impairment of assets






(180
)


(148
)TOTAL OPERATING COST AND EXPENSES


(104,587
)


(97,464
)


(86,221
)OPERATING INCOME


9,857



8,864



6,239Interest Expense, net


(697
)


(623
)


537Foreign Exchage and Monetary Restatement Loss






(42
)


(84
)NET INCOME BEFORE INCOME TAX


9,160



8,199



6,692Income taxes  deferred (note 11)


4,343



4,543



Income taxes  current (note 11)


(46
)


(2,808
)


(2,248
)NET INCOME

R$
13,457


R$
9,934


R$
4,444NET INCOME PER COMMON SHARE 
    BASIC AND DILUTED

R$
1.65


R$
1.22


R$
0.55WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:BASIC AND DILUTED


8,169,766



8,137,291



8,061,317    F-4




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF COMPREHENSIVE
    INCOME
  Year Ended December 31,2007


2006


2005(In thousands of Brazilian Reais)Net Income

R$
13.457


R$
9.934


R$
4.444Other comprehensive loss:Foreign currency translation adjustment


(134
)


(33
)


(20
)Comprehensive Income

R$
13.323


R$
9.901


R$
4.424    F-5




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
  Additional








AccumulatedCommon Stock


Paid-In


Treasury


Accumulated


ComprehensiveShares


Par Value


Capital


Stock


Deficit


Loss


Total(In thousands of Brazilian Reais)Balance, December 31, 2004


8.102.177


R$
1


R$
59.865


R$



R$
(63.131
)

R$
(927
)

R$
(4.192
)Exercise of options


26.250







18















18Acquisition of Companys own shares


(101.900
)










(216
)










(216
)Net income


















4.444







4.444Cumulative translation adjustment






















(20
)


(20
)Balance, December 31, 2005


8.026.527


R$
1


R$
59.883


R$
(216
)

R$
(58.687
)

R$
(947
)

R$
34Exercise of options


255.750







935















935Acquisition of Companys own shares


(100.035
)










(592
)










(592
)Net Income


















9.934







9.934Cumulative translation adjustment






















(33
)


(33
)Balance, December 31, 2006


8.182.242


R$
1


R$
60.818


R$
(808
)

R$
(48.753
)

R$
(980
)

R$
10.278Exercise of options


10.000







35















35Shares granted


10.000







135















135Net Income


















13.457







13.457Acquisition of Companys own shares


(24.555
)










(252
)










(252
)Cumulative translation adjustment






















(134
)


(134
)Balance, December 31, 2007


8.177.687


R$
1


R$
60.988


R$
(1.060
)

R$
(35.296
)

R$
(1.114
)

R$
23.519    F-6




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2007


2006


2005(In thousands of Brazilian Reais)CASH FLOW FROM OPERATING ACTIVITIES:Net Income

R$
13,457


R$
9,934


R$
4,444Adjustments to reconcile net income to cash provided by
    operating activities:Depreciation and amortization


3,249



2,945



3,352(Gain) Loss on assets sold and impairment of assets


(842
)


35



200Deferred income tax asset


(4,343
)


(4,543
)


Accrued reassessed tax










(809
)Changes in assets and liabilities:(Increase) decrease in:Accounts receivable


(1,305
)


(1,706
)


484Inventories


(1,091
)


(133
)


312Prepaid expenses and other current assets


(1,164
)


(808
)


344Other assets


(1,366
)


344



(1,626
)(Decrease) increase in:Accounts payable and accrued expenses


(4,108
)


2,188



2,422Payroll and related accruals


98



509



361Taxes


(242
)


(440
)


640Other liabilities


(2,593
)


(1,765
)


235Deferred income


3,532



(1,004
)


(358
)CASH FLOWS PROVIDED BY OPERATING ACTIVITIES


3,282



5,556



10,001CASH FLOW FROM INVESTING ACTIVITIES:Additions to property and equipment


(6,039
)


(4,059
)


(4,356
)Proceeds from sale of property, equipment and deferred charges


1,537



518



1,806CASH FLOWS (USED IN) INVESTING ACTIVITIES


(4,502
)


(3,541
)


(2,550
)CASH FLOW FROM FINANCING ACTIVITIES:Net Borrowings (Repayments) under lines of credit


4,971



(959
)


(6,506
)Acquisition of Companys own shares


(252
)


(592
)


(216
)Proceeds from issuance of shares of common stock


170



935



18CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES


4,889



(616
)


(6,704
)EFFECT OF FOREIGN EXCHANGE RATE


(134
)


(33
)


(20
)NET INCREASE IN CASH AND CASH EQUIVALENTS


3,535



1,366



727CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR


3,810



2,444



1,717CASH AND CASH EQUIVALENTS AT END OF YEAR

R$
7,345


R$
3,810


R$
2,444      F-7




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1  BUSINESS
    AND OPERATIONS
          2  SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES
  Generally
    Accepted Accounting Principles (GAAP)
  real reais
  Use of
    estimates
   F-8




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Geographic
    area of operations
        Principles
    of consolidation
    Constant
    currency restatement
    Foreign
    currency
    Cash
    and cash equivalents
    Accounts
    receivable
   F-9




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Inventories
    Property
    and equipment
    YearsBuildings and building improvements


50Leasehold improvements


4-5Machinery and equipment


10-15Furniture and fixtures


10-15Software


3-5Vehicles


5-13   Deferred
    charges
      Preopening
    costs
    Revenue
    recognition
     F-10




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Marketing
    expense, Marketing fund and advertising expenses
                  Stock
    options
   F-11




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2005R$ 000, except share infoNet income as reported


4,444Stock compensation


(124
)Net income pro forma


4,320Net income per share, as reported


0,55Net income per share, pro forma


0,54           Effective January 1, 2006, the Company adopted the
    provisions of the Statement of Financial Accounting Standards
    No. 123(R), Share-Based Payment(SFAS No. 123(R)), using the modified-prospective
    transition method. Under this transition method, compensation
    cost beginning in 2006 includes the portion vesting in the
    period for (1) all share-based payments granted prior to,
    but not vested as of January 1, 2006, based on the grant
    date fair value estimated in accordance with the original
    provisions of SFAS No. 123 and (2) all
    share-based payments granted subsequent to January 1, 2006,
    based on the grant date fair value estimated in accordance with
    the provisions of SFAS No. 123(R). Results for prior
    periods have not been restated.
  In 2007, results included share-based compensation expense of
    R$5,125 (R$12,744 in 2006). Compensation expense related to
    share-based awards is generally amortized on a straight-line
    basis over the vesting period other income (expenses) in the
    consolidated statement of results.
  Income
    taxes
   F-12




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Long-lived
    and intangibles assets
      Net
    income (loss) per common share
    Recently
    issued accounting standards
  In July 2006, the FASB issued Interpretation No. 48,
    Accounting for Uncertainty in Income Taxes(FIN 48),
    which is an interpretation of FASB Statement No. 109,
    Accounting for Income Taxes. FIN 48 clarifies the
    accounting for income taxes by prescribing the minimum
    recognition threshold a tax position is required to meet before
    being recognized in the financial statements. FIN 48 also
    provides guidance on derecognition, measurement, classification,
    interest and penalties, accounting in interim periods,
    disclosure and transition. The provisions of FIN 48
    establish the cumulative effect of the change in accounting
    principle to be recorded as an adjustment to retained earnings.
    The Company adopted FIN 48 effective January 1,
    2007,as required, however, its adoption did not have a material
    effect on the Companys Consolidated financial
    statements.
  In September 2006 the FASB issued Statement of Financial
    Accounting Standards No. 157, Fair Value Measurements,
    which establishes a framework for measuring fair value and
    expands disclosures about fair value measurements. This
    statement is effective for fiscal years beginning after
    November 15, 2007 except for nonfinancial assets and
    nonfinancial liabilities, for which the effective date is fiscal
    years beginning after November 15, 2008. The adoption of
    SFAS No. 157 is not expected to have a material impact
    on the Companys financial statements.
  In September 2006, the FASB issued Statement of Financial
    Accounting Standards No. 158, Employers Accounting
    for Defined Benefit Pension and Other Postretirement Plans, an
    amendment of FASB Statements No. 87, 88, 106 and 132(R)
    (SFAS No. 158). SFAS No. 158 requires the
    Company to recognize the overfunded or underfunded status of a
    defined benefit postretirement plan as an asset or liability in
    the Consolidated balance sheet and to recognize changes in that
    funded status in the year changes occur through other
    comprehensive income. The provisions of SFAS 158 did not
    affect the Companys Consolidated financial statements
    since the Company has no pension plans for its employees.
  In February 2007, the FASB issued SFAS No. 159
    The Fair Value Option for Financial Assets and Financial
    Liabilities Including an Amendment of SFAS No. 115.
    This statement allows entities to
 F-13




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  measure certain assets and liabilities at fair value, with
    changes in the fair value recognized in earnings. The
    statements objective is to mitigate volatility in reported
    earnings caused by measuring related assets and liabilities
    differently, without applying complex hedge accounting
    provisions. This statement is effective for fiscal years
    beginning after November 15, 2007. The Company is currently
    evaluating the impact of the adoption of SFAS No. 159,
    however, it is not expected to have material effects on the
    Companys Consolidated financial statements.
  In December 2007, the FASB issued SFAS No. 141(R),
    Business Combinations. This Statement requires an
    acquirer to recognize the assets acquired, the liabilities
    assumed, and any noncontrolling interest in the acquiree at the
    acquisition date, measured at their fair values as of that date.
    This Statement changes the accounting for acquisition-related
    costs and restructuring costs, now requiring those costs to be
    recognized separately from the acquisition. This Statement also
    makes various other amendments to the authoritative literature
    intended to provide additional guidance or to conform the
    guidance in that literature to that provided in this Statement.
    SFAS No. 141(R) shall be applied prospectively to business
    combinations for which the acquisition date is on or after the
    beginning of the first annual reporting period beginning on or
    after December 15, 2008 and early adoption is prohibited.
    The Company does not expect the adoption of SFAS No. 141(R)
    to have a significant impact on the consolidated financial
    statements.
  In December 2007, the FASB issuedSFAS No. 160, Noncontrolling Interests in
    Consolidated Financial Statements, an amendment of ARB No.
    51. This Statement establishes accounting and reporting
    standards for the noncontrolling interest in a subsidiary
    (previously referred to as minority interest) and for the
    deconsolidation of a subsidiary. This Statement shall be applied
    prospectively as of the beginning of the fiscal year in which
    this Statement is initially applied, except for the presentation
    and disclosure requirements, which shall be applied
    retrospectively for all periods presented. This Statement is
    effective for fiscal years, and interim periods within those
    fiscal years, beginning on or after December 15, 2008, with
    early adoption prohibited. The Company does not expect the
    adoption of SFAS No. 160 to have a significant impact
    on the consolidated financial statements.
  Reclassifications
    3
    CASH AND
    CASH EQUIVALENTS    December 31,2007


2006Cash at point of sales

R$
778


R$
532Cash with money collectors


929



825Bank accounts


846



1,476Investments funds


4,792



977R$
7,345


R$
3,810      F-14




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4
    ACCOUNTS
    RECEIVABLES    December 31,2007


2006Clients  food sales

R$
2,282


R$
2,026Franchisees  current accounts


4,227



3,679Franchisees  renegotiated past due accounts


1,643



1,941Franchisees  receivable from sales of assets


1,312



392Allowance for doubtful accounts


(847
)


(726
)R$
8,617


R$
7,312   5
    OTHER
    CURRENT ASSETS, OTHER RECEIVABLES AND OTHER ASSETS    December 31,2007


2006R$ 000Other current assets:Witholding taxes

R$
115


R$
59Receivables from franchisees and from FBD  Suprilog
    assets(a)


2,063



1,628Other current receivables


89



3R$
2,267


R$
1,690   December 31,2007


2006R$ 000Other receivables and other assets:Receivables from franchisees  assets sold(b)

R$
415



702Judicial deposits(c)


5,345



3,774Other receivables


85



3R$
5,845


R$
4,479     (a)
    
    Short term receivables from franchisees developed from rights
    other than royalties and sale of assets and receivables derived
    from transaction discussed at note 1;(b)
    
    Long term portion of receivables derived from selling of
    restaurants to franchisees;(c)
    
    Deposits required by Brazilian court in connection to some legal
    disputes, also discussed at note 12.c; F-15




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6
    PROPERTY
    AND EQUIPMENT, NET    December 31,2007


2006Land

R$
2.322


R$
2.322Buildings and building improvements


3.717



3.330Leasehold improvements


8.714



8.308Machinery, equipment and software


19.026



18.076Furniture and fixtures


3.245



2.959Assets under capitalized leases


2.039



Vehicles


286



40739.349



35.402Less: Accumulated depreciation and amortization


(19.813
)


(17.948
)R$
19.536


R$
17.454   7
    DEFERRED
    CHARGES, NET    December 31,2007


2006R$ 000Leasehold premiums

R$
9,982


R$
9,484Less: accumulated amortization


(5,415
)


(4,930
)R$
4,567


R$
4,554   8
    NOTES PAYABLE    December 31,


December 31,2007


2006R$ 000Revolving lines of credit(a)

R$
3,242


R$
Leasing Facilities(b)


1,729



4,971



Less: current portion


(4,010
)


R$
961


R$
     R$ 0002008

R$
4,0102009


7682010


192R$
4,971  F-16




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (a)
    
    Due on demand from two Brazilian financial institutions with
    interest rates of approximately 17.0% and guaranteed by certain
    officers and receivables.(b)
    
    Comprised of various lease facilities with Brazilian private
    institutions for the funding of store equipment; payable in
    27 monthly payments, together with interests range from
    12.9% to 14.3% per annum;    9
    ACCOUNTS
    PAYABLE AND ACCRUED EXPENSES  December 31,2007


2006R$ 000Suppliers

R$
4,306


R$
4,189Rent payable


488



713Outsourcing fees


68



615Accrued utilities


447



436Accrued maintenance


267



221Accrued advertising


311



Marketing fund






3,804Audit services


78



82Other accrued liabilities


641



654R$
6,606


R$
10,714     10
    CASH FLOW
    INFORMATION      Year Ended December 31,2007


2006


2005R$ 000Interest paid

R$
465


R$
1,108


R$
828Income taxes paid

R$
69


R$
2,533


R$
1,584   11
    TAXATION     F-17




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2007


2006


2005R$ 000Tax (expense) income at the combined statutory rate

R$
(3.114
)

R$
(2.788
)

R$
(2.275
)Current income tax offset by accumulated tax loss credits






1.114



1.688Combined statutory rate applied to differences between taxable
    results in Brazil and reported results


3.068



(1.134
)


(1.661
)Income tax (expense) income as reported in the accompanying
    consolidated statement of operations

R$
(46
)

R$
(2.808
)

R$
(2.248
)           December 31,2007


2006R$ 000Deferred tax assets:Tax loss carry forward

R$
11.669


R$
11.108Provision for contingencies


1.570



1.268Total deferred tax assets


13.239



12.376Deferred tax liabilities:Property and equipment


1.773



67Deferred charges


979



Total deferred tax liabilities


2.752



67Net deferred tax asset


10.487



12.309Valuation allowance


(1.601
)


(7.766
)R$
8.886


R$
4.543      F-18




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      12
    COMMITMENTS
    AND LITIGATION  a)
    Operating
    leases    ContractualFiscal Year

LeasesR$ 0002008


4,1072009


3,2702010


2,4662011


1,9492012


891Thereafter


565Total


13,248     b)
    Other
    commitments    Coca-Cola 
  c)
    Reassessed
    taxes and Contingencies  Reassessed
    taxes
   F-19




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        
    Value added state tax  ICMS    
    Federal taxes  PAES         F-20




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Contingencies
  
    ISS litigation          
    Labor litigations    
    Social security fines  
    During the last quarter of 2006, Brazilian Social Security
    Authorities applied fines of R$1.6 million against the
    Company, by charging certain employees benefits not covered by
    the Companys previous calculation of Social Security
    contributions. During the first quarter of 2007, the Company
    paid R$979,638 related to such penalties. For the remaining
    amount of R$551,239 the Company obtained a reduction of such
    fine and paid R$334,000 to have it settled. F-21




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2007


2006Long








LongTotal


Current


Term


Total


Current


TermLiability


Liability


Liability


Liability


Liability


LiabilityR$ 000Reassessed taxesState tax (value-added)














415







415Federal taxes (PAES)


12,383



1,696



10,687



13,698



1,695



12,003ContingenciesISS tax litigation


2,703







2,703



1,763







1,763Social security fines














1,558



1,558



Labor litigation


1,700







1,700



1,783







1,783Property leasing litigation


215







215



181







181TOTAL

$
17,001


$
1,696


$
15,305


$
19,398


$
3,253


$
16,145   Other
    contingencies
  
    The Company purchased Venbo Comércio de Alimentos Ltda.
    (Venbo) from VENDEX in 1996. The Acquisitions
    Purchase Agreement stated that Venbos former owner
    (VENDEX) would be responsible for off-balance
    liabilities derived from Venbos transactions prior to the
    Acquisition, limited to certain conditions. From 1997 to date,
    the Company has received several communications from the
    Brazilian fiscal authorities related to the period prior to the
    Acquisition and, accordingly, has forwarded those to VENDEX and
    its attorneys.      
    The ICMS is a Brazilian value added state tax required of
    business that sell products and render services within the
    domain of Brazilian state governments and federal district.
    Every amount due related to ICMS registered as of May 2002 has
    been paid by the Company, and since then, the Company has been
    paying regularly its taxes to the governments of Rio de Janeiro
    and Sao Paulo states and to the federal district
    (Brasília). Nevertheless, in 2005, the fiscal authorities
    of Rio de Janeiro and Sao Paulo compelled the Company to submit
    electronic forms with 4 years monthly figures corresponding
    to two stores sales. The exigency could not be met by the
    Company due to technical difficulties, which caused the Company
    to be fined in R$754,457 by the Rio de Janeiros fiscal
    authorities. During the last quarter of 2006 the Government of
    Rio de Janeiro issued an amnesty program through which the fine
    was reduced and the Company paid R$264,953 to quit such debt.
    The amount of R$489,504 was reversed to other income in the
    statements of results.
    During the quarter ended June 30, 2007, Brazilian Internal
    Revenue Service Authorities applied penalties of R$522,917
    against the Company, by charging certain employees benefits not
    covered by the Companys previous calculation of income tax
    withheld on salaries. By the end of the quarter ended F-22




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  June 30, 2007, the Company obtained a reduction of such
    penalties and paid R$441,706 to pay off this fiscal debt.  
    In 2007, the Company was condemned to pay a compensation of
    R$1.2 million to a franchisee that alleged in court that
    the Company is responsible for having offered the operation of a
    store with guaranteed profitability. This franchisee has became
    a permanent debtor of Royalties and marketing contributions, and
    the Company, after failing a great exertion to improve his
    business, finally decided to interrupt his franchise contract
    and closed the stores explored by him. The Companys legal
    advisors believe his argument contradicts franchise laws and the
    usual business practices of the Company, and appealed. However,
    the Company cannot predict the result of its appeal.  13
    SHAREHOLDERS
    EQUITY  Preferred
    stock
    Common
    Stock
    December 31,2007


2006Issued shares


8,404,177



8,384,177Less: Treasury stock


(226,490
)


(201,935
)Outstanding shares


8,177,687



8,182,242   Private
    placements
  On December 20, 2004, Bigburger Ltda.
    (BigBurger) and CCC Empreendimentos e
    Participações Ltda. (CCC) completed a
    total buyout of AIG Latin America Equity Partners
    (AIG) 375,000 share position in Brazil Fast
    Food Corp. (BFFC). This buyout nullified the
    pre-existing shareholders agreement, which granted AIG
    certain rights over BFFCs administration, and increases
    the collective share of Bigburger and CCC in BFFC by 5.0% to
    approximately 60.0% of the Companys common stock.
  Stock
    repurchase plan
     F-23




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Severance
    agreement
    Stock
    option plan
    Form S-8 No. 333-133981,
          2007


2006


2005Weighted





Weighted





WeightedAverage





Average





AverageExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceOptions outstanding at beginning of year


78,750


$
1.35



347,000


$
1.65



521,250


$
1.86Granted


















32,500



0.16Exercised


(10,000
)


2.188



(255,750
)


1.68



(26,250
)


0.29Expired










(12,500
)


2.88



(170,000
)


2.24Canceled


















(10,500
)


1.77Options outstanding at December 31,


68,750


$
1.224



78,750


$
1.35



347,000


$
1.65Options exercisable at December 31,


68,750


$
1.224



78,750


$
1.35



347,000


$
1.65    F-24




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14
    OTHER
    OPERATING EXPENSES    December 31,2007


2006


2005R$ 000Uncollectable receivables


(1,288
)


(482
)


(2,470
)Reassessed tax and other tax adjustments


424



(701
)


1,552Accruals for contingencies


215



(936
)


(1,482
)Depreciation of Headquarters fixed assets


(833
)


(626
)


(1,158
)Professional fees for tax consulting


(1,793
)


(1,175
)


Preopening and other (expenses) income


330



(293
)


(290
)R$
(2,945
)

R$
(4,213
)

R$
(3,848
)   15
    TRANSACTIONS
    WITH RELATED PARTIES    16
    SELECTED
    QUARTERLY FINANCIAL DATA  2007First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Amounts in thousands of Brazilian Reais, except shares and
    income (loss) per share)Net Restaurant Sales


21.243



17.102



25.759



21.800Net Franchise Revenues


4.463



3.976



4.547



5.825Operating income


3.903



1.367



1.822



2.765Net income


3.692



1.259



1.625



6.881Basic and diluted income per share


0,45



0,15



0,20



0,83Weighted average common shares outstanding


8.182.242



8.171.688



8.159.048



8.167.367   2006Net Restaurant Sales


23.426



17.610



18.432



21.463Net Franchise Revenues


3.993



3.439



4.208



4.745Operating income


3.414



224



2.345



2.881Net income (loss)


2.458



(26
)


1.694



5.808Basic and diluted income per share


0,31







0,21



0,70Weighted average common shares outstanding


8.046.683



8.112.127



8.203.272



8.184.840   17
    SEGMENT
    INFORMATION  Through our wholly-owned subsidiary Venbo, which conducts
    business under the trade name Bobs, we own
    and, directly and through franchisees, operate the second
    largest fast food hamburger
 F-25




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  restaurant chain in Brazil. Since April 2007, we operate,
    through our wholly-owned subsidiary CFK, the KFCs brand in
    Brazil, which operating figures are not yet material to the
    Companys overall results.
  Currently the majority of Companys operations are
    concentrated at the southeast region of Brazil. Regarding Bobs
    brand, as of December 31, 2007, from the total of 58
    Company own-operated point of sales, 57 were located at the
    southeast region which provided 98.1% of total Net Revenues from
    Own-operated Restaurants. In addition, from the total of 522
    franchise-operated point of sales, 285 were located at the same
    region, which provided 54.4% Net Revenues from Franchisees.
  Besides the Brazilian operations, the Bobs brand is
    also present, through franchisees, in Angola, Africa. These
    operations are not material to our overall results.
    Results from Own-Stores OperationsYear Ended December 31,2007


2006


2005R$ 000Revenues


85.904



80.931



75.559Food, Beverage and Packaging


(31.334
)


(30.240
)


(28.306
)Payroll & Related Benefits


(22.807
)


(19.447
)


(17.094
)Restaurant Occupancy


(10.107
)


(9.311
)


(8.926
)Contracted Services


(11.681
)


(9.523
)


(8.624
)Depreciation and Amortization


(2.416
)


(2.319
)


(2.194
)Other Store Costs and Expenses


(5.004
)


(3.849
)


(3.240
)Total Own-stores cost and expenses


(83.349
)


(74.689
)


(68.384
)Operating margin


2.555



6.242



7.175   Results from Franchise OperationsYear Ended December 31,2007


2006


2005R$ 000Revenues


18.811



16.385



11.963Payroll & Related Benefits


(2.600
)


(2.068
)


(1.311
)Occupancy expenses


(283
)


(375
)


(169
)Travel expenses


(334
)


(296
)


(206
)Other franchise cost and expenses


(406
)


(437
)


(458
)Total franchise cost and expenses


(3.623
)


(3.176
)


(2.144
)Operating margin


15.188



10.033



7.675        F-26




---



##### Table of Contents



BRAZIL
    FAST FOOD CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     F-27




---



##### Table of Contents



SIGNATURES
    BRAZIL FAST FOOD CORP.
  By:
    /s/  Ricardo
    Figueiredo Bomeny       /s/  Ricardo
    Figueiredo BomenyRicardo
    Figueiredo Bomeny

Chief Executive Officer and Acting Chief Financial Officer

Date: September 24, 2008/s/  Guillermo
    Hector PisanoGuillermo
    Hector Pisano

Chairman of the Board

Date: September 24, 2008/s/  Omar
    Carneiro da CunhaOmar
    Carneiro da Cunha

Director

Date: September 24, 2008/s/  Peter
    J.F. van Voorst VaderPeter
    J.F. van Voorst Vader

Director

Date: September 24, 2008/s/  Romulo
    Borges FonsecaRomulo
    Borges Fonseca

Director

Date: September 24, 2008/s/  José
    Ricardo Bousquet BomenyJosé
    Ricardo Bousquet Bomeny

Director

Date: September 24, 2008/s/  Gustavo
    Alberto Villela FilhoGustavo
    Alberto Villela Filho

Director

Date: September 24, 2008/s/  Gustavo
    Figueiredo BomenyGustavo
    Figueiredo Bomeny

Director

Date: September 24, 2008




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitIndex

Description3
.1

Certificate of Incorporation of the Registrant, as amended(1)3
.2

By-laws of the Registrant(2)10
.1

Amended and Restated 1992 Stock Option Plan(2)10
.2

Capitalization and Administrative Restructuring Intentions
    Protocol dated May 15, 2002 by and among Brazil Fast Food
    Corp., Gustavo Figueredo Bomeny, CCC Emprendimentos e
    Participacoes Ltda., BigBurger Ltda., Jose Ricardo Bousquet
    Bomeny, Omar Carneiro da Cunha, Seaview Venture Group, Peter van
    Voorst Vader and Shampi Investments A.E.C.(3)21
.1

Subsidiaries of Registrant(4)24
.1

Power of Attorney (comprises a portion of the signature page of
    this report)31
.1*

Certification by Ricardo Figueiredo Bomeny, Chief Executive
    Officer and Acting Chief Financial Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1*

Certification by Ricardo Figueiredo Bomeny, Chief Executive
    Officer and Acting Chief Financial Officer, pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Filed herewith.(1)
    
    Filed as an exhibit to Registrants Registration Statement
    on
    Form S-1
    (File
    No. 333-3754).(2)
    
    Filed as an exhibit to Registrants Registration Statement
    on
    Form S-1
    (File
    No. 33-71368).(3)
    
    Filed as an exhibit to Registrants Current Report on
    Form 8-K,
    dated April 1, 2002.(4)
    
    Filed as an exhibit to Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 1997 (File
    No. 0-23278).